Document:

ex_111746.htm

Exhibit 10.1

Execution Version

 

 

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Among:

 

BRANCH BANKING AND TRUST COMPANY,

a North Carolina banking corporation,

 

as “Lender”

 

and

 

SUPERIOR UNIFORM GROUP, INC.,

a Florida corporation

 

as “Borrower”

 

and

 

THE LOAN PARTIES HERETO

 

 

 

 

Dated: May 2, 2018

 

 

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT (as amended, modified, restated, or supplemented at any time or from time to time, the “Agreement”) is made and entered into as of May 2, 2018, by and among Branch Banking and Trust Company, a North Carolina banking corporation (“Lender”), having an address of 400 N. Tampa Street, Suite 2500, Tampa, Florida 33602, Superior Uniform Group, Inc., a Florida corporation (“Borrower”), and Borrower’s Wholly Owned Subsidiaries, CID Resources, Inc., a Delaware corporation (“CID”), Superior Group of Companies, LLC, a Florida limited liability company (“SGC LLC”), Fashion Seal Corporation, a Nevada corporation (“Fashion Seal”), The Office Gurus, LLC, a Florida limited liability company (“TOG”), BAMKO, LLC, a Delaware limited liability company (“BAMKO, LLC”), and Superior Uniform Arkansas LLC, an Arkansas limited liability company (“SU-ARK”), all having an address of 10055 Seminole Boulevard, Seminole, Florida 33772. Borrower, CID, SGC LLC, Fashion Seal, TOG, BAMKO, LLC, SU-ARK and each other Person becoming a Subsidiary Loan Party and a Guarantor at any time as provided in Sections 6.19 and 6.20 hereof, are each individually sometimes referred to herein as a “Loan Party” and collectively as the “Loan Parties.”

 

W I T N E S S E T H:

 

A.     Certain of the parties hereto are parties to a Credit Agreement dated as of February 28, 2017 by and among the Borrower, the Guarantors party thereto, Branch Banking and Trust Company, as Lender (as amended, the “Existing Credit Agreement”), and certain other Loan Documents entered into in connection with (and as defined in) the Existing Credit Agreement (collectively with the Existing Credit Agreement, as amended, the “Existing Loan Documents”), pursuant to which the Lender provided a secured term loan in the principal amount of $42,000,000.00 and a secured revolving line of credit in the maximum principal amount of $35,000,000.00 (the “Existing Revolving Credit”) as set forth in the Existing Credit Agreement.

 

B.     The Loan Parties have requested the Lender to make an additional term loan to the Borrower in the amount of $85,000,000.00 for the purpose of funding the CID Transaction. The Loan Parties also have requested the Lender to increase the Existing Revolving Credit in favor of the Borrower in the aggregate maximum principal amount of $75,000,000.00. The parties wish to enter into this Agreement and the Loan Documents (as defined herein) to provide for such loans and credit facilities to the Borrower, which shall amend, restate, replace and supersede (but not cause a novation of) the Existing Credit Agreement and the other Existing Loan Documents, and which hereinafter shall govern the terms and conditions under which the Lender shall provide senior secured term loans and a senior secured revolving credit facility to the Borrower.

 

NOW, THEREFORE, in consideration of the mutual provisions, covenants and agreements herein contained, the parties hereto hereby agree as follows:

 

1

 

 

Article One

DEFINITIONS

 

1.01     Defined Terms. For purposes of this Agreement, in addition to the terms defined elsewhere herein, the following terms shall have the meanings set forth below (such meanings to be equally applicable to the singular and plural forms thereof):

 

“Acquisition” shall mean any transaction or series of related transactions by which Borrower or any direct or indirect Subsidiary of Borrower, directly, or indirectly through one or more Subsidiaries, (i) acquires any going business, or all or substantially all of the assets, of any Person, whether through purchase of assets, merger or otherwise, or (ii) acquires securities or other ownership interests of any Person having at least a majority of combined voting power of the then outstanding securities or other ownership interests of such Person.

 

“Advance” shall mean the aggregate principal amount of any borrowing of funds under the Revolving Credit Facility.

 

“Affiliate” shall mean, as to any Person, each other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. A Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors or managing general partners.

 

“Amended and Restated Revolving Note” shall mean the Amended and Restated Revolving Line of Credit Promissory Note in the principal amount of up to $75,000,000.00, executed by Borrower and payable to the order of Lender, in the form of Exhibit “D” attached hereto, together with all amendments, modifications, replacements, consolidations, or renewals thereof or supplements thereto.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

 

“Applicable Law” shall mean, as to any Loan Party or its assets, any law, ordinance, policy, manual provision, administrative guidance, statute, rule or regulation, or any determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon a Loan Party or any of its assets, or to which a Loan Party or any of its assets is subject.

 

“Applicable Libor Margin” shall mean: (a) in the case of the 2017 Term Loan, 0.68%; (b) in the case of the 2018 Term Loan, (i) for the period commencing on the Effective Date and ending twelve (12) months after the Effective Date, 0.93% (ii) for the period commencing thirteen (13) months after the Effective Date and ending eighteen (18) months after the Effective Date, 1.50%, and (iii) for the period commencing nineteen (19) months after the Effective Date and at all times thereafter, 1.75%; and (c) in the case of the Revolving Credit Facility, 0.68%.

 

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“Approved Acquisition” means an Investment constituting an Acquisition that Lender has consented to in writing prior to the consummation of such Acquisition.

 

“Availability Period” shall mean the period from the Effective Date to the Revolving Commitment Termination Date.

 

“Borrowing Availability” means, at any time, the amount by which the Revolving Commitment Amount exceeds the sum of the outstanding principal balance of the Revolving Credit Facility and LC Exposure.

 

“Business Day” means a day other than a Saturday, Sunday, legal holiday or any other day when the Lender is authorized or required by applicable law to be closed.

 

“Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Capital Stock” shall mean (i) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock (whether voting or nonvoting, and whether common or preferred) of such corporation, and (ii) with respect to any Person that is not a corporation, any and all partnership, membership, limited liability company or other equity interests of such Person; and in each case, any and all warrants, rights or options to purchase any of the foregoing.

 

“Change in Control” shall mean the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of Borrower to any Person or “group” (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission thereunder in effect on the date hereof), (ii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) of 25% or more of the outstanding shares of the voting stock of Borrower other than by any Person that is a record holder of outstanding shares of the voting stock of the Borrower as of the Effective Date, (iii) except to the extent such a change is the result solely of the retirement, death or disability of directors who are directors as of the Effective Date, the occupation of a majority of the seats (other than vacant seats) on the board of directors of Borrower by Persons who are neither (a) directors as of the Effective Date, (b) nominated by the current board of directors nor (c) appointed by directors so nominated, or (iv) Borrower ceases to own, directly or indirectly, the percentage of Capital Stock of each of its Subsidiaries that it owns, directly or indirectly, as of the Effective Date or, with respect to a Subsidiary acquired or formed after the date hereof, as of the date of such acquisition or formation.

 

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“Change in Law” shall mean (i) the adoption of any law, rule or regulation after the Effective Date, (ii) any change in law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Effective Date or (iii) compliance by Lender (or by the Lender’s holding company, if applicable) with any written request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Effective Date; provided, however, that notwithstanding anything herein to the contrary, (x) all requests, rules, guidelines or directives under or issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act, all interpretations and applications thereof and any compliance by Lender with any request or directive relating thereto and (y) all requests, rules, guidelines or directives promulgated under or in connection with, all interpretations and applications of, or and any compliance by a Lender with any request or directive relating to International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case under clause (x) and (y) be deemed to be a “Change in Law,” regardless of the date adopted, issued, promulgated or implemented.

 

“Charges” shall have the meaning ascribed to said term in Section 9.12 hereof.

 

“CID Stock Purchase Agreement” shall mean the Stock Purchase Agreement dated May 2, 2018, among the Borrower, CID, CID Resources Holdings, LLC and its equityholders, pursuant to which the CID Transaction is being consummated as of the Effective Date.

 

“CID Transaction” shall mean the acquisition of all or substantially all of the Capital Stock of CID pursuant to the terms of the CID Transaction Documents on or about the Effective Date.

 

“CID Transaction Documents” shall mean collectively the CID Stock Purchase Agreement and all other documentation required for or to consummate the CID Transaction and all schedules, exhibits, annexes and amendments thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith, in each case, as amended, restated, modified or supplemented from time to time or at any time as permitted by this Agreement, in each case, in form and substance satisfactory to Lender.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Collateral” shall mean all assets, property and interests in property that shall from time to time be pledged or be purported to be pledged as direct or indirect security for the Obligations pursuant to any one or more of the Security Documents, including without limitation, the following assets of Borrower or any Domestic Subsidiary of Borrower: (a) accounts and inventory owned at any time or from time to time by Borrower or any Domestic Subsidiary of Borrower; (b) all Capital Stock issued by each Domestic Subsidiary, and (c) to the extent pledged pursuant to Section 6.19, sixty-five percent (65%) of the Capital Stock issued by each Foreign Subsidiary directly owned by Borrower or any Domestic Subsidiary of Borrower. In the event of any inconsistency between this definition and the definition of Collateral in any Security Document, such Security Document shall control.

 

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

 

“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.

 

“Compliance Certificate” shall mean a certificate from the principal executive officer and the principal Financial Officer of Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit “A.”

 

“Contingent Obligation” shall mean, without duplication, with respect to any Person, any direct or indirect liability of such Person with respect to any Indebtedness, liability or other obligation (the “primary obligation”) of another Person (the “primary obligor”), whether or not contingent, (a) to purchase, repurchase or otherwise acquire such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or provide funds (i) for the payment or discharge of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor in respect thereof to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss or failure or inability to perform in respect thereof; provided, however, that, with respect to any Loan Party, the term Contingent Obligation shall not include endorsements for collection or deposit in the ordinary course of business.

 

“Contractual Obligation” of any Person shall mean any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.

 

“Coverage Ratio” shall have the meaning ascribed to said term in Section 6.16 hereof.

 

“Credit Facility” or “Credit Facilities” shall mean any or all of the 2017 Term Loan, the 2018 Term Loan and the Revolving Credit Facility.

 

“Default Condition” shall mean any event or condition that, with the passage of time or giving of notice, or both, would constitute an Event of Default.

 

“Default Rate” shall mean a simple rate of interest per annum equal to the lesser of (i) the applicable Interest Rate, as in effect from time to time, plus 4.00% and (ii) the Maximum Rate.

 

“Designated Person” means any Person listed on a Sanctions List.

 

“Disqualified Stock” shall mean any Capital Stock which, by its terms (or by the terms of any security or instrument into which it is convertible or for which it is exchangeable), or upon the happening of any event, (i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case at any time on or prior to the first anniversary of the last to occur of the 2017 Term Loan Maturity Date or the Revolving Commitment Termination Date, or (ii) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (a) Indebtedness or (b) any Capital Stock referred to in clause (i) above, in each case at any time prior to the first anniversary of the last to occur of the 2017 Term Loan Maturity Date or the Revolving Commitment Termination Date.

 

5

 

 

“Dollars” or “$” shall mean dollars of the United States of America.

 

“Domestic Subsidiary” shall mean any direct or indirect Subsidiary of Borrower that is incorporated or organized under the laws of the United States of America, any State thereof, or the District of Columbia.

 

“EBITDA” shall mean, for Borrower and its Subsidiaries for any period, on a consolidated basis, the amount of their earnings for such period, plus (A) Interest Expense for such period, (B) income tax expense for such period determined on a consolidated basis in accordance with GAAP, (C) depreciation expense for such period determined on a consolidated basis in accordance with GAAP, (D) amortization (including amortization of intangibles) expense for such period determined on a consolidated basis in accordance with GAAP, (E) (or less) any extraordinary or non-recurring items reducing (or increasing) such earnings for such period, (F) non-cash stock compensation reducing earnings for such period, (G) (or less) any other non-cash items (without duplication) reducing (or increasing) such earnings for such period, (H) losses (or less gains) from any non-ordinary course sale or disposition of assets permitted hereunder, and (I) reasonable transaction expenses incurred in connection with the closings of any Permitted Acquisition or any Approved Acquisition. For purposes of determining compliance with Sections 6.16 and 6.18 with respect to any period (a “Test Period”) which includes all or a portion of a Post-Acquisition Period, “EBITDA”, “Coverage Ratio” and “Funded Indebtedness to EBITDA Ratio” shall be calculated with respect to such Test Period by adding to the EBITDA amount calculated as set forth in the preceding sentence for the applicable Test Period, an additional amount equal to: (1) if such calculation is being made prior to the end of the first full fiscal quarter of such Post-Acquisition Period, the actual EBITDA attributable to the entity or assets acquired in the Permitted Acquisition or Approved Acquisition for the period of twelve months preceding the date such Permitted Acquisition or Approved Acquisition was consummated multiplied by 1.00; (2) if such calculation is being made at the end of the first full fiscal quarter of such Post-Acquisition Period, the actual EBITDA attributable to the entity or assets acquired in the Permitted Acquisition or Approved Acquisition for the period of twelve months preceding the date such Permitted Acquisition or Approved Acquisition was consummated multiplied by 0.75; (3) if such calculation is being made at the end of the second full fiscal quarter of such Post-Acquisition Period, the actual EBITDA attributable to the entity or assets acquired in the Permitted Acquisition or Approved Acquisition for the period of twelve months preceding the date such Permitted Acquisition or Approved Acquisition was consummated, multiplied by 0.5, and (4) if such calculation is being made at the end of the third full fiscal quarter of such Post-Acquisition Period, the actual EBITDA attributable to the entity or assets acquired in the Permitted Acquisition or Approved Acquisition for the period of twelve months preceding the date such Permitted Acquisition or Approved Acquisition was consummated, multiplied by 0.25.

 

6

 

 

“Effective Date” means May 2, 2018.

 

“Environmental Laws” shall mean any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of common law and orders of courts or Governmental Authorities, relating to the protection of human health or occupational safety or the environment, now or hereafter in effect and in each case as amended from time to time, including, without limitation, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Substances.

 

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of any Loan Party directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Substances, (iii) any actual or alleged exposure to any Hazardous Substances, (iv) the Release or threatened Release of any Hazardous Substances or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

 

“ERISA Affiliate” shall mean any Person (including any trade or business, whether or not incorporated) that would be deemed to be under “common control” with, or a member of the same “controlled group” as, any Loan Party, within the meaning of Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

 

“ERISA Event” shall mean (i) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (ii) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (v) the receipt by any Loan Party or any of its ERISA Affiliates from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by any Loan Party or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from any Loan Party or any of its ERISA s of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

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“Event of Default” shall have the meaning given to such term in Section 8.01 hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

 

“Excluded Accounts” shall mean: (A) prior to the occurrence of a Default Condition or Event of Default under this Agreement, (i) any deposit account the balance of which is transferred at the end of each day to a deposit account maintained with the Lender or subject to its control, (ii) petty cash and other deposit accounts in which the aggregate balance in all such accounts at no time exceeds $100,000.00; and (iii) any deposit account arising in connection with any Permitted Acquisition or Approved Acquisition for a period of sixty (60) days following such Acquisition, or such longer period approved in writing by Lender in its sole discretion, and (B) after the occurrence of a Default Condition or an Event of Default under this Agreement, no account shall be an Excluded Account.

 

“Excluded Swap Obligation” shall mean, with respect to any guarantor of a Swap Obligation, including the grant of a security interest to secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.

 

“Excluded Taxes” shall mean with respect to the Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of the Lender, in which its applicable lending office is located and (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction.

 

“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve System or any successor thereto.

 

“Financial Officer” shall mean, with respect to Borrower, the vice president of finance, chief financial officer, principal accounting officer or treasurer of Borrower.

 

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

 

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“Fiscal Year” shall mean any fiscal year of the Borrower.

 

“Foreign Subsidiary” shall mean any direct or indirect Subsidiary of Borrower that is incorporated or organized under the laws of any jurisdiction other than the United States of America, any State thereof or the District of Columbia.

 

“Funded Indebtedness to EBITDA Ratio” shall have the meaning ascribed to said term in Section 6.18 hereof.

 

“GAAP” shall mean generally accepted accounting principles as established by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants, as amended and supplemented from time to time, subject to the terms of Section 1.02 hereof.

 

“Governmental Authority” shall mean the government of the United States of America, any other nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

 

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly and including any obligation, direct or indirect, of the guarantor (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided, that the term “Guarantee” shall not include endorsements for collection or deposits in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which Guarantee is made or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantors” shall mean, in the singular any Domestic Subsidiary of Borrower, including without limitation CID, SGC LLC, Fashion Seal, TOG, BAMKO, LLC, SU-ARK and any other Subsidiary Loan Party at any time becoming a party hereto, and, collectively all Domestic Subsidiaries of Borrower, including without limitation, CID, SGC LLC, Fashion Seal, TOG, BAMKO, LLC, SU-ARK and any other Subsidiary Loan Party, from time to time, and each other Person who at any time or from time to time guaranties payment and/or performance of the Obligations, other than Excluded Swap Obligations.

 

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“Guarant(y)(ies)” shall mean, in the singular, the Subsidiary Guaranty and any other guaranty agreement guaranteeing the Obligations, other than Excluded Swap Obligations, and executed in connection herewith, and, in the plural, the Subsidiary Guaranty and all other guaranty agreements guaranteeing the Obligations and executed in connection herewith, and in any case, as the same may be amended, restated, supplemented or otherwise modified at any time or from time to time.

 

“Hazardous Substances” shall mean any substances or materials (i) that are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants or toxic substances under any applicable Environmental Law, (ii) that are defined by any applicable Environmental Law as toxic, explosive, corrosive, ignitable, infectious, radioactive or mutagenic, (iii) the presence of which require investigation or response under any applicable Environmental Law, (iv) that consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (v) that contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear fuel, natural gas or, synthetic gas.

 

“Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whomsoever created, arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions, and shall include without limitation any Rate Management Obligations.

 

“Hedging Transaction” of any Person shall mean any transaction (including an agreement with respect thereto) now existing or hereafter entered into by such Person that is a rate swap, basis swap, forward rate transaction, commodity swap, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collateral transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures and shall include without limitation any transaction evidenced by any Rate Management Agreement.

 

“Immaterial Foreign Subsidiary” shall mean, on any date of determination, any Foreign Subsidiary directly owned by the Borrower or any other Loan Party that, together with its Subsidiaries, (a) generates less than 10% of EBITDA of the Borrower and its Subsidiaries for the four (4) fiscal quarter period most recently ended for which financial statements have been delivered (or are required to have been delivered) under Section 6.01, and (b) owns assets of less than $1,500,000 as reflected in the financial statements most recently delivered on or prior to such date.

 

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“Indebtedness” of any Person shall mean, without duplication (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business; provided, that for purposes of Section 8.01(i) hereof, trade payables overdue by more than 120 days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures, and that adequate reserves for such contest are being maintained in accordance with GAAP), including, without limitation, earn-out and similar obligations, but only to the extent such obligations appear or are required to appear as debt on the balance sheet of such Person, (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person (other than accrued obligations), (v) all Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all guaranties of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) the value of property owned by such Person securing the Indebtedness of a third party, whether or not such Indebtedness has been assumed by such Person, but not to exceed the total amount of such third party Indebtedness, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person, (x) all Off-Balance Sheet Liabilities and (xi) all Net Mark-to-Market Exposure in respect of all Hedging Obligations. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnitee” shall have the meaning ascribed to said term in Section 9.03(b) hereof.

 

“Interest Expense” shall mean, without duplication, for the Borrower and its Subsidiaries from time to time for any period determined on a consolidated basis in accordance with GAAP, the sum of (i) total interest expense, including without limitation the interest component of any payments in respect of Capital Lease Obligations capitalized or expensed during such period (whether or not actually paid during such period) plus (ii) the net amount payable (or minus the net amount receivable) under interest rate Hedging Transactions during such period (whether or not actually paid or received during such period).

 

“Interest Rate” shall mean the LIBOR Rate or, if applicable pursuant to Section 3.11 or Section 3.12, the Standard Rate.

 

“Investments” shall have the meaning ascribed to said term in Section 7.04 hereof.

 

“Joinder to Credit Agreement” shall mean a Joinder to Credit Agreement in the form of Exhibit “B” attached hereto pursuant to which any Domestic Subsidiary formed or acquired by Borrower or any other Loan Party subsequent to the date hereof shall join in and become a Loan Party to this Agreement as provided in Sections 6.19 and 6.20 hereof.

 

“LC Commitment” shall mean that portion of the Revolving Commitment Amount that may be used by the Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed $25,000,000.00.

 

“LC Disbursement” shall mean a payment made by Lender pursuant to a Letter of Credit.

 

11

 

 

“LC Documents” shall mean all applications, agreements and instruments relating to the Letters of Credit (but excluding the Letters of Credit themselves).

 

“LC Exposure” shall mean, at any time, the sum of (i) the aggregate undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the aggregate amount of all LC Disbursements that have not been reimbursed by or on behalf of the Borrower at such time.

 

“Letter of Credit” shall mean any letter of credit issued pursuant to Section 2.03 by Lender for the account of the Borrower pursuant to the LC Commitment.

 

“Letter of Credit Fee” shall have the meaning ascribed to such term in Section 3.07.

 

“LIBOR Interest Period” is a period of one month, which period shall commence on the first day of each month (provided that the initial LIBOR Interest Period with respect to the 2018 Term Loan and the Revolving Credit Facility shall commence on the Effective Date, and with respect to the 2017 Term Loan Commitment commenced on the 2017 Closing Date) and ending on the date that is immediately prior to the numerically corresponding day of each month thereafter, subject to the terms of this Agreement and shall be determined by Lender in accordance with this Agreement and Lender’s loan systems and procedures periodically in effect, including, without limitation, in accordance with the following terms and conditions, as applicable:

 

(a)     Any LIBOR 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 LIBOR Interest Period shall end on the next preceding Business Day; and

 

(b)     Any LIBOR Interest Period which begins on a day for which there is no numerically corresponding day in a subsequent month if adjusted monthly or in a subsequent quarter if adjusted quarterly, shall end on the last Business Day of each subsequent month if adjusted monthly or in the last Business Day of each subsequent quarter if adjusted quarterly.

 

“LIBOR Rate” means a rate of interest per annum equal to the sum obtained (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) by adding (i) the One Month LIBOR plus (ii) the Applicable LIBOR Margin per annum, which shall be adjusted monthly on the first day of each LIBOR Interest Period. The LIBOR Rate shall be adjusted for any change in the LIBOR Reserve Percentage so that Lender shall receive the same yield. The interest rate will in no instance exceed the maximum rate permitted by applicable law. Notwithstanding the foregoing, in no event shall the LIBOR Rate be less than the Applicable LIBOR Margin.

 

“LIBOR Rate Loan” means any loan bearing interest at a rate based upon the LIBOR Rate.

 

“LIBOR Reserve Percentage” means the maximum aggregate rate at which reserves (including, without limitation, any marginal supplemental or emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Reserve System with respect to dollar funding in the London interbank market. Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall reflect any other reserves required to be maintained by such member banks by reason of any applicable regulatory change against (i) any category of liability which includes deposits by reference to which the LIBOR Rate is to be determined or (ii) any category of extensions of credit or other assets related to the LIBOR Rate.

 

12

 

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), preference, priority, charge or other encumbrance of any nature, whether voluntary or involuntary, including, without limitation, the interest of any vendor or lessor under any conditional sale agreement, title retention agreement, capital lease or any other lease or arrangement having substantially the same effect as any of the foregoing.

 

“Loan Documents” shall mean this Agreement, the 2017 Term Loan Note, the 2018 Term Loan Note, the Amended and Restated Revolving Note, the Guaranties, each other Security Document, any Rate Management Agreement, the Subordination Agreements, and all other agreements, instruments, documents and certificates now or hereafter executed and delivered to the Lender by or on behalf of the Loan Parties with respect to this Agreement and the transactions contemplated hereby, in each case as amended, modified, supplemented or restated from time to time.

 

“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on (i) the financial condition, operations, business, properties, liabilities (actual or contingent), or assets of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of any of the Loan Parties to perform their respective obligations under this Agreement or any of the other Loan Documents to which they are party, (iii) the rights or remedies of the Lender under any of the Loan Documents, or (iv) the legality, validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of the Lender hereunder and thereunder.

 

“Material Contract” shall mean any agreement identified in Item 601 of SEC Regulation S-K as a “material contract” required to be filed with appropriate SEC filings in accordance with the periodic reporting requirements of the Securities Exchange Act of 1934.

 

“Material Indebtedness” shall mean Indebtedness (other than the Credit Facilities, Letters of Credit and Rate Management Obligations, if any) and Hedging Obligations of any Loan Party, individually or in an aggregate principal amount exceeding $250,000.00. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.

 

“Material Foreign Subsidiary” shall mean any Foreign Subsidiary that is directly owned by the Borrower or any other Loan Party and is not an Immaterial Foreign Subsidiary.

 

“Maximum Rate” shall have the meaning ascribed to it in Section 9.12 hereof.

 

13

 

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates is making, or is accruing an obligation to make, contributions or has made, or been obligated to make, contributions within the preceding six (6) fiscal years.

 

“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of determination with respect to any Hedging Obligation, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Hedging Obligation. “Unrealized losses” shall mean the fair market value of the cost to such Person of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of determination (assuming the Hedging Transaction were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Hedging Transaction as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date).

 

“Net Worth” of any Person shall mean, as of any date of determination, an amount, determined in accordance with GAAP, as of the last day of the immediately preceding Fiscal Quarter equal to: (i) total liabilities of the Borrower and its Subsidiaries, subtracted from (ii) total assets of the Borrower and its Subsidiaries.

 

“Note” or “Notes” shall mean any one or more of the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note.

 

“Non-Pledged Foreign Subsidiary” shall have the meaning set forth in Section 7.04(d) hereof.

 

“Non-Pledged Immaterial Foreign Subsidiary” shall mean, as of any date of determination, an Immaterial Foreign Subsidiary that sixty-five percent (65%) of the Capital Stock issued by such Immaterial Foreign Subsidiary has not been pledged to Lender as collateral security for the Obligations.

 

“Notice of Borrowing” shall mean a Notice of Borrowing in the form of Exhibit “C” attached hereto to be delivered by Borrower to Lender as a condition of obtaining any Advance under the Revolving Credit Facility as provided in Section 2.02(d) hereof.

 

“Obligations” shall mean (i) all amounts owing by (A) Borrower to Lender pursuant to or in connection with the 2017 Term Loan Note, the 2018 Term Loan Note, the Amended and Restated Revolving Note, or any other promissory note or other instrument of indebtedness from Borrower to Lender, at any time or from time to time, (B) Borrower with respect to any Letter of Credit or under any LC Documents, (C) any of the Loan Parties to the Lender pursuant to or in connection with this Agreement or any other Loan Document or otherwise with respect to the Credit Facilities, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to Lender incurred pursuant to the Notes, this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, (ii) all Rate Management Obligations, (iii) all Treasury Management Obligations, (iv) any obligations under any purchasing card or credit card account established for a Loan Party by Lender or any affiliate of Lender, and (v) all other indebtedness of whatever kind arising of any Loan Party to Lender or any affiliate of Lender, together with all renewals, extensions, modifications or refinancings of any of the foregoing. Notwithstanding the foregoing, the term “Obligations” shall exclude any Excluded Swap Obligations.

 

14

 

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.

 

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which is not otherwise included in the definition of “Indebtedness” and does not constitute or appear as a liability on the balance sheet of such Person.

 

“One Month LIBOR” means the average quoted by Bloomberg Finance L.P., or any quoting service or commonly available source utilized by the Lender, on the determination date for deposits in U. S. Dollars offered in the London interbank market for one month determined at approximately 11:00 am London time two (2) Business Days prior to the commencement of the applicable LIBOR Interest Period; provided that if the above method for determining one month LIBOR shall not be available, the rate quoted in The Wall Street Journal, or a rate determined in accordance with Section 3.15; and provided further that if One Month LIBOR determined as provided above would be less than zero percent (0%) then One Month LIBOR shall be deemed to be zero percent (0%).

 

“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended from time to time, and any successor statute.

 

“Participant” shall have the meaning ascribed said term in Section 9.04(b) hereof.

 

“Patriot Act” shall have the meaning ascribed to said term in Section 9.14 hereof.

 

“Payment Date” shall mean the first day of each calendar month: (i) in the case of the Revolving Credit Facility, commencing on May 2, 2018, and ending on the Revolving Commitment Termination Date; (ii) in the case of the 2017 Term Loan, commencing on April 1, 2017, and ending on the 2017 Term Loan Maturity Date; and (iii) in the case of the 2018 Term Loan, commencing on June 1, 2018, and ending on the 2018 Term Loan Maturity Date.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation and any successor thereto.

 

15

 

 

“Permitted Acquisition” shall mean any transaction consummated after the Effective Date hereof in which the Borrower or a Subsidiary Loan Party acquires all or substantially all of the assets or outstanding Capital Stock of any Person or any division or business line of any Person, or merges or consolidates with any Person (with any such acquisition being referred to as an “Acquired Business” and any such Person, division or line of business being the “Target”), provided that (a) (i) the purchase price with respect thereto (which shall include any and all earnouts and similar obligations) does not exceed $20,000,000.00 for any single Acquisition; and (ii) the aggregate purchase price (which shall include any and all earnouts and similar obligations) of all Permitted Acquisitions after the Effective Date does not exceed forty percent (40%) of Borrower’s Net Worth (determined as of the date such Permitted Acquisition is consummated), (b) at the closing of such transaction, after giving effect thereto, no Default Condition or Event of Default shall have occurred and be continuing, (c) the Target has EBITDA (assuming that EBITDA were to be determined for the Target and its Subsidiaries rather than Borrower and its Subsidiaries) for the twelve month period ending as of the most recent Fiscal Quarter end prior to the acquisition date in an amount greater than $0, (d) such acquisition is not a “hostile” acquisition and has been approved by the board of directors or managers and/or shareholders or members of the Borrower, the applicable Subsidiary and the Target, (e) at least ten (10) Business Days prior to the consummation of such transaction (or such shorter period consented to by Lender in its sole discretion), the Borrower shall give written notice of such transaction to Lender (the “Acquisition Notice”), and within ten (10) Business Days after the consummation of such transaction (or such longer period consented to by Lender in its sole discretion), the Borrower shall deliver to Lender the final acquisition agreement, (f) the Borrower or a Subsidiary Loan Party shall be the surviving entity of any merger, and the surviving entity in any merger shall not be a Foreign Subsidiary, (g) the Acquired Business shall be in substantially the same line of business as the Borrower and its Subsidiaries or a business reasonably related thereto, (h) at the time it gives the Acquisition Notice, the Borrower shall deliver to Lender pro forma financial statements for the next succeeding twelve-month period giving effect to the acquisition, which shall reflect that Borrower and its Subsidiaries will continue to be in compliance with all of the financial covenants set forth in this Agreement, in each case, as of the consummation of, and after giving effect to, such acquisition and such pro forma financial statements shall be prepared in a manner and incorporate determinations consistent with pro-forma financial statements previously delivered by Borrower to Lender, (i) Lender shall receive all documents relating to the acquisition and such additional documentation regarding the acquisition as it shall reasonably require (and to the extent practicably available), including, without limitation, audited financial statements (if available), or otherwise the highest quality prepared financial statements of such Target that are available, as applicable, for its two most recent fiscal years (provided, however, in the event the Target has not been in existence for at least two years, Lender shall receive the highest quality prepared financial statements of such Target that are available for such period of such Target’s existence), and unaudited fiscal year-to-date statements for the two most recent interim periods, and (j) within ten (10) Business Days after the consummation of such transaction (or such longer period consented to by Lender in its sole discretion), the Borrower shall deliver to Lender a certificate, executed by a Responsible Officer of Borrower, demonstrating in sufficient detail compliance with the financial covenants contained in Article Six of this Agreement on a pro forma basis after giving effect to such acquisition and, further, certifying that, after giving effect to the consummation of such acquisition, the representations and warranties of the Borrower and the Loan Parties contained herein will be true and correct in all material respects (except where the same are qualified by materiality, in which case, the same shall be true and correct in all respects) and as of the date of such consummation, except to the extent such representations or warranties expressly relate to an earlier date, and that Borrower and the other Loan Parties, as of the date of such consummation, will be in compliance with all other terms and conditions contained herein.

 

16

 

 

“Permitted Encumbrances” shall mean: (i) Liens imposed by law for taxes, assessments or charges or levies of any Governmental Authority not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (ii) statutory Liens of suppliers carriers, warehousemen, mechanics, materialmen and similar Liens arising by operation of law in the ordinary course of business for amounts not more than sixty (60) days past due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (iii) pledges, Liens and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations; (iv) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of any Loan Party; (v) extensions, renewals or replacements of any Lien referred to in paragraphs (i) through (iv) above, provided that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby; (vi) statutory Liens on deposit accounts maintained with, or other property in the custody of, a depositary bank pursuant to its general business terms and in the ordinary course of business, provided that such Liens do not secure any Indebtedness; (vii) Liens on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to this Agreement to be applied against the purchase price for such Investment; (viii) Liens that are contractual rights of set-off relating to purchase orders and other agreements entered into with customers of any Loan Party in the ordinary course of business; and (ix) Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by any Loan Party in the ordinary course of business or Liens arising by operation of law under Article 2 of the UCC in favor of a reclaiming seller of goods or buyer of goods.

 

“Permitted Investments” shall mean: (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof; (ii) commercial paper having the highest rating, at the time of acquisition thereof, of S&P or Moody’s and in either case maturing within six months from the date of acquisition thereof; (iii) certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000; (iv) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i) above and entered into with a financial institution satisfying the criteria described in clause (iii) above; and (v) mutual funds investing solely in any one or more of the Permitted Investments described in the foregoing clauses (i) through (iv).

 

17

 

 

“Person” shall mean a natural person, partnership, corporation, trust, unincorporated organization, limited liability company, limited liability partnership, association, joint venture, or a Governmental Authority (or political subdivision thereof) or other entity.

 

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Post-Acquisition Period” means with respect to a Permitted Acquisition or Approved Acquisition, the period beginning on the first day after the date such transaction is consummated and ending on the last day of the fourth full consecutive fiscal quarter immediately following the date on which such transaction is consummated.

 

“Prime Rate” shall mean the rate of interest per annum announced by Lender from time to time and adopted as its Prime Rate, which is one of several rate indexes employed by Lender when extending credit and may not necessarily be Lender’s lowest lending rate.

 

“Rate Management Agreement” shall mean any agreement, device or arrangement providing for payments which are related to fluctuations of interest rates, exchange rates, forward rates, or equity prices, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and any agreement pertaining to equity derivative transactions (e.g., equity or equity index swaps, options, caps, floors, collars and forwards), including without limitation any ISDA Master Agreement between any Loan Party and Lender or any affiliate of Lender, and any schedules, confirmations and documents and other confirming evidence between the parties confirming transactions thereunder, all whether now existing or hereafter arising, and in each case as amended, modified or supplemented from time to time.

 

“Rate Management Obligations” shall mean any and all obligations of any Loan Party to Lender or any affiliate of Lender, whether absolute, contingent or otherwise and howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under or in connection with (i) any and all Rate Management Agreements, and (ii) any and all cancellations, buy-backs, reversals, terminations or assignments of any Rate Management Agreement.

 

“Regulations T, U and X” shall mean Regulations T, U and X, respectively, of the Federal Reserve Board, and any successor regulations.

 

“Related Part(y)(ies)” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, and agents of such Person and such Person’s Affiliates.

 

18

 

 

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

 

“Replacement Rate” shall have the meaning ascribed to said term in Section 3.15 hereof.

 

“Required Insurance” shall have the meaning ascribed to said term in Section 6.02(a) hereof.

 

“Requirement of Law” shall mean, with respect to any Person, the charter, articles or certificate of organization or incorporation and bylaws or other organizational or government documents of such Person and any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or 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 or otherwise pertaining to any or all of the transactions contemplated by this Agreement and the other Loan Documents.

 

“Responsible Officer” shall mean with respect to any Loan Party which is not a natural person any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president or a manager or managing member of such Loan Party or such other representative of such Loan Party as may be designated in writing by any one of the foregoing with the consent of Lender; and, with respect to the financial covenants only, the chief financial officer or the treasurer of such Loan Party

 

“Restricted Payment” means (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock or other equity interest of any Loan Party or any of their respective Subsidiaries now or hereafter outstanding; (b) any redemption, conversion, exchange, retirement or similar payment, purchase or other acquisition for value, direct or indirect, or any shares of any class of stock or other equity interest of any Loan Party or their respective Subsidiaries now or hereafter outstanding; and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock or other equity interest of a Loan Party or any of its Subsidiaries now or hereafter outstanding.

 

“Revolving Commitment Amount” shall mean the principal sum of up to $75,000,000.00.

 

“Revolving Commitment Termination Date” shall mean the earliest of (i) May 2, 2023 and (ii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).

 

“Revolving Credit Facility” shall mean the revolving line of credit described in Section 2.02 established and opened by Lender in favor of Borrower in the principal amount of up to $75,000,000.00, to be used solely for the purposes set forth in Section 2.02.

 

19

 

 

“Sanctioned Country” shall mean a country or territory which is at any time subject to Sanctions.

 

“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.treasury.gov/resource-center/sanctions/SDN-List, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, (C) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC or (D) any Person 50% or more owned, directly or indirectly, by any of the above.

 

“Sanctions” shall mean:

 

(A)     economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (i) the U.S. government and administered by OFAC, (ii) the United Nations Security Council, (iii) the European Union or (iv) Her Majesty’s Treasury of the United Kingdom; and

 

(B)     economic or financial sanctions imposed, administered or enforced from time to time by the U.S. State Department, the U.S. Department of Commerce or the U.S. Department of the Treasury.

 

“Sanctions List” shall mean any of the lists of specifically designated nationals or designated persons or entities (or equivalent) held by the U.S. government and administered by OFAC, the U.S. State Department, the U.S. Department of Commerce or the U.S. Department of the Treasury or the United Nations Security Council or any similar list maintained by the European Union, any other EU Member State, Her Majesty’s Treasury of the United Kingdom or any other U.S. government entity, in each case as the same may be amended, supplemented or substituted from time to time.

 

“Security Agreement” shall mean the Amended and Restated Security Agreement, in the form of Exhibit “E” attached hereto made by Borrower and the other Loan Parties in favor of Lender as of the Effective Date, as amended, modified or supplemented from time to time.

 

“Security Agreement Supplement” shall mean each supplement substantially in the form of Annex 2 to the Security Agreement executed and delivered by any Domestic Subsidiary of Borrower pursuant to Section 6.19.

 

“Security Documents” shall mean the Security Agreement, and all other pledge or security agreements, mortgages, deeds of trust, assignments or other similar agreements or instruments executed and delivered by any of the Loan Parties pursuant to the provisions hereof or otherwise in connection with the transactions contemplated hereby, in each case as amended, modified or supplemented from time to time.

 

“Solvency Certificate” shall mean the Solvency Certificate in the form of Exhibit “F” attached hereto, which is to be executed and delivered by a Responsible Officer of Borrower as a condition of the closing and funding of the 2018 Term Loan.

 

20

 

 

“Standard Rate” means, for any day, a rate per annum equal to the sum of: (i) the Applicable LIBOR Margin for the 2017 Term Loan, the 2018 Term Loan or the Revolving Credit Facility, as the case may be, plus (ii) the Lender’s announced Prime Rate minus 2.75% per annum, and each change in the Standard Rate shall be effective on the date any change in the Prime Rate is publicly announced as being effective; provided that if the Standard Rate determined as provided above would be less than the Applicable LIBOR Margin for the 2017 Term Loan, the 2018 Term Loan or the Revolving Credit Facility, as the case may be, then the Standard Rate shall be deemed to be such Applicable LIBOR Margin.

 

“Subordinated Debt” shall mean any Indebtedness of the Borrower or any Subsidiary (i) that is expressly subordinated to the Obligations on terms reasonably satisfactory to Lender, (ii) that matures by its terms no earlier than six months after the 2017 Term Loan Maturity Date with no scheduled principal payments permitted prior to such maturity, except as may be permitted under the applicable Subordination Agreement, and (iii) that is evidenced by a note, bond, indenture or other similar agreement that is in a form reasonably satisfactory to the Lender.

 

“Subordination Agreements” shall mean the collective reference to, and “Subordination Agreement” means each intercreditor or subordination agreement, in form and substance satisfactory to Lender, from the holders of any Subordinated Debt in favor of Lender.

 

“Subsidiary” shall mean, with respect to any Person, any corporation or other Person of which more than fifty percent (50%) of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors, board of managers or other governing body of such Person, is at the time, directly or indirectly, owned or controlled by such Person and one or more of its other Subsidiaries or a combination thereof (irrespective of whether, at the time, securities of any other class or classes of any such corporation or other Person shall or might have voting power by reason of the happening of any contingency). When used without reference to a parent entity, the term “Subsidiary” shall be deemed to refer to a Subsidiary of any Loan Party.

 

“Subsidiary Guaranty” shall mean the Amended and Restated Subsidiary Guaranty Agreement substantially in the form of Exhibit “G” made by the Domestic Subsidiaries of Borrower as of the Effective Date, and as the same be joined in at any time or from time to time by any Domestic Subsidiary created, formed or acquired hereafter, in favor of Lender, as the same may be amended, restated, modified or supplemented at any time or from time to time.

 

“Subsidiary Guaranty Supplement” shall mean each supplement substantially in the form of Annex I to the Subsidiary Guaranty executed and delivered by any Domestic Subsidiary of Borrower pursuant to Section 6.19.

 

“Subsidiary Loan Party” shall mean any Subsidiary that executes or becomes a party to the Subsidiary Guaranty Agreement and is a party to this Agreement as of the Effective Date or becomes a party to this Agreement subsequent to the Effective Date hereof by executing a Joinder to Credit Agreement. Unless the applicable Loan Parties otherwise agree, no Foreign Subsidiary shall be required to become a Subsidiary Loan Party.

 

21

 

 

“Swap Obligation” shall mean any Rate Management Obligation that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, as amended from time to time.

 

“Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.

 

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, and (ii) all rental and purchase price payment obligations of such Person under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term.

 

“Taxes” shall have the meaning ascribed said term in Section 3.14(a) hereof.

 

“2017 Closing Date” shall mean February 28, 2017.

 

“2017 Term Loan” shall mean the term loan described in Section 2.01 hereof made by Lender to Borrower in the principal amount of $42,000,000.00, to be used solely for the purposes set forth in Section 2.01.

 

“2017 Term Loan Maturity Date” shall mean February 26, 2024.

 

“2017 Term Loan Note” shall mean the Amended and Restated Term Loan Promissory Note in the principal amount of $42,000,000.00 dated as of the 2017 Closing Date, executed by Borrower and payable to the order of Lender, in the form of Exhibit “H-1” attached hereto, together with all amendments, modifications, replacements, consolidations, or renewals thereof or supplements thereto.

 

“2018 Term Loan” shall mean the term loan described in Section 2.01 hereof made by Lender to Borrower in the principal amount of $85,000,000.00, to be used solely for the purposes set forth in Section 2.01.

 

“2018 Term Loan Maturity Date” shall mean May 4, 2020.

 

“2018 Term Loan Note” shall mean the Term Loan Promissory Note in the principal amount of $85,000,000.00 dated as of the Effective Date, executed by Borrower and payable to the order of Lender, in the form of Exhibit “H-2” attached hereto, together with all amendments, modifications, replacements, consolidations, or renewals thereof or supplements thereto.

 

“Treasury Management Obligations” shall mean, collectively, all obligations and other liabilities of any Loan Party owing to Lender or any affiliate of Lender pursuant to any agreements governing the provision to such Loan Party of treasury or cash management services, including deposit accounts, funds transfer, automated clearing house, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services.

 

22

 

 

“UCC” shall mean the Uniform Commercial Code as in effect in each applicable jurisdiction.

 

“Unused Line Fee” shall have the meaning ascribed to said term in Section 3.06 hereof.

 

“Wholly Owned” shall mean, with respect to any Subsidiary of any Person, that 100% of the outstanding Capital Stock of such Subsidiary is owned, directly or indirectly, by such Person.

 

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

1.02     Accounting Matters.

 

(a)     Accounting Terms and Determinations. Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statements of the Loan Parties delivered pursuant to Section 6.01(a) hereof. Notwithstanding any other provision contained herein, all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any similar accounting principle) permitting a Person to value its financial liabilities at the fair value thereof. For purposes of determining compliance with any covenant (including computation of any financial covenant) contained herein, Indebtedness of the Loan Parties shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB Accounting Standards Codification 825 on financial liabilities shall be disregarded.

 

(b)     Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Lender shall so request, Lender and 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; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrower shall provide to Lender financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

1.03     Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the word “to” means “to but excluding.” Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “hereof,” “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and state of Lender’s principal office in Winston-Salem, North Carolina.

 

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Article Two

CREDIT FACILITIES AND LETTERS OF CREDIT

 

2.01     Term Loans.

 

(a)      General Terms.

 

	 	
			(i)

				
			Pursuant to the Existing Credit Agreement, Lender has made to Borrower and Borrower has taken from Lender the 2017 Term Loan in the principal amount of $42,000,000.00, which was funded in a single advance to Borrower on the 2017 Closing Date, for the purposes set forth in the Existing Credit Agreement.

			

 

	 	
			(ii)

				
			Upon the execution of this Agreement and compliance with its terms and conditions as of the Effective Date, Lender has made to Borrower and Borrower has taken from Lender the 2018 Term Loan in the principal amount of $85,000,000.00, which will be funded in a single advance to Borrower on the Effective Date, for the purpose of funding the CID Acquisition.

			

 

 

(b)        Term Loan Notes.

 

	 	
			(i)

				
			The 2017 Term Loan is evidenced by the 2017 Term Loan Note, which (A) was executed by the Borrower on the 2017 Closing Date, (B) is payable to the order of Lender, (C) is dated as of the 2017 Closing Date, (D) is in a stated principal amount of $42,000,000.00, (E) bears interest at the Interest Rate in accordance with the provisions of the 2017 Term Loan Note and Section 3.01(a) hereof, (F) provides for monthly payments on each Payment Date, commencing with the Payment Date occurring on April 1, 2017, of (I) principal in the amount of $500,000.00 per month, plus (II) accrued interest at the Interest Rate, as provided in the 2017 Term Loan Note, (G) is due and payable in full in accordance with the 2017 Term Loan Note and Section 3.02(a) hereof on the 2017 Term Loan Maturity Date, and (H) is entitled to all of the benefits of this Agreement and the other Loan Documents and subject to the provisions hereof and thereof.

			

 

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			(ii)

				
			The 2018 Term Loan shall be evidenced by the 2018 Term Loan Note, which shall (A) be executed by the Borrower, (B) be payable to the order of Lender, (C) be dated as of the Effective Date, (D) be in a stated principal amount of $85,000,000.00, (E) bear interest at the Interest Rate in accordance with the provisions of the 2018 Term Loan Note and Section 3.01(a) hereof, (F) provide for monthly payments on each Payment Date, commencing with the Payment Date occurring on June 1, 2018, of accrued interest at the Interest Rate, as provided in the 2018 Term Loan Note, (G) be due and payable in full in accordance with the 2018 Term Loan Note and Section 3.02(a) hereof on the 2018 Term Loan Maturity Date, and (H) be entitled to all of the benefits of this Agreement and the other Loan Documents and subject to the provisions hereof and thereof.

			

 

(c)     Voluntary Prepayments. The Borrower shall have the right to prepay the 2017 Term Loan and 2018 Term Loan, in whole or in part, at any time, without premium or penalty. Any principal prepayment of the 2017 Term Loan Note or 2018 Term Loan Note, as the case may be, shall be applied to payments due under the 2017 Term Loan Note or 2018 Term Loan Note, as the case may be, in the inverse order of their maturity. Notwithstanding the foregoing, any and all obligations of the Loan Parties under any Rate Management Agreement(s) must also be fully satisfied by the Borrower, in accordance with the terms of such Rate Management Agreement(s), and any and all Obligations, including without limitation, the Revolving Credit Facility must be indefeasibly paid in full in cash, prior to release of any of the Collateral.

 

2.02     Revolving Credit Facility.

 

(a)     General Terms. Upon the execution of this Agreement and compliance with its terms and conditions and effective as of the Effective Date, Lender agrees to make to Borrower and Borrower agrees to take from Lender the Revolving Credit Facility in the principal amount of $75,000,000.00 for the purposes of the expansion of Borrower’s current assets and for working capital purposes. The Revolving Credit Facility shall be available to Borrower during the Availability Period such that so long as no Default Condition or Event of Default exists as of the date of each Advance, the Revolving Commitment Termination Date has not occurred, and the Revolving Credit Facility has not been otherwise terminated. Subject to the terms of this Agreement, Lender shall make advances under the Revolving Credit Facility into the Borrower’s designated operating account or other designated deposit account maintained with Lender upon receipt of the written or oral request (thereafter confirmed in writing) of Borrower. Borrower may borrow, re-pay (either partially or wholly) and re-borrow on a revolving basis Advances not to exceed at any time or from time to time the maximum principal sum outstanding under the Revolving Credit Facility of $75,000,000.00, subject in each case to the Borrowing Availability, upon and subject to the terms, conditions and limitations herein contained. Each borrowing under the Revolving Credit Facility shall be made as an Advance hereunder and under the Amended and Restated Revolving Note for providing working capital to Borrower, reimbursing LC Disbursements as provided in Section 2.03 and the other provisions hereof applicable thereto, and other general business purposes, including without limitation Permitted Acquisitions and Approved Acquisitions.

 

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(b)     Amended and Restated Revolving Note. The Revolving Credit Facility shall be evidenced by the Amended and Restated Revolving Note, which shall (i) be executed by the Borrower, (ii) be payable to the order of Lender, (iii) be dated as of the Effective Date, (iv) be in a stated principal amount of $75,000,000.00, (v) bear interest at the Interest Rate in accordance with the provisions of the Amended and Restated Revolving Note and Section 3.01(b) hereof, (vi) provide for monthly payments of interest only at the Interest Rate on each Payment Date commencing on May 2, 2018, as provided in the Amended and Restated Revolving Note, (vii) be due and payable in full in accordance with the Amended and Restated Revolving Note and Section 3.02(b) hereof on the Revolving Commitment Termination Date, and (viii) be entitled to all of the benefits of this Agreement and the other Loan Documents and subject to the provisions hereof and thereof.

 

(c)     Voluntary Prepayments. The Borrower shall have the right to prepay the Revolving Credit Facility, in whole or in part, at any time, without premium or penalty. Any principal prepayment of the Amended and Restated Revolving Note shall be applied to payments due under the Amended and Restated Revolving Note in the inverse order of their maturity. Notwithstanding the foregoing, any and all obligations of the Loan Parties under any Rate Management Agreement(s) must also be fully satisfied by the Borrower, in accordance with the terms of such Rate Management Agreement(s), and any and all Obligations, including without limitation, the 2017 Term Loan and the 2018 Term Loan must be indefeasibly paid in full in cash, prior to release of any of the Collateral.

 

(d)     Procedure for Advances.

 

	 	
			(i)

				
			Lender agrees to make Advances under the Revolving Credit Facility to the Borrower from time to time in accordance with the treasury and cash management services and products provided to the Borrower by the Lender.

			

 

	 	
			(ii)

				
			Except as provided in clause (i) above, in order to obtain any other Advance under the Revolving Credit Facility, Borrower shall submit to Lender a Notice of Borrowing setting forth the principal amount of the Advance to be obtained by Borrower from Lender pursuant to the terms hereof. So long as such Notice of Borrowing is received by the Lender prior to 11:00 a.m. (Winston-Salem, North Carolina time), such Advance can be made on the Business Day of receipt of such notice. Unless otherwise indicated by the Borrower, each Notice of Borrowing shall be irrevocable.

			

 

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			(iii)

				
			The amount of each Advance, whether advanced pursuant to clause (i) or clause (ii) above, when added to the then outstanding principal balance of the Revolving Credit Facility shall not exceed in any and all events the amount of the Borrowing Availability.

			

 

2.03     Letters of Credit.

 

(a)     During the Availability Period, Lender agrees to issue, at the request of the Borrower, Letters of Credit for the account of the Borrower on the terms and conditions hereinafter set forth; provided, that (i) each Letter of Credit shall expire on the earlier of (A) the date one year after the date of issuance of such Letter of Credit (or in the case of any renewal or extension thereof, one year after such renewal or extension) and (B) the date that is thirty (30) days prior to the Revolving Commitment Termination Date, unless the Letter of Credit is fully secured by a cash deposit equal to the face amount of the Letter of Credit by a written pledge in all respects acceptable to Lender; (ii) the Borrower may not request any Letter of Credit, if, after giving effect to such issuance the LC Exposure would exceed the LC Commitment; and (iii) no Default Condition or Event of Default exists and is continuing.

 

(b)     To request the issuance of a Letter of Credit (or any amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall give Lender irrevocable written notice at least three (3) Business Days prior to the requested date of such issuance specifying the date (which shall be a Business Day) such Letter of Credit is to be issued (or amended, extended or renewed, as the case may be), the expiration date of such Letter of Credit, the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. Borrower shall further pay to Lender the Letter of Credit Fees as provided in Section 3.07 applicable to each Letter of Credit. In addition to the satisfaction of the conditions in Article Four, the issuance of such Letter of Credit (or any amendment which increases the amount of such Letter of Credit) will be subject to the further conditions that such Letter of Credit shall be in such form and contain such terms as Lender shall approve and that the Borrower shall have executed and delivered any additional applications, agreements, reimbursement agreements, and instruments relating to such Letter of Credit as Lender shall reasonably require; provided, that in the event of any conflict between such applications, agreements or instruments and this Agreement, the terms of this Agreement shall control.

 

(c)     Lender shall examine all documents purporting to represent a demand for payment under a Letter of Credit promptly following its receipt thereof. Lender shall notify the Borrower of such demand for payment and whether Lender has made or will make an LC Disbursement thereunder; provided, that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse Lender with respect to such LC Disbursement. The Borrower shall be irrevocably and unconditionally obligated to reimburse Lender for any LC Disbursements paid by Lender in respect of such drawing, without presentment, demand or other formalities of any kind. Unless the Borrower shall have notified Lender prior to 11:00 a.m. (Winston-Salem, North Carolina time) on the Business Day on which such drawing is honored that the Borrower intends to reimburse Lender for the amount of such drawing in funds other than from the proceeds of the Revolving Credit Facility, the Borrower shall be deemed to have timely given a Notice of Borrowing to Lender requesting Lender to make an Advance under the Revolving Credit Facility on the date on which such drawing is honored in an exact amount due to Lender which will be used for the purpose of reimbursing to Lender the amount of such LC Disbursement; provided, that for purposes solely of such Advance, the conditions precedent set forth in Section 4.02 hereof shall not be applicable.

 

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(d)     If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from Lender demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with Lender, in the name of Lender, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid fees thereon; provided, that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in subparagraphs (j) or (k) of Section 8.01. Such deposit shall be held by Lender as collateral for the payment and performance of the obligations of the Borrower under this Agreement. Lender shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Borrower agrees to execute any documents and/or certificates to effectuate the intent of this paragraph. Other than any interest earned on the investment of such deposits in money market accounts or cash equivalents, which investments shall be made at the option and sole discretion of Lender and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest and profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by Lender to reimburse itself for LC Disbursements for which it had not been reimbursed and to the extent so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Credit Facilities has been accelerated, at the option of Lender, be applied to satisfy other obligations of the Borrower under this Agreement and the other Loan Documents. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not so applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.

 

(e)     Borrower’s obligation to reimburse LC Disbursements hereunder shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under all circumstances whatsoever and irrespective of any of the following circumstances:

 

	 	
			(i)

				
			Any lack of validity or enforceability of any Letter of Credit or this Agreement;

			

 

	 	
			(ii)

				
			The existence of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons or entities for whom any such beneficiary or transferee may be acting), Lender or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;

			

 

	 	
			(iii)

				
			Any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;

			

 

	 	
			(iv)

				
			Payment by Lender under a Letter of Credit against presentation of a draft or other document to Lender that does not comply with the terms of such Letter of Credit;

			

 

	 	
			(v)

				
			Any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.03, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder; or

			

 

	 	
			(vi)

				
			The existence of a Default Condition or an Event of Default.

			

 

Neither Lender nor any Related Party of Lender shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of Lender; provided, that the foregoing shall not be construed to excuse Lender from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for lost profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by Lender’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree, that in the absence of gross negligence or willful misconduct on the part of Lender (as finally determined by a court of competent jurisdiction), Lender shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

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(f)     Unless otherwise expressly agreed by Lender and Borrower when a Letter of Credit is issued and subject to applicable laws, performance under Letters of Credit by Lender, its correspondents, and the beneficiaries thereof will be governed by (i) the rules of the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued) as to each standby Letter of Credit, (ii) the rules of The Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance as to each documentary Letter of Credit, and (iii) to the extent not inconsistent therewith, the governing law of this Agreement set forth in Section 9.05.

 

Article Three

INTEREST, PRINCIPAL, MANDATORY PRINCIPAL PREPAYMENTS, LATE CHARGES, FEES, INABILITY TO DETERMINE INTEREST RATES, ILLEGALITY, INCREASED COSTS, TAXES

 

3.01     Interest.

 

(a)     Term Loans. 

 

	 	
			(i)

				
			The Borrower shall pay interest on the 2017 Term Loan pursuant to the terms of the 2017 Term Loan Note in arrears as provided in the 2017 Term Loan Note on each Payment Date, in respect of the unpaid principal balance of the 2017 Term Loan, at the Interest Rate as in effect from time to time.

			

 

	 	
			(ii)

				
			The Borrower shall pay interest on the 2018 Term Loan pursuant to the terms of the 2018 Term Loan Note in arrears as provided in the 2018 Term Loan Note on each Payment Date, in respect of the unpaid principal balance of the 2018 Term Loan, at the Interest Rate as in effect from time to time

			

 

(b)     Revolving Credit Facility. The Borrower shall pay interest on the Revolving Credit Facility pursuant to the terms of the Amended and Restated Revolving Note in arrears as provided in the Amended and Restated Revolving Note on each Payment Date, in respect to the unpaid principal balance of the Revolving Credit Facility, at the Interest Rate as in effect from time to time.

 

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(c)     Default Rate. Upon the occurrence and during the continuance of an Event of Default, all outstanding principal of the 2017 Term Loan, the 2018 Term Loan and the Revolving Credit Facility shall bear interest in accordance with the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note, respectively, at the Default Rate, and such default interest shall be payable pursuant to each of the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note on each Payment Date or upon demand or acceleration by Lender. To the greatest extent permitted by law, interest shall continue to accrue under the Notes at the Default Rate after the filing by or against any Loan Party of any petition seeking any relief in bankruptcy or under any law pertaining to insolvency or debtor relief.

 

(d)     Maximum Rate. Nothing contained in the Notes, this Agreement or in any other Loan Document shall be deemed to establish or require the payment of interest to Lender at a rate in excess of the Maximum Rate. If the amount of interest payable for the account of Lender under the 2017 Term Loan Note, the 2018 Term Loan Note or the Amended and Restated Revolving Note on any Payment Date or upon the Revolving Commitment Termination Date, the 2018 Term Loan Maturity Date or the 2017 Term Loan Maturity Date, as applicable, would exceed the maximum amount permitted by Applicable Law to be charged by Lender, the amount of interest payable for its account on such Payment Date shall be automatically reduced to such maximum permissible amount. In the event of any such reduction, if from time to time thereafter the amount of interest payable on any Payment Date or upon the Revolving Commitment Termination Date, the 2018 Term Loan Maturity Date or the 2017 Term Loan Maturity Date, as applicable, would be less than the maximum amount permitted by applicable law to be charged by Lender, then the amount of interest payable on such subsequent Payment Date or upon the Revolving Commitment Termination Date, the 2018 Term Loan Maturity Date or the 2017 Term Loan Maturity Date, as applicable, shall be automatically increased to such maximum permissible amount, provided that at no time shall the aggregate amount by which interest paid to the Lender has been increased pursuant to this sentence exceed the aggregate amount by which interest paid for its account has theretofore been reduced pursuant to the previous sentence.

 

3.02     Principal.

 

(a)     2017 Term Loan. Borrower shall pay principal on the 2017 Term Loan in accordance with the 2017 Term Loan Note in monthly installments of principal of $500,000.00 each on each Payment Date as provided in the 2017 Term Loan Note commencing on April 1, 2017 and the entire outstanding principal balance of the 2017 Term Loan shall be paid in full in accordance with the terms of the 2017 Term Loan Note on the 2017 Term Loan Maturity Date.

 

(b)     Revolving Credit Facility. Borrower shall pay the outstanding principal balance of the Revolving Credit Facility in accordance with the Amended and Restated Revolving Note in full on the Revolving Commitment Termination Date.

 

(c)     2018 Term Loan. The entire outstanding principal balance of the 2018 Term Loan shall be paid in full in accordance with the terms of the 2018 Term Loan Note on the 2018 Term Loan Maturity Date.

 

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3.03     Mandatory Prepayments.

 

(a)     Sale of Assets. Within five (5) Business Days following receipt by the Borrower or any of its direct or indirect Domestic Subsidiaries of proceeds of any sale or disposition by the Borrower or such Domestic Subsidiary of any of its assets which when aggregated with the proceeds of prior sales and dispositions by the Borrower and its Domestic Subsidiaries within the same fiscal year exceed $500,000 in the aggregate (excluding (i) sales of inventory in the ordinary course of business, (ii) sales of obsolete equipment, and (iii) so long as there has not occurred any Default Condition or Event of Default and the Borrower has delivered to Lender satisfactory evidence of its intent to reinvest within five (5) Business Days following receipt of such proceeds, sales of assets the proceeds of which are invested into the businesses of the Borrower and its Subsidiaries within 180 days after such assets are sold, and the Borrower has delivered to Lender satisfactory evidence thereof within such time period), the Borrower shall prepay the Credit Facilities in an amount equal to such excess proceeds, net of commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by the Borrower or such Subsidiary in connection therewith (in each case, paid to non-Affiliates). Any such prepayment shall be applied in accordance with Section 3.03(d).

 

(b)     Insurance Proceeds. Within five (5) Business Days following receipt by the Borrower or any of its direct or indirect Domestic Subsidiaries of proceeds of any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of the Borrower or any of its Domestic Subsidiaries (excluding, so long as there has not occurred any Default Condition or Event of Default and the Borrower has delivered to Lender satisfactory evidence of its intent to reinvest within five (5) Business Days following receipt of such proceeds, proceeds which are invested into the businesses of the Borrower and its Subsidiaries within 180 days after the receipt of such proceeds, and the Borrower has delivered to Lender satisfactory evidence thereof within such time period), the Borrower shall prepay the Credit Facilities in an amount equal to all such proceeds. Any such prepayment shall be applied in accordance with Section 3.03(d).

 

(c)     Issuance of Debt or Securities. If the Borrower or any of its direct or indirect Subsidiaries issues any debt or equity securities (other than, so long as, in each case, there has not occurred any Default Condition or Event of Default, Indebtedness permitted under Section 7.01 or equity securities (i) issued by a Subsidiary of the Borrower to the Borrower or another Subsidiary, (ii) as to which the proceeds of such issuance are used exclusively for the consummation of Permitted Acquisitions or Approved Acquisition (excluding the CID Transaction) or (iii) issued as a form of executive compensation) then no later than the Business Day following the date of receipt of the proceeds thereof, Borrower shall prepay the Credit Facilities in an amount equal to: (1) first, 100% of all such proceeds, net of underwriting discounts and commissions and other reasonable costs, in each case, paid to non-Affiliates in connection therewith until the 2018 Term Loan is repaid in full; (2) second, after repayment in full of the 2018 Term Loan, unless the Lender consents otherwise, 100% of the remainder of such proceeds, until the Revolving Credit Facility is paid in full; and (3) third, unless the Lender consents otherwise, 50% of the remainder of such proceeds, until the 2017 Term Loan is paid in full. The Revolving Commitment Amount of the Lender shall not be permanently reduced by the amount of any prepayments made pursuant to this Section 3.03(c).

 

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(d)     Order of Prepayment. Subject to Section 8.02, amounts to be applied in connection with prepayments made pursuant to Sections 3.03(a), (b), or (c) shall be applied first, to Lender’s fees and reimbursable expenses then due and payable pursuant to any of the Loan Documents; second, to interest then due and payable on the Credit Facilities; third, to the principal balance of the 2018 Term Loan, until the same shall have been paid in full; fourth, to the principal balance of the Revolving Credit Facility until the same shall have been paid in full; fifth, to the principal balance of the 2017 Term Loan until the same shall have been paid in full and applied to the scheduled payments of principal under the 2017 Term Loan Note in reverse order of their maturities; and sixth, to cash collateralize the Letters of Credit in accordance with Section 2.03(d) in an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid fees thereon. The Revolving Commitment Amount of the Lender shall not be permanently reduced by the amount of any prepayments made pursuant this the Section 3.03 (d).

 

3.04     Late Charges. If any payment of principal or interest is not paid when due under and pursuant to the 2017 Term Loan Note, the 2018 Term Loan Note or the Amended and Restated Revolving Note (whether by acceleration or otherwise) or within ten (10) days thereafter, the Borrower shall pay to Lender as provided in each of said Notes a late payment fee of five percent (5%) of the payment amount then due, with a minimum fee of $20.00.

 

3.05     NSF Charges. Borrower shall pay to Lender a returned payment fee if Borrower or any Guarantor makes any payment at any time by check or other instrument, or by any electronic means, which is returned to Lender because of nonpayment due to nonsufficient funds. Lender shall not be obligated to accept any check, money order, or other payment instrument marked “payment in full” on any disputed amount due hereunder, and Lender expressly reserves the right to reject all such payment instruments. Borrower agrees that tender of its check or other payment instrument so marked will not satisfy or discharge its obligation under this Agreement, any Note or any other Loan Document, disputed, or otherwise, even if such check or payment instrument is inadvertently processed by Lender unless such payment is in fact sufficient to pay the amount due hereunder.

 

3.06     Fees. (a)   Unused Line Fee. Borrower shall unconditionally pay to Lender, in arrears, on the first Business Day of each April, July, October and January, beginning July 1, 2018, an availability fee (the “Unused Line Fee”) equal to one-tenth of one percent (0.10%) per annum of the average daily Borrowing Availability for the preceding calendar quarter or portion thereof.

 

(b)     2018 Term Loan Fee. Borrower shall unconditionally pay to Lender: (i) on the Effective Date, a commitment fee equal to $144,500.00 [0.17% multiplied by $85,000,000]; (ii) on the first day of the thirteenth month after the Effective Date, an additional commitment fee equal to 0.25% multiplied by the outstanding principal amount of the 2018 Term Loan on such date; and (iii) on the first day of nineteenth month after the Effective Date, an additional commitment fee equal to 0.25% multiplied by the outstanding principal amount of the 2018 Term Loan on such date.

 

3.07     Letter of Credit Fee. Borrower agrees to pay to Lender an annual fee (“Letter of Credit Fee”) for any Letter of Credit issued by Lender hereunder, prior to the issuance of any such Letter of Credit and on each anniversary of the issuance thereof equal to the product obtained by multiplying the Applicable Libor Margin for Advances by the amount available to be drawn under such Letter of Credit as of the date of determination.

 

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3.08     Method of Payments; Computations. All payments by Borrower pursuant to each of the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note or the terms of this Agreement shall be made without setoff, counterclaim, recoupment or other defense in Dollars and in immediately available funds to the Lender at its office referred to in the preamble to this Agreement, prior to 2:00 p.m. (Winston-Salem, North Carolina time), on the date payment is due. Any payment made as required pursuant to the terms hereof and of each of the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note, but after 2:00 p.m. (Winston-Salem, North Carolina time), shall be deemed to have been made on the next succeeding Business Day. If any payment falls due on a day that is not a Business Day, then such due date shall be extended to the next succeeding Business Day. All computations of interest and fees hereunder shall be made on the basis of a year consisting of 360 days and the actual number of days (including the first day, but excluding the last day) elapsed.

 

3.09     Account. Principal and/or interest payments due under each of the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note shall be deducted by Lender in accordance with the terms of the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note, respectively, and hereof from Borrower’s designated operating account or other designated deposit account maintained with Lender. Each payment under any of the 2017 Term Loan Note, the 2018 Term Loan Note or the Amended and Restated Revolving Note may be applied in the following order: accrued interest, principal, fees, charges and advanced costs.

 

3.10     Recovery of Payments. Loan Parties agree that to the extent Borrower makes a payment or payments to or for the account of Lender, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy, insolvency or similar state or federal law, common law or equitable cause, or the recipient of any such payment elects to repay the same in good faith settlement of any pending or threatened avoidance claim, then, to the extent of such payment or repayment, the Obligation intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been received.

 

3.11     Inability to Determine Interest Rate. In the event that Lender shall have determined, which determination shall be final, conclusive and binding, that by reason of circumstances occurring after the Effective Date affecting the London interbank market, adequate and fair means do not exist for ascertaining the One Month LIBOR on the basis provided for in this Agreement, the Lender shall give notice (by telephone confirmed in writing or by telecopy) to Borrower of such determination, whereupon (i) any request for an Advance under the Revolving Credit Facility shall be deemed to be a request for an Advance bearing interest at the Standard Rate, and (ii) the Credit Facilities shall bear interest at the Standard Rate, in each case, until Lender notifies Borrower that the circumstances giving rise to such notice no longer exist.

 

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3.12     Illegality. In the event the Lender shall determine, which determination shall be final, conclusive and binding, that the making, maintaining, continuance or funding of any portion of the Credit Facilities at the applicable Interest Rate, (i) has become unlawful as a result of compliance by Lender with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any of the same not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause Lender material hardship, as a result of contingencies occurring after the Effective Date materially and adversely affect the London interbank market or Lender’s ability to make the Credit Facilities at the applicable Interest Rate generally, then and in any such event, Lender shall give notice (by telephone confirmed in writing or by telecopy) to Borrower of such determination. Thereafter, (x) the obligation of Lender to make any advance under the Revolving Credit Facility shall be suspended until such notice shall be withdrawn by Lender, and (y) the Credit Facilities shall bear interest at the Standard Rate until Lender notifies Borrower that the circumstances giving rise to such notice no longer exist.

 

3.13     Increased Costs.

 

(a)     If, at any time after the date hereof and from time to time, any Change in Law shall (i) subject Lender to any tax or other charge, or change the basis of taxation of payments to Lender, or its obligation to make, fund or maintain the Credit Facilities (other than any change in the rate or basis of tax on the overall net income or profits of Lender and, without duplication of amounts, other than as indemnified by Borrower pursuant to Section 3.14(b)), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, Lender (except any reserve adjustment requirement which is otherwise reflected in the determination of the Libor Rate as provided in the definition thereof), or (iii) other than excluded by clause (ii) above, impose on Lender any other condition, and the result of the foregoing shall be to increase the cost to Lender of making or maintaining the Credit Facilities or to reduce the amount of any sum received or receivable by Lender hereunder, Borrower shall, within thirty (30) days of written demand therefor by Lender, pay to Lender such additional amounts as shall compensate Lender for such increase in costs or reduction in return.

 

(b)     If, at any time after the date hereof and from time to time, Lender shall have reasonably determined that the introduction of any Change in Law, or compliance by Lender with any Change in Law, has or would have the effect as a consequence of the Credit Facilities of reducing the rate of return on the capital of Lender or any Person controlling Lender to a level below that which Lender or such controlling Person could have achieved but for such Change in Law (taking into account such Lender’s or controlling Person’s policies with respect to capital adequacy), then, from time to time, within ten (10) Business Days after receipt by Borrower of written demand therefor by Lender, Borrower shall pay to Lender such additional amounts as will compensate Lender or such controlling Person for such reduction in return.

 

(c)     Determinations by Lender for purposes of this Section 3.13 of any increased costs, reduction in return, market contingencies, illegality or any other matter shall, absent manifest error, be conclusive, provided that such determinations are made in good faith. No failure by Lender at any time to demand payment of any amounts payable under this Section 3.13 shall constitute a waiver of its right to demand payment of any additional amounts arising at any subsequent time. Nothing in this Section 3.13 shall require or be construed to require Borrower to pay any interest, fees, costs or other amounts in excess of that permitted by applicable law.

 

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3.14     Taxes.

 

(a)     Any and all payments by Borrower under the 2017 Term Loan Note, the 2018 Term Loan Note and the Amended and Restated Revolving Note shall be made, in accordance with the terms hereof and thereof, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, other than Excluded Taxes (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under the Notes to Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.14), Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) Borrower shall deliver to the Lender evidence of such payment.

 

(b)     The Loan Parties shall indemnify Lender for the full amount of Taxes (including, without limitation, any Taxes imposed by any jurisdiction on amounts payable under this Section 3.14) paid by Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted. This indemnification shall be made within ten (10) Business Days from the date Lender makes written demand therefor.

 

(c)     Lender agrees that if it subsequently recovers, or receives a permanent net tax benefit with respect to, any amount of Taxes (i) previously paid by it and as to which it has been indemnified by or on behalf of the Loan Parties or (ii) previously deducted by Borrower (including, without limitation, any Taxes deducted from any additional sums payable under clause (i) of subsection (a) above), Lender shall reimburse the applicable Loan Party to the extent of the amount of any such recovery or permanent net tax benefit (but only to the extent of indemnity payments made, or additional amounts paid, by or on behalf of such Loan Party under this Section 3.14 with respect to the Taxes giving rise to such recovery or tax benefit); provided, however, that such Loan Party, upon the request of Lender, agrees to repay to the Lender the amount paid over to such Loan Party (together with any penalties, interest or other charges), in the event the Lender is required to repay such amount to the relevant taxing authority or other Governmental Authority. The determination by the Lender of the amount of any such, recovery or permanent net tax benefit shall, in the absence of manifest error, be conclusive and binding.

 

3.15     Replacement Rate. 

 

Notwithstanding anything to the contrary in this Section 3.15, if Lender has made the determination in good faith and confirmed in writing to Borrower (such determination to be conclusive absent manifest error) that (i) the circumstances described in Section 3.11 have arisen with respect to LIBOR Rate Loans and that such circumstances are unlikely to be temporary, (ii) any applicable interest rate specified herein is no longer a widely recognized benchmark rate for newly originated loans in the U.S. syndicated loan market in the applicable currency or (iii) the applicable supervisor or administrator (if any) of any applicable interest rate specified herein or any Governmental Authority having or purporting to have jurisdiction over Lender has established a specific date after which any applicable interest rate specified herein shall no longer be used for determining interest rates for loans in the U.S. syndicated loan market in the applicable currency, then Lender may, to the extent practicable (in consultation with the Borrower and as reasonably determined by Lender to be generally in accordance with similar situations in other transactions in which it is making loans or otherwise consistent with market practice generally), establish a replacement interest rate (the “Replacement Rate”), in which case, the Replacement Rate shall, subject to the next two sentences, replace such applicable interest rate for all purposes under the Loan Documents unless and until (A) an event described in (i), (ii) or (iii) above occurs with respect to the Replacement Rate or (B) Lender notifies the Borrower that the Replacement Rate does not adequately and fairly reflect the cost to Lender of funding the LIBOR Rate Loans bearing interest at the Replacement Rate. In connection with the establishment and application of the Replacement Rate, this Agreement and the other Loan Documents shall be amended solely with the consent of Lender and the Borrower, as may be necessary or appropriate, in the reasonable opinion of Lender, to effect the provisions of this Section 3.15; provided that until such amendment is effective, any request for an Advance under the Revolving Credit Facility shall be made, and the Credit Facilities shall bear interest, in accordance with the terms of Section 3.11. Notwithstanding anything to the contrary in this Agreement or the other Loan Documents, (x) Lender and the Borrower may, without the consent of any Subsidiary Guarantor, enter into amendments or modifications to this Agreement or any of the other Loan Documents or to enter into additional Loan Documents as Lender reasonably deems appropriate in order to implement any Replacement Rate or otherwise effectuate the terms of Section 3.15 in accordance with the terms of this Section 3.15 and (y) such amendment shall become effective without any further action or consent of any other party to this Agreement. To the extent the Replacement Rate is approved by Lender in connection with this Section 3.15, the Replacement Rate shall be applied in a manner consistent with market practice.

 

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Article Four

CONDITIONS TO CREDIT FACILITIES AND LETTERS OF CREDIT

 

4.01     Conditions To Effectiveness. The obligations of Lender to make the 2018 Term Loan, to make Advances under the Revolving Credit Facility and to issue any Letter of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied:

 

(a)     Lender shall have received all fees and other amounts due and payable on or prior to the Effective Date, including without limitation reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to Lender) required to be reimbursed or paid by Borrower hereunder and under any other Loan Document.

 

(b)     The Lender (or its counsel) shall have received the following:

 

	 	
			(i)

				
			a counterpart of this Agreement signed by or on behalf of each party hereto or written evidence satisfactory to the Lender (which may include telecopy or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement;

			

 

	 	
			(ii)

				
			the duly executed 2017 Term Loan Note and the 2018 Term Loan Note payable to the Lender;

			

 

	 	
			(iii)

				
			the duly executed Amended and Restated Revolving Note payable to the Lender;

			

 

	 	
			(iv)

				
			the Subsidiary Guaranty duly executed by the Subsidiary Loan Parties existing on or as of the Effective Date;

			

 

	 	
			(v)

				
			the Security Agreement duly executed by Borrower and the Subsidiary Loan Parties;

			

 

	 	
			(vi)

				
			each other Loan Document duly executed by the respective parties thereto;

			

 

	 	
			(vii)

				
			a certificate of the Secretary, Assistant Secretary or other authorized officer, general partner, member or manager of each Loan Party in form and substance acceptable to the Lender, attaching and certifying copies of its articles or certificate of incorporation, articles of organization, certificate of limited partnership, bylaws, partnership agreement, limited liability company agreement or operating agreement, or comparable organizational documents and authorizations of each such Person’s board of directors, general partners, members or managers, authorizing the execution, delivery and performance of the Loan Documents to which it is a party and certifying the name, title and true signature of each officer, general partner, member or manager of each Loan Party executing the Loan Documents to which it is a party;

			

 

	 	
			(viii)

				
			certificates of good standing, status or existence, as may be available from the Secretary of State or other issuing agency of the jurisdiction of organization of such Loan Party and each other jurisdiction where such Loan Party is required to be qualified to do business as a foreign corporation, partnership, or limited liability company;

			

 

	 	
			(ix)

				
			favorable written opinions of Hill Ward Henderson, counsel to the Loan Parties, and certain other local counsel to Borrower, each addressed to Lender, and covering such matters relating to the Loan Parties, the Loan Documents and the transactions contemplated therein as Lender shall reasonably request;

			

 

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			(x)

				
			a certificate, in form and substance acceptable to the Lender, dated the Effective Date and signed by a Responsible Officer, certifying that (x) no Default Condition or Event of Default exists, (y) all representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct in all material respects and (z) since the date of the financial statements of the Loan Parties described in Section 5.06 hereof, there shall have been no change which has had or would reasonably be expected to have a Material Adverse Effect;

			

 

	 	
			(xi)

				
			certified copies of all consents, approvals, authorizations, registrations and filings and orders required or advisable to be made or obtained under any Requirement of Law, or by any Contractual Obligation of the Loan Parties, in connection with the execution, delivery, performance, validity and enforceability of the Loan Documents, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired, and no investigation or inquiry by any Governmental Authority regarding the Credit Facilities, any Letters of Credit, or any transaction being financed with the proceeds thereof shall be ongoing;

			

 

	 	
			(xii)

				
			if applicable, duly executed payoff letters or other evidence satisfactory to the Lender from lenders under any existing loans or credit facilities of Borrower;

			

 

	 	
			(xiii)

				
			Perfection Certificates (as defined in the Security Agreement) with respect to Borrower and each Subsidiary Loan Party dated the Effective Date and duly executed by a Responsible Officer of such Person, and the results of a search of the Uniform Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such Persons, and in the case of the Perfection Certificates, in which the chief executive office of such Person is located and in the other jurisdictions in which such Persons maintain property, in each case as indicated on such Perfection Certificate, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Lender that the Liens indicated in any such financing statement (or similar document) would be permitted by Section 7.02 hereof or have been or will be contemporaneously released or terminated;

			

 

	 	
			(xiv)

				
			certified copies of all agreements, indentures or notes governing the terms of any Material Indebtedness and all other material agreements, documents and instruments to which any Loan Party or any of its assets are bound;

			

 

	 	
			(xv)

				
			a copy of, or a certificate as to coverage under, the insurance policies required by the applicable provisions of the Security Documents, each of which shall be endorsed or otherwise amended to include a customary lender’s loss payable endorsement and to name the Lender as additional insured, in form and substance satisfactory to the Lender;

			

 

	 	
			(xvi)

				
			Collateral Access Agreements from such landlords of the properties leased by Borrower as the Lender may reasonably require, in form and substance satisfactory to the Lender.

			

 

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(c)     Lender shall have received (i) the certificates representing any shares of Capital Stock pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of Borrower and (ii) each promissory note pledged to Lender pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to Lender) by the pledgor thereof.

 

(d)     Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Lender to be filed, registered or recorded in order to create in favor of the Lender a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.02 hereof), shall be in proper form for filing, registration or recordation.

 

4.02     Each Advance Under Revolving Credit Facility. The obligation of the Lender to make each Advance under the Revolving Credit Facility or to issue, amend, renew or extend any Letter of Credit is further subject to the satisfaction of the following conditions:

 

(a)     at the time of and immediately after giving effect to such Advance or the issuance, amendment, renewal or extension of any Letter of Credit, no Default Condition or Event of Default shall exist;

 

(b)     at the time of and immediately after giving effect to such Advance or the issuance, amendment, renewal or extension of any Letter of Credit, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (except where the same are qualified by materiality, in which case the same shall be true and correct in all respects) on and as of the date of such Advance or the date of issuance, amendment, renewal or extension of any Letter of Credit, in each case before and after giving effect thereto; and

 

(c)     if required pursuant to Section 2.02(d)(ii), Borrower shall have delivered to Lender a Notice of Borrowing.

 

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Each Advance or request for the issuance, amendment, renewal or extension of any Letter of Credit shall be deemed to constitute a representation and warranty by the Loan Parties on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section 4.02 and that all of the representations and warranties provided in Article Five hereof remain true, accurate and complete in all material respects.

 

4.03     Delivery of Documents. All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article Four, unless otherwise specified, shall be delivered to Lender and, except for the Notes, in sufficient counterparts or copies as Lender shall require and shall be in form and substance satisfactory in all respects to Lender.

 

Article Five

REPRESENTATIONS AND WARRANTIES

 

The Loan Parties represent and warrant to Lender as follows:

 

5.01     Existence; Power. Borrower and each of its Subsidiaries (i) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company, as applicable, under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.

 

5.02     Organizational Power; Authorization. The execution, delivery and performance by the Loan Parties of the Loan Documents to which each is a party are within such Person’s organizational powers, as applicable, and have been duly authorized, as applicable, by all necessary organizational, and if required, shareholder, partner or member action. This Agreement and each other Loan Document dated the date hereof has been duly executed and delivered by the Loan Parties, and constitute, and each other Loan Document to which any Loan Party will become a party, when executed and delivered by such Loan Party shall constitute, valid and binding obligations of the Loan Parties, enforceable against each such Loan Party in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

5.03     Places of Business. Each Loan Party’s jurisdiction of organization is set forth in Schedule 5.03 hereto and (a) each Loan Party’s chief executive office, (b) all other places of business of each Loan Party and (c) any other location of any Collateral are located at the corresponding addresses set forth on Schedule 5.03 hereto. Except as disclosed on Schedule 5.03 hereto: (a) no Loan Party has been organized in any other jurisdiction, nor changed any such location in the last five (5) years, (b) no Loan Party has changed its name in the last five (5) years, and (c) during such period no Loan Party has used, nor does any Loan Party now use, any fictitious or trade name, except to the extent disclosed on Schedule 5.03 hereto.

 

5.04     Pending Litigation. There are no judgments or judicial or administrative orders, proceedings or investigations (civil or criminal) pending or, to the knowledge of the Loan Parties, threatened, against Borrower or any of its direct or indirect Subsidiaries in any court or before any Governmental Authority, other than as set forth on Schedule 5.04 hereto or which, if adversely determined, could not reasonably be expected to cause a Material Adverse Effect. No member or executive officer of Borrower or any Subsidiary of Borrower has been indicted or convicted in connection with or is engaging in any racketeering or other similar criminal conduct or activity, or is currently subject to any lawsuit or proceeding or, to the knowledge of the Loan Parties, under investigation in connection with any racketeering or other similar criminal conduct or activity.

 

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5.05     Governmental Approvals; No Conflicts. The execution, delivery and performance by the Loan Parties of this Agreement, and the other Loan Documents to which each is a party (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (b) will not violate any Requirements of Law applicable to any Loan Party, or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding any Loan Party or any of their respective assets or give rise to a right thereunder to require any payment to be made by any Loan Party and (d) will not result in the creation or imposition of any Lien on any asset of a Loan Party, except Liens created under the Loan Documents.

 

5.06     Financial Statements. Borrower has furnished to Lender: (i) the audited consolidated balance sheet of Borrower and its Subsidiaries, as of December 31, 2017, and the related statements of income, shareholder equity and cash flows for the Fiscal Year then ended certified by Mayer Hoffman Mcann P.C.; and (ii) the unaudited internally prepared consolidated balance sheet of Borrower and its Subsidiaries, as of March 31, 2018, and the related statements of income, shareholder equity and cash flows for the fiscal quarter then ended. Except as noted therein, these financial statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries, as of such date and the consolidated results of operations for such period in conformity with GAAP consistently applied. For the period from December 31, 2017 through and including the Effective Date, there have been no changes with respect to Borrower and its Subsidiaries which have had or could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.

 

5.07     Environmental Matters. Except for the matters set forth on Schedule 5.07, the Loan Parties (i) have not failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) have not become subject to any Environmental Liability, (iii) have not received notice of any claim with respect to any Environmental Liability or (iv) do not know of any basis for any Environmental Liability, except where the result of any of the foregoing, either singly or in the aggregate, has or could reasonably be expected to result in a Material Adverse Effect.

 

5.08     Compliance with Laws and Agreements. Except as set forth on Schedule 5.08, the Loan Parties and their respective direct or indirect Subsidiaries, if any, are in compliance with (a) all Requirements of Law and all judgments, decrees and orders of any Governmental Authority and (b) all indentures, agreements or other instruments binding upon it or its properties, except where non-compliance, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

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5.09     Investment Company Act, etc. None of the Loan Parties is (a) an “investment company” or is “controlled” by an “investment company,” as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, or (b) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from or registration or filing with, any Governmental Authority in connection therewith.

 

5.10     Taxes. Each of the Loan Parties has timely filed or caused to be filed all Federal income tax returns and all other material tax returns that are required to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except where the same are currently being contested in good faith by appropriate proceedings and for which such Loan Party has set aside on its books adequate reserves in accordance with GAAP. The charges, accruals and reserves on the books of the Loan Parties in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.

 

5.11     Margin Regulations. None of the proceeds of the Credit Facilities will be used, directly or indirectly, for “purchasing” or “carrying” any “margin stock” with the respective meanings of each of such terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulation U. None of the Loan Parties is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock.”

 

5.12     ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, has or could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such underfunded Plans.

 

5.13     Ownership of Property.

 

(a)     Each Loan Party has good title to, or valid leasehold interests in, all of its real and personal property material to the operation of its business, including all such properties reflected in the most recent balance sheets referred to in Section 5.06 hereof or purported to have been acquired by any such Person after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are material to the business or operations of the Loan Parties are valid and subsisting and are in full force.

 

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(b)     Each Loan Party owns, or is licensed or otherwise has the right to use, all patents, trademarks, service marks, trade names, copyrights and other intellectual property material to its business, and to the Loan Parties’ knowledge the use thereof by the Loan Parties does not infringe in any material respect on the rights of any other Person.

 

(c)     The properties of each Loan Party are insured with financially sound and reputable insurance companies which are not Affiliates of the Loan Parties, in such amounts with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Loan Parties operate.

 

5.14     Each Loan Party Has Made Good Disclosure. The Loan Parties have disclosed to Lender all agreements, instruments, and corporate or other restrictions to which any Loan Party is subject, and all other matters known to any of them, that, individually or in the aggregate, are reasonably likely to result in a Material Adverse Effect. None of the reports (including without limitation all reports that any Loan Party is required to file with the Securities and Exchange Commission), financial statements, certificates nor other information furnished by or on behalf of the Loan Parties to the Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contains any material misstatement of fact nor omits to state any material fact necessary to make the statements therein, taken as a whole, in light of the circumstances under which they were made, not misleading; provided, that with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

5.15     Labor Relations. There are no strikes, lockouts, collective bargaining activities or other material labor disputes or grievances against any Loan Party or their respective direct or indirect Subsidiaries, or, to the Loan Parties’ knowledge, threatened against or affecting any of the Loan Parties, and no significant unfair labor practice, charges or grievances are pending against any Loan Party, or to the Loan Parties’ knowledge, threatened against any of them before any Governmental Authority, except where the result of any of the foregoing, either singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. All payments due from any Loan Party pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of the applicable Person, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

5.16     Subsidiaries.

 

(a)     Schedule 5.16(a) sets forth the name of, the ownership interest of Borrower or any other Loan Party in, the jurisdiction of incorporation or organization of, and the type of, each Domestic Subsidiary of Borrower and/or any of its Subsidiaries and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Effective Date.

 

(b)     Schedule 5.16(b) sets forth the name of, the ownership interest of Borrower or any other Loan Party in, the jurisdiction of incorporation or organization of, and the type of, each Foreign Subsidiary of Borrower or any other Loan Party, in each case as of the Effective Date.

 

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5.17     Solvency. Immediately prior to and after giving effect to the closing of the Credit Facilities as provided herein and in the other Loan Documents, each borrowing hereunder and the use of the proceeds thereof, with respect to the Loan Parties determined on a consolidated basis (a) the fair value of its assets is greater than the amount of its liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated, (b) the present fair saleable value of its assets is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, (c) it is able to realize upon its assets and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) it does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature, and (e) it is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would constitute an unreasonably small amount of capital to conduct its business.

 

5.18     OFAC; Anti-Terrorism Laws.

 

(a)     Neither the Borrower nor any of its Subsidiaries (i) is a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned Countries, or (iii) derives more than 10% of its operating income from investments in, or transactions with, Sanctioned Persons or Sanctioned Countries. No part of the proceeds of the loans 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, the Foreign Corrupt Practices Act or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

 

5.19     Foreign Assets Control Regulations. Neither the Borrower nor any Subsidiary is in violation of (i) the Trading with the Enemy Act (50 U.S.C. App. Sec. 1 et seq.), as amended, (ii) any foreign assets control regulations issued by OFAC and any executive order related thereto, or (iii) the Patriot Act, and further that it (a) is not subject to sanctions administered by OFAC or the U.S. Department of State or (b) has not engaged in any dealing or transactions with, or is otherwise associated with, any person subject to such sanctions.

 

5.20     Anti-Corruption Laws and Sanctions.

 

(a)     The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower and its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower and its Subsidiaries and, to the knowledge of the Borrower, their respective directors, officers, employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.

 

(b)     To the extent applicable, each of the Borrower and its Subsidiaries is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, the International Emergency Economic Powers 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.

 

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(c)     Neither the Borrower nor any of its Subsidiaries nor, to the knowledge of the Borrower, any director, officer, employee, agent or controlled Affiliate of the Borrower or any of its Subsidiaries that will act in any capacity in connection with or benefit from the credit facility established hereby is a Designated Person, nor is the Borrower or any of its Subsidiaries located, organized or resident in any Sanctioned Country.

 

5.21     Security Documents.

 

(a)     The Security Agreement, upon the execution and delivery thereof by the Loan Parties, will create in favor of Lender, a legal, valid and enforceable security interest in the Collateral (as defined in the Security Agreement) and the proceeds thereof, in which a security interest may be perfected under the UCC as in effect at the relevant time by filing of financing statements or obtaining control or possession, and the Liens created under the Security Agreement are (or will be, upon the filing of appropriate financing statements and grants of security in intellectual property, the execution of appropriate control agreements and delivery of certificated securities and instruments to Lender) a fully perfected first-priority Lien on, and security interest in, all right, title and interest of respective Loan Parties in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 7.02 hereof.

 

(b)     Schedule 5.21(b) lists completely and correctly as of the Effective Date all real property owned in fee by any of the Loan Parties and the addresses thereof. As of the Effective Date, the respective parcels of real property described on Schedule 5.21(b) are owned in fee simple as set forth said Schedule 5.21(b), subject only to the Liens permitted by Section 7.02 and the specific exceptions set forth in said Schedule 5.21(b) with respect to each such respective parcel.

 

(c)     Schedule 5.21(c) lists completely and correctly as of the Effective Date all real property leased by the Loan Parties and the addresses thereof. As of the Effective Date, the Loan Parties have valid leases in all the real property set forth on Schedule 5.21(c).

 

5.22     Subordinated Debt. On or prior to the Effective Date, the Loan Parties have provided to the Lender complete copies of all documents or instruments evidencing, securing or relating to Indebtedness of any of the Loan Parties, including all promissory notes, debentures, mortgages, security agreements, schedules, exhibits and disclosure letters relating thereto, if any, and all amendments thereto, waivers relating thereto. As of the Effective Date, none of such agreements and documents has been amended or supplemented, nor have any material provisions thereof been waived, except pursuant to a written agreement or agreement which has heretofore been delivered to the Lender. Schedule 5.22 sets forth all Indebtedness of Borrower that Lender has required be subordinated to the Obligations as of the Effective Date.

 

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5.23     Material Contracts. As of the Effective Date, other than as set forth in Schedule 5.23, each Material Contract is, and after giving effect to the transactions contemplated by the Loan Documents will be, in full force and effect in accordance with the terms thereof and neither Borrower nor a Subsidiary thereof has violated in any material respect any such Material Contract.

 

5.24     Schedules. Each of the Schedules attached to this Agreement sets forth a true, correct and complete description, in all material respects, of the matter or matters covered thereby.

 

Article Six

AFFIRMATIVE COVENANTS

 

The Loan Parties covenant and agree that so long as the Credit Facilities have not been terminated hereunder or any Obligation remains unpaid or outstanding:

 

6.01     Financial Statements and Other Information. The Loan Parties shall, or shall cause the appropriate Person to, deliver:

 

(a)     as soon as available and in any event within 120 days after the end of each Fiscal Year of Borrower, (i) a copy of the annual audit report and audited financial statements for such Fiscal Year for Borrower and its direct and indirect Subsidiaries, containing a consolidated balance sheet of Borrower and its direct and indirect Subsidiaries, as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows (together with all footnotes thereto) of Borrower and its direct and indirect Subsidiaries, for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and reported on by an independent public accountant acceptable to the Lender (without a “going concern” or like qualification, exception or explanation and without any qualification or exception as to scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of Borrower and its direct and indirect Subsidiaries, for such Fiscal Year on a consolidated basis in accordance with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards and (ii) copies of internally prepared consolidating balance sheet and consolidating statement of income for Borrower and its direct and indirect Subsidiaries as of the end of such Fiscal Year certified by Borrower’s Financial Officer;

 

(b)     as soon as available and in any event within forty-five (45) days after the end of each Fiscal Quarter, an internally prepared consolidated and consolidating balance sheet of Borrower and its direct and indirect Subsidiaries, as of the end of such Fiscal Quarter and the related unaudited consolidated and consolidating statement of income and unaudited consolidated statement of cash flows of Borrower and its direct and indirect Subsidiaries for the then elapsed portion of such Fiscal Year, setting forth in each case in comparative form the figures (as applicable) for the corresponding Fiscal Quarter, the corresponding portion of Borrower’s previous Fiscal Year and Borrower’s budget, certified to Lender by the Financial Officer of Borrower;

 

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(c)     concurrently with the delivery of the financial statements referred to in subparagraphs (a) and (b) above, a Compliance Certificate signed by the Financial Officer of Borrower and containing a covenant compliance worksheet in form and substance acceptable to Lender;

 

(d)     within seven (7) days of filing thereof with the Securities and Exchange Commission, Borrower shall submit to Lender true and complete copies of all reports or other filings filed with the Securities Exchange Commission;

 

(e)     upon occurrence, prompt written notice of any change (i) in any of the Loan Parties’ organizational name, (ii) in the jurisdiction of organization or formation of any Loan Party, (iii) in any Loan Party’s identity or form of organization or (iv) in any Loan Party’s Federal Taxpayer Identification Number. The Loan Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Lender to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral. Notwithstanding the foregoing, Lender hereby acknowledges and consents to the following, which Borrower intends to consummate promptly following Borrower’s shareholder meeting scheduled for May 3, 2018: (A) Borrower changing its name to “Superior Group of Companies, Inc.;” and (B) SGC LLC changing its name to “Superior Uniform Group, LLC”; and

 

(f)     promptly following any request therefor by Lender, such other information regarding the results of operations, business affairs and financial condition of the Loan Parties and their respective direct or indirect Subsidiaries, as Lender may reasonably request.

 

6.02     Maintenance of Insurance, Financial Records and Existence.

 

(a)     Required Insurance. Borrower and its direct or indirect Subsidiaries, shall maintain or cause to be maintained insurance on their properties and assets against fire, casualty, public liability, as well as general liability, and other liability insurance related to the business of the Loan Parties as is customary for such business, all in such amounts, with such deductibles and with such insurers as are customary for such business (the “Required Insurance”). All of the policies relating to the Required Insurance shall contain standard “lender loss payable” and “additional insured” clauses issued in favor of Lender (where applicable) pursuant to which all losses thereunder shall be paid to Lender as Lender’s interests may appear. Such policies shall expressly provide that the Required Insurance cannot be canceled without sixty (60) days’ (or ten (10) days with respect to nonpayment of premium) prior written notice to Lender. At or prior to the Effective Date, Borrower shall furnish Lender with insurance certificates certified as true and correct and being in full force and effect as of the Effective Date or such other evidence of the Required Insurance as Lender may require. In the event Borrower fails to procure or cause to be procured any of the Required Insurance or to timely pay or cause to be paid the premium(s) on any of the Required Insurance, Lender may do so for Borrower and its direct or indirect Subsidiaries, if any, but Borrower shall continue to be liable for the same. Borrower further covenants that all insurance premiums owing under their respective current casualty policy or policies will be paid when due. Borrower also agrees to notify Lender, promptly, upon Borrower’s receipt of a notice of termination, cancellation or non-renewal from its insurance company of any of the Required Insurance. Borrower hereby appoints Lender as its attorney-in-fact, exercisable at Lender’s option upon the occurrence and during the continuance of an Event of Default, to endorse any check which may be payable to Borrower in order to collect the proceeds of the Required Insurance.

 

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(b)     Financial Records. Borrower and each of its Subsidiaries shall keep current and accurate books of records and accounts in which full and correct entries in all material respects will be made of all of its business transactions, and will reflect in its financial statements adequate accruals and appropriations to reserves, all in accordance with GAAP. Borrower and its Subsidiaries shall not change their Fiscal Year end date without prior written notice to Lender.

 

(c)     Existence and Rights. Except to the extent permitted under Section 7.03, each of the Loan Parties shall do (or cause to be done) all things reasonably necessary to preserve and keep in full force and effect its legal existence and good standing and each such Loan Party’s rights and franchises.

 

6.03     Notices of Material Events. The Loan Parties shall furnish to Lender prompt written notice of the following:

 

(a)     the occurrence of any Default Condition or Event of Default;

 

(b)     receipt by Borrower of any notice that Borrower’s common stock is to, or will, be delisted from the NASDAQ Global Market® Exchange.

 

(c)     the filing or commencement of any action, suit, proceeding or investigation by or before any arbitrator or Governmental Authority, against or, to the knowledge of any Loan Party, affecting any Loan Party which, if adversely determined, has or could reasonably be expected to result in a Material Adverse Effect;

 

(d)     the occurrence of any event or any other development by which any Loan Party (i) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) becomes subject to any Environmental Liability, (iii) receives notice of any claim with respect to any Environmental Liability, or (iv) becomes aware of any basis for any Environmental Liability and in each of the preceding clauses, which individually or in the aggregate, has or could reasonably be expected to result in a Material Adverse Effect;

 

(e)     the occurrence of any Acquisition;

 

(f)     the formation of any Subsidiary;

 

(g)     the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, has or could reasonably be expected to result in a Material Adverse Effect;

 

(h)     the occurrence of any default or event of default, or the receipt by any Loan Party of any written notice of an alleged default or event of default, in respect of any Material Indebtedness of any Loan Party; and

 

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(i)     any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section 6.03 shall be accompanied by a written statement of a Responsible Officer of Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

6.04     Existence; Conduct of Business. Except to the extent permitted under Section 7.03, each Loan Party that is not a natural person shall do or cause to be done all things reasonably necessary to preserve, renew and maintain in full force and effect their legal existence and their respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto.

 

6.05     Litigation. The Loan Parties shall give prompt notice to Lender of any litigation claiming in excess of $1,000,000.00 from any Loan Party or which could reasonably be expected to cause a Material Adverse Effect.

 

6.06     Taxes. The Loan Parties shall pay taxes when due (other than taxes based upon or measured by Lender’s income or revenues or other Excluded Taxes), if any, in connection with the Credit Facilities and/or the recording of any financing statements or other Loan Documents. The Obligations of the Loan Parties under this section shall survive the payment of Borrower’s Obligations under this Agreement and the termination of this Agreement.

 

6.07     Compliance with Laws, etc. The Loan Parties shall comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including without limitation, all Environmental Laws, ERISA, and OSHA, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

6.08     Payment of Obligations. The Loan Parties shall pay and discharge at or before maturity, all of their respective obligations and liabilities (including without limitation all tax liabilities and claims that could result in a statutory Lien) before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the affected Loan Party has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

 

6.09     Books and Records. Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of the Borrower and its Subsidiaries in conformity with GAAP.

 

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6.10     Visitation, Inspection, etc. The Loan Parties will permit any of Lender’s officers or other representatives to visit and inspect any such Loan Party’s location(s) or where any Collateral is kept upon reasonable prior notice during regular business hours to examine and audit all of such Loan Party’s books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees and independent certified public accountants and attorneys. The Loan Parties shall pay to Lender all reasonable fees, costs and expenses actually incurred by Lender in connection with such inspections; provided that, unless a Default Condition or Event of Default shall have occurred and be continuing, the Loan Parties shall only be required to pay such fees, costs and expenses for one such inspection or audit per calendar year.

 

6.11     Collateral Reporting. The Loan Parties agree to furnish to the Lender such information as Lender reasonably requires in connection with monitoring the Collateral, at the times and in the manner reasonably determined by Lender.

 

6.12     Maintenance of Properties. Borrower will, and will cause each of its Subsidiaries to, keep and maintain all property material to the conduct of their respective businesses in good working order and condition, ordinary wear and tear excepted.

 

6.13     Use of Proceeds. Borrower shall use the proceeds of the Credit Facilities solely for the purposes provided herein. No part of the proceeds of the Credit Facilities will be used, whether directly or indirectly, (i) for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulations T, U or X; (ii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (iii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country or (iv) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

6.14     Depository Relationship. Borrower shall establish and maintain, and shall cause its Domestic Subsidiaries to establish and maintain, so long as the Obligations have not been paid in full in cash or any commitment of Lender to loan money hereunder remains open, Lender as the principal depository in which substantially all of the funds of Borrower and its direct and indirect Domestic Subsidiaries, are deposited and the principal bank of account for Borrower and its direct and indirect Domestic Subsidiaries as long as any Obligations are outstanding, but excluding, in each case, so long as no Default Condition or Event of Default has occurred, Excluded Accounts.

 

6.15     Leased Premises. Lender may require at any time or from time to time any leased premises be subject to a Collateral Access Agreement in form and substance reasonably acceptable to Lender.

 

6.16     Minimum Coverage Ratio. Borrower and its direct and indirect Subsidiaries shall maintain a Coverage Ratio of not less than 1.25 to 1.00 calculated as of the end of each Fiscal Year and as of the end of each Fiscal Quarter for the trailing twelve (12) month period ending as of the end of each such Fiscal Quarter; provided, however, in the event of a Permitted Acquisition or Approved Acquisition, Borrower and its direct and indirect Subsidiaries shall maintain a Coverage Ratio of not less than 1.25 to 1.00 for the period of four (4) Fiscal Quarters most recently completed. For the purposes hereof the term “Coverage Ratio” shall mean EBITDA for the period of measure divided by the sum of all required principal payments (whether or not actually paid) on long term debt and Capital Lease Obligations required to be paid in cash (whether or not actually paid) plus Interest Expense required to be paid in cash (whether or not actually paid) for the period of measure, plus earnouts associated with Acquisitions consummated prior to the Effective Date or any Permitted Acquisitions or Approved Acquisitions (whether or not actually paid) for the period of measure.

 

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6.17     Intentionally omitted.

 

6.18     Maximum Funded Indebtedness to EBITDA Ratio. Borrower and its direct and indirect Subsidiaries shall maintain a Funded Indebtedness to EBITDA Ratio of not more than 4.00 to 1.00 calculated as of the end of each Fiscal Year and as of the end of each Fiscal Quarter for the trailing twelve (12) month period ending as of the end of each such Fiscal Quarter. For the purposes hereof the term “Funded Indebtedness to EBITDA Ratio” shall mean the ratio of (i) Indebtedness (a) in respect of money borrowed or (b) evidenced by a note, debenture or other like written obligation to pay money (both senior debt and subordinated debt) or (c) in respect of Capital Lease Obligations or (d) in respect of obligations or liabilities under conditional sales or other title retention agreements and (e) in respect of the balance of any earnout associated with Acquisitions consummated prior to the Effective Date or any Permitted Acquisition or Approved Acquisition to (ii) EBITDA, for the period of measure.

 

6.19     Additional Subsidiaries.

 

(a)     If any Subsidiary of Borrower or any other Loan Party is acquired or formed after the Effective Date, the Loan Parties will promptly notify the Lender thereof in writing and, within thirty (30) days after any such Subsidiary is acquired or formed, will cause such Subsidiary other than a Foreign Subsidiary to become a Subsidiary Loan Party and a Guarantor of the Obligations and Borrower, if such Subsidiary is a Domestic Subsidiary of Borrower, or the applicable other Loan Party, if such Subsidiary is a Domestic Subsidiary of any such other Loan Party shall within said thirty (30) day period pledge or cause to be pledged to Lender as collateral security for the Obligations, as required by Lender, subject to no other lien or encumbrance, one hundred percent (100%) of the Capital Stock owned by Borrower or any other Loan Party in such Domestic Subsidiary; provided, however, that in the event any Subsidiary formed or acquired after the Effective Date is a Material Foreign Subsidiary (and if any Immaterial Foreign Subsidiary becomes a Material Foreign Subsidiary), then the applicable Loan Parties shall as soon as reasonably practical and in any event within ninety (90) days after any such Subsidiary is acquired or formed (or in the case of an Immaterial Foreign Subsidiary that becomes a Material Foreign Subsidiary, as soon as reasonably practical and in any event within ninety (90) days after such Immaterial Foreign Subsidiary becomes a Material Foreign Subsidiary) (or such longer period approved in writing by Lender in its sole discretion), pledge or cause to be pledged to Lender as collateral security for the Obligations, as required by Lender, subject to no other lien or encumbrance, the Capital Stock issued by such Material Foreign Subsidiary that is owned by Borrower or any other Loan Party, but only to the extent of 65% of such Capital Stock issued by said Foreign Subsidiary. Notwithstanding the foregoing, nothing contained herein shall prevent the Borrower from pledging to Lender as collateral security for the Obligations, subject to no other lien or encumbrance, the Capital Stock issued by any Foreign Subsidiary, whether or not such Foreign Subsidiary is a Material Foreign Subsidiary.

 

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(b)     A Domestic Subsidiary of Borrower or any other Loan Party shall become a Subsidiary Loan Party and a Guarantor of the Obligations by executing and delivering to Lender a Joinder to Credit Agreement, a Subsidiary Guaranty Supplement, a Security Agreement Supplement and such other Security Documents as are required by Section 6.20 accompanied by (i) all other Loan Documents related thereto, (ii) certified copies of certificates or articles of incorporation or organization, by-laws, membership operating agreements or limited liability company agreements, partnership agreements, and other organizational documents, appropriate authorizing resolutions of the board of directors or other applicable governing body of such Subsidiaries, and, if required by Lender, opinions of counsel addressing such matters as Lender shall require, and (iii) such other documents as the Lender may reasonably request.

 

(c)     If at any time there are Foreign Subsidiaries which are classified as Non-Pledged Immaterial Foreign Subsidiaries but which collectively: (i) generate 10% or more of EBITDA of the Borrower and its Subsidiaries for the four (4) fiscal quarter period most recently ended for which financial statements have been delivered (or are required to have been delivered) under Section 6.01, or (ii) have total assets equal to or greater than $1,500,000, then the Borrower shall promptly, but in any event within ninety (90) days, pledge or cause to be pledged to Lender as collateral security for the Obligations, upon terms and conditions satisfactory to Lender, subject to no other lien or encumbrance, the Capital Stock issued by such Immaterial Foreign Subsidiaries (but only to the extent of sixty-five percent (65%) of such Capital Stock issued by said Foreign Subsidiary) such that after such Capital Stock is pledged hereunder, all Non-Pledged Immaterial Foreign Subsidiaries collectively shall: (a) generate less than 10% of EBITDA of the Borrower and its Subsidiaries for the four (4) fiscal quarter period most recently ended for which financial statements have been delivered (or are required to have been delivered) under Section 6.01, and (b) own assets of less than $1,500,000 as reflected in the financial statements most recently delivered on or prior to such date.

 

6.20     Further Assurances. Subject to the limitations and agreements set forth herein or in the other Loan Documents, the Loan Parties shall execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, and preparing all documentation relating to filings under the Federal Assignment of Claims Act) that may be required under applicable law, or that Lender may reasonably request consistent with terms hereof, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Security Documents. In addition, from time to time, the Loan Parties shall, at their sole cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected security interests with respect to such of the non-real estate assets and properties of Borrower and its direct and indirect Domestic Subsidiaries, as the Lender shall designate. Such security interests and Liens will be created under the Security Documents and other security agreements and other instruments and documents in form and substance reasonably satisfactory to Lender, and the Loan Parties shall deliver or cause to be delivered to Lender all such instruments and documents (including legal opinions, ownership and encumbrances reports and lien searches) as Lender shall reasonably request to evidence compliance with this Section 6.20. The Loan Parties agree to provide such evidence as Lender shall reasonably request as to the perfection and priority status of each such security interest and Lien. In furtherance of the foregoing, the Loan Parties shall give prompt notice to Lender of the acquisition by Borrower of any direct or indirect Subsidiary.

 

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Article Seven

NEGATIVE COVENANTS

 

The Loan Parties covenant and agree that so long as any Obligation remains outstanding:

 

7.01     Indebtedness and Disqualified Stock. The Borrower and its direct and indirect Subsidiaries will not issue any Disqualified Stock or create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)     Indebtedness created pursuant to the Loan Documents;

 

(b)     the Subordinated Debt;

 

(c)     Indebtedness of the Borrower and its direct and indirect Subsidiaries existing on the date hereof (excluding Indebtedness described in the other subsections of this Section 7.01) and set forth on Schedule 7.01 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof;

 

(d)     Indebtedness of the Borrower owing to any direct or indirect Subsidiary and of any direct or indirect Subsidiary owing to the Borrower or any other direct or indirect Subsidiary; provided that any such Indebtedness that is owed by a Subsidiary that is not a Subsidiary Loan Party to a Loan Party, when taken together with the aggregate amount of capital contributions by Loan Parties in or to any direct or indirect Subsidiary that is not a Subsidiary Loan Party permitted by Section 7.04(d), and Guarantees by Loan Parties of Indebtedness of any direct or indirect Subsidiary that is not a Subsidiary Loan Party (including all such Guarantees existing on the Effective Date) permitted by the succeeding subparagraph (e), shall be subject to the limitation set forth in Section 7.04(d);

 

(e)     Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided, that Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not a Subsidiary Loan Party, when taken together with the Indebtedness of any Subsidiary that is not a Subsidiary Loan Party permitted by the foregoing subparagraph (d) and the aggregate amount of capital contributions by Loan Parties in or to any direct or indirect Subsidiary that is not a Subsidiary Loan Party permitted by Section 7.04(d), shall be subject to the limitation set forth in Section 7.04(d);

 

(f)     Indebtedness other than Capital Lease Obligations not exceeding in the aggregate $500,000.00 at any time outstanding, for the purposes of acquiring equipment, inventory and/or other personal property used in the operation of the business of the Loan Parties, and Capital Lease Obligations not to exceed the aggregate amount of $1,000,000.00 at any time outstanding;

 

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(g)     Indebtedness in respect of Hedging Obligations permitted by Section 7.10 hereof;

 

(h)     Indebtedness owed to any bank in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;

 

(i)     Indebtedness consisting of Contingent Obligations of any Loan Party in respect of the Indebtedness of any other Loan Party, but only to the extent that such Indebtedness of any other Loan Party is otherwise permitted as provided in this Section 7.01;

 

(j)     Indebtedness associated with, but only to extent of, Liens permitted pursuant to Section 7.02(c) hereof;

 

(k)     Indebtedness in respect of any earnout associated with any Acquisition consummated prior to the Effective Date or any Permitted Acquisition or Approved Acquisition, provided that (A) with respect to both of the foregoing such obligations are unsecured, and (B) with respect to any earnout associated with a Permitted Acquisition or Approved Acquisition, the Borrower would be in compliance with the financial covenants in Sections 6.17 through 6.19 after giving pro forma effect to the maximum earnout amount.

 

(l)     Indebtedness in respect of deferred purchase price of property or services (whether assets or Capital Stock), other than in respect of earnouts associated with any Permitted Acquisition or Approved Acquisition, that is and shall remain unsecured and shall be subordinated to the Obligations on terms and conditions satisfactory to Lender, and not to exceed $250,000.00 in the aggregate at any time outstanding;

 

(m)     in each case to the extent (if any) that such obligations constitute Indebtedness, (i) customary indemnification obligations in connection with any Acquisition consummated prior to the Effective Date, Permitted Acquisitions, Approved Acquisitions and dispositions permitted under the Agreement, (ii) reimbursement or indemnification obligations owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, (iii) obligations for deferred payment of insurance premiums, and (iv) take-or-pay obligations contained in supply arrangements; provided, in each case, that such obligation arises in the ordinary course of business and not in connection with the obtaining of financing; and

 

(n)     additional unsecured Indebtedness of the Borrower or any of its direct or indirect Subsidiaries in an aggregate principal amount (for the Borrower and all Subsidiaries (both direct and indirect)) not to exceed $250,000 at any one time outstanding.

 

7.02     Negative Pledge. Without the prior written consent of Lender, the Borrower and its direct and indirect Subsidiaries shall not create, incur, assume or suffer to exist any Lien on any of their assets or property now owned or hereafter acquired, except:

 

(a)     Liens securing the Obligations;

 

(b)     Permitted Encumbrances;

 

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(c)     Liens securing the Subordinated Debt, to the extent subordinated pursuant to the applicable Subordination Agreement;

 

(d)     Liens securing not more than $2,000,000.00 in the aggregate on assets of Borrower and/or its direct and indirect Subsidiaries for statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(e)     any Liens on any property or asset of Borrower existing on the Effective Date set forth on Schedule 7.02; provided, that such Lien shall not apply to any other property or asset of Borrower;

 

(f)     extensions, renewals, or replacements of any Lien referred to in paragraphs (b) through (d) of this Section 7.02; provided, that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby;

 

(g)     Liens arising from precautionary UCC financing statements regarding operating leases;

 

(h)     Liens securing Indebtedness permitted under Section 7.01(f); provided that, (i) such Liens shall be created substantially simultaneously with the acquisition of such assets or entry into such lease, and (ii) such Liens do not at any time encumber any assets other than the assets financed by such Indebtedness;

 

(i)     Liens existing on any property or asset prior to the acquisition thereof by Borrower or any of its direct or indirect Subsidiaries or existing on any property or asset of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of such Loan Party (other than after acquired property affixed thereto or incorporated therein and proceeds or products thereof) and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be;

 

(j)     Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon; and

 

(k)     extensions, renewals, or replacements of any Lien referred to in the foregoing subparagraphs (a) through (h) of this Section 7.02; provided, that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby.

 

7.03     Fundamental Changes.

 

(a)     The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired) or all or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired) or liquidate or dissolve, except for (i) mergers (A) of Subsidiaries of Borrower into Borrower, or (B) of Subsidiaries of Borrower into other Subsidiaries of Borrower and (ii) dispositions between Subsidiaries of Borrower or by Subsidiaries of Borrower to Borrower. Notwithstanding the foregoing or any other terms of this Agreement or any other Loan Documents, SGC LLC may be dissolved at any time prior to December 31, 2018, so long as, at such time, SGC LLC is not engaged in any business activities and does not hold any assets.

 

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(b)     The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, engage in any business other than businesses that are similar or complementary to the type conducted by Borrower and its Subsidiaries on the date hereof and businesses complementary or reasonably related thereto.

 

(c)     The Loan Parties shall not suffer a Change in Control.

 

(d)     The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, make any Acquisition other than a Permitted Acquisition or an Approved Acquisition.

 

7.04     Investments, Loans, etc. The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a Wholly Owned Subsidiary prior to such merger), any common stock, evidence of indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, guaranty any obligations of, or make or permit to exist any investment or any other interest in, any other Person (all of the foregoing being collectively called “Investments”), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, or create or form any Subsidiary, except:

 

(a)     Investments (other than Permitted Investments) existing on the date hereof and set forth on Schedule 7.04 (including Investments in Subsidiaries), and any modification, replacement, renewal, reinvestment or extension thereof (provided that the amount of the original Investment is not increased except as otherwise permitted by this Section 7.04);

 

(b)     Permitted Investments;

 

(c)     Guarantees constituting Indebtedness permitted by Section 7.01 hereof; provided, that the aggregate principal amount of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties that is guaranteed by any Loan Party, when taken together with the Indebtedness permitted by Section 7.01(d) and the aggregate amount of Investments by Loan Parties in or to any direct or indirect Subsidiary that is not a Subsidiary Loan Party (including all such Investments existing on the Effective Date) permitted by the succeeding subparagraph (d), shall be subject to the limitation set forth in the following subparagraph (d);

 

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(d)     Investments made by the Borrower in or to any Subsidiary and by any Subsidiary to the Borrower or in or to another Subsidiary; provided, that:

 

	 	
			(i)

				
			the aggregate amount of capital contributions by Loan Parties in or to any direct or indirect Subsidiary that is not a Subsidiary Loan Party, and Guarantees by Loan Parties of Indebtedness of any Subsidiary that is not a Subsidiary Loan Party (including all such Guarantees existing on the Effective Date) permitted by the foregoing subparagraph (c) and Section 7.01(e), when taken together with the Indebtedness permitted by Section 7.01(d) of any Subsidiary that is not a Loan Party owed to a Loan Party (without duplication), shall not exceed $15,000,000.00 at any time outstanding in the aggregate; and

			

 

	 	
			(ii)

				
			the aggregate amount of capital contributions by Loan Parties in or to any Non-Pledged Foreign Subsidiary (as defined herein) and Guarantees by Loan Parties of Indebtedness of Non-Pledged Foreign Subsidiaries (including all such Guarantees existing on the Effective Date) permitted by the foregoing subparagraph (c) and Section 7.01(e), when taken together with the Indebtedness permitted by Section 7.01(d) of any Non-Pledged Foreign Subsidiary owed to a Loan Party (without duplication) shall not exceed $1,500,000.00 at any time outstanding in the aggregate. “Non-Pledged Foreign Subsidiary” shall mean each Foreign Subsidiary that is not owned by SUG Holding and 65% of the Capital Stock issued by said Foreign Subsidiary has not been pledged to Lender as collateral security for the Obligations;

			

 

(e)     Permitted Acquisitions and Approved Acquisitions;

 

(f)     Hedging Transactions permitted by Section 7.10 hereof;

 

(g)     Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers, licensors, licensees and suppliers, in each case in the ordinary course of business;

 

(h)     loans and advances in the ordinary course of business to employees, officers and directors so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $500,000.00;

 

(i)     extensions of trade credit in the ordinary course of business;

 

(j)     Investments made as a result of the receipt of non-cash consideration from a sale, transfer or other disposition of any asset in compliance with this Agreement;

 

(k)     Investments in the ordinary course of business consisting of endorsements for collection or deposit.

 

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7.05     Restricted Payments. Except as provided herein below, the Loan Parties shall not, and shall not permit or cause any of their respective direct or indirect Subsidiaries to, directly or indirectly, declare or make any Restricted Payment or enter into any agreement to make any Restricted Payment, except for dividends payable by Borrower solely in shares of any class of its Capital Stock. Notwithstanding the foregoing, (i) provided that no Event of Default has occurred and is continuing and no Event of Default or Default Condition will result therefrom, Borrower may pay dividends on account of its Capital Stock; (ii) provided that no Event of Default has occurred and is continuing and no Event of Default or Default Condition will result therefrom, any Loan Party and any Subsidiary of any Loan Party may make Restricted Payments to any other Loan Party or any Subsidiary of a Loan Party (for clarification, the foregoing shall not permit any Loan Party or Subsidiary of a Loan Party to make any Restricted Payment in contravention of any other provision of this Section 7.05 to any Person holding Capital Stock in such Loan Party), and (iii) any Loan Party or any Subsidiary of a Loan Party may make Restricted Payments for the purposes of making payments on the Subordinated Debt but only as and to the extent permitted by the Subordination Agreement applicable thereto.

 

7.06     Sale of Assets. The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose of, any of their assets, business or property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person other than a Loan Party, except:

 

(a)     the sale or other disposition for fair market value of obsolete, uneconomical or worn out property or other property not necessary for operations disposed of in the ordinary course of business or which is replaced with new property serving the same or reasonably equivalent function and having a value of not less than that of the property which has been sold or disposed of; and

 

(b)     the sale of inventory in the ordinary course of business;

 

(c)     the sale of Permitted Investments (excluding Investments in the equity of any Loan Party or any Subsidiary of a Loan Party) in the ordinary course of business;

 

(d)     intercompany sales or other intercompany transfers of assets among the Borrower and its direct or indirect Subsidiaries;

 

(e)     each Loan Party and their respective Subsidiaries may grant licenses, sublicenses, leases or subleases in the ordinary course of business to other Persons not materially interfering with the conduct of the business of such Loan Party or such Subsidiary, in each case so long as no such grant would adversely affect any Collateral or Lender’s rights or remedies with respect thereto; and

 

(f)     other sales of assets having a fair market value not in excess of $500,000 in the aggregate per Fiscal Year of Borrower.

 

7.07     Transactions with Affiliates. Except with respect to any Restricted Payments permitted by Section 7.05 hereof, the Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property, assets or services from, or otherwise engage in any other transactions with, any Affiliate or Subsidiary which is not itself a Loan Party, except (i) in the ordinary course of business at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties and (ii) any Restricted Payments permitted by Section 7.05.

 

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7.08     Restrictive Agreements. The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Loan Parties or any of their respective direct or indirect Subsidiaries to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any of the Loan Parties’ respective direct or indirect Subsidiaries to pay dividends or other distributions with respect to its Capital Stock, to make or repay loans or advances to any Loan Party, or any of their respective direct or indirect Subsidiaries or to transfer any of its property or assets to any other Loan Party or their respective direct or indirect Subsidiaries; provided, that the foregoing shall not apply to (i) restrictions or conditions imposed by law including without limitation regulations of any Governmental Authority or by this Agreement or any other Loan Document, (ii) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted pursuant to the terms of this Agreement if such restrictions or conditions are applicable solely to the assets or property securing such Indebtedness, or (iii) ordinary and customary provisions of leases or other contracts restricting the assignment thereof.

 

7.09     Sale and Leaseback Transactions. The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.

 

7.10     Hedging Transactions. The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, directly or indirectly, enter into any Hedging Transaction, other than (i) with respect to Rate Management Obligations with Lender or affiliates of Lender or in lieu thereof Hedging Transactions with another counterparty acceptable to Lender, or (ii) Hedging Transactions entered into in the ordinary course of business to hedge or mitigate risks to which a Loan Party, or its direct or indirect Subsidiaries to, directly or indirectly, is exposed in the conduct of its business or the management of its liabilities. Solely for the avoidance of doubt, the Loan Parties acknowledge that a Hedging Transaction entered into for speculative purposes or of a speculative nature (which shall be deemed to include any Hedging Transaction under which a Loan Party is or may become obliged to make any payment (i) in connection with the purchase by any third party of any Capital Stock or any Indebtedness or (ii) as a result of changes in the market value of any Capital Stock or any Indebtedness) is not a Hedging Transaction entered into in the ordinary course of business to hedge or mitigate risks.

 

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7.11     Amendment to Material Documents.

 

(a)     Except with respect to any amendment required to be made pursuant to the terms of this Agreement, the Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, amend, modify or waive any of its rights in a manner materially adverse to the Lender, or which could otherwise be reasonably expected to have a Material Adverse Effect under (i) its articles of incorporation, articles of organization, bylaws, operating agreement, partnership agreement, or other organizational documents, as applicable, (ii) the documents or instruments evidencing and/or securing the Subordinated Debt, or (iii) any Material Contract.

 

(b)     Borrower shall not amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the indemnities and licenses furnished to Borrower or any of its Subsidiaries pursuant to the CID Transaction Documents or the transaction documents necessary to consummate a Permitted Acquisition or an Approved Acquisition if such amendment, supplement or modification would be materially adverse to the interests of the Loan Parties, or their respective direct or indirect Subsidiaries, or the Lender with respect thereto, or otherwise amend, supplement or otherwise modify the terms and conditions of the CID Transaction Documents or the transaction documents necessary to consummate a Permitted Acquisition or an Approved Acquisition except to the extent that any such amendment, supplement or modification could not reasonably be expected to have a Material Adverse Effect.

 

7.12     Accounting Changes. The Loan Parties shall not, and shall not permit any of their respective direct or indirect Subsidiaries to, make any significant change in accounting treatment or reporting practices, except as required or permitted by GAAP, or change the Fiscal Year of any Loan Party or of any of their respective Subsidiaries.

 

7.13     Lease Obligations. The Loan Parties will not, and will not permit any direct or indirect Subsidiary to, create or suffer to exist any obligations for the payment under operating leases or agreements to lease (but (x) excluding any obligations under leases required to be classified as capital leases under GAAP and (y) including those operating leases related to contracts between any Loan Party and its clients for which a Loan Party is no longer liable for the operating lease payments in the event that such contract is cancelled (other than obligations expressly stated to survive assumption, transfer or termination of such contracts)) which would cause the annual lease expense of the Loan Parties, determined on a consolidated basis in accordance with GAAP, under such leases or agreements to lease to exceed the greater of (a) $2,500,000.00 in the aggregate, and (b) an amount equal to 1.00% of gross revenue of the Borrower and its Subsidiaries determined on a consolidated basis for the applicable fiscal year.

 

7.14     Article 8 Matters. With respect to any Loan Party, or any direct or indirect Subsidiary of any Loan Party, which is a partnership or a limited liability company, no Loan Party, or any direct or indirect Subsidiary of a Loan Party, shall take any vote or action making an election under Article 8 of the UCC (i) if such Person has previously made an election to treat its partnership interests or membership interests as “securities” within the meaning of Article 8 of the UCC, to have such Person’s equity interests treated as other than “securities” or (ii) if any such Person has not previously made an election to treat its partnership interests or membership interests as “securities” within the meaning of Article 8 of the UCC, to have such Person’s equity interests treated as “securities,” in either case without Lender’s prior written consent, in its sole and absolute discretion.

 

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7.15     Subordinated Debt Payments. The Loan Parties shall not make any payment in contravention of the terms and conditions of any Subordination Agreements.

 

Article Eight

EVENTS OF DEFAULT

 

8.01     Events of Default. If any of the following events (each an “Event of Default”) shall occur:

 

(a)     Borrower shall fail to pay any principal of the 2017 Term Loan, the 2018 Term Loan or the Revolving Credit Facility when and as the same shall become due and payable pursuant to the terms of this Agreement, the 2017 Term Loan Note, the 2018 Term Loan Note or the Amended and Restated Revolving Note, as applicable, whether at the due date thereof, at a date fixed for prepayment, upon acceleration or otherwise; or

 

(b)     Borrower shall fail to pay any interest on the 2017 Term Loan, the 2018 Term Loan or the Revolving Credit Facility or any fee or any other amount (other than an amount payable under subparagraph (a) of this Section 8.01) payable under this Agreement, the 2017 Term Loan Note, the 2018 Term Loan Note or the Amended and Restated Revolving Note, as applicable, or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of ten (10) days; or

 

(c)     nonpayment by any Loan Party of any Rate Management Obligation when due or the breach by any Loan Party of any term, provision or condition contained in any Rate Management Agreement, and such nonpayment or breach shall continue after the applicable grace period, if any, specified in the applicable Rate Management Agreement; or

 

(d)     any Loan Party shall default under, breach any agreement relating to, or fail to make when due any payment, with respect to, any Treasury Management Obligation, and such nonpayment or breach shall continue after the applicable grace period, if any, specified in the applicable Rate Management Agreement; or

 

(e)     a default or event of default shall occur under or with respect to any other Obligation not otherwise specified in subparagraphs (a), (b), (c) or (d) above, and such default or event of default shall continue after the applicable grace period, if any, therefor; or

 

(f)     any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with this Agreement or any other Loan Document (including the Schedules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to Lender by any Loan Party, or any representative thereof pursuant to or in connection with this Agreement or any other Loan Document shall prove to be materially incorrect when made or deemed made or submitted; or

 

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(g)     any Loan Party shall fail to observe or perform any covenant or agreement contained in Sections 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, 6.13, 6.14, 6.16, 6.17, 6.18, 6.19, 6.20, or Article Seven hereof; or

 

(h)     any Loan Party shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those referred to in subparagraphs (a) through (g) above) or any other Loan Document, and such failure shall remain unremedied for thirty (30) days after the first to occur of (i) any executive officer of a Loan Party becomes aware of such failure or (ii) notice thereof shall have been given to Borrower by Lender; or

 

(i)     any Loan Party (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of, or premium or interest on, any Material Indebtedness that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure is not waived or shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Material Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Material Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, the maturity of such Material Indebtedness; or any such Material Indebtedness shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Material Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or

 

(j)     any Loan Party shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in subparagraph (i) of this Section 8.01(j), (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for any Loan Party or for a substantial part of their assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or

 

(k)     an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other similar relief in respect of any Loan Party or their debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for Borrower, any other Loan Party or for a substantial part of their assets, and in any such case, such proceeding or petition shall remain undismissed for a period of sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

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(l)     any Loan Party shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or

 

(m)     Borrower’s common stock shall be delisted from the NASDAQ Global Market® Exchange; or

 

(n)     an ERISA Event shall has occurred that, in the opinion of Lender, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in or have a Material Adverse Effect; or

 

(o)     any judgment or order for the payment of money, not fully covered by insurance or a bond, in excess of $500,000.00 in the aggregate shall be rendered against any Loan Party and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(p)     any non-monetary judgment or order shall be rendered against any Loan Party that has or could reasonably be expected to have a Material Adverse Effect, and there shall be a period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(q)     the modification of the terms or provisions of any agreement, instrument or other document relating to any Subordinated Debt without Lender’s prior written consent, unless such modification is permitted by the applicable Subordination Agreement; or

 

(r)     a Change in Control shall occur or exist with respect to any Loan Party; or

 

(s)     any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Security Document) security interest in the securities, assets or properties covered thereby; or

 

(t)     any Loan Party shall be prohibited or otherwise restrained from conducting the business theretofore conducted by it in any manner that has or could reasonably be expected to have or result in a Material Adverse Effect by virtue of any determination, ruling, decision, decree, ordinance, or order of any court of competent jurisdiction, Governmental Authority, or municipality; or

 

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(u)     there shall be any evidence received by Lender that reasonably leads it to believe that the Loan Parties may have directly or indirectly been engaged in any type of criminal activity which would be reasonably likely to result in the forfeiture of a substantial portion of their assets or properties to any Governmental Authority; or

 

(v)     the default beyond any grace period under any agreement with respect to any Subordinated Debt, and (i) such default consists of the failure to pay any principal, premium or interest with respect to such Indebtedness or (ii) such default consists of the failure to perform any covenant or agreement with respect to such Indebtedness, if the effect of such default is to cause or permit such Indebtedness to become due prior to its maturity date or prior to its regularly scheduled date of payment;

 

then, and in every such event (other than an event with respect to the Loan Parties described in subparagraph (j) or (k) of this Section 8.01) and at any time thereafter during the continuance of such event, the Lender may take any or all of the following actions, at the same or different times: (i) declare the principal of and any accrued interest on the Credit Facilities, and all other Obligations owing hereunder, to be, whereupon the same shall become, due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties, (ii) exercise all remedies contained in any other Loan Document, and (iii) exercise any other remedies available at law or in equity; and that, if an Event of Default specified in either subparagraph (j) or (k) of this Section 8.01 shall occur, the principal of the Credit Facilities then outstanding, together with accrued interest thereon, and all fees, and all other Obligations shall automatically immediately become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties.

 

8.02     Application of Proceeds from Collateral. All proceeds from each sale of, or other realization upon, all or any part of the Collateral by the Lender after an Event of Default arises shall be applied as follows:

 

(a)     first, to the reimbursable expenses of the Lender incurred in connection with such sale or other realization upon the Collateral, until the same shall have been paid in full;

 

(b)     second, to the fees and other reimbursable expenses of the Lender then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;

 

(c)     third, to interest then due and payable under the terms of this Agreement and the Notes, until the same shall have been paid in full;

 

(d)     fourth, to the outstanding principal amount of the Credit Facilities, in such order, manner and tenor as Lender shall determine in its sole absolute discretion, until the same shall have been paid in full to Lender;

 

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(e)     fifth, to all other Obligations until the same shall have been paid in full to Lender; and

 

(f)     sixth, to the extent any proceeds remain, to the Borrower or other parties lawfully entitled thereto.

 

Article Nine

MISCELLANEOUS

 

9.01     Notices.

 

(a)     Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

 

	 	To the Loan Parties:	
			Superior Uniform Group, Inc.

			10055 Seminole Boulevard

			Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			
	 	 	 
	 	 	Facsimile Number: 727-803-2642
	 	 	 
	 	With a copy to:	
			Hill Ward Henderson

			101 East Kennedy Boulevard

			Suite 3700

			Tampa, Florida 33602

			Attention: David S. Felman, Esquire

			 

			Facsimile Number: 813-221-2900

			
	 	 	 
	 	To the Lender:	
			Branch Banking and Trust Company

			400 N. Tampa Street

			Suite 2500

			Tampa, Florida 33602

			Attention: Thomas M. Lambert

			 

			Facsimile Number: 813-314-3206

			
	 	 	 
	 	With a copy to:	
			Womble Bond Dickinson (US) LLP

			One West Fourth Street

			Winston-Salem, NC 27101

			Attention: Christopher E. Leon, Esq.

			 

			Facsimile Number: 336-726-6932

			

                                                             

 

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(b)     Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon delivery; provided, that notices delivered to Lender shall not be effective until actually received by such Person at its address specified in this Section 9.01.

 

(c)     Any agreement of the Lender to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Loan Parties. Lender shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Loan Parties to give such notice and Lender shall not have any liability to the Loan Parties or other Person on account of any action taken or not taken by Lender in reliance upon such telephonic or facsimile notice. The obligation of the Loan Parties to repay the Credit Facilities and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of Lender to receive written confirmation of any telephonic or facsimile notice or the receipt by Lender of a confirmation which is at variance with the terms understood by Lender to be contained in any such telephonic or facsimile notice.

 

9.02     Waiver; Amendments.

 

(a)     No failure or delay by Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Loan Parties and Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of Lender hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Loan Parties therefrom shall in any event be effective unless the same shall be permitted by subparagraph (b) of this Section 9.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of an advance under the Credit Facilities shall not be construed as a waiver of any Default Condition or Event of Default, regardless of whether the Lender may have had notice or knowledge of such Default Condition or Event of Default at the time.

 

(b)     No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Loan Parties therefrom, shall in any event be effective unless the same shall be in writing and signed by the Loan Parties and Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

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9.03     Expenses; Indemnification.

 

(a)     The Loan Parties shall, jointly and severally, pay (i) all reasonable, out-of-pocket costs and expenses of Lender, including the reasonable fees, charges and disbursements of counsel for Lender, in connection with the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), (ii) all reasonable, actual out-of-pocket expenses incurred by Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) incurred by Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section 9.03, or in connection with the Credit Facilities opened by Lender in favor of Borrower hereunder or any Letters of Credit issued pursuant to the terms hereof, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Credit Facilities or Letters of Credit.

 

(b)     The Loan Parties shall indemnify Lender and each Related Party (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Loan Parties or any Subsidiary of any Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) the Credit Facilities or Letters of Credit or the use or proposed use of the proceeds therefrom (including any refusal by Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Substances on or from any property owned or operated by the Loan Parties or any Subsidiary of any Loan Party, or any actual or alleged Environmental Liability related in any way to the Loan Parties or any Subsidiary of any Loan Party, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Loan Parties, or any Subsidiary of any Loan Party, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Loan Parties, or any Subsidiary of any Loan Party against an Indemnitee for such Indemnitee’s gross negligence or willful misconduct, if the Loan Parties, or any Subsidiary of a Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

66

 

 

(c)     The Loan Parties shall, jointly and severally, pay, and hold Lender harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

 

(d)     The Loan Parties shall, jointly and severally, pay, and hold Lender harmless from and against any civil penalty or fine assessed by OFAC against, and all reasonable costs and expenses (including counsel fees and disbursements) incurred in connection with defense thereof by the Lender as a result of conduct of the Borrower that violates a sanction enforced by OFAC.

 

(e)     To the extent permitted by applicable law, the Loan Parties shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any loan or the use of proceeds thereof.

 

(f)     All amounts due under this Section 9.03 shall be payable promptly after written demand therefor.

 

9.04     Successors and Assigns.

 

(a)     The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Loan Parties may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of the Lender and (ii) Lender may assign its rights and obligations hereunder and upon such assignment shall be relieved of all obligations hereunder. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subparagraph (b) of this Section 9.04 and, to the extent expressly contemplated hereby, the Related Parties of Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)     Lender may at any time, without the consent of, or notice to, the Loan Parties, sell participations to any Person (other than a natural person, the Loan Parties or any of their Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of Lender’s rights and/or obligations under this Agreement; provided that (i) Lender’s obligations under this Agreement shall remain unchanged, (ii) Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Loan Parties shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

67

 

 

9.05     Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)     This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of Florida. EACH LOAN DOCUMENT (OTHER THAN AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

 

(b)     The Loan Parties hereby irrevocably and unconditionally submit, for themselves and their property, to the non-exclusive jurisdiction of the United States District Court of the Middle District of Florida, Tampa Division, and of any court of the State of Florida sitting in Hillsborough County, Florida, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Florida state court or, to the extent permitted by applicable law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Loan Parties or their properties in the courts of any jurisdiction.

 

(c)     The Loan Parties irrevocably and unconditionally waive any objection which they may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section 9.05 and brought in any court referred to in paragraph (b) of this Section 9.05. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)     Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 9.01 hereof. Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

 

9.06    Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.06.

 

68

 

 

9.07     Right of Setoff. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Loan Parties, any such notice being expressly waived by the Loan Parties to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Loan Parties at any time held or other obligations at any time owing by Lender to or for the credit or the account of the Loan Parties against any and all Obligations held by Lender, irrespective of whether Lender shall have made demand hereunder and although such Obligations may be unmatured. Lender agree promptly to notify the Loan Parties after any such set-off and any application made by Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application.

 

9.08     Counterparts; Integration. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Any party to this Agreement may execute a counterpart copy of this Agreement and deliver the same by telecopier, or by an electronically or digitally scanned copy signed counterpart stored in an electronic or digital format (e.g., “.pdf” or “.tft” format) which preserves the graphical or pictorial appearance of the original and delivered by electronic or digital means, such as electronic mail, so that the same may be printed in a tangible format, which shall be deemed an original for all purposes. This Agreement, the Notes and the other Loan Documents constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.

 

9.09     Survival. All covenants, agreements, representations and warranties made by the Loan Parties herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Advances, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Lender may have had notice or knowledge of any Default Condition or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on the Credit Facilities or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Credit Facilities have not expired or terminated. The provisions of Sections 3.10, 3.13, 3.14, and 9.03 hereof shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Credit Facilities, the expiration or termination of the Credit Facilities or the termination of this Agreement or any provision hereof. All representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of any Advances.

 

69

 

 

9.10     Severability. Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

9.11     Confidentiality. Lender agrees to take normal and reasonable precautions to maintain the confidentiality of any information provided to it by the Loan Parties or any Subsidiary in accordance with a previously executed confidentiality and non-disclosure agreement between such parties, except that such information may be disclosed (i) to any Related Party of the Lender, including without limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section 9.11, or which becomes available to the Lender or any Related Party of any of the foregoing on a non-confidential basis from a source other than the Loan Parties, (v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, and subject to provisions substantially similar to this Section 9.11, to any actual or prospective assignee or Participant, or (vi) with the consent of the Loan Parties. Any Person required to maintain the confidentiality of any information as provided for in this Section 9.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information.

 

9.12     Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to the Credit Facilities or any Advance, together with all fees, charges and other amounts which may be treated as interest on such Credit Facility under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by Lender in accordance with applicable law, the rate of interest payable in respect of the Credit Facilities or any Advance hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate.

 

9.13     Waiver of Effect of Corporate Seal. The Loan Parties represent and warrant that neither they nor any Subsidiary is required to affix its corporate seal to this Agreement or any other Loan Document pursuant to any Requirement of Law or regulation, agrees that this Agreement is delivered by Loan Parties under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Loan Documents.

 

70

 

 

9.14     Patriot Act. The Lender hereby notifies Loan Parties and their Subsidiaries that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies Loan Parties and each of their Subsidiaries, which information includes the name and address of such Person and other information that will allow such Lender to identify such Person in accordance with the Patriot Act. Each of the Loan Parties and their Subsidiaries shall provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the Patriot Act.

 

9.15     Publicity. Each Loan Party consents to the publication by Lender of customary advertising material relating to the transactions contemplated by this Agreement and the Loan Documents using Borrower’s or any other Loan Party’s name, product photographs, logo or trademark.

 

9.16     Post Closing Actions. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, the parties hereto acknowledge and agree that the actions and other matters described in Annex X shall be completed in accordance with Annex X. The provisions of Annex X shall be deemed incorporated herein by reference as fully as if set forth herein in its entirety.

 

All provisions of this Agreement and the other Loan Documents (including, without limitation, all conditions precedent, representations, warranties, covenants, events of default and other agreements herein and therein) shall be deemed modified to the extent necessary to effect the foregoing (and to permit the taking of the actions described above within the time periods required above, rather than as otherwise provided in the Loan Documents); provided that (x) to the extent any representation and warranty would not be true because the foregoing actions were not taken on the Effective Date the respective representation and warranty shall be required to be true and correct in all material respects at the time the respective action is taken (or was required to be taken) in accordance with the foregoing provisions of this Section 9.16 and (y) all representations and warranties relating to the Security Documents shall be required to be true immediately after the actions required to be taken by this Section 9.16 have been taken (or were required to be taken). The acceptance of the benefits of the Credit Facilities shall constitute a covenant and agreement by each Loan Party to the Lender that the actions required pursuant to this Section 9.16 will be, or have been, taken within the relevant time periods referred to in this Section 9.16 and that, at such time, all representations and warranties contained in this Agreement and the other Loan Documents shall then be true and correct without any modification pursuant to this Section 9.16. The parties hereto acknowledge and agree that the failure to take any of the actions required above, within the relevant time periods required above, shall give rise to an immediate Event of Default pursuant to this Agreement.

 

9.17     Amendment and Restatement of Existing Credit Agreement. The parties to this Agreement agree that, on the Effective Date, 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, payment and reborrowing or termination of the Obligations under the Existing Credit Agreement and the other Existing Loan Documents as in effect prior to the Effective Date. All Advances made and Obligations incurred under the Existing Credit Agreement that are outstanding on the Effective Date shall continue as Advances and Obligations under (and shall be governed by the terms of) this Agreement and the other Loan Documents. Without limiting the foregoing, on the Effective Date: (a) all references in the Existing Loan Documents to the “Credit Agreement” and the “Loan Documents” shall be deemed to refer to this Agreement and the Loan Documents, (b) all obligations constituting “Obligations” with Lender or any Affiliate of any Lender that are outstanding on the Effective Date shall continue as Obligations under this Agreement and the other Loan Documents, and (c) the liens and security interests in favor of the Lender securing payment of the Obligations are in all respects continuing and in full force and effect with respect to all Obligations.

 

9.18     Consent and Reaffirmation. Each Guarantor hereby consents to the execution, delivery and performance of this Agreement and agrees that each reference to the Existing Credit Agreement in the Loan Documents shall, on and after the date hereof, be deemed to be a reference to this Agreement. Each Guarantor hereby acknowledges and agrees that, after giving effect to this Agreement, all of its respective obligations and liabilities under the Loan Documents to which it is a party, as such obligations and liabilities have been amended by this Agreement, are reaffirmed, and remain in full force and effect.

 

 

 

[Remainder of Page Intentionally Blank]

 

71

 

 

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

 

	
			 

				
			Lender:

			 

			BRANCH BANKING AND TRUST COMPANY,

			a North Carolina banking corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Thomas M. Lambert

				
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

[Remainder of Page Intentionally Blank]

 

Signature Page to Credit Agreement

 

 

	
			 

				
			Borrower:

			 

			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Andrew D. Demott, Jr.  

				
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.  

				
			 

			
	
			 

				
			 

				
			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			

 

 

 

	
			 

				
			Fashion Seal:

			 

			FASHION SEAL CORPORATION,

			a Nevada corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ Andrew D. Demott, Jr.

				
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.

				
			 

			
	
			 

				
			 

				
			President

				
			 

			

 

 

 

	
			 

				
			TOG:

			 

			THE OFFICE GURUS, LLC,

			a Florida limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				/s/ Andrew D. Demott, Jr.	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

Signature Page to Credit Agreement

 

 

	
			 

				
			BAMKO, LLC:

			 

			BAMKO, LLC,

			a Delaware limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				/s/ Andrew D. Demott, Jr.	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

	
			 

				
			SU-ARK:

			 

			Superior Uniform Arkansas LLC,

			an Arkansas limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				/s/ Andrew D. Demott, Jr.	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

	
			 

				
			SGC LLC:

			 

			SUPERIOR GROUP OF COMPANIES, LLC,

			a Florida limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				/s/ Andrew D. Demott, Jr.	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

Signature Page to Credit Agreement

 

 

	
			 

				
			CID:

			 

			CID Resources, Inc.,

			a Delaware corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				/s/ Andrew D. Demott, Jr.	
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

				
			 

			
	
			 

				
			 

				
			Vice President

				
			 

			

 

 

 

[Remainder of Page Intentionally Blank]

 

 

 

 

 

 

Signature Page to Credit Agreement

 

 

EXHIBIT “A”

TO CREDIT AGREEMENT

 

FORM OF COMPLIANCE CERTIFICATE

 

COMPLIANCE CERTIFICATE

 

In connection with the terms of the Amended and Restated Credit Agreement, dated as of May 2, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), between, inter alios, Superior Uniform Group, Inc., a Florida corporation (the “Borrower”) and Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”), the undersigned certifies that the following information is true and correct, in all material respects, as of the date of this Covenant Compliance Certificate:

 

No Default Condition or Event of Default has occurred and is continuing.

 

The Coverage Ratio for the period of twelve (12) months ended on [_____] was [___] to 1.00, calculated as set forth in Schedule 1, and exceeds the level required by Section 6.16 of the Credit Agreement.

 

The Funded Indebtedness to EBITDA Ratio for the period of twelve (12) months ended on [____] was [____] to 1.00, calculated as set forth in Schedule 2, and is less than the level required by Section 6.18 of the Credit Agreement.

 

Capitalized terms used in this Compliance Certificate shall have the same meanings as those assigned to them in the Credit Agreement. The foregoing is true and correct, in all material respects, as of [____________, 20__].

 

[Remainder of Page Intentionally Blank]

 

A-1

 

 

Dated as of [_________, 20___].

 

	
			 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ 

				
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

				
			 

			
	
			 

				
			 

				
			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			

 

A-2

 

 

Schedule 1

 

Calculation of Coverage Ratio

 

A-3

 

 

Schedule 2

 

Calculation of Funded Indebtedness to EBITDA Ratio

 

A-4

 

 

EXHIBIT “B”

TO CREDIT AGREEMENT

 

FORM OF JOINDER TO CREDIT AGREEMENT

 

JOINDER TO AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS JOINDER TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Joinder”) is made this [____day of _________, 20__] by and among SUPERIOR UNIFORM GROUP, INC., a Florida corporation (the “Borrower”), BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, and [_____________________], (collectively, the “Subsidiary Loan Parties,” and individually, a “Subsidiary Loan Party,” and together with the Borrower, and the Guarantors (as defined in the Credit Agreement) collectively, the “Loan Parties,” and individually, a “Loan Party”). Reference is made to the Amended and Restated Credit Agreement, dated as of May 2, 2018 (as amended, modified or supplemented from time to time, the “Credit Agreement”), among, inter alios, Lender and Borrower. Capitalized and initially capitalized terms used herein and not herein defined shall have the meanings given to such terms in the Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Sections 6.19 and 6.20 of the Credit Agreement provide that upon any Loan Party’s formation or acquisition of any Domestic Subsidiary, such Subsidiary shall (i) join in and become a party to the Credit Agreement as a “Subsidiary Loan Party,” (ii) guaranty payment and performance of the Credit Facility, the Credit Agreement and the other Loan Documents pursuant to the Amended and Restated Subsidiary Guaranty Agreement dated as of even date with the Credit Agreement (the “Subsidiary Guaranty Agreement”), and (iii) grant to Lender a security interest in and to that portion of the Collateral owned by such Subsidiary, all pursuant to the terms of a Joinder to the Credit Agreement in the form hereof, a Supplement to the Subsidiary Guaranty Agreement in the form required by the Subsidiary Guaranty Agreement, and a Supplement to the Security Agreement in the form required by the Amended and Restated Security Agreement dated as of even date with the Credit Agreement (the “Security Agreement”);

 

WHEREAS, each of the undersigned Subsidiary Loan Parties has been formed or acquired as a Domestic Subsidiary of a Loan Party and is therefore entering into this Joinder and further executing and delivering to Lender contemporaneously with the execution and delivery hereof a Supplement to Amended and Restated Subsidiary Guaranty Agreement and a Supplement to Amended and Restated Security Agreement pursuant to Sections 6.19 and/or 6.20, as applicable, of the Credit Agreement; and

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto hereby agree as follows:

 

1.     Incorporation of Recitals. The foregoing recitals are incorporated herein by reference to the same extent and with the same force and effect as if fully set forth herein.

 

B-1

 

 

2.     Subsidiary Loan Parties as Parties to the Credit Agreement. Each of the undersigned Subsidiary Loan Parties hereby (i) agrees that by execution and delivery of this Joinder each of the undersigned shall become a “Subsidiary Loan Party,” a “Guarantor” and a “Loan Party” under the Credit Agreement with the same force and effect as if originally named therein as a Subsidiary Loan Party, (ii) acknowledge receipt of a copy of and agree to be obligated and bound by all of the terms and provisions of the Credit Agreement and all other Loan Documents, (iii) acknowledges that each of the undersigned is a Subsidiary of a Loan Party and has executed and delivered to Lender a Supplement to the Subsidiary Guaranty Agreement and a Supplement to the Security Agreement contemporaneously with the execution and delivery hereof, and (iv) acknowledge and agree that, from and after the date hereof, each reference in the Credit Agreement and the other Loan Documents to a “Guarantor,” a “Subsidiary Loan Party,” a “Loan Party,” a “Subsidiary,” and a “Domestic Subsidiary” shall be deemed to include without limitation each of the undersigned Subsidiary Loan Parties. Each of the undersigned Subsidiary Loan Parties hereby waive acceptance from the Lender of the obligations of each Subsidiary Loan Party under the Credit Agreement, the Subsidiary Guaranty Agreement, the Security Agreement, and the other Loan Documents upon the execution and delivery of this Joinder by the undersigned.

 

3.     Subsidiary Loan Party Representations, Warranties and Covenants. Each of the undersigned Subsidiary Loan Parties (a) represents and warrants that (i) each of the undersigned Subsidiary Loan Parties has full power and authority, and has taken all action necessary, to execute and deliver this Joinder and to consummate the transactions contemplated hereby and to become a Guarantor, a Subsidiary Loan Party and a Loan Party under the Credit Agreement, (ii) from and after the Joinder Effective Date (as defined below), each of the undersigned Subsidiary Loan Parties shall be bound by the provisions of the Credit Agreement, the Subsidiary Guaranty Agreement, the Security Agreement and the other Loan Documents as a Guarantor, a Subsidiary Loan Party and a Loan Party thereunder and shall have the obligations as such thereunder, and (iii) each has received copies of the Credit Agreement and the other Loan Documents; (b) affirms and makes as to itself to Lender those representations and warranties set forth in Article Five of the Credit Agreement which are applicable to a Loan Party as of the date hereof; and (c) agrees that the undersigned will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by the undersigned as a Guarantor, a Subsidiary Loan Party and a Loan Party.

 

4.     Effectiveness of Joinder. This Joinder and the amendments contained herein shall become effective on the date (the “Joinder Effective Date”) when each of the conditions set forth below shall have been fulfilled to the satisfaction of the Lender:

 

(a)     Lender shall have received counterparts of this Joinder, duly executed and delivered on behalf of the Borrower and each Subsidiary Loan Party set forth herein, and the Lender, as well as a Supplement to Amended and Restated Subsidiary Guaranty Agreement and a Supplement to Amended and Restated Security Agreement each duly executed and delivered by the undersigned Subsidiary Loan Parties becoming party to the Credit Agreement pursuant to the terms hereof.

 

B-2

 

 

(b)     No event shall have occurred and be continuing that constitutes an Event of Default or a Default Condition.

 

(c)     All representations and warranties of the Borrower contained in the Credit Agreement, and all representations and warranties of each other Loan Party in each Loan Document to which it is a party, shall be true and correct in all material respects at the Effective Date as if made on and as of such Joinder Effective Date.

 

(d)     The Borrower shall have delivered to the Lender (1) certified copies of evidence of all corporate, company and/or partnership actions taken by the Borrower and the other Loan Parties, including without limitation each Subsidiary Loan Party set forth herein, to authorize the execution and delivery of this Joinder, (2) certified copies of any amendments to the articles or certificate of incorporation, formation or organization, bylaws, partnership certificate or operating agreement of the Borrower and each other Loan Party since the date of the Credit Agreement, (3) certified copies of the articles or certificate of incorporation, formation, organization, bylaws, partnership certificate or operating agreement of each Subsidiary Loan Party joining into the Credit Agreement pursuant to the terms hereof, (4) a certificate of incumbency for the officers or other authorized agents, members or partners of the Borrower and each other Loan Party executing this Joinder, and (5) such additional supporting documents as the Lender or counsel for the Lender reasonably may request.

 

(e)     The Lender (or its counsel) shall have received a favorable written opinion of counsel to the Loan Parties, addressed to the Lender, and covering such matters relating to the Loan Parties, this Joinder, each Supplement to Amended and Restated Subsidiary Guaranty Agreement, each Supplement to Amended and Restated Security Agreement, and the other documents required hereby and the transactions contemplated herein and therein as the Lender shall reasonably request.

 

(f)     The Lender (or its counsel) shall have received the results of a search of the Uniform Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such Persons, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Lender that the Liens indicated in any such financing statement (or similar document) would be permitted by Section 7.02 of the Credit Agreement or have been or will be contemporaneously released or terminated.

 

(g)     All documents delivered pursuant to this Joinder must be of form and substance reasonably satisfactory to the Lender and its counsel, and all legal matters incident to this Joinder must be reasonably satisfactory to the Lender’s counsel.

 

As of the Joinder Effective Date, each Subsidiary Loan Party becoming a Subsidiary Loan Party by the execution hereof shall be a party to the Credit Agreement and, to the extent provided in this Joinder, shall have the rights and obligations of a Loan Party and a Guarantor thereunder and under the other Loan Documents.

 

B-3

 

 

5.     Successors and Assigns. This Joinder shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, and the Lender and their respective successors and assigns.

 

6.     No Further Amendments. Nothing in this Joinder or any prior amendment to the Loan Documents shall require the Lender to grant any amendments to the terms of the Loan Documents. Each of the Borrower and each other Loan Party acknowledges and agrees that there are no defenses, counterclaims or setoffs against any of their respective obligations under the Loan Documents.

 

7.     Representations and Warranties. Each of the Borrower and each other Loan Party represents and warrants that this Joinder has been duly authorized, executed and delivered by it in accordance with resolutions adopted by its board of directors or comparable managing body. All other representations and warranties made by the Borrower and each other Loan Party in the Loan Documents are incorporated by reference in this Joinder and are deemed to have been repeated as of the date of this Joinder with the same force and effect as if set forth in this Joinder, except that any representation or warranty relating to any financial statements shall be deemed to be applicable to the financial statements most recently delivered to the Lender in accordance with the provisions of the Loan Documents. Each of the Borrower and each other Loan Party represents and warrants to the Lender that, after giving effect to the terms of this Joinder, no Default Condition has occurred and been continuing.

 

8.     Confirmation of Lien. Each of the Borrower and each other Loan Party hereby acknowledges and agrees that the Collateral is and shall remain in all respects subject to the lien, charge and encumbrance of the Credit Agreement and the other Loan Documents and nothing herein contained, and nothing done pursuant hereto, shall adversely affect or be construed to adversely affect the lien, charge or encumbrance of, or conveyance effected by the Loans or the priority thereof over other liens, charges, encumbrances or conveyances.

 

9.     Fees and Expenses. The Borrower agrees to pay all reasonable, actual out-of-pocket costs and expenses of the Lender and its Affiliates, including the reasonable, actual fees, charges and disbursements of counsel for the Lender and its Affiliates, in connection with the preparation and administration of this Joinder.

 

10.     Severability. Any provision of this Joinder held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

11.     Governing Law. This Joinder shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of Florida. THIS JOINDER WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

 

12.     Counterparts. This Joinder may be executed by one or more of the parties to this Joinder on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. It shall not be necessary that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on more than one counterpart.

 

B-4

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Joinder to be duly executed by their respective duly authorized representatives all as of the day and year first above written.

 

	
			 

				
			BORROWER:

			 

			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ 

				
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			

 

	
			 

				
			 

				
			 

				
			 

			
	 	 	 	 
	 	
			SUBSIDIARY LOAN PARTIES:

				 
	 	 	 	 
	 	[_____________________________________]	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

B-5

 

 

Consented and agreed to:

 

LENDER:

 

BRANCH BANKING AND TRUST COMPANY

 

By: ________________________

Thomas M. Lambert

Senior Vice President

 

B-6

 

 

EXHIBIT “C”

TO CREDIT AGREEMENT

 

FORM OF NOTICE OF BORROWING 

 

NOTICE OF BORROWING

 

[________________, 20__]

 

Branch Banking and Trust Company

400 N. Tampa Street, Suite 2500

Tampa, Florida 33602

 

 

Ladies and Gentlemen:

 

Reference is made to the Amended and Restated Credit Agreement dated as of May 2, 2018 (as amended and in effect on the date hereof, the “Credit Agreement”), between, inter alios, the undersigned, as Borrower and Branch Banking and Trust Company, as Lender. Terms defined in the Credit Agreement are used herein with the same meanings. This notice constitutes a Notice of Borrowing, and the Borrower hereby requests an Advance under the Revolving Credit Facility opened pursuant to, and upon the terms and conditions of, the Credit Agreement, and in that connection the Borrower specifies the following information with respect to the Advance requested hereby:

 

	 	
			(A)

				
			Aggregate principal amount of Advance:

			
	 	 	 
	 	 	$[_______________]

 

	 	
			(B)

				
			Date of Advance (which is a Business Day):

			
	 	 	 
	 	 	[______________].

 

	 	
			(C)

				
			Location and number of Borrower’s account to which proceeds of Advance are to be disbursed:

			
	 	 	 
	 	 	
			Beneficiary Name: Superior Uniform Group, Inc.

			Bank Name: Branch Banking and Trust Company

			Account Number: [______________]

			Routing Number: [_______________]

			

 

C-1

 

 

The Borrower hereby represents and warrants that the conditions specified in Section 4.02 of the Credit Agreement are satisfied.

 

	
			 

				
			Very truly yours,

			 

			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			

 

C-2

 

 

EXHIBIT “D”

TO CREDIT AGREEMENT

 

FORM OF REVOLVING NOTE

 

 

Amended and restated REVOLVING LINE OF CREDIT 

PROMISSORY NOTE

	
			$75,000,000.00

				 
	 	 
	 	
			May 2, 2018

			

 

FOR VALUE RECEIVED, the undersigned, SUPERIOR UNIFORM GROUP, INC., a Florida corporation (the “Borrower”), hereby promises to pay to the order of BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (the “Lender”) or its assigns, at its office located at 400 N. Tampa Street, Suite 2500, Tampa, Florida 33602, on the Revolving Commitment Termination Date, as defined in the Amended and Restated Credit Agreement dated as of May 2, 2018 (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Credit Agreement”), between, inter alios, the Borrower and the Lender, the lesser of the principal sum of seventy-FIVE MILLION AND NO/100 DOLLARS ($75,000,000.00) or the aggregate unpaid principal amount of all Advances made by the Lender to the Borrower pursuant to the Credit Agreement, in lawful money of the United States of America in immediately available funds, and to pay interest from the date hereof on the principal amount thereof from time to time outstanding, in like funds, at said office, on each Payment Date and on the Revolving Commitment Termination Date at the Interest Rate per annum applicable to the Revolving Credit Facility as provided in the Credit Agreement. In addition, should legal action or an attorney-at-law be utilized to collect any amount due hereunder, the Borrower further promises to pay all out-of-pocket costs of collection, including the reasonable attorneys’ fees of the Lender. Capitalized or initially capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Credit Agreement.

 

The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at a rate or rates provided in the Credit Agreement.

 

If any payment of principal or interest is not paid when due under (whether by acceleration or otherwise) or within ten (10) days thereafter, the Borrower shall pay to Lender a late payment fee of 5% of the payment amount then due, with a minimum fee of $20.00.

 

Upon the occurrence and during the continuance of an Event of Default, all outstanding principal of this Amended and Restated Revolving Line of Credit Promissory Note shall bear interest at the Default Rate, and such default interest shall be payable on each Payment Date or upon demand or acceleration by Lender. To the greatest extent permitted by law, interest shall continue to accrue under the Notes at the Default Rate after the filing by or against any Loan Party of any petition seeking any relief in bankruptcy or under any law pertaining to insolvency or debtor relief.

 

DOCUMENTARY STAMP TAX IN THE AMOUNT OF $2,450 DUE ON THIS NOTE HAVE BEEN PAID IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA.

 

D-1

 

 

The principal amount of this Amended and Restated Revolving Line of Credit Promissory Note is subject to mandatory prepayments, if any, as provided in Section 3.03 of the Credit Agreement.

 

Subject to and upon compliance with all of the terms and conditions of the Credit Agreement, Borrower may borrow, repay and reborrow the proceeds of the Revolving Credit Facility.

 

All borrowings evidenced by this Amended and Restated Revolving Line of Credit Promissory Note and all payments and prepayments of the principal hereof and the date thereof shall be recorded by the holder hereof in its internal records. Should a conflict arise between this Amended and Restated Revolving Line of Credit Promissory Note and the Credit Agreement, the terms of the Credit Agreement shall control.

 

This Amended and Restated Revolving Line of Credit Promissory Note is issued in connection with, and is entitled to the benefits of, the Credit Agreement which, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified. This Amended and Restated Revolving Line of Credit Promissory Note amends and restates, but is not a novation or an accord and satisfaction of, the Lender’s Revolving Line of Credit Promissory Note dated as of February 28, 2017 in the original principal amount of $35,000,000 executed in connection with that certain Credit Agreement dated as of February 28, 2017.

 

THIS AMENDED AND RESTATED REVOLVING LINE OF CREDIT PROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AMENDED AND RESTATED REVOLVING LINE OF CREDIT PROMISSORY NOTE WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

 

BORROWER BY ITS EXECUTION HEREOF AND LENDER BY ITS ACCEPTANCE HEREOF, EACH IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS NOTE AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

[SIGNATURE ON FOLLOWING PAGE]

 

D-2

 

 

IN WITNESS WHEREOF, the Borrower has caused this Amended and Restated Revolving Line of Credit Promissory Note to be signed by its duly authorized representative all as of the day and year first above written.

 

	
			 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			/s/ 

				
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

Revolving Line of Credit Promissory Note Signature Page

D-3

 

 

EXHIBIT “E”

TO CREDIT AGREEMENT

 

FORM OF SECURITY AGREEMENT

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”), dated as of May 2, 2018, among Superior Uniform Group, Inc., a Florida corporation (the “Borrower”), the Subsidiaries of the Borrower signatory hereto and each other Subsidiary of the Borrower hereafter a party hereto (Borrower, each Subsidiary of the Borrower a party hereto and each other Subsidiary hereafter becoming a party hereto shall be collectively known as the “Grantors,” and individually as a “Grantor”), in favor of Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”) and is entered into pursuant to the terms of that certain Amended and Restated Credit Agreement (as the same may be amended, supplemented, replaced, restated or otherwise modified from time to time, the “Credit Agreement”) dated as of the date hereof, among Lender, Borrower the Subsidiaries of the Borrower signatory thereto and each other Subsidiary of the Borrower hereafter a party thereto.

 

WIT N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, Lender has agreed to establish a revolving credit facility and to extend two term loans to the Borrower; and

 

Whereas, the Grantors have previously entered into a Security Agreement, dated as of February 28, 2017 (as amended, the “Existing Security Agreement”) and the parties hereto wish to amend and restate the Existing Security Agreement on the terms set forth herein; and

 

WHEREAS, it is a condition precedent to the obligations of the Lender under the Credit Agreement that the Grantors enter into this Agreement in order to secure and continue to secure all obligations of the Borrower under the Credit Agreement, to secure and to continue to secure the obligations of each Subsidiary of the Borrower as party to the Credit Agreement under the Amended and Restated Subsidiary Guaranty Agreement dated as of May 2, 2018 (the “Subsidiary Guaranty Agreement”) and all other Loan Documents to which each Grantor is a party, to secure and continue to secure all other Obligations owed by any Loan Party to Lender or Affiliate of Lender, and the Grantors desire to satisfy such condition precedent.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.     Definitions. Capitalized and initially capitalized terms defined in the Credit Agreement and not otherwise defined herein, when used in this Agreement shall have the respective meanings provided for in the Credit Agreement. The following additional terms, when used in this Agreement, shall have the following meanings:

 

E-1

 

 

“Account Debtor” shall mean any person or entity that is obligated under an Account.

 

“Accounts” shall mean all “accounts” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights, and, in any event, shall mean and include, without limitation, (a) all accounts receivable, contract rights, book debts, notes, drafts and other obligations or indebtedness owing to any Grantor arising from the sale or lease of Goods or other property by any Grantor or the performance of services by Grantor (including, without limitation, any such obligation which might be characterized as an account, contract right or general intangible under the UCC in effect in any jurisdiction), (b) all of each Grantor’s rights in, to and under all purchase and sales orders for Goods, services or other property, and all of each Grantor’s rights to any Goods, services or other property represented by any of the foregoing (including returned or repossessed Goods and unpaid sellers’ rights of rescission, replevin, reclamation and rights to stoppage in transit), (c) all monies due to or to become due to any Grantor under all contracts for the sale, lease or exchange of Goods or other property or the performance of services by any Grantor (whether or not yet earned by performance on the part of such Grantor), and (d) all collateral security and guarantees of any kind given to any Grantor with respect to any of the foregoing.

 

“Chattel Paper” shall mean all “chattel paper” (as defined in the UCC) owned or acquired by any Grantor or in which any Grantor has or acquires any rights.

 

“Collateral” shall mean, collectively, all of the following:

 

all Accounts;

 

all as-extracted collateral

 

all Chattel Paper;

 

all Deposit Accounts;

 

all Documents;

 

all Equipment;

 

all Fixtures;

 

General Intangibles;

 

Goods, and all accessions thereto and Goods with which the Goods are commingled;

 

all Health Care Insurance Receivables;

 

all Instruments;

 

all Inventory;

 

all Investment Property;

 

all Payment Intangibles;

 

E-2

 

 

all Promissory Notes;

 

all Software;

 

money, cash or cash equivalents;

 

all other goods and personal property, whether tangible or intangible;

 

all Supporting Obligations and Letter-of-Credit Rights of any Grantor;

 

all books and records pertaining to any of the Collateral (including, without limitation, credit files, Software, computer programs, printouts and other computer materials and records but excluding customer lists); and

 

All products and Proceeds of all or any of the Collateral described in clauses (i) through (xv) hereof;

 

provided, however, that “Collateral” shall not include any Excluded Property; and provided, further, that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and after the date hereof to constitute Collateral.

 

“Copyright License” shall mean any and all rights of any Grantor under any written agreement granting any right to use any Copyright or Copyright registration.

 

“Copyrights” shall mean all of the following now owned or hereafter acquired by any Grantor or in which Grantor now has or hereafter acquires any rights: (a) all copyrights and general intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof.

 

“Deposit Accounts” shall mean all “deposit accounts” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights, or other receipts, of any Grantor covering, evidencing or representing rights or interest in such deposit accounts..

 

“Documents” shall mean all “documents” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights, or other receipts, of any Grantor covering, evidencing or representing goods.

 

“Equipment” shall mean all “equipment” (as defined in the UCC) now owned or hereafter acquired by any Grantor and wherever located, and, in any event, shall include without limitation all machinery, furniture, furnishings, processing equipment, conveyors, machine tools, engineering processing equipment, manufacturing equipment, materials handling equipment, trade fixtures, trucks, trailers, forklifts, vehicles, computers and other electronic data processing and other office equipment of any Grantor, and any and all additions, substitutions and replacements of any of the foregoing, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto, all fuel therefore and all manuals, drawings, instructions, warranties and rights with respect thereto.

 

E-3

 

 

“Event of Default” shall have the meaning set forth for such term in Section 7 hereof.

 

“Excluded Equity” shall mean any voting stock in excess of 65% of the outstanding voting stock of any Subsidiary not formed in the United States. For the purposes of this definition, “voting stock” means, with respect to any issuer, the issued and outstanding shares of each class of equity of such issuer entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).

 

“Excluded Property” shall mean, collectively, (i) Excluded Equity, (ii) any permit or license or any Contractual Obligation entered into by any Grantor (A) that prohibits or requires the consent of any Person other than the Borrower and its Subsidiaries as a condition to the creation by Grantor of a Lien on any right, title or interest in such permit, license or Contractual Obligation or any equity related thereto or (B) to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, but only, with respect to the prohibition in (A) and (B), to the extent, and for as long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other Requirement of Law, (iii) fixed or capital assets owned by any Grantor that is subject to a purchase money Lien or a Capital Lease Obligation if the Contractual Obligation pursuant to which such Lien is granted (or in the document providing for such Capital Lease Obligation) prohibits or requires the consent of any Person other than the Borrower and its Subsidiaries as a condition to the creation of any other Lien on such equipment and (iv) any “intent to use” Trademark applications for which a statement of use has not been filed (but only until such statement is filed); provided, however, “Excluded Property” shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property); provided, however, that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and after the date hereof to constitute Collateral.

 

“Excluded Swap Obligation” shall mean, with respect to any guarantor of a Swap Obligation, including the grant of a security interest to secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.

 

“Fixtures” shall mean all “fixtures” (as defined in the UCC) now owned or hereafter acquired by any Grantor and affixed to or forming a part of any real property now owned or hereafter acquired by any Grantor

 

E-4

 

 

“General Intangibles” shall mean all “general intangibles” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all right, title and interest in or under all contracts, all customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and reissues, extensions or renewals thereof, rights in Intellectual Property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any Trademark or Trademark License), all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, deposit, checking and other bank accounts, rights to receive tax refunds and other payments, rights of indemnification, all books and records, correspondence, credit files, invoices, tapes, cards, computer runs, domain names, prospect lists, customer lists and other papers and documents.

 

“Goods” shall mean all “goods” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights.

 

“Instruments” shall mean all “instruments” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all promissory notes, all certificates of deposit and all letters of credit evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Accounts or other obligations owed to any Grantor.

 

“Intellectual Property” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights: (a) all Patents, patent rights and patent applications, Copyrights and copyright applications, Trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, applications for registration of trademarks, trade names and service marks, fictitious names registrations and trademark, trade name and service mark registrations, and all derivations thereof; and (b) Patent Licenses, Trademark Licenses, Copyright Licenses and other licenses to use any of the items described in the preceding clause (a), and any other items necessary to conduct or operate the business of any Grantor.

 

“Inventory” shall mean all “inventory” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all Goods owned or held for sale or lease to any other Persons.

 

“Investment Property” shall mean all “investment property” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights and, in any event, shall include all “certificated securities,” “uncertificated securities,” “security entitlements,” “securities accounts,” “commodity contracts” and “commodity accounts” (as all such terms are defined in the UCC) of any Grantor.

 

E-5

 

 

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” (as defined in the UCC) now owned or hereafter acquired by any Grantor, including rights to payment or performance under a letter of credit, whether or not any Grantor, as beneficiary, has demanded or is entitled to demand payment or performance.

 

“License” shall mean any Copyright License, Patent License, Trademark License or other license of rights or interests of any Grantor in Intellectual Property.

 

“Patent License” shall mean any written agreement now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights granting any right with respect to any property, process or other invention on which a Patent is in existence.

 

“Patents” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or any other country, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State or Territory thereof, or any other country; and (b) all reissues, continuations, continuations-in-part and extensions thereof.

 

“Payment Intangibles” shall mean “payment intangibles” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights.

 

“Proceeds” shall mean all “proceeds” (as defined in the UCC) of, and all other profits, rentals or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or realization upon, the Collateral, and, in any event, shall mean and include all claims against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of any Collateral, and any condemnation or requisition payments with respect to any Collateral and the following types of property acquired with cash proceeds: Accounts, Inventory, General Intangibles, Documents, Instruments and Equipment.

 

“Promissory Notes” shall mean all “promissory notes” (as defined in the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights.

 

“Secured Obligations” shall mean (i) all Obligations of the Borrower, (ii) all Guaranteed Obligations (as such term is defined in the Subsidiary Guaranty Agreement) of each other Grantor and all other Loan Documents to which such other Grantor is a party to (whether for principal, interest, fees, expenses, indemnity or reimbursement payments, or otherwise), (iii) all renewals, extensions, refinancings and modifications thereof, and (iv) all reasonable costs and expenses incurred by the Lender in connection with the exercise of its rights and remedies hereunder (including reasonable attorneys’ fees).

 

“Security Interests” shall mean the security interests granted to the Lender pursuant to Section 3, as well as all other security interests created or assigned as additional security for the Secured Obligations pursuant to the provisions of this Agreement.

 

E-6

 

 

“Software” shall mean all “software” (as defined in the UCC), now owned or hereafter acquired by any Grantor, including all computer programs and all supporting information provided in connection with a transaction related to any program.

 

“Subsidiary Capital Stock” shall mean Investment Property, “securities” (as defined in the UCC) and/or General Intangibles now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any rights consisting of all of the issued and outstanding Capital Stock of any direct or indirect Domestic Subsidiary of Borrower or any other Grantor and Capital Stock of any direct or indirect Foreign Subsidiary of Borrower or any other Grantor but only to the extent of 65% of said Capital Stock in a Foreign Subsidiary, and, in any event, shall include all “general intangibles,” “certificated securities,” “uncertificated securities,” “security entitlements,” and “securities accounts” evidencing or relating thereto, which Subsidiary Capital Stock existing as of the date of this Agreement is described on Schedule IV

 

“Supporting Obligations” means all “supporting obligations” (as defined in the UCC), including letters of credit and guaranties issued in support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments, or Investment Property.

 

“Swap Obligation” shall mean any Rate Management Obligation that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, as amended from time to time.

 

“Trademark License” shall mean any written agreement now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any such rights granting to Grantor any right to use any Trademark.

 

“Trademarks” shall mean all of the following now owned or hereafter acquired by any Grantor or in which any Grantor has or acquires any such rights: (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature (whether registered or unregistered), now owned or existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, (ii) all reissues, extensions or renewals thereof and (iii) all goodwill associated with or symbolized by any of the foregoing.

 

“UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in the State of Florida; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than Florida, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. “United States” or “U.S.” shall mean the United States of America, any of the fifty states thereof, and the District of Columbia.

 

E-7

 

 

Section 2.     Representations and Warranties. Grantors represent and warrant to the Lender, as follows:

 

	 	
			(a)

				
			Each Grantor has rights in and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder and has good and marketable title to all of its Collateral, free and clear of any Liens other than Liens expressly permitted under Section 7.02 of the Credit Agreement.

			

 

	 	
			(b)

				
			Other than financing statements, security agreements, or other similar or equivalent documents or instruments with respect to Liens expressly permitted under Section 7.02 of the Credit Agreement, no financing statement, mortgage, security agreement or similar or equivalent document or instrument evidencing a Lien on all or any part of the Collateral is on file or of record in any jurisdiction. None of the Collateral is in the possession of a Person (other than the Grantor owning the same) asserting any claim thereto or security interest therein, except that the Lender or its designee may have possession of Collateral as contemplated hereby.

			

 

	 	
			(c)

				
			When the UCC financing statements in appropriate form are filed in the offices specified on Schedule I attached hereto, the Security Interests shall constitute valid and perfected security interests in the Collateral, prior to all other Liens and rights of others therein except for the Liens expressly permitted under Section 7.02 of the Credit Agreement, to the extent that a security interest therein may be perfected by filing pursuant to the UCC, assuming the proper filing and indexing thereof.

			 

			

	 	
			(d)

				
			All Inventory and Equipment is insured in accordance with the requirements of the Credit Agreement.

			

 

	 	
			(e)

				
			None of the Collateral constitutes, or is the Proceeds of, “farm products” (as defined in the UCC).

			

 

	 	
			(f)

				
			Schedule II correctly sets forth each Grantor’s state of organization, taxpayer identification number, organizational identification number and correct legal name indicated on the public record of each Grantor’s jurisdiction of organization which shows each Grantor to be organized.

			

 

	 	
			(g)

				
			The Perfection Certificates for each Grantor, which are attached hereto as composite Schedule III, correctly set forth (i) all names and tradenames that each Grantor has used within the last five (5) years and the names of all Persons that have merged into or been acquired by any Grantor, (ii) the chief executive offices of each Grantor over the last five (5) years, (iii) all other locations in which tangible assets of each Grantor have been located in the last five (5) years, (iv) the name of each bank at which each Grantor maintains Deposit Accounts, the state or other jurisdiction of location of each such bank, and the account numbers for each Deposit Account, (v) all letters of credit under which each Grantor is a beneficiary, (vi) all third parties with possession of any Inventory or Equipment of each Grantor and (vii) each Grantor’s mailing address.

			

 

E-8

 

 

	 	
			(h)

				
			With respect to the Accounts of each Grantor: (i) to the extent an Account arises out of Goods sold and/or services furnished, (A) the Goods sold and/or services furnished giving rise to each Account, to the extent applicable, are not subject to any security interest or Lien except the security interest granted to the Lender herein and Liens expressly permitted by Section 7.02 of the Credit Agreement, (B) such Account arises out of a bona fide transaction for Goods sold and delivered (or in the process of being delivered) by any Grantor or for services actually rendered by any Grantor; (ii) each Account and the papers and documents of the applicable Grantor relating thereto are genuine and in all material respects what they purport to be; (iii) the amount of each Account as shown on the applicable Grantor’s books and records, and on all invoices and statements which may be delivered to the Lender with respect thereto, is due and payable to the applicable Grantor and is not in any way contingent (except for contingent Accounts relating to the sale, lease or other disposition of all or substantially all of the assets of a line of business or division of any Grantor); (iv) no Account is subject to set-offs, counterclaims or disputes existing or asserted with respect to any Account that in the aggregate could reasonably be expected to have a Material Adverse Effect, and no Grantor has made any agreement with any Account Debtor for any deduction from any Account except for deductions made in the ordinary course of its business; (v) to each Grantor’s knowledge, there has been no development or event in respect of the validity or enforcement of any Account or Accounts or the amount payable thereunder as shown on the applicable Grantor’s books and records and all invoices and statements delivered to the Lender with respect thereto, which individually or in the aggregate has had or could be reasonably expected to have a Material Adverse Effect; and (vi) the right to receive payment under each Account is assignable except where the Account Debtor with respect to such Account is the United States government or any State government or any agency, department or instrumentality thereof, to the extent the assignment of any such right to payment is prohibited or limited by applicable law, regulations, administrative guidelines or contract.

			

 

	 	
			(i)

				
			With respect to any Inventory, (i) such Inventory is located at one of the Grantor’s locations set forth on the respective Perfection Certificate for such Grantor (other than Inventory in transit or in foreign locations, in each instance which is insured as required pursuant to the terms of Section 4(g) hereof), (ii) no Inventory is now, or shall at any time or times hereafter be stored at any other location without Lender’s prior consent, and if Lender gives such consent, such Grantor will concurrently therewith obtain, to the extent required by the Credit Agreement, Collateral Access Agreements, (iii) each Grantor has good title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the Lien granted to the Lender and Permitted Encumbrances, (iv) such Inventory is not subject to any material licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, and (v) the completion of manufacture, sale or other disposition of such Inventory by the Lender following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which each Grantor is a party or to which such property is subject.

			

 

E-9

 

 

	 	
			(j)

				
			No Grantor has any interest in, or title to, any Patent, Trademark or Copyright except as set forth in the applicable Perfection Certificate for such Grantor. This Agreement is effective to create a valid and continuing Lien on and, upon filing of the Copyright Security Agreements (as hereinafter defined) with the United States Copyright Office and filing of the Patent Security Agreements (as hereinafter defined) and the Trademark Security Agreements (as hereinafter defined) with the United States Patent and Trademark Office, perfected security interests in favor of the Lender in each Grantor’s Patents, Trademarks and Copyrights and such perfected security interests are enforceable as such as against any and all creditors of and purchasers from each Grantor. Upon filing of the Copyright Security Agreements with the United States Copyright Office and filing of the Patent Security Agreements and the Trademark Security Agreements with the United States Patent and Trademark Office and the filing of appropriate financing statements listed on Schedule I hereto, all action necessary or desirable to protect and perfect the Lender’s Lien on each Grantor’s Patents, Trademarks or Copyrights shall have been duly taken. Notwithstanding anything to the contrary contained in this Agreement, the Lender shall only require perfection of its security interests in, or other registration with respect to, any Patent, Trademark or Copyright registered, or eligible to be registered, with a country other than the United States or any political subdivision thereof, to the extent that Lender determines, in its sole discretion, that such Patent, Trademark or Copyright, and the registration thereof in such other country or political subdivision thereof, is material to the applicable Grantor’s business.

			

 

Section 3.     The Security Interests. In order to secure the full and punctual payment and performance of the Secured Obligations in accordance with the terms of the Credit Agreement, each Grantor hereby pledges, assigns, hypothecates, sets over and conveys to the Lender and grants to the Lender a continuing security interest in and to, all of its rights in and to all Collateral now or hereafter owned or acquired by each Grantor or in which any Grantor now has or hereafter has or acquires any rights, and wherever located. The Security Interests are granted as security only and shall not subject the Lender or transfer to the Lender, or in any way affect or modify, any obligation or liability of the Grantors with respect to any Collateral or any transaction in connection therewith

 

E-10

 

 

Section 4.     Further Assurances; Covenants.

 

	 	
			(a)

				
			General.

			

 

	 	
			(i)

				
			No Grantor shall change the location of its chief executive office or principal place of business unless it shall have given the Lender thirty (30) days’ prior notice thereof, as well as authorized the filing by Lender of all financing statements and financing statement amendments which Lender may require in connection therewith. No Grantor shall change the locations, or establish new locations, where it keeps or holds any of the Collateral or any records relating thereto from the applicable locations described in the respective Perfection Certificates attached hereto as composite Schedule III unless such Grantor shall have given the Lender thirty (30) days’ prior notice of such change of location. The foregoing covenant shall not apply to any Collateral (including motor vehicles) perfected by recordation of the Lender’s Lien on the appropriate certificate of title.

			

 

	 	
			(ii)

				
			No Grantor shall change its name, organizational identification number, identity or jurisdiction or form of organization in any manner unless it shall have given the Lender thirty (30) days’ prior written notice thereof, as well as authorized the filing by Lender of all financing statements and financing statement amendments which Lender may require in connection therewith. No Grantor shall merge or consolidate into, or transfer any of the Collateral to, any other Person other than another Grantor, other than as permitted by the Credit Agreement. Lender hereby consents to the Borrower changing its name to “Superior Group of Companies, Inc.” and to Superior Group of Companies, LLC changing its name to “Superior Uniform Group, LLC” following approval by the Borrower’s shareholders.

			

 

E-11

 

 

	 	
			(iii)

				
			Each Grantor hereby authorizes the Lender, its counsel or its representative, at any time and from time to time, to file financing statements and amendments that describe the collateral covered by such financing statements as “all assets of the Grantor,” “all personal property of the Grantor” or words of similar effect, in such jurisdictions as are necessary or desirable in order to perfect the security interests granted by any Grantor under this Agreement. Each Grantor will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action (including, without limitation, any filings with the United States Patent and Trademark Office, Copyright or Patent filings and any filings of financing or continuation statements under the UCC) that from time to time may be necessary, or that the Lender may request, in order to create, preserve, upgrade in rank (to the extent required hereby), perfect, confirm or validate the Security Interests or to enable the Lender to obtain the full benefits of this Agreement, or to enable the Lender to exercise and enforce any of its rights, powers and remedies hereunder with respect to any of its Collateral. Each Grantor hereby authorizes the Lender to execute and file financing statements, financing statement amendments or continuation statements on behalf of each Grantor. Each Grantor agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. Grantors shall pay the costs of, or incidental to, any recording or filing of any financing statements, financing statement amendments or continuation statements necessary in the sole discretion of the Lender, to perfect the Lender’s security interest in the Collateral.

			

 

	 	
			(iv)

				
			Except as set forth in the respective Perfection Certificates attached hereto as composite Schedule III, no Grantor shall permit any of its Inventory and Equipment to be in the possession of any other Person unless pursuant to an agreement in form and substance satisfactory to the Lender and (A) such Person has acknowledged that (1) it holds possession of such Inventory and Equipment, as the case may be, for the Lender’s benefit, subject to the Lender’s instructions, and (2) such Person does not have a Lien in such Inventory or Equipment, (B) such Person agrees not to hold such Inventory or Equipment on behalf of any other Person and (C) such Person agrees that, after the occurrence and during the continuance of an Event of Default and upon request by the Lender it will issue and deliver to the Lender warehouse receipts, bills of lading or any similar documents relating to such Collateral in the Lender’s name and in form and substance acceptable to the Lender. Lender reserves the right to require a Collateral Access Agreement from any lessor, warehousemen, processor or other Person in possession of, having a Lien upon or having rights or interests in the Collateral that Lender determines, in its sole discretion, at any time or from time to time, to be material.

			

 

	 	
			(v)

				
			No Grantor shall (A) sell, transfer, lease, exchange, assign or otherwise dispose of, or grant any option, warrant or other right with respect to, any of its Collateral other than sales of assets permitted under Section 7.06 of the Credit Agreement; or (B) create, incur or suffer to exist any Lien with respect to any Collateral, except for the Liens expressly permitted under Section 7.02 of the Credit Agreement.

			

 

E-12

 

 

	 	
			(vi)

				
			Grantors will, promptly upon request, provide to the Lender all information and evidence it may reasonably request concerning the Collateral, to enable the Lender to enforce the provisions of this Agreement.

			

 

	 	
			(vii)

				
			Each Grantor shall take all actions necessary or reasonably requested by Lender in order to maintain the perfected status of the Security Interests.

			

 

	 	
			(viii)

				
			No Grantor shall file any amendment to or termination of a financing statement naming such Grantor as debtor and the Lender as Lender, or any correction statement with respect thereto, in any jurisdiction until such time as the Secured Obligations have been indefeasibly paid in full in cash and the Revolving Credit Facility has been terminated.

			

 

	 	
			(ix)

				
			Each Grantor shall take all steps commercially reasonably necessary to grant the Lender control of all electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

			

 

	 	
			(b)

				
			Accounts, Etc.

			

 

	 	
			(i)

				
			Each Grantor shall use all commercially reasonable efforts consistent with prudent business practice to cause to be collected from its Account Debtors, as and when due, any and all amounts owing under or on account of each Account (including, without limitation, Accounts which are delinquent, such Accounts to be collected in accordance with lawful collection procedures) and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account. The costs and expenses (including, without limitation, reasonable attorneys’ fees actually incurred) of collection of Accounts incurred by Grantors or the Lender shall be borne by Grantors.

			

 

	 	
			(ii)

				
			Upon the occurrence and during the continuance of any Event of Default, Grantors shall, at the request and option of the Lender, notify Account Debtors and other Persons obligated on the Accounts or any of the Collateral of the security interest of Lender in any Account or other Collateral and that payment thereof is to be made directly to the Lender, and may itself, if an Event of Default shall have occurred and be continuing, without notice to or demand upon Grantors, so notify Account Debtors and other Persons obligated on Collateral. After the making of such a request or the giving of any such notification, Grantors shall hold any proceeds of collection of the Accounts and such other Collateral received by any Grantor as trustee for the Lender without commingling the same with other funds of such Debtor and shall turn the same over to the Lender in the identical form received, together with any necessary endorsements or assignments. The Lender shall apply the proceeds of collection of the Accounts and other Collateral received by the Lender to the Obligations in accordance with the provisions of the Credit Agreement, such proceeds to be immediately credited after final payment in cash or other immediately available funds of the items giving rise to them.

			

 

E-13

 

 

	 	
			(iii)

				
			Grantors will perform and comply in all material respects with all of their respective material obligations in respect of Accounts, Instruments and General Intangibles.

			

 

	 	
			(iv)

				
			Anything herein to the contrary notwithstanding, Grantors shall remain liable under each of its Accounts, contracts and agreements to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account or the terms of such contract or agreement. The Lender shall not have any obligation or liability under any Account (or any agreement giving rise thereto), contract or agreement by reason of or arising out of this Agreement or the receipt by the Lender of any payment relating to such Account, contract or agreement pursuant hereto, nor shall the Lender be obligated in any manner to perform any of the obligations of Grantors under or pursuant to any Account (or any agreement giving rise thereto), contract or agreement, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

			

 

	 	
			(v)

				
			At any time and from time to time, the Lender shall have the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and Grantors shall furnish all such assistance and information as the Lender may reasonably require in connection with such test verifications. Upon the Lender’s request and at the expense of Grantors, Grantors shall cause their independent public accountants or others reasonably satisfactory to Lender to furnish Lender reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts. After the occurrence of an Event of Default, Lender in its own name or in the name of others may communicate with Account Debtors on the Accounts to verify with them to the Lender’s reasonable satisfaction the existence, amount and terms of any Accounts.

			

 

E-14

 

 

	 	
			(vi)

				
			Lender shall have the right at any time after the occurrence and during the continuance of an Event of Default, to require that Grantors enter into a “lockbox” or “blocked account” arrangement whereby Grantors shall notify any or all of the account debtors on the Accounts, Chattel Paper or General Intangibles of Grantors, or obligors on any instruments of which Grantors is obligee, all as Lender shall determine, to make payments directly to a post office box or address maintained by a collection agent designated by Lender, which collection agent may be Lender, all at Grantors’ sole cost and expense, all pursuant to a “blocked account agreement” in form and substance as required by or as is satisfactory to Lender, in its sole and absolute discretion. The cost of any lockbox or blocked account arrangement whether with Lender or any other collection agent shall be paid by Grantors.

			

 

	 	
			(c)

				
			Equipment, Etc. Grantors shall, (i) within ten (10) days after a written request by the Lender, in the case of Equipment now owned, and (ii) following a request by the Lender pursuant to subclause (i) above, within ten (10) days after acquiring any other Equipment, deliver to the Lender, any and all certificates of title, and applications therefor, if any, of such Equipment and shall cause the Lender to be named as lienholder on any such certificate of title and applications to the extent such Equipment has a value of $25,000 or more. No Grantor shall permit any such items to become a fixture to real estate or an accession to other personal property unless such real estate or personal property is the subject of a fixture filing (as defined in the UCC) creating a first priority perfected Lien in favor of the Lender.

			

 

	 	
			(d)

				
			Patents, Trademarks, Etc. Grantors shall notify the Lender immediately upon the occurrence of each of the following (i) any Grantor’s acquisition after the date of this Agreement of any material Intellectual Property and (ii) a Responsible Officer of the applicable Grantor obtaining actual knowledge that any application or registration relating to any material Intellectual Property owned by or licensed to such Grantor is reasonably likely to become abandoned or dedicated, or of any material adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Copyright Office, the United States Patent and Trademark Office or any court) regarding such Grantor’s ownership of any material Intellectual Property, its right to register the same, or to keep and maintain the same. Grantors will, contemporaneously herewith, execute and deliver to the Lender the Patent Security Agreement, Trademark Security Agreement and Copyright Security Agreement in the forms of Exhibit A, Exhibit B and Exhibit C hereto, as necessary, and shall execute and deliver to the Lender any other document required to acknowledge or register or perfect the Lender’s interest in any part of the Intellectual Property. Notwithstanding anything to the contrary contained in this Agreement, the Lender shall only require perfection of its security interests in, or other registration with respect to, any Patent, Trademark or Copyright registered, or eligible to be registered, with a country other than the United States or any political subdivision thereof, to the extent that Lender determines, in its sole discretion, that such Patent, Trademark or Copyright, and the registration thereof in such other country or political subdivision thereof, is material to the applicable Grantor’s business.

			

 

E-15

 

 

	 	
			(e)

				
			Deposit Accounts, Subsidiary Capital Stock, Chattel Paper, Investment Property and Letters of Credit.

			

 

	 	
			(i)

				
			No Grantor shall open or maintain any Deposit Accounts other than those listed on the respective Perfection Certificates attached hereto as composite Schedule III or Excluded Accounts and such other Deposit Accounts as such Grantor shall open and maintain with the written consent of Lender subject to control agreements, in form and substance satisfactory to Lender in its sole discretion, executed by such Grantor, that depository institution at which the deposit account is maintained and Lender; provided that no control agreements shall be required for the Deposit Accounts of CID Resources, Inc. unless such Deposit Accounts remain open after June 30, 2018.

			

 

	 	
			(ii)

				
			No Grantor shall become the beneficiary of any Letters of Credit with a face amount in excess of $50,000, unless the issuer of the Letter of Credit has consented to the assignment of the proceeds of such Letter of Credit to the Lender which consent shall not be unreasonably withheld, such assignment to be in form and substance acceptable to the Lender.

			

 

E-16

 

 

	 	
			(iii)

				
			Grantors, at any time and from time to time, will (a) take such steps as the Lender may reasonably request from time to time for the Lender to obtain “control” of any Subsidiary Capital Stock and any other Investment Property or electronic Chattel Paper, with any agreements establishing control to be in form and substance reasonably satisfactory to the Lender, and (b) otherwise to insure the continued perfection and priority of Lender’s security interest in any of the Collateral and of the preservation of its rights therein. Each Grantor specifically covenants and agrees that upon the formation or acquisition of any Subsidiary, such Grantor shall subject 100% of the Capital Stock of any Domestic Subsidiary and 65% of the Capital Stock of any Foreign Subsidiary so formed or acquired to the security interest and lien of this Agreement and shall execute and deliver to Lender a Supplement in the form of Annex 1 to this Agreement describing with the specificity the Capital Stock in the Domestic Subsidiary or Foreign Subsidiary formed or acquired and required to be made subject of this Agreement and shall further deliver to Lender all original certificates evidencing any such Capital Stock, together with appropriate stock or other powers executed in blank with respect to such certificates, to the extent that such Capital Stock is “certificated” and shall otherwise take such actions as are required by the first sentence of this clause (ii). The execution and delivery of any instrument supplementing this Agreement so as to add Subsidiary Capital Stock as herein contemplated shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any such additional Subsidiary Capital Stock.

			

 

	 	
			(f)

			 

				
			Commercial Tort Claims. If any Grantor shall at any time acquire a “commercial tort claim” (as such term is defined in the UCC) with a claim for damages that could reasonably be expected to be in excess of $100,000, such Grantor shall promptly notify the Lender thereof in a writing, providing a reasonable description and summary thereof, and shall execute a supplement to this Agreement granting a security interest in such commercial tort claim to the Lender. Notwithstanding anything to the contrary, prior to the occurrence of an Event of Default, Grantor shall not be obligated to execute a supplement to this Agreement in respect of the claim filed by Superior Uniform Group, Inc. d/b/a Fashion Seal Healthcare (as “Claimant”) against Oceanside Institutional Industries, Inc., known as Civ. Action No. 16-4807 filed in the United States District Court for the Eastern District of New York.

			

 

	 	
			(g)

				
			Insurance. Each Grantor shall have its Inventory, Equipment and all other tangible personal property insured against loss or damage by fire, theft, burglary, pilferage, loss in transportation and such other hazards as Lender shall reasonably specify, by reputable and financially viable insurers (having a rating of A or A-: Class V or better by Best’s Key Rating Guide), in amounts satisfactory to Lender and under policies containing loss payable clauses satisfactory to Lender. Any such insurance policies, or certificates or other evidence thereof satisfactory to Lender, shall be deposited with Lender. Each Grantor agrees that Lender shall have a security interest in such policies and the proceeds of such policies thereof, and if any loss shall occur during the continuation of an Event of Default, the proceeds relating to the loss or damage of Inventory, Equipment or other personal property may be applied to the payment of the Obligations or to the replacement or restoration of the Inventory, Equipment or other personal property damaged or destroyed, as Lender may elect or direct. After the occurrence and during the continuance of an Event of Default, Lender shall have the right to file claims under any insurance policies, to receive receipt and give acquaintance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect to the collection, compromise, or settlement of any claims under any of the insurance policies.

			

 

E-17

 

 

Section 5.     Reporting and Recordkeeping. Grantors covenant and agree with the Lender that from and after the date of this Agreement and until the Secured Obligations have been indefeasibly paid in full in cash:

 

	 	
			(a)

				
			Maintenance of Records Generally. Each Grantor will keep and maintain at its own cost and expense records of its Collateral, complete in all material respects, including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and all other dealings with its Collateral. Each Grantor shall mark its books and records pertaining to its Collateral to evidence this Agreement and the Security Interests. All Chattel Paper will be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest of Branch Banking and Trust Company.” For the Lender’s further security, Grantors agree that the Lender shall have a security interest in all of each Grantor’s books and records pertaining to its Collateral and, upon the occurrence and during the continuation of any Event of Default, each Grantor shall deliver and turn over full and complete copies of any such books and records to the Lender or to its representatives at any time on demand of the Lender. To the extent required by the Credit Agreement, upon reasonable notice from the Lender, Grantors shall permit any representative of the Lender, to inspect such books and records and will provide photocopies thereof to the Lender.

			

 

	 	
			(b)

				
			Special Provisions Regarding Maintenance of Records and Reporting Re: Accounts, Inventory and Equipment;

			

 

E-18

 

 

	 	
			(i)

				
			Grantors shall keep complete and materially accurate records of its Accounts. Upon the request of the Lender, Grantors shall deliver to the Lender copies of all documents, including, without limitation, repayment histories and present status reports, relating to its Accounts so scheduled and such other matters and information relating to the status of its then existing Accounts as the Lender shall reasonably request.

			

 

	 	
			(ii)

				
			In the event any amounts due and owing in excess of $500,000 in the aggregate are in dispute between any Account Debtor and any Grantor, such Grantor shall provide the Lender with written notice thereof promptly after such Grantor’s learning thereof explaining in detail the reason for the dispute, all claims related thereto and the amount in controversy.

			

 

	 	
			(iii)

				
			Each Grantor shall maintain itemized records, accurate in all material respects, itemizing and describing the kind, type, quality, quantity, location and book value of its Inventory and Equipment and shall, upon request by the Lender, furnish the Lender with a current schedule containing the foregoing information.

			

 

	 	
			(iv)

				
			Each Grantor will promptly upon, but in no event later than five (5) Business Days after:

			

 

	 	
			A.

				
			Grantor’s learning thereof, inform the Lender, in writing, of any delay in Grantor’s performance of any of its obligations to any Account Debtor and of any assertion of any claims, offsets or counterclaims by any Account Debtor and of any allowances, credits or other monies granted by Grantor to any Account Debtor, in each case involving amounts in excess of $500,000 in the aggregate for all Accounts of such Account Debtor; and

			

 

	 	
			B.

				
			Grantor’s receipt or learning thereof, furnish to and inform the Lender of all material adverse information relating to the commencement of any insolvency proceeding with respect to any Account Debtor with Accounts exceeding $500,000 in the aggregate.

			

 

	 	
			(v)

				
			If any Account, arises out of a contract with the United States of America, or any department, agency, subdivision or instrumentality thereof, or of any state (or department, agency, subdivision or instrumentality thereof) where such state has a state assignment of claims act or other law comparable to the Federal Assignment of Claims Act, Grantors will take any action required or requested by the Lender to give notice of the Lender’s security interest in such Accounts under the provisions of the Federal Assignment of Claims Act or any comparable law or act enacted by any state or local governmental authority.

			

 

E-19

 

 

	 	
			(c)

				
			Further Identification of Collateral. Grantors will if so requested by the Lender furnish to the Lender, as often as the Lender reasonably requests but in no event more frequently than once per Fiscal Quarter and without limit after the occurrence and during the continuance of an Event of Default, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Lender may reasonably request, all in reasonable detail.

			

 

	 	
			(d)

				
			Notices. In addition to the notices required by Section 5(b) hereof, Grantors will advise the Lender promptly, but in no event later than thirty (30) days after the occurrence thereof, in reasonable detail, (i) of any Lien or claim made or asserted against any of the Collateral that is not expressly permitted by the terms of the Credit Agreement, and (ii) of the occurrence of any other event which would have a material adverse effect on the aggregate value of the Collateral or on the validity, perfection or priority of the Security Interests.

			

 

Section 6.     General Authority. Grantors hereby irrevocably appoint, so long as any Obligations remain outstanding, the Lender its true and lawful attorney, with full power of substitution, in the name of Grantors, the Lender or otherwise, for the sole use and benefit of the Lender on its behalf, but at Grantors’ expense, to exercise, at any time (subject to the proviso below) all or any of the following powers:

 

	 	
			(a)

				
			to file the financing statements, financing statement amendments and continuation statements referred to in Section 4(a),

			

 

	 	
			(b)

				
			to demand, sue for, collect, receive and give acquaintance for any and all monies due or to become due with respect to any Collateral or by virtue thereof,

			

 

	 	
			(c)

				
			to settle, compromise, compound, prosecute or defend any action or proceeding with respect to any Collateral,

			

 

	 	
			(d)

				
			to sell, transfer, assign or otherwise deal in or with the Collateral or the proceeds or avails thereof, as fully and effectually as if the Lender were the absolute owner thereof, and

			

 

	 	
			(e)

				
			to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference to the Collateral;

			

 

provided, however, that the powers described in clauses (ii), (iii), (iv) and (v) above may be exercised by the Lender only if an Event of Default then exists.

 

E-20

 

 

Section 7.     Events of Default. Each of the following specified events shall constitute an Event of Default under this Agreement:

 

	 	
			(a)

				
			The existence or occurrence of any “Event of Default” as provided under the terms of the Credit Agreement;

			

 

	 	
			(b)

				
			Any representation or warranty made by or on behalf of Grantor under or pursuant to this Agreement shall have been false or misleading in any material respect when made; or

			

 

	 	
			(c)

				
			Grantors shall fail, in any material respect, to observe or perform any covenant or agreement set forth in this Agreement other than those referenced in paragraphs (a) and (b) above, and if such failure is capable of being remedied, such failure shall remain unremedied for thirty (30) days following notice from Lender to Grantors.

			

 

Section 8.     Remedies upon Event of Default.

 

	 	
			(a)

				
			If any Event of Default has occurred and is continuing, the Lender may, without further notice, exercise all rights and remedies under this Agreement or any other Loan Document or that are available to a secured creditor under the UCC or that are otherwise available at law or in equity, at any time, in any order and in any combination, including to collect any and all Secured Obligations from Grantors, and, in addition, the Lender may sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Lender may deem satisfactory. The Lender shall give the Borrower not less than ten (10) days’ prior written notice of the time and place of any sale or other intended disposition of Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. Grantors agree that any such notice constitutes “reasonable notification” within the meaning of Section 9-611 of the UCC (to the extent such Section or any successor provision under the UCC is applicable).

			

 

	 	
			(b)

				
			The Lender may be the purchaser of any or all of the Collateral so sold at any public sale (or, if such Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations or if otherwise permitted under applicable law, at any private sale) and thereafter hold the same, absolutely, free from any right or claim of whatsoever kind. Grantors agree during an Event of Default to execute and deliver such documents and take such other action as the Lender reasonably deems necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale the Lender shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold to it absolutely, free from any claim or right of any kind, including any equity or right of redemption of Grantors. To the extent permitted by applicable law, Grantors hereby specifically waive all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The notice (if any) of such sale shall (1) in case of a public sale, state the time and place fixed for such sale, and (2) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Lender may fix in the notice of such sale. At any such sale Collateral may be sold in one (1) lot as an entirety or in separate parcels, as the Lender may determine. The Lender shall not be obligated to make any such sale pursuant to any such notice. The Lender may, without notice or publication (other than any notices required by this Section 8 or by applicable law), adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, such Collateral so sold may be retained by the Lender until the selling price is paid by the purchaser thereof, but the Lender shall not incur any liability in case of the failure of such purchaser to take up and pay for such Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Lender, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. Grantors shall remain liable for any deficiency.

			

 

E-21

 

 

	 	
			(c)

				
			For the purpose of enforcing any and all rights and remedies under this Agreement, the Lender may (i) require Grantors to, and Grantors agree that it will, at the joint and several expense of Grantors, and upon the request of the Lender, forthwith assemble all or any part of its Collateral as directed by the Lender and make it available at a place designated by the Lender which is, in the Lender’s opinion, reasonably convenient to the Lender and Grantors, whether at the premises of Grantors or otherwise, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any such Collateral is or may be located and, without charge or liability to the Lender, seize and remove such Collateral from such premises, (iii) have access to and use each Grantor’s books and records, computers and software (subject to the terms of applicable licenses) relating to the Collateral, and (iv) prior to the disposition of any of the Collateral, store or transfer such Collateral without charge in or by means of any storage or transportation facility owned or leased by any Grantor, process, repair or recondition such Collateral or otherwise prepare it for disposition in any manner and to the extent the Lender deems appropriate and, in connection with such preparation and disposition, use without charge any trademark, trade name, copyright, patent or technical process used by any Grantor.

			

 

	 	
			(d)

				
			Without limiting the generality of the foregoing, if any Event of Default has occurred and is continuing:

			

 

	 	
			(i)

				
			the Lender may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the exclusive right to enforce) against any licensee or sublicensee all rights and remedies of Grantors in, to and under any Licenses and take or refrain from taking any action under any thereof, and Grantors hereby release the Lender from, and agrees to hold the Lender free and harmless from and against any claims arising out of, any lawful action so taken or omitted to be taken with respect thereto except for the Lender’s gross negligence or willful misconduct as determined by a final and nonappealable decision of a court of competent jurisdiction; and

			

 

	 	
			(ii)

				
			upon request by the Lender, Grantor agrees to execute and deliver to the Lender powers of attorney, in form and substance satisfactory to the Lender, for the implementation of any lease, assignment, license, sublicense, grant of option, sale or other disposition of any Intellectual Property, in each case subject to the terms of the applicable License. In the event of any such disposition pursuant to this Section 8, Grantors shall supply their know-how and expertise relating to the manufacture and sale of the products bearing Trademarks or the products or services made or rendered in connection with Patents or Copyrights, and its customer lists and other records relating to such Intellectual Property and to the distribution of said products, to the Lender.

			

 

Section 9.     Limitation on Duty of Lender in Respect of Collateral. Beyond reasonable care in the custody thereof, the Lender shall have no duty as to any Collateral of Grantors in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Lender shall be deemed to have exercised reasonable care in the custody of the Collateral of Grantors in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property, and the Lender shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Lender in good faith.

 

Section 10.     Application of Proceeds. The proceeds of any sale of, or other realization upon, all or any part of the Collateral of Grantors shall be applied by the Lender in the manner set forth in Section 8.02 of the Credit Agreement.

 

E-22

 

 

Section 11.     Expenses. In the event that Grantors fail to comply with the provisions of the Credit Agreement, this Agreement or any other Loan Document, such that the value of any of its Collateral or the validity, perfection, rank or value of the Security Interests are thereby diminished or potentially diminished or put at risk, the Lender may, but shall not be required to, effect such compliance on behalf of Grantors, and Grantors shall reimburse the Lender for the reasonable and actual costs thereof on demand. All insurance expenses and all expenses of protecting, storing, warehousing, appraising, insuring, handling, maintaining and shipping such Collateral, any and all excise, stamp, intangibles, transfer, property, sales, and use taxes imposed by any state, federal, or local authority or any other governmental authority on any of such Collateral, or in respect of periodic appraisals and inspections of such Collateral, or in respect of the sale or other disposition thereof, shall be borne and paid by Grantors; and if Grantors fail promptly to pay any portion thereof when due, the Lender may, at its option, but shall not be required to, pay the same and charge each Grantor’s accounts therefor, and Grantors agree to reimburse the Lender therefor on demand. All sums so paid or incurred by the Lender for any of the foregoing and any and all other sums for which Grantors may become liable hereunder and all reasonable costs and expenses (including reasonable attorneys’ fees, legal expenses and court costs) incurred by the Lender in enforcing or protecting the Security Interests or any of its rights or remedies thereon shall be payable by Grantors on demand and shall bear interest (after as well as before judgment) until paid at the default rate of interest set forth in the Credit Agreement and shall be additional Secured Obligations hereunder

 

Section 12.     Termination of Security Interests; Release of Collateral. Upon the repayment in full in cash of all Secured Obligations, termination of all commitments of the Lender under the Credit Agreement, the Security Interests shall terminate and all rights to the Collateral shall revert to Grantors. Upon any such termination of the Security Interests or release of such Collateral, the Lender will promptly upon the Grantors’ request and contemporaneously with any refinancing of the Obligations, at the expense of the Borrower, (a) execute and deliver to the Borrower such documents as Grantors shall reasonably request, but without recourse or warranty to the Lender, including but not limited to written authorization to file termination statements to evidence the termination of the Security Interests in such Collateral, and (b) assign and deliver to the Grantor any Collateral in the possession of Lender.

 

Section 13.     Notices. All notices, requests and other communications to Grantors or the Lender hereunder shall be delivered in the manner required by the Credit Agreement and shall be sufficiently given to the Lender or Grantor if addressed or delivered to them at, in the case of the Lender and the Borrower, its addresses and telecopier numbers specified in the Credit Agreement and in the case of any other Grantors, at their respective addresses and telecopier number provided in the Subsidiary Guaranty Agreement. All such notices and communications shall be deemed to have been duly given at the times set forth in the Credit Agreement.

 

Section 14.     No Waiver; Remedies Cumulative. No failure or delay on the part of the Lender in exercising any right or remedy hereunder, and no course of dealing between Grantors on the one hand and the Lender or any holder of any Note on the other hand shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy hereunder or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder or thereunder. The rights and remedies herein and in the other Loan Documents are cumulative and not exclusive of any rights or remedies which the Lender would otherwise have. No notice to or demand on Grantors not required hereunder in any case shall entitle Grantors to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Lender to any other or further action in any circumstances without notice or demand.

 

E-23

 

 

Section 15.     Successors and Assigns. This Agreement is for the benefit of the Lender and its successors and assigns, and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Agreement shall be binding on Grantors and its successors and assigns; provided, however, that no Grantor may assign any of its rights or obligations hereunder without the prior written consent of the Lender.

 

Section 16.     Amendments. No amendment or waiver of any provision of this Agreement, nor consent to any departure by each Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Lender and each Grantor, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

Section 17.     Governing Law; Waiver of Jury Trial.

 

	 	
			(a)

				
			THIS AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF FLORIDA, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF PERFECTION AND NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN FLORIDA. THIS AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

			

 

	 	
			(b)

				
			GRANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF FLORIDA AND THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH FLORIDA STATE COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SUCH FEDERAL COURT. EACH GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST SUCH GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

			

 

E-24

 

 

	 	
			(c)

				
			GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING DESCRIBED IN PARAGRAPH (b) OF THIS SECTION 17 AND BROUGHT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION 17. GRANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

			

 

	 	
			(d)

				
			GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN THE CREDIT AGREEMENT. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

			

 

	 	
			(e)

				
			GRANTOR HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING AMONG THE PARTIES HERETO DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). GRANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS NOT BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 17.

			

 

E-25

 

 

Section 18.     Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable, in whole or in part, in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

Section 19.     Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one (1) and the same instruments.

 

Section 20.     Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

 

Section 21.     Additional Grantors. Pursuant to Section 6.19 of the Credit Agreement, each Subsidiary Loan Party that was not in existence on the date of the Credit Agreement is required to enter into this Agreement as a Grantor upon becoming a Subsidiary Loan Party. Upon execution and delivery after the date hereof by Lender and such Subsidiary of an instrument in the form of Annex 2, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any instrument adding an additional Grantor as a party to this Agreement shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

 

Section 22.     Conflicts. If the terms of any provision of this Agreement conflicts with the terms of any provision of the Credit Agreement, the terms of the provision of the Credit Agreement shall control.

 

Section 23.     Consent and Reaffirmation. Each Grantor hereby consents to the execution, delivery and performance of the Credit Agreement and agrees that each reference to the Existing Credit Agreement in the Loan Documents shall, on and after the date hereof, be deemed to be a reference to the Credit Agreement. Each Grantor hereby acknowledges and agrees that, after giving effect to the Credit Agreement, all of its respective obligations and liabilities under the Loan Documents (including, without limitation, this Agreement) to which it is a party, as such obligations and liabilities have been amended by the Credit Agreement, are reaffirmed, and remain in full force and effect.

 

Section 24.     Effect of Restatement. The Agreement amends and restates the Existing Security Agreement in its entirety and supersedes the Existing Security Agreement in all respects.

 

[Remainder of Page Intentionally Blank]

 

E-26

 

 

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

 

	
			 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			

 

 

	
			 

				
			FASHION SEAL CORPORATION,

			a Nevada corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

			President

				
			 

			

 

 

	
			 

				THE OFFICE GURUS, LLC,

			a Florida limited liability company	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

	
			 

				BAMKO, LLC,

			a Delaware limited liability company	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

E-27

 

 

	
			 

				
			Superior Uniform Arkansas LLC,

			an Arkansas limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

 

	
			 

				Superior Group of Companies, LLC,

			a Florida limited liability company	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

	
			 

				
			CID Resources, Inc.

			a Delaware corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			Name:

				
			 

				
			 

			
	
			 

				
			Title:

				
			 

				
			 

			

 

E-28

 

 

ANNEX 1 TO THE

 

SECURITY AGREEMENT

 

COLLATERAL SUPPLEMENT NO. [__] dated as of [________________], to the Amended and Restated Security Agreement (the “Security Agreement”) dated as of May 2, 2018, among Superior Uniform Group, Inc., a Florida corporation (the “Borrower”), each of the direct and indirect Subsidiaries of Borrower listed on Schedule I thereto, and each direct or indirect Subsidiary subsequently becoming a party thereto as provided in Section 21 thereof (Borrower and each such Subsidiary individually, a “Grantor” and collectively, the “Grantors”) and Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”).

 

A.     Reference is made to the Amended and Restated Credit Agreement dated as of May 2, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lender and certain other Loan Parties (as defined therein).

 

B.     Capitalized or initially capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and the Credit Agreement.

 

C.     The Grantors have entered into the Security Agreement in order to induce the Lender to extend the Credit Facilities and to issue Letters of Credit. Pursuant to Section 6.19 of the Credit Agreement, upon the acquisition and formation of any Subsidiary subsequent to the date of the Credit Agreement, the Grantor owning the Capital Stock of such Subsidiary is required to pledge to Lender 100% of the Capital Stock of such Subsidiary if it is a Domestic Subsidiary and 65% of the Capital Stock of such Subsidiary if it is a Foreign Subsidiary. Clause (iii) of Section 4(e) of the Security Agreement provides that upon formation or acquisition of any such Subsidiary, the Grantor forming or acquiring Capital Stock in such Subsidiary shall execute a supplement in the form hereof in order to modify Schedule IV to the Security Agreement so as to include the Capital Stock of the Domestic Subsidiary and/or a Foreign Subsidiary being formed or acquired as aforesaid.

 

Accordingly, the undersigned Grantor agrees with Lender as follows:

 

Section 1.     In accordance with Clause (iii) of Section 4(e) of the Security Agreement, Grantor by its signature below grants to Lender a security interest in the Subsidiary Capital Stock described on Schedule I hereto and Grantor (a) agrees that the Subsidiary Capital Stock described on Schedule I shall be subject to the security interest, lien, encumbrance, and operation of the Security Agreement in favor of Lender, (b) Schedule IV of the Security Agreement is hereby supplemented and amended so as to include, without limitation, the Subsidiary Capital Stock described on Schedule I hereto and (c) represents and warrants that the representations and warranties made by the Grantors thereunder, including without limitation those representations and warranties as to Subsidiary Capital Stock are true and correct on and as of the date hereof with respect to the Subsidiary Capital Stock described on Schedule I hereto. Each reference to Subsidiary Capital Stock in the Security Agreement shall be deemed to include the Subsidiary Capital Stock described on Schedule I hereto. The Security Agreement is hereby incorporated herein by reference.

 

Annex 1-1

 

 

Section 2.     Grantor represents and warrants to Lender that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

Section 3.     This Supplement may be executed in counterparts each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when Lender shall have received counterparts of this Supplement that, when taken together, bear the signatures of Grantor and Lender of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

 

Section 4.     Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

 

Section 5.     THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA.

 

Section 6.     In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 7.     Grantor agrees to reimburse Lender for its out-of-pocket expenses in connection with this Supplement, including the fees, disbursements and other charges of counsel for Lender.

 

[Remainder of Page Intentionally Blank]

 

Annex 1-2

 

 

IN WITNESS WHEREOF, Grantor and Lender have duly executed this Collateral Supplement to the Security Agreement as of the day and year first above written.

 

	
			 

				
			[NAME OF GRANTOR]

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	 	 	Name:	 
	 	 	 	 
	 	 	Title:	 
	
			 

				
			 

				
			 

				
			 

			
	 	 	Address:	 

 

 

 

	
			 

				
			BRANCH BANKING AND TRUST COMPANY,

			a North Carolina banking corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

Annex 1-3

 

 

ANNEX 2 TO THE

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

SUPPLEMENT NO. [__] dated as of [________________], to the Amended and Restated Security Agreement (the “Security Agreement”) dated as of May 2, 2018, among Superior Uniform Group, Inc., a Florida corporation (the “Borrower”), each of the direct and indirect Subsidiaries of Borrower listed on Schedule I thereto, and each direct or indirect Subsidiary subsequently becoming a party thereto as provided in Section 21 thereof (Borrower and each such Subsidiary individually, a “Grantor” and collectively, the “Grantors”) and Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”).

 

A.     Reference is made to the Amended and Restated Credit Agreement dated as of May 2, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lender and certain other Loan Parties (as defined therein).

 

B.     Capitalized or initially capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and the Credit Agreement.

 

C.     The Grantors have entered into the Security Agreement in order to induce the Lender to extend the Credit Facilities and to issue Letters of Credit. Pursuant to Section 6.19 of the Credit Agreement, each Subsidiary Loan Party that was not in existence or not a Subsidiary Loan Party on the date of the Credit Agreement is required to enter into the Security Agreement as a Grantor upon becoming a Subsidiary Loan Party. Section 21 of the Security Agreement provides that additional direct or indirect Domestic Subsidiaries of the Borrower may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned direct or indirect Domestic Subsidiary of the Borrower (the “New Grantor”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security Agreement in order to induce Lender to make additional advances under the Revolving Credit Facility and to issue additional Letters of Credit and as consideration for the 2017 Term Loan, the 2018 Term Loan and/or or Advances under the Revolving Credit Facility previously made and Letters of Credit previously issued.

 

Accordingly, New Grantor agrees with Lender as follows:

 

Section 1.     In accordance with Section 21 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as Grantor thereunder and (b) represents and warrants that the representations and warranties made by it (but not the other Grantors) as a Grantor thereunder are true and correct on and as of the date hereof. Each reference to a Grantor in the Security Agreement shall be deemed to include the New Grantor. The Security Agreement is hereby incorporated herein by reference.

 

Section 2.     The New Grantor represents and warrants to Lender that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

Annex 2-1

 

 

Section 3.     This Supplement may be executed in counterparts each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when Lender shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and Lender of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

 

Section 4.     Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

 

Section 5.     THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA.

 

Section 6.     In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 7.     All communications and notices hereunder shall be in writing and given as provided in Section 13 of the Security Agreement. All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower.

 

Section 8.     The New Grantor agrees to reimburse Lender for its out-of-pocket expenses in connection with this Supplement, including the fees, disbursements and other charges of counsel for Lender.

 

[Remainder of Page Intentionally Blank]

 

Annex 2-2

 

 

IN WITNESS WHEREOF, the New Grantor and Lender have duly executed this Supplement to the Security Agreement as of the day and year first above written.

 

	
			 

				
			[NAME OF GRANTOR]

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	 	 	Name:	 
	 	 	Title:	 
	 	 	Address:	 

 

 

	
			 

				
			BRANCH BANKING AND TRUST COMPANY,

			a North Carolina banking corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

				
			 

			

 

Annex 2-3

 

 

EXHIBIT A

 

to Security Agreement

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Agreement”), dated as of _________, is made between  _____________________ (the “Grantor”), and Branch Banking and Trust Company, a North Carolina banking corporation, as the Secured Party (the “Secured Party”) and relates to certain financing or other financial accommodations made by Secured Party pursuant to the terms of that certain Amended and Restated Credit Agreement, dated as of May 2, 2018, by and between, inter alios, Superior Uniform Group, Inc., a Florida corporation (“Borrower”) and Secured Party (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered, or has previously or contemporaneously with the execution and delivery hereof become a party to, an Amended and Restated Security Agreement, dated as of May 2, 2018 (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security Agreement, the Grantor is required to execute and deliver this Agreement and to grant to the Secured Party a continuing security interest in all of the Patent Collateral (as defined below) to secure all Secured Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees, for the benefit of the Secured Party, as follows:

 

SECTION 1.     Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

 

SECTION 2.     Grant of Security Interest. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to the Secured Party, and grant to the Secured Party a security interest in, for its benefit and the benefit of each Secured Party, all of the following property (the “Patent Collateral”), whether now owned or hereafter acquired or existing by it:

 

(a)     all letters patent and applications for letters patent throughout the world, including all patent applications in preparation for filing anywhere in the world and including each patent and patent application referred to in Item A of Schedule I attached hereto;

 

A-1

 

 

(b)     all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (a);

 

(c)     all patent licenses, including each patent license referred to in Item B of Schedule I attached hereto; and

 

(d)     all proceeds of, and rights associated with, the foregoing (including license royalties and proceeds of infringement suits), the right to sue third parties for past, present or future infringements of any patent or patent application, including any patent or patent application referred to in Item A of Schedule I attached hereto, and for breach or enforcement of any patent license, including any patent license referred to in Item B of Schedule I attached hereto, and all rights corresponding thereto throughout the world.

 

SECTION 3.     Security Agreement. This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Secured Party in the Patent Collateral with the United States Patent and Trademark Office and corresponding offices in other countries of the world (subject to Sections 2 and 4(d) of the Security Agreement). The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Secured Party under the Security Agreement. The Security Agreement (and all rights and remedies of the Secured Party thereunder) shall remain in full force and effect in accordance with its terms subject to Section 4 hereof.

 

SECTION 4.     Release of Security Interest. Upon (i) the sale, transfer or other disposition of any Patent Collateral in accordance with the Credit Agreement or (ii) the indefeasible payment in full in cash of the Secured Obligations and the termination of the Revolving Credit Facility (as defined in the Credit Agreement), the Secured Party shall promptly upon the Grantor’s request and contemporaneously with any refinancing of the Secured Obligations, at the Grantor’s expense, execute and deliver to the Grantor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Patent Collateral which has been granted hereunder; provided that in the case of subsection (i) above, only the Patent Collateral sold, transferred or otherwise disposed of in accordance with the Credit Agreement shall be released.

 

SECTION 5.     Acknowledgment. The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

 

SECTION 6.     Loan Document, etc. This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

 

A-2

 

 

SECTION 7.     Counterparts. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.

 

[Remainder of Page Intentionally Blank]

 

A-3

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Title:

				
			 

			

 

	
			 

				
			BRANCH BANKING AND TRUST COMPANY

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

				
			 

			

 

A-4

 

 

SCHEDULE I

 

to Patent Security Agreement

 

	
			Item A. Patents

				 	 	 	 
	 	 	
			Issued Patents

				 	 	 
	 	 	 	 	 	 
	
			*Country

				
			Patent No.

				
			Issue Date

				
			Inventor(s)

				
			Title

				 
	 	 	 	 	 	 
	 	
			Pending Patent Applications

				 	 
	 	 	 	 	 	 
	
			*Country

				
			Serial No.

				
			Filing Date

				
			Inventor(s)

				
			Title

				 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
			Patent Applications in Preparation

				 	 
	 	 	 	 	 	 
	
			*Country

				
			Docket No.

				
			Expected

			Filing Date

				
			Inventor(s)

				
			Title

				 
	 	 	 	 	 	 
	
			Item B. Patent Licenses

				 	 	 
	 	 	 	 	 	 
	
			*Country or

			Territory

				
			Licensor

				
			Licensee

				
			Effective

			Date

				
			Expiration

			Date

				
			Subject

			Matter

			

 

*List items related to the United States first for ease of recordation. List items related to other countries next, grouped by country and in alphabetical order by country name.

 

A-5

 

 

EXHIBIT B

to Security Agreement

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of __________, is made between _______________ (the “Grantor”), and Branch Banking and Trust Company, a North Carolina banking corporation, as the Secured Party (the “Secured Party”) and relates to certain financing or other financial accommodations made by Secured Party pursuant to the terms of that certain Amended and Restated Credit Agreement, dated as of May 2, 2018, by and between, inter alios, Superior Uniform Group, Inc., a Florida corporation (“Borrower”) and Secured Party (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered, or has previously or contemporaneously with the execution and delivery hereof become a party to, an Amended and Restated Security Agreement, dated as of May 2, 2018 (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security Agreement, the Grantor is required to execute and deliver this Agreement and to grant to the Secured Party a continuing security interest in all of the Trademark Collateral (as defined below) to secure all Secured Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees, for the benefit of the Secured Party, as follows:

 

SECTION 1.     Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

 

SECTION 2.     Grant of Security Interest. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to the Secured Party, and grant to the Secured Party a security interest in, for its benefit and the benefit of each Secured Party, all of the following property (the “Trademark Collateral”), whether now owned or hereafter acquired or existing by it:

 

B-1

 

 

(a)     all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos, other source of business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of a like nature (all of the foregoing items in this clause (a) being collectively called a “Trademark”), now existing anywhere in the world or hereafter adopted or acquired, whether currently in use or not, all registrations and recordings thereof and all applications in connection therewith, whether pending or in preparation for filing, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States of America or any State thereof or any foreign country, including those referred to in Item A of Schedule I attached hereto;

 

(b)     all Trademark licenses, including each Trademark license referred to in Item B of Schedule I attached hereto;

 

(c)     all reissues, extensions or renewals of any of the items described in clause (a) and (b);

 

(d)     all of the goodwill of the business connected with the use of, and symbolized by the items described in, clauses (a) and (b); and

 

(e)     all proceeds of, and rights associated with, the foregoing, including any claim by the Grantor against third parties for past, present or future infringement or dilution of any Trademark, Trademark registration or Trademark license, including any Trademark, Trademark registration or Trademark license referred to in Item A and Item B of Schedule I attached hereto, or for any injury to the goodwill associated with the use of any such Trademark or for breach or enforcement of any Trademark license.

 

Provided, that Trademark Collateral shall not include any “intent to use” Trademark applications for which a statement of use has not been filed (but only until such statement is filed).

 

SECTION 3.     Security Agreement. This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Secured Party in the Trademark Collateral with the United States Patent and Trademark Office and corresponding offices in other countries of the world (subject to Sections 2 and 4(d) of the Security Agreement). The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Secured Party under the Security Agreement. The Security Agreement (and all rights and remedies of the Secured Party thereunder) shall remain in full force and effect in accordance with its terms subject to Section 4 hereof.

 

SECTION 4.     Release of Security Interest. Upon (i) the sale, transfer or other disposition of any Trademark Collateral in accordance with the Credit Agreement or (ii) the indefeasible payment in full in cash of the Secured Obligations and the termination of the Revolving Credit Facility (as defined in the Credit Agreement), the Secured Party shall promptly upon the Grantor’s request and contemporaneously with any refinancing of the Secured Obligations, at the Grantor’s expense, execute and deliver to the Grantor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Trademark Collateral which has been granted hereunder; provided that in the case of subsection (i) above, only the Trademark Collateral sold, transferred or otherwise disposed of in accordance with the Credit Agreement shall be released.

 

B-2

 

 

SECTION 5.     Acknowledgment. The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

 

SECTION 6.     Loan Document, etc. This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

 

SECTION 7.     Counterparts. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.

 

[Remainder of Page Intentionally Blank]

 

B-3

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Title:

				
			 

			

 

	
			 

				
			BRANCH BANKING AND TRUST COMPANY

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

			 

				
			 

			

B-4

 

 

SCHEDULE I

 

to Trademark Security Agreement

 

	
			Item A. Trademarks

				 	 	 	 
	 	 	
			Registered Trademark

				 	 
	 	 	 	 	 	 
	
			*Country

				
			Trademark.

				
			Registration No

				
			Registration Date

				 
	 	 	 	 	 	 
	 	
			Pending Trademark Applications

				 	 
	 	 	 	 	 	 
	
			*Country

				
			Trademark

				
			Serial No

				
			Filling Date

				 	 
	 	 	 	 	 	 
	 	
			Trademark Application in Preparation

				 	 
	 	 	 	 	 	 
	
			*Country

				
			Trademark.

				
			Docket No.

				
			Expected 

			Filling Date

				
			Products/

			services

				 
	 	 	 	 	 	 
	
			Item B. Trademark Licenses

				 	 	 
	 	 	 	 	 	 
	
			*Country or

			Territory

				
			Trademark

				
			Licensor

				
			Licensee

				
			Effective

			Date

				
			Expiration

			Date

			

 

*List items related to the United States first for ease of recordation. List items related to other countries next, grouped by country and in alphabetical order by country name.

 

B-5

 

 

EXHIBIT C

to Security Agreement

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Agreement”), dated as of _________, is made between  ________________________ (the “Grantor”) and, and Branch Banking and Trust Company, a North Carolina banking corporation, as the Secured Party (the “Secured Party”) and relates to certain financing or other financial accommodations made by Secured Party pursuant to the terms of that certain Amended and Restated Credit Agreement, dated as of May 2, 2018, by and between, inter alios, Superior Uniform Group, Inc., a Florida corporation (“Borrower”) and Secured Party (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Credit Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, in connection with the Credit Agreement, the Grantor has executed and delivered, or has previously or contemporaneously with the execution and delivery hereof become a party to, an Amended and Restated Security Agreement, dated as of May 2, 2018 (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to Section 4(d) of the Security Agreement, the Grantor is required to execute and deliver this Agreement and to grant to the Secured Party a continuing security interest in all of the Copyright Collateral (as defined below) to secure all Secured Obligations; and

 

WHEREAS, the Grantor has duly authorized the execution, delivery and performance of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor agrees, for the benefit of the Secured Party, as follows:

 

SECTION 1.     Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided (or incorporated by reference) in the Security Agreement.

 

SECTION 2.     Grant of Security Interest. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, to secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to the Secured Party, and grant to the Secured Party a security interest in, all of the following property (the “Copyright Collateral”), whether now owned or hereafter acquired or existing by it, being all copyrights (including all copyrights for semi-conductor chip product mask works) of the Grantor, whether statutory or common law, registered or unregistered, now or hereafter in force throughout the world including all of the Grantor’s right, title and interest in and to all copyrights registered in the United States Copyright Office or anywhere else in the world and also including the copyrights referred to in Item A of Schedule I attached hereto, and all applications for registration thereof, whether pending or in preparation, all copyright licenses, including each copyright license referred to in Item B of Schedule I attached hereto, the right to sue for past, present and future infringements of any thereof, all rights corresponding thereto throughout the world, all extensions and renewals of any thereof and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

 

C-1

 

 

SECTION 3.     Security Agreement. This Agreement has been executed and delivered by the Grantor for the purpose of registering the security interest of the Secured Party in the Copyright Collateral with the United States Copyright Office and corresponding offices in other countries of the world (subject to Sections 2 and 4(d) of the Security Agreement). The security interest granted hereby has been granted as a supplement to, and not in limitation of, the security interest granted to the Secured Party under the Security Agreement. The Security Agreement (and all rights and remedies of the Secured Party thereunder) shall remain in full force and effect in accordance with its terms subject to Section 4.

 

SECTION 4.     Release of Security Interest. Upon (i) the sale, transfer or other disposition of any Copyright Collateral in accordance with the Credit Agreement or (ii) the indefeasible payment in full in cash of the Secured Obligations and the termination of the Revolving Credit Facility (as defined in the Credit Agreement), the Secured Party shall promptly upon the Grantor’s request and contemporaneously with any refinancing of the Secured Obligations, at the Grantor’s expense, execute and deliver to the Grantor all instruments and other documents as may be necessary or proper to release the lien on and security interest in the Copyright Collateral which has been granted hereunder; provided that in the case of subsection (i) above, only the Copyright Collateral sold, transferred or otherwise disposed of in accordance with the Credit Agreement shall be released.

 

SECTION 5.     Acknowledgment. The Grantor does hereby further acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which (including the remedies provided for therein) are incorporated by reference herein as if fully set forth herein.

 

SECTION 6.     Loan Document, etc. This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

 

SECTION 7.     Counterparts. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original (whether such counterpart is originally executed or an electronic copy of an original) and all of which shall constitute together but one and the same agreement.

 

[Remainder of Page Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the day and year first above written.

 

	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Title:

				
			 

			

 

	
			 

				
			BRANCH BANKING AND TRUST COMPANY

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

			

 

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SCHEDULE I

to Copyright Security Agreement

 

	
			Item A. Copyrights

				 	 	 	 
	 	 	 	 	 
	
			Registered Trademark

				 	 	 
	 	 	 	 	 	 
	
			*Country

				
			Title.

				
			Date of

			Creation

				
			Date of 

			Publication

				
			Date of 

			Registration

				
			Registration Number

			
	 	 	 	 	 	 
	
			Pending Trademark Applications

				 	 	 
	 	 	 	 	 	 
	
			*Country

				
			Copyright

				
			Application

				
			Filling Date

				 	 
	 	 	 	 	 	 
	
			Item B: Copyright Licenses

				 	 	 
	 	 	 	 	 	 
	
			*Country or

			Territory

				
			Copyright

				
			Licensor

				
			Licensee

				
			Effective

			Date

				
			Expiration

			Date

			

 

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EXHIBIT “F”

TO CREDIT AGREEMENT

 

FORM OF SOLVENCY CERTIFICATE

 

SOLVENCY CERTIFICATE

 

TO:     Branch Banking and Trust Company

 

THIS SOLVENCY CERTIFICATE (the “Certificate”) is delivered to you in connection with, and reference is made to, that certain Amended and Restated Credit Agreement (the “Credit Agreement”) between, inter alios, Branch Banking and Trust Company (the “Lender”), Superior Uniform Group, Inc. (the “Borrower”) and the other Loan Parties thereto dated as of May 2, 2018. Capitalized or initially capitalized terms used herein but not defined have the meanings ascribed to such terms in the Credit Agreement. This Certificate is being delivered in connection with the execution of the Credit Agreement and other Loan Documents.

 

I, Andrew D. Demott, Jr., the Chief Operating Officer, Chief Financial Officer and Treasurer of the Borrower hereby certify as follows:

 

1.     I am familiar with the properties, business and assets of the Borrower and its Subsidiaries and an authorized to execute this Certificate on behalf of the Borrower and its Subsidiaries

 

2.     I have carefully reviewed the contents of this Certificate and have made such investigations and inquiries as I deem reasonably necessary and prudent in connection with the matters set forth herein. Among other things, I have reviewed the Credit Agreement, together with the other material Loan Documents executed or to be executed by the Borrower pursuant to the Credit Agreement

 

3.     I believe that the financial information and assumptions which underlie and form the basis for the representations made in this Certificate are reasonable in all material respects as of the date hereof

 

4.     For purposes of this Certificate: (a) the term “Transactions” means (1) the fulfillment of all conditions precedent to the execution of the Credit Agreement and (2) the execution and delivery of the Credit Agreement and all other Loan Documents under the Credit Agreement, and (b) the term “indebtedness” mean all obligations and liabilities of the Borrower, whether matured or unmatured, liquidated or unliquidated, disputed or undisputed, secured or unsecured, subordinated, absolute, fixed or contingent.

 

5.     As of the date hereof, assuming each of the Transactions is consummated on and as of the date hereof and taking into account the effect thereof, it is my opinion that:

 

(a)     the present fair saleable value of the business of the Borrower and its Subsidiaries, taken as a whole, exceeds the total amount of the indebtedness of the Borrower and its Subsidiaries;

 

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(b)     the Borrower and its Subsidiaries are each able to realize upon their assets and pay their indebtedness as such indebtedness matures in the normal course of business; and

 

(c)     the Borrower and its Subsidiaries, taken as a whole, do not have an unreasonably small capital nor will they be left with an unreasonably small capital

 

6.     The Borrower and its Subsidiaries do not intend to, nor believes that it will, incur indebtedness that will be beyond its ability to pay such indebtedness as it matures.

 

7.     In consummating the Transactions contemplated by the Credit Agreement, the Borrower and its Subsidiaries do not intend to disturb, delay, hinder or defraud either present or future creditors or other persons to which the Borrower or any such Subsidiary is or will become, on or after the date hereof, indebted.

 

8.     Each of the representations and warranties made by the Borrower and its Subsidiaries under the Credit Agreement and the other Loan Documents are true and correct in all material respects.

 

9.     In reaching the conclusions set forth in this Certificate, I have reviewed and considered, among other things:

 

(a)     the cash and other current assets of the Borrower and its Subsidiaries, on a consolidated basis, as reflected in its audited December 31, 2017 balance sheets;

 

(b)     the book and enterprise value of Borrower’s and its Subsidiaries’ business and now (and to the extent) owned real property, equipment, inventory, investment property, accounts receivable, computer software, customer lists, trade secrets and proprietary information, supply contracts, leases, copyrights, patents, trademarks and all other property of the Borrower and its Subsidiaries, real and personal, tangible and intangible; provided that nothing herein shall be deemed to conflict with the Borrower’s and its Subsidiaries’ representations regarding asset ownership contained in the Credit Agreement;

 

(c)     the experience of management of the Borrower and its Subsidiaries in acquiring and disposing of their assets and managing their businesses;

 

(d)     all indebtedness of the Borrower and its Subsidiaries known to me, including, among other things, claims arising out of pending or, to my knowledge, overtly threatened litigation against the Borrower or its Subsidiaries;

 

(e)     historical and anticipated growth in the Borrower’s and its Subsidiaries’ sales volume

 

(f)     the customary terms of trade payables of the Borrower and its Subsidiaries;

 

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(g)     the amount of the credit extended by and to customers of the Borrower and its Subsidiaries

 

(h)     the financing alternatives available to the Borrower and its Subsidiaries

 

(i)     the Borrower’s and its Subsidiaries’ backlog of contracts; and

 

(j)     the level of capital customarily maintained by the Borrower and its Subsidiaries and other entities engaged in the same or similar business as the business of the Borrower and its Subsidiaries.

 

For purposes of the above analysis, the values of the Borrower’s and its Subsidiaries’ enterprise and assets have been computed by considering the Borrower and its Subsidiaries as a going concern entity.

 

[Remainder of Page Intentionally Blank]

 

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IN WITNESS WHEREOF, I have executed this Certificate as of May 2, 2018.

 

	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			Name:

				
			Andrew D. Demott, Jr.

				
			 

			
	
			 

				
			Title:

				
			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

F-4

 

 

EXHIBIT “G”

TO CREDIT AGREEMENT

 

FORM OF SUBSIDIARY GUARANTY AGREEMENT 

 

AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT

 

THIS AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT dated as of May 2, 2018, by each of the direct or indirect Subsidiaries listed on Schedule I hereto (each such Subsidiary individually, a “Guarantor,” and collectively, the “Guarantors”) of Superior Uniform Group, Inc., a Florida corporation (the “Borrower”), in favor of Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”), having an address for purposes hereof of 400 N. Tampa Street, Suite 2500, Tampa, Florida 33602.

 

Reference is made to the Amended and Restated Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Loan Parties (as defined in the Credit Agreement), including without limitation the undersigned Guarantors, any other Subsidiary Loan Parties who become party thereto from to time and Lender.

 

Lender has agreed to make the 2017 Term Loan, the 2018 Term Loan and a Revolving Credit Facility to the Borrower, and Lender has agreed to issue Letters of Credit for the account of the Borrower, pursuant to, and upon the terms and subject to the conditions specified in, the Credit Agreement. Each of the Guarantors is a direct or indirect Subsidiary of the Borrower and acknowledges that it will derive substantial benefit from the making of the Credit Facilities and the issuance of the Letters of Credit by Lender. The obligations of the Lender to open the Credit Facilities and to issue Letters of Credit are conditioned on, among other things, the execution and delivery by the Guarantors of a Subsidiary Guaranty Agreement in the form hereof. The Grantors have previously entered into a Subsidiary Guaranty Agreement, dated as of February 28, 2017 (as amended, the “Existing Guaranty Agreement”) and the parties hereto wish to amend and restate the Existing Guaranty Agreement on the terms set forth herein. As consideration therefor and in order to induce Lender to open the Credit Facilities and to issue Letters of Credit, the Guarantors are willing to execute this Amended and Restated Subsidiary Guaranty Agreement (as amended, modified or supplemented from time to time, this “Agreement”).

 

Accordingly, Guarantors agree with Lender as follows:

 

Section 1.     Definitions. Capitalized and initially capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement. In addition to the terms which are defined in the Credit Agreement, the preamble to this Agreement or otherwise herein, the following terms shall have the meanings set forth below such meanings to be equally applicable to the singular and plural forms thereof):

 

“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.

 

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“Excluded Swap Obligation” shall mean, with respect to any guarantor of a Swap Obligation, including without limitation any Guarantor, and including the grant of a security interest to secure the guaranty of such Swap Obligation, any Swap Obligation if, and to the extent that, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty or grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Swap Obligation or security interest is or becomes illegal.

 

“Obligations” shall mean (i) all amounts owing by (A) Borrower to Lender pursuant to or in connection with the Credit Agreement, the 2017 Term Loan Note, the 2018 Term Loan Note, the Amended and Restated Revolving Note, or any other promissory note or other instrument of indebtedness from Borrower to Lender, at any time or from time to time, including without limitation, the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Credit Facilities, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (B) Borrower with respect to any Letter of Credit or under any LC Documents, including without limitation each payment required to be made by the Borrower thereon or with respect thereto when and as due, including payments in respect of reimbursement or disbursements, interest thereon and obligations to provide cash collateral, (C) any of the Loan Parties to the Lender pursuant to or in connection with the Credit Agreement, this Agreement or any other Loan Document or otherwise with respect to the Credit Facilities, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to Lender incurred pursuant to the Notes, this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, (ii) all Rate Management Obligations, (iii) all Treasury Management Obligations, (iv) any obligations under any purchasing card or credit card account established for a Loan Party by Lender or any affiliate of Lender, and (v) all other indebtedness of whatever kind arising of any Loan Party to Lender or any affiliate of Lender, together with all renewals, extensions, modifications or refinancings of any of the foregoing, together with all renewals, extensions, modifications or refinancings of any of the foregoing. Notwithstanding the foregoing, the term “Obligations” shall exclude any Excluded Swap Obligations.

 

“Rate Management Agreement” shall mean any agreement, device or arrangement providing for payments which are related to fluctuations of interest rates, exchange rates, forward rates, or equity prices, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and any agreement pertaining to equity derivative transactions (e.g., equity or equity index swaps, options, caps, floors, collars and forwards), including without limitation any ISDA Master Agreement between any Loan Party and Lender or any affiliate of Branch Banking and Trust Company, and any schedules, confirmations and documents and other confirming evidence between the parties confirming transactions thereunder, all whether now existing or hereafter arising, and in each case as amended, modified or supplemented from time to time.

 

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“Rate Management Obligations” shall mean any and all obligations of any Loan Party to Lender or any affiliate of Branch Banking and Trust Company, whether absolute, contingent or otherwise and howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under or in connection with (i) any and all Rate Management Agreements, and (ii) any and all cancellations, buy-backs, reversals, terminations or assignments of any Rate Management Agreement.

 

“Swap Obligation” shall mean any Rate Management Obligation that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, as amended from time to time.

 

“Treasury Management Obligations” shall mean, collectively, all obligations and other liabilities of any Loan Party owing to Lender or any affiliate of Lender pursuant to any agreements governing the provision to such Loan Party of treasury or cash management services, including deposit accounts, funds transfer, automated clearing house, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services.

 

Section 2.     Guaranty. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment of all Obligations, as well as the due and punctual performance by the Loan Parties of other obligations required to be performed by the Loan Parties under and pursuant to the Credit Agreement and all other Loan Documents (all of the foregoing being collectively called the “Guaranteed Obligations”). In no event shall the Guaranteed Obligations be deemed to include any Excluded Swap Obligation. Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from such Guarantor, and that such Guarantor will remain bound upon its guarantee notwithstanding any extension or renewal of any Guaranteed Obligations.

 

Section 3.     Obligations Not Waived. To the fullest extent permitted by applicable law, each Guarantor waives presentment or protest to, demand of or payment from the other Loan Parties of any of the Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (i) the failure of Lender to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of the Credit Agreement, any other Loan Document or otherwise, (ii) the failure of Lender to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of any instruments, agreements or documents executed in connection with any Rate Management Agreement incurred to limit interest rate or fee fluctuation with respect to the Credit Facilities and Letters of Credit, (iii) the failure of Lender to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of any instruments, agreements or documents executed in connection with a Treasury Management Obligation, (iv) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, any other Loan Document, Rate Management Agreement, any document evidencing any Treasury Management Obligation or any guarantee or any other agreement, including with respect to any other Guarantor under this Agreement, or (v) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of Lender.

 

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Section 4.     Security. Each of the Guarantors authorizes Lender to (a) take and hold security for payment under this Agreement and the Guaranteed Obligations and exchange, enforce, waive and release any such security, (b) apply such security and direct the order or manner of sale thereof as they in their discretion may determine and (c) release or substitute any one or more endorsees, other guarantors or other obligors.

 

Section 5.     Guaranty of Payment. Each Guarantor further agrees that its guaranty constitutes a guaranty of payment when due and not of collection, and waives any right to require that any resort be had by Lender to any of the security held for payment of the Guaranteed Obligations or to any balance of any deposit account or credit on the books of Lender in favor of the Borrower or any other Person.

 

Section 6.     No Discharge or Diminishment of Guaranty. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of Lender to assert any claim or demand or to enforce any remedy under the Credit Agreement except to the extent otherwise provided by applicable law, any other Loan Document, Rate Management Agreement, any document relating to any Treasury Management Obligation, or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations, or by any other act or omission that may or might in any manner or to the extent vary the risk of any Guarantor or that would otherwise operate as a discharge of each Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations).

 

Section 7.     Defenses of Borrower Waived. To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of any Loan Party or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Loan Party, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Lender may, at its election, foreclose on any security held by it by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any other Loan Party or any other guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Guarantor or guarantor, as the case may be, or any security.

 

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Section 8.     Agreement to Pay; Subordination. In furtherance of the foregoing and not in limitation of any other right that Lender has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to Lender in cash the amount of such unpaid and overdue Obligation. Upon payment by any Guarantor of any sums to Lender, all rights of such Guarantor against any Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Guaranteed Obligations. In addition, any indebtedness of any Loan Party now or hereafter held by any Guarantor is hereby subordinated in right of payment to the prior payment in full in cash of the Guaranteed Obligations. If any amount shall erroneously be paid to any Guarantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such indebtedness of any Loan Party, such amount shall be held in trust for the benefit of Lender and shall forthwith be paid to Lender to be credited against the payment of the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents.

 

Section 9.     Information. Each Guarantor assumes all responsibility for being and keeping itself informed of other Loan Parties’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that Lender will not have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks.

 

Section 10.     Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 8), the Borrower agrees that (a) in the event a payment shall be made by any Guarantor under this Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the person to whom such payment shall have been made to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold to satisfy a claim of Lender under this Agreement, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

 

Section 11.     Contribution and Subrogation. Each Guarantor (a “Contributing Guarantor”) agrees (subject to Section 8) that, in the event a payment shall be made by any other Guarantor under this Agreement or assets of any other Guarantor shall be sold to satisfy a claim of Lender and such other Guarantor (the “Claiming Guarantor”) shall not have been fully indemnified by the Borrower as provided in Section 10, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 24, the date of the Supplement hereto executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this Section 11 shall be subrogated to the rights of such Claiming Guarantor under Section 10 to the extent of such payment.

 

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Section 12.     Subordination. Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors under Section 10 and Section 11 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Guaranteed Obligations. No failure on the part of the Borrower or any Guarantor to make the payments required under applicable law or otherwise shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.

 

Section 13.     Representations and Warranties. Each Guarantor represents and warrants as to itself that all representations and warranties relating to it (as a direct or indirect Subsidiary of the Borrower) contained in the Credit Agreement are true and correct.

 

Section 14.     Termination. The guarantees made hereunder (i) shall terminate without the necessity of any further action by any party hereto when all the Guaranteed Obligations have been paid in full in cash and Lender has no further commitment to lend under the Credit Agreement, the LC Exposure has been reduced to zero and Lender has no further obligation to issue Letters of Credit under the Credit Agreement and (ii) shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by Lender or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. In connection with the foregoing, Lender shall execute and deliver to such Guarantor or Guarantor’s designee, at such Guarantor’s expense, any documents or instruments which such Guarantor shall reasonably request from time to time to evidence such termination and release.

 

Section 15.     Binding Effect; Several Agreement; Assignments. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Guarantors that are contained in this Agreement shall bind and inure to the benefit of each party hereto and their respective permitted successors and assigns. This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such Guarantor shall have been delivered to Lender, and thereafter shall be binding upon such Guarantor and its successors and assigns, and shall inure to the benefit of Lender, and its successors and assigns, except that no Guarantor shall have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void). This Agreement shall be construed as a separate agreement with respect to each Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder.

 

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Section 16.     Waivers; Amendment.

 

(a)     No failure or delay of Lender of any kind in exercising any power, right or remedy hereunder and no course of dealing between any Guarantor on the one hand and Lender or any holder of any Note on the other hand shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy hereunder, or under any Loan Document, Rate Management Agreement, or any document relating to any Treasury Management Obligation, or any abandonment or discontinuance of steps to enforce such a power, right or remedy, preclude any other or further exercise thereof or the exercise of any other power, right or remedy. The rights of Lender hereunder and under the other Loan Documents, the Rate Management Agreements and any document relating to any Treasury Management Obligation, as applicable, are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be permitted by subsection (b) below, and then such waiver and consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice in similar or other circumstances.

 

(b)     Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Guarantors with respect to which such waiver, amendment or modification relates and Lender.

 

Section 17.     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA.

 

Section 18.     Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.01 of the Credit Agreement. All communications and notices hereunder to each Guarantor shall be given to it at its address set forth on Schedule I attached hereto or any subsequent address described in a written notice given as provided in Section 9.01 of the Credit Agreement.

 

Section 19.     Survival of Agreement; Severability.

 

(a)     All covenants, agreements representations and warranties made by the Guarantors herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or the other Loan Document shall be considered to have been relied upon by Lender and shall survive the making by Lender of the Credit Facilities and the issuance of any Letters of Credit by Lender regardless of any investigation made by any of them or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Credit Facility or any other fee or amount payable under this Agreement or any other Loan Document is outstanding and unpaid or the LC Exposure does not equal zero and as long as the commitment of Lender to may Advances under the Revolving Credit Facility has not been terminated.

 

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(b)     In the event one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 20.     Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract (subject to Section 15), and shall become effective as provided in Section 15. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement.

 

Section 21.     Rules of Interpretation. The rules of interpretation specified in Section 1.03 of the Credit Agreement shall be applicable to this Agreement.

 

Section 22.     Jurisdiction; Consent to Service of Process.

 

(a)     Each Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any Florida State court or Federal court of the United States of America sitting in Tampa, Florida, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, any other Loan Document or any Rate Management Agreement or any document relating to any Treasury Management Obligation or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Florida State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against any Guarantor or its properties in the courts of any jurisdiction.

 

(b)     Each Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any Florida State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

G-8

 

 

(c)     Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 18. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

Section 23.     Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT, RATE MANAGEMENT AGREEMENT OR ANY DOCUMENT RELATING TO ANY TREASURY MANAGEMENT OBLIGATION OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, ANY RATE MANAGEMENT AGREEMENT OR ANY DOCUMENT EVIDENCING ANY TREASURY MANAGEMENT OBLIGATION, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 23.

 

Section 24.     Additional Guarantors. Pursuant to Section 6.19 of the Credit Agreement, each Subsidiary Loan Party that was not in existence on the date of the Credit Agreement is required to enter into this Agreement as a Guarantor upon becoming a Subsidiary Loan Party. Upon execution and delivery after the date hereof by Lender and such Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any instrument adding an additional Guarantor as a party to this Agreement shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement.

 

Section 25.     Right of Setoff. If an Event of Default shall have occurred and be continuing, Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by Lender to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Agreement, the other Loan Documents, any Rate Management Agreement (but only to extent that the same does not relate to an Excluded Swap Obligation) or any document relating to any Treasury Management Obligation held by Lender, irrespective of whether or not such Person shall have made any demand under this Agreement or any other Loan Document, Rate Management Agreement or any document relating to any Treasury Management Obligation, and although such obligations may be unmatured. The rights of Lender under this Section 25 are in addition to other rights and remedies (including other rights of setoff) which Lender may have.

 

G-9

 

 

Section 26.     Savings Clause.

 

(a)     It is the intent of each Guarantor and Lender that each Guarantor’s maximum obligations hereunder shall be, but not in excess of:

 

(i)     in a case or proceeding commenced by or against any Guarantor under the provisions of Title 11 of the United States Code, 11 U.S.C. §§101 et seq. (the “Bankruptcy Code”), the maximum amount which would not otherwise cause the Guaranteed Obligations (or any other obligations of such Guarantor owed to Lender) to be avoidable or unenforceable against such Guarantor under (i) Section 548 of the Bankruptcy Code or (ii) any state fraudulent transfer or fraudulent conveyance act or statute applied in such case or proceeding by virtue of Section 544 of the Bankruptcy Code; or

 

(ii)     in a case or proceeding commenced by or against any Guarantor under any law, statute or regulation other than the Bankruptcy Code (including, without limitation, any other bankruptcy, reorganization, arrangement, moratorium, readjustment of debt, dissolution, liquidation or similar debtor relief laws), the maximum amount which would not otherwise cause the Guaranteed Obligations (or any other obligations of such Guarantor to Lender) to be avoidable or unenforceable against such Guarantor under such law, statute or regulation including, without limitation, any state fraudulent transfer or fraudulent conveyance act or statute applied in any such case or proceeding.

 

(b)     The substantive laws under which the possible avoidance or unenforceability of the Guaranteed Obligations (or any other obligations of such Guarantor to Lender) as may be determined in any case or proceeding shall hereinafter be referred to as the “Avoidance Provisions.” To the extent set forth in Section 26(a) (i) and (ii), but only to the extent that the Guaranteed Obligations would otherwise be subject to avoidance or found unenforceable under the Avoidance Provisions, if any Guarantor is not deemed to have received valuable consideration, fair value or reasonably equivalent value for the Guaranteed Obligations, or if the Guaranteed Obligations would render such Guarantor insolvent, or leave such Guarantor with an unreasonably small capital to conduct its business, or cause such Guarantor to have incurred debts (or to have intended to have incurred debts) beyond its ability to pay such debts as they mature, in each case as of the time any of the Guaranteed Obligations are deemed to have been incurred under the Avoidance Provisions and after giving effect to the contribution by such Guarantor, the maximum Guaranteed Obligations for which such Guarantor shall be liable hereunder shall be reduced to that amount which, after giving effect thereto, would not cause the Guaranteed Obligations (or any other obligations of such Guarantor to Lender), as so reduced, to be subject to avoidance or unenforceability under the Avoidance Provisions.

 

G-10

 

 

(c)     This Section 26 is intended solely to preserve the rights of Lender hereunder to the maximum extent that would not cause the Guaranteed Obligations of such Guarantor to be subject to avoidance or unenforceability under the Avoidance Provisions, and neither the Guarantors nor any other Person shall have any right or claim under this Section 26 as against Lender that would not otherwise be available to such Person under the Avoidance Provisions.

 

Section 27.     Consent and Reaffirmation. Each Guarantor hereby consents to the execution, delivery and performance of the Credit Agreement and agrees that each reference to the Existing Credit Agreement in the Loan Documents shall, on and after the date hereof, be deemed to be a reference to the Credit Agreement. Each Guarantor hereby acknowledges and agrees that, after giving effect to the Credit Agreement, all of its respective obligations and liabilities under the Loan Documents to which it is a party, as such obligations and liabilities have been amended by the Credit Agreement, are reaffirmed, and remain in full force and effect.

 

Section 28.     Effect of Restatement. The Agreement amends and restates the Existing Guaranty Agreement in its entirety and supersedes the Existing Guaranty Agreement in all respects.

 

[Remainder of Page Intentionally Blank]

 

G-11

 

 

EXHIBIT “G”

TO CREDIT AGREEMENT

 

FORM OF SUBSIDIARY GUARANTY AGREEMENT

 

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

 

 

	
			 

				
			FASHION SEAL CORPORATION,

			a Nevada corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Andrew D. Demott, Jr.,

			President

				
			 

			

 

 

	
			 

				THE OFFICE GURUS, LLC,

			a Florida limited liability company	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

	
			 

				BAMKO, LLC,

			a Delaware limited liability company	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

G-12

 

 

	
			 

				
			Superior Uniform Arkansas LLC,

			an Arkansas limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

	
			 

				
			Superior Group of Companies, LLC,

			a Florida limited liability company

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	
			 

				
			By: 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation, its Sole Member

				
			 

			
	
			 

				
			 

				
			 

				 	
			 

			
	 	 	 	 	 
	
			 

				
			 

				
			By:

				 	
			 

			
	 	 	
			Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				 

 

 

 

	
			 

				
			CID Resources, Inc.

			a Delaware corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			Name:

				
			 

				
			 

			
	
			 

				
			Title:

				
			 

				
			 

			

 

G-13

 

 

EXHIBIT “G”

TO CREDIT AGREEMENT

 

FORM OF SUBSIDIARY GUARANTY AGREEMENT 

 

SCHEDULE I TO THE

 

AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT

 

	
			Guarantor(s)

			
	
			Guarantors

				
			Address

			

 

	
			FASHION SEAL CORPORATION,

			a Nevada corporation

				 	
			c/o Superior Uniform Group, Inc. 10055

			Seminole Boulevard Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			 

			Facsimile Number: (727) 803-2642

			
	 	 	 
	
			THE OFFICE GURUS, LLC,

			a Florida limited liability company

				 	
			c/o Superior Uniform Group, Inc. 10055

			Seminole Boulevard Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			 

			Facsimile Number: (727) 803-2642

			
	 	 	 
	
			BAMKO, LLC,

			a Delaware limited liability company

				 	
			c/o Superior Uniform Group, Inc. 10055

			Seminole Boulevard Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			

			Facsimile Number: (727) 803-2642

			 

			
	
			SUPERIOR UNIFORM ARKANSAS LLC,

			an Arkansas limited liability company

				 	
			c/o Superior Uniform Group, Inc. 10055

			Seminole Boulevard Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			

			Facsimile Number: (727) 803-2642

			
	 	 	 
	
			SUPERIOR GROUP OF COMPANIES, LLC,

			a Florida limited liability company

				 	
			c/o Superior Uniform Group, Inc. 10055

			Seminole Boulevard Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			

			Facsimile Number: (727) 803-2642

			
	 	 	 
	
			CID RESOURCES, INC.

				 	
			c/o Superior Uniform Group, Inc. 10055

			Seminole Boulevard Seminole, Florida 33772

			Attention: Andrew D. Demott, Jr.

			

			Facsimile Number: (727) 803-2642

			

 

Schedule I

G-14

 

 

EXHIBIT “G”

 

TO CREDIT AGREEMENT

 

FORM OF SUBSIDIARY GUARANTY AGREEMENT 

 

ANNEX 1 TO THE

 

AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of [        ], to the Amended and Restated Subsidiary Guaranty Agreement (the “Guaranty Agreement”) dated as of May 2, 2018, from each of the Subsidiaries listed on Schedule I thereto (each such Subsidiary individually, a “Guarantor” and collectively, the “Guarantors”) of Superior Uniform Group, Inc., a Florida corporation (the “Borrower”), in favor of Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”).

 

A.     Reference is made to the Amended and Restated Credit Agreement dated as of May 2, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lender and certain other Loan Parties (as defined therein).

 

B.     Capitalized or initially capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guaranty Agreement and the Credit Agreement.

 

C.     The Guarantors have entered into the Guaranty Agreement in order to induce the Lender to extend the Credit Facilities and to issue Letters of Credit. Pursuant to Section 6.19 of the Credit Agreement, each Subsidiary Loan Party that was not in existence or not a Subsidiary Loan Party on the date of the Credit Agreement is required to enter into the Guaranty Agreement as a Guarantor upon becoming a Subsidiary Loan Party. Section 24 of the Guaranty Agreement provides that additional direct or indirect Domestic Subsidiaries of the Borrower may become Guarantors under the Guaranty Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned direct or indirect Domestic Subsidiary of the Borrower (the “New Guarantor”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guaranty Agreement in order to induce Lender annex to make additional advances under the Credit Facilities and to issue additional Letters of Credit and as consideration for 2017 Term Loan, the 2018 Term Loan and/or or Advances under the Revolving Credit Facility previously made and Letters of Credit previously issued.

 

Accordingly, New Guarantor agrees with Lender as follows:

 

Section 1.     In accordance with Section 24 of the Guaranty Agreement, the New Guarantor by its signature below becomes a Guarantor under the Guaranty Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Guaranty Agreement applicable to it as Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it (but not the other Guarantors) as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a Guarantor in the Guaranty Agreement shall be deemed to include the New Guarantor. The Guaranty Agreement is hereby incorporated herein by reference.

 

G-15

 

 

Section 2.     The New Guarantor represents and warrants to Lender that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

Section 3.     This Supplement may be executed in counterparts each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when Lender shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and Lender of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

 

Section 4.     Except as expressly supplemented hereby, the Guaranty Agreement shall remain in full force and effect.

 

Section 5.     THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA.

 

Section 6.     In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guaranty Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 7.     All communications and notices hereunder shall be in writing and given as provided in Section 18 of the Guaranty Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower.

 

Section 8.     The New Guarantor agrees to reimburse Lender for its out-of-pocket expenses in connection with this Supplement, including the fees, disbursements and other charges of counsel for Lender.

 

[Remainder of Page Intentionally Blank]

 

G-16

 

 

EXHIBIT “G”

 

TO CREDIT AGREEMENT

 

FORM OF SUBSIDIARY GUARANTY AGREEMENT

 

IN WITNESS WHEREOF, the New Guarantor and Lender have duly executed this Supplement to the Amended and Restated Subsidiary Guaranty Agreement as of the day and year first above written.

 

	
			 

				
			[NAME OF NEW GRANTOR]

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				
			 

				
			 

			
	 	 	Name:	 
	 	 	Title:	 
	 	 	Address:	 

 

 

	
			 

				
			BRANCH BANKING AND TRUST COMPANY,

			a North Carolina banking corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			Thomas M. Lambert

			Senior Vice President

				
			 

			

 

G-17

 

 

EXHIBIT “H-1”

TO CREDIT AGREEMENT

 

FORM OF 2017 TERM LOAN NOTE 

 

Amended and restated TERM LOAN PROMISSORY NOTE

 

$42,000,000.00

May 2, 2018

 

FOR VALUE RECEIVED, the undersigned, SUPERIOR UNIFORM GROUP, INC., a Florida corporation (the “Borrower”), hereby promises to pay to the order of Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”) or its assigns, at its office located at 400 N. Tampa Street, Suite 2500, Tampa, Florida 33602, the principal sum of FORTY-TWO MILLION AND NO/100 DOLLARS ($42,000,000.00) in (i) installments of principal of $500,000.00, plus accrued interest thereon, at the Interest Rate per annum applicable to the 2017 Term Loan as provided in the Amended and Restated Credit Agreement dated as of May 2, 2018 (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Credit Agreement”), between, inter alios, the Borrower and the Lender, on each Payment Date and (ii) a final payment of the outstanding principal balance of this Amended and Restated Term Loan Promissory Note, together with accrued interest thereon, at the Interest Rate per annum applicable to the 2017 Term Loan as provided in the Credit Agreement, on the 2017 Term Loan Maturity Date, all in lawful money of the United States of America in immediately available funds, at said office. In addition, should legal action or an attorney-at-law be utilized to collect any amount due hereunder, the Borrower further promises to pay all out-of-pocket costs of collection, including the reasonable attorneys’ fees of the Lender. Capitalized or initially capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Credit Agreement.

 

The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at a rate or rates provided in the Credit Agreement.

 

If any payment of principal or interest is not paid when due under (whether by acceleration or otherwise) or within ten (10) days thereafter, the Borrower shall pay to Lender a late payment fee of 5% of the payment amount then due, with a minimum fee of $20.00.

 

Upon the occurrence and during the continuance of an Event of Default, all outstanding principal of this Amended and Restated Term Loan Promissory Note shall bear interest at the Default Rate, and such default interest shall be payable on each Payment Date or upon demand or acceleration by Lender. To the greatest extent permitted by law, interest shall continue to accrue under the Notes at the Default Rate after the filing by or against any Loan Party of any petition seeking any relief in bankruptcy or under any law pertaining to insolvency or debtor relief.

 

 

DOCUMENTARY STAMP TAX IN THE AMOUNT OF $2,450 DUE ON THIS NOTE HAVE BEEN PAID IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA.

 

H-1

 

 

The principal amount of this Amended and Restated Term Loan Promissory Note is subject to mandatory prepayments, if any, as provided in Section 3.03 of the Credit Agreement.

 

All borrowings evidenced by this Amended and Restated Term Loan Promissory Note and all payments and prepayments of the principal hereof and the date thereof shall be recorded by the holder hereof in its internal records; provided, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrower to make the payments of principal and interest in accordance with the terms of this Amended and Restated Term Loan Promissory Note and the Credit Agreement. Should a conflict arise between this Amended and Restated Term Loan Promissory Note and the Credit Agreement, the terms of the Credit Agreement shall control.

 

This Amended and Restated Term Loan Promissory Note is issued in connection with, and is entitled to the benefits of, the Credit Agreement which, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified. This Amended and Restated Term Loan Promissory Note amends and restates, but is not a novation or an accord and satisfaction of, the Lender’s Term Loan Promissory Note dated as of February 28, 2017 in the original principal amount of $42,000,000 executed in connection with that certain Credit Agreement dated as of February 28, 2017.

 

THIS AMENDED AND RESTATED TERM LOAN PROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AMENDED AND RESTATED TERM LOAN PROMISSORY NOTE WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

 

BORROWER BY ITS EXECUTION HEREOF AND LENDER BY ITS ACCEPTANCE HEREOF, EACH IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AMENDED AND RESTATED TERM LOAN PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDED AND RESTATED TERM LOAN PROMISSORY NOTE AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[SIGNATURE ON FOLLOWING PAGE]

 

H-2

 

 

IN WITNESS WHEREOF, the Borrower has caused this Amended and Restated Term Loan Promissory Note to be signed by its duly authorized representative all as of the day and year first above written.

 

	
			 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			 Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

Amended and Restated Term Loan Promissory Note Signature Page

 

H-3

 

 

EXHIBIT “H-2”

TO CREDIT AGREEMENT

 

FORM OF 2018 TERM LOAN NOTE

 

TERM LOAN PROMISSORY NOTE

 

$85,000,000.00

May 2, 2018

 

FOR VALUE RECEIVED, the undersigned, SUPERIOR UNIFORM GROUP, INC., a Florida corporation (the “Borrower”), hereby promises to pay to the order of Branch Banking and Trust Company, a North Carolina banking corporation (the “Lender”) or its assigns, at its office located at 400 N. Tampa Street, Suite 2500, Tampa, Florida 33602, the principal sum of Eighty-Five MILLION AND NO/100 DOLLARS ($85,000,000.00) in (i) installments of interest from the date hereof on the principal amount thereof from time to time outstanding, in like funds, at said office, on each Payment Date at the Interest Rate per annum applicable to the 2018 Term Loan as provided in the Amended and Restated Credit Agreement dated as of May 2, 2018 (as the same may be amended, supplemented, replaced, amended and restated or otherwise modified from time to time, the “Credit Agreement”), between, inter alios, the Borrower and the Lender, and (ii) a final payment of the outstanding principal balance of this Term Loan Promissory Note, together with accrued interest thereon, at the Interest Rate per annum applicable to the 2018 Term Loan as provided in the Credit Agreement, on the 2018 Term Loan Maturity Date, all in lawful money of the United States of America in immediately available funds, at said office. In addition, should legal action or an attorney-at-law be utilized to collect any amount due hereunder, the Borrower further promises to pay all out-of-pocket costs of collection, including the reasonable attorneys’ fees of the Lender. Capitalized or initially capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Credit Agreement.

 

The Borrower promises to pay interest, on demand, on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at a rate or rates provided in the Credit Agreement.

 

If any payment of principal or interest is not paid when due under (whether by acceleration or otherwise) or within ten (10) days thereafter, the Borrower shall pay to Lender a late payment fee of 5% of the payment amount then due, with a minimum fee of $20.00.

 

Upon the occurrence and during the continuance of an Event of Default, all outstanding principal of this Term Loan Promissory Note shall bear interest at the Default Rate, and such default interest shall be payable on each Payment Date or upon demand or acceleration by Lender. To the greatest extent permitted by law, interest shall continue to accrue under the Notes at the Default Rate after the filing by or against any Loan Party of any petition seeking any relief in bankruptcy or under any law pertaining to insolvency or debtor relief.

 

The principal amount of this Term Loan Promissory Note is subject to mandatory prepayments, if any, as provided in Section 3.03 of the Credit Agreement.

 

DOCUMENTARY STAMP TAX IN THE AMOUNT OF $2,450 DUE ON THIS NOTE HAVE BEEN PAID IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA.

 

 

 

 

All borrowings evidenced by this Term Loan Promissory Note and all payments and prepayments of the principal hereof and the date thereof shall be recorded by the holder hereof in its internal records; provided, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrower to make the payments of principal and interest in accordance with the terms of this Term Loan Promissory Note and the Credit Agreement. Should a conflict arise between this Term Loan Promissory Note and the Credit Agreement, the terms of the Credit Agreement shall control.

 

This Term Loan Promissory Note is issued in connection with, and is entitled to the benefits of, the Credit Agreement which, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events, for prepayment of the principal hereof prior to the maturity hereof and for the amendment or waiver of certain provisions of the Credit Agreement, all upon the terms and conditions therein specified.

 

THIS TERM LOAN PROMISSORY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS TERM LOAN PROMISSORY NOTE WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.

 

BORROWER BY ITS EXECUTION HEREOF AND LENDER BY ITS ACCEPTANCE HEREOF, EACH IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS TERM LOAN PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS TERM LOAN PROMISSORY NOTE AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

[SIGNATURE ON FOLLOWING PAGE]

 

 

 

IN WITNESS WHEREOF, the Borrower has caused this Term Loan Promissory Note to be signed by its duly authorized representative all as of the day and year first above written.

 

	
			 

				
			SUPERIOR UNIFORM GROUP, INC.,

			a Florida corporation

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By: 

				 	
			 

			
	
			 

				
			 

				
			 Andrew D. Demott, Jr.,

			Chief Operating Officer, Chief Financial Officer and Treasurer

				
			 

			
	
			 

				
			 

				
			 

				
			 

			

 

 

 

 

Term Loan Promissory Note Signature PageExhibit

Exhibit 10(a)

VANGUARD FIDUCIARY TRUST COMPANY
DEFINED CONTRIBUTION VOLUME SUBMITTER PLAN AND TRUST

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

ARTICLE II ADMINISTRATION

2.1     POWERS AND RESPONSIBILITIES OF THE EMPLOYER ................................................................................................. 16

2.2     DESIGNATION OF ADMINISTRATIVE AUTHORITY ....................................................................................................... 16

2.3     ALLOCATION AND DELEGATION OF RESPONSIBILITIES ............................................................................................ 16

2.4     POWERS AND DUTIES OF THE ADMINISTRATOR.......................................................................................................... 17

2.5     RECORDS AND REPORTS .................................................................................................................................................. 17

2.6     APPOINTMENT OF ADVISERS........................................................................................................................................... 18

2.7     INFORMATION FROM EMPLOYER ................................................................................................................................... 18

2.8     PAYMENT OF EXPENSES................................................................................................................................................... 18

2.9     MAJORITY ACTIONS .......................................................................................................................................................... 18

2.10     CLAIMS PROCEDURES....................................................................................................................................................... 18

ARTICLE III ELIGIBILITY

3.1     CONDITIONS OF ELIGIBILITY .......................................................................................................................................... 19

3.2     EFFECTIVE DATE OF PARTICIPATION ............................................................................................................................ 19

3.3     DETERMINATION OF ELIGIBILITY .................................................................................................................................. 20

3.4     TERMINATION OF ELIGIBILITY ....................................................................................................................................... 20

3.5     REHIRED EMPLOYEES AND 1-YEAR BREAKS IN SERVICE .......................................................................................... 20

3.6     ELECTION NOT TO PARTICIPATE .................................................................................................................................... 21

3.7     OMISSION OF ELIGIBLE EMPLOYEE; INCLUSION OF INELIGIBLE EMPLOYEE ......................................................... 22

ARTICLE IV CONTRIBUTION AND ALLOCATION

4.1     FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION....................................................................................  22

4.2     TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION ................................................................................................. 23

4.3     ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS ......................................................................... 23

4.4     MAXIMUM ANNUAL ADDITIONS..................................................................................................................................... 29

4.5     ADJUSTMENT FOR EXCESS ANNUAL ADDITIONS ........................................................................................................ 32

4.6     ROLLOVERS ........................................................................................................................................................................ 32

4.7     PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS ............................................................................................... 33

4.8     AFTER-TAX VOLUNTARY EMPLOYEE CONTRIBUTIONS ............................................................................................. 34

4.9     QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS .............................................................................................. 34

4.10     PARTICIPANT DIRECTED INVESTMENTS .......................................................................................................................  35

4.11     INTEGRATION IN MORE THAN ONE PLAN .....................................................................................................................  35

4.12     QUALIFIED MILITARY SERVICE ...................................................................................................................................... 35

4.13     TRANSFER OF ASSETS FROM TERMINATED EMPLOYER DEFINED BENEFIT PENSION PLAN ................................ 36

© 2014 The Vanguard Group or its suppliers

VALUATIONS

5.1     VALUATION OF THE TRUST FUND .................................................................................................................................. 36

5.2     METHOD OF VALUATION ................................................................................................................................................. 37

ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1     DETERMINATION OF BENEFITS UPON RETIREMENT ................................................................................................... 37

6.2     DETERMINATION OF BENEFITS UPON DEATH ..............................................................................................................  37

6.3     DETERMINATION OF BENEFITS IN EVENT OF DISABILITY ......................................................................................... 38

6.4     DETERMINATION OF BENEFITS UPON TERMINATION ................................................................................................. 38

6.5     DISTRIBUTION OF BENEFITS............................................................................................................................................ 40

6.6     DISTRIBUTION OF BENEFITS UPON DEATH ...................................................................................................................  44

6.7     TIME OF DISTRIBUTION .................................................................................................................................................... 45

6.8     REQUIRED MINIMUM DISTRIBUTIONS ........................................................................................................................... 45

6.9     DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL ..................................................................................... 49

6.10     LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN ....................................................................................... 49

6.11     IN-SERVICE DISTRIBUTION .............................................................................................................................................. 49

6.12     ADVANCE DISTRIBUTION FOR HARDSHIP..................................................................................................................... 50

6.13     SPECIAL RULE FOR CERTAIN PROFIT SHARING PLANS .............................................................................................. 50

6.14     QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION ....................................................................................... 51

6.15     DIRECT ROLLOVERS ......................................................................................................................................................... 51

6.16     RESTRICTIONS ON DISTRIBUTION OF ASSETS TRANSFERRED FROM A MONEY PURCHASE PLAN ..................... 52

6.17     CORRECTIVE DISTRIBUTIONS ......................................................................................................................................... 52

6.18     QUALIFIED RESERVIST DISTRIBUTIONS AND HEART ACT ......................................................................................... 53

ARTICLE VII TRUSTEE AND CUSTODIAN

7.1     BASIC RESPONSIBILITIES OF THE TRUSTEE ..................................................................................................................  53

7.2     INVESTMENT POWERS AND DUTIES OF DISCRETIONARY TRUSTEE ........................................................................ 54

7.3     INVESTMENT POWERS AND DUTIES OF NONDISCRETIONARY TRUSTEE ................................................................ 56

7.4     POWERS AND DUTIES OF CUSTODIAN ........................................................................................................................... 57

7.5     LIFE INSURANCE ................................................................................................................................................................ 57

7.6     LOANS TO PARTICIPANTS ................................................................................................................................................ 58

7.7     ALLOCATION AND DELEGATION OF RESPONSIBILITIES ............................................................................................ 59

7.8     TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES .......................................................................................... 59

7.9     ANNUAL REPORT OF THE TRUSTEE................................................................................................................................ 59

7.10     AUDIT .................................................................................................................................................................................. 60

7.11     RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE ........................................................................................ 60

7.12     TRANSFER OF INTEREST................................................................................................................................................... 61

7.13     TRUSTEE INDEMNIFICATION ........................................................................................................................................... 61

7.14     EMPLOYER SECURITIES AND REAL PROPERTY............................................................................................................ 61

7.15     DIVESTMENT OF EMPLOYER SECURITIES .....................................................................................................................  61

© 2014 The Vanguard Group or its suppliers
ii

AMENDMENT, TERMINATION AND MERGERS

8.1     AMENDMENT...................................................................................................................................................................... 62

8.2     TERMINATION .................................................................................................................................................................... 63

8.3     MERGER, CONSOLIDATION OR TRANSFER OF ASSETS ............................................................................................... 63

ARTICLE IX
TOP-HEAVY PROVISIONS

9.1     TOP-HEAVY PLAN REQUIREMENTS ................................................................................................................................ 64

9.2     DETERMINATION OF TOP-HEAVY STATUS ....................................................................................................................  64

ARTICLE X MISCELLANEOUS

10.1     EMPLOYER ADOPTIONS.................................................................................................................................................... 65

10.2     PARTICIPANT'S RIGHTS .................................................................................................................................................... 65

10.3     ALIENATION ....................................................................................................................................................................... 65

10.4     PLAN COMMUNICATIONS, INTERPRETATION AND CONSTRUCTION ........................................................................ 66

10.5     GENDER, NUMBER AND TENSE ....................................................................................................................................... 66

10.6     LEGAL ACTION................................................................................................................................................................... 67

10.7     PROHIBITION AGAINST DIVERSION OF FUNDS............................................................................................................. 67

10.8     EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE...................................................................................................  67

10.9     INSURER'S PROTECTIVE CLAUSE .................................................................................................................................... 67

10.10     RECEIPT AND RELEASE FOR PAYMENTS .......................................................................................................................  67

10.11     ACTION BY THE EMPLOYER ............................................................................................................................................ 67

10.12     NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY ................................................................................. 67

10.13     APPROVAL BY INTERNAL REVENUE SERVICE .............................................................................................................  68

10.14     PAYMENT OF BENEFITS.................................................................................................................................................... 68

10.15     ELECTRONIC MEDIA ......................................................................................................................................................... 68

10.16     PLAN CORRECTION ........................................................................................................................................................... 68

10.17     NONTRUSTEED PLANS ...................................................................................................................................................... 68

ARTICLE XI PARTICIPATING EMPLOYERS

11.1     ELECTION TO BECOME A PARTICIPATING EMPLOYER ............................................................................................... 69

11.2     REQUIREMENTS OF PARTICIPATING EMPLOYERS ....................................................................................................... 69

11.3     DESIGNATION OF AGENT ................................................................................................................................................. 69

11.4     EMPLOYEE TRANSFERS .................................................................................................................................................... 69

11.5     PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES .......................................................................... 69

11.6     AMENDMENT...................................................................................................................................................................... 70

11.7     DISCONTINUANCE OF PARTICIPATION .......................................................................................................................... 70

11.8     ADMINISTRATOR'S AUTHORITY ..................................................................................................................................... 70

11.9     PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE ................................................................................... 70

ARTICLE XII
CASH OR DEFERRED PROVISIONS

12.1     FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION....................................................................................  70

12.2     PARTICIPANT'S SALARY DEFERRAL ELECTION ........................................................................................................... 71

12.3     ALLOCATION OF CONTRIBUTIONS AND FORFEITURES .............................................................................................. 75

12.4     ACTUAL DEFERRAL PERCENTAGE TESTS .....................................................................................................................  76

12.5     ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS ...................................................................................... 78

12.6     ACTUAL CONTRIBUTION PERCENTAGE TESTS.............................................................................................................  81

12.7     ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS ............................................................................. 83

12.8     401(k) ADP TEST SAFE HARBOR PROVISIONS ................................................................................................................  85

12.9     QUALIFIED AUTOMATIC CONTRIBUTION ARRANGEMENT ........................................................................................ 87

12.10     ADVANCE DISTRIBUTION FOR HARDSHIP..................................................................................................................... 88

12.11     IN-PLAN ROTH ROLLOVER CONTRIBUTIONS ................................................................................................................  89

ARTICLE XIII SIMPLE 401(K) PROVISIONS

13.1     SIMPLE 401(k) PROVISIONS ............................................................................................................................................... 90

13.2     DEFINITIONS ....................................................................................................................................................................... 91

13.3     CONTRIBUTIONS ................................................................................................................................................................ 91

13.4     ELECTION AND NOTICE REQUIREMENTS ......................................................................................................................  91

13.5     VESTING REQUIREMENTS ................................................................................................................................................ 92

13.6     TOP-HEAVY RULES ............................................................................................................................................................ 92

13.7     NONDISCRIMINATION TESTS........................................................................................................................................... 92

ARTICLE XIV
MULTIPLE EMPLOYER PROVISIONS

14.1     ELECTION AND OVERRIDING EFFECT ............................................................................................................................ 92

14.2     DEFINITIONS ....................................................................................................................................................................... 92

14.3     PARTICIPATING EMPLOYER ELECTIONS .......................................................................................................................  92

14.4     HIGHLY COMPENSATED EMPLOYEE STATUS ...............................................................................................................  93

14.5     TESTING .............................................................................................................................................................................. 93

14.6     TOP HEAVY PROVISIONS .................................................................................................................................................. 93

14.7     COMPENSATION................................................................................................................................................................. 93

14.8     SERVICE .............................................................................................................................................................................. 94

14.9     REQUIRED MINIMUM DISTRIBUTIONS ........................................................................................................................... 94

14.10     COOPERATION AND INDEMNIFICATION ........................................................................................................................  94

14.11     INVOLUNTARY TERMINATION ........................................................................................................................................ 94

14.12     VOLUNTARY TERMINATION ............................................................................................................................................ 95

ARTICLE I DEFINITIONS

As used in this Plan, the following words and phrases shall have the meanings set forth herein unless a different meaning is clearly required by the context:

1.1  "Account" means any separate notational account established and maintained by the Administrator for each Participant under the
Plan. To the extent applicable, a Participant may have any (or all) of the following notational Accounts:

(a)   "Combined Account" means the account representing the Participant's total interest under the Plan resulting from (1) the Employer's contributions in the case of a Profit Sharing Plan or Money Purchase Plan, and (2) the Employer Nonelective Contributions in the case of a 401(k) Profit Sharing Plan. In addition, Forfeitures are part of the Combined Account to the e xtent they are reallocated. Separate accountings shall be maintained with respect to that portion of a Participant's Account attributable to Employer contributions made pursuant to Section 12.1(a)(2) and to Employer contributions made pursuant to Section 12.1(a)(3).

(b)   "Elective Deferral Account" means the account established hereunder to which Elective Deferrals (including a separate accounting for Catch-Up Contributions) are allocated. Amounts in the Participant's Elective Deferral Account are nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(e). The Elective Deferral Account may consist of the
sub-Accounts listed below. Unless specifically stated otherwise, any reference to a Participant's Elective Deferral Account will refer to both of these sub-Accounts.

(1)   "Pre-Tax Elective Deferral Account" means the portion of the Elective Deferral Account attributable to Pre -Tax Elective
Deferrals (i.e., Elective Deferrals that are not subject to federal income tax at the t ime of their deferral to the Plan).

(2)   "Roth Elective Deferral Account" means the portion of the Elective Deferral Account attributable to Roth Elective Deferrals (i.e., that are subject to federal income tax at the time of their deferral to t he Plan) which does not include amounts attributable to "in-Plan Roth rollover contributions" (as defined in Section 12.11). No contributions other than Roth Elective Deferrals and properly attributable earnings will be credited to each Participant's Roth Elective Deferral Account.

(c)   "In-Plan Roth Rollover Account" means the account attributable to a distribution from the Plan that is directly rolled over withi n this Plan, as described in Section 12.11. The amount thus contributed retains the characteristics of the source Account from which the amount of the "in-Plan Roth rollover contribution" (as defined in Section 12.11) was distributed (except for the tax treatment of such amount when distributed out of the Plan).

(d)   "Qualified Automatic Contribution Safe Harbor Account" means the account established hereunder to which Qualified Automatic Contribution "ADP test safe harbor contributions" are allocated. Amounts in the Qualified Automatic Contribution Safe Harbor Account are subject to the distribution restrictions of Section 12.2(e).

(e)   "Qualified Matching Contribution Account" means the account established hereunder to which Qualified Matching Contributions are allocated. Amounts in the Qualified Matching Contribution Account are nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(e).

(f)    "Qualified Nonelective Contribution Account" means the account established hereunder to which Qualified Nonelective Contributions are allocated. Amounts in the Qualified Nonelective Contribution Account are nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(e).

(g)   "Qualified Voluntary Employee Contribution Account" means the account established hereunder to which a Participant's tax - deductible qualified voluntary Employee contributions made pursuant to Section 4.9 are allocated.

(h)   "Rollover Account" means the account established hereunder to which amounts transferred from a qualified plan (including this
Plan) or individual retirement account in accordance with Section 4.6 are allocated.

(i)    "Transfer Account" means the account established hereunder to which amounts transferred to this Plan from a direct plan-to-plan transfer in accordance with Section 4.7 are allocated.

(j)    "Voluntary Contribution Account" means the account established hereunder to which after -tax voluntary Employee contributions made pursuant to Section 4.8 are allocated. Amounts recharacterized as after-tax voluntary Employee contributions pursuant to
Section 12.5 shall remain subject to the limitations of Section 12.2. Therefore, a separate accounting shall be maintained with respect to that portion of the Voluntary Contribution Account attributable to after-tax voluntary Employee contributions made pursuant to
Section 4.8.

1.2  "ACP" means the "Actual Contribution Percentage" determined pursuant to Section 12.6(d).

1.3  "Act" means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.4  "ADP" means the "Actual Deferral Percentage" determined pursuant to Section 12.4(d).

1.5  "Administrator" means the Employer unless another person or entity has been designated by the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer. "Administrator" also includes any Qualified Termination Administrator (QTA) that has assumed the responsibilities of the Administrator in accordance with guidelines set forth by the Department of Labor.

1.6  "Adoption Agreement" means the separate agreement which is executed by the Employer and sets forth the elective provisions of this Plan and Trust as specified by the Employer.

1.7  "Affiliated Employer" means any corporation which is a member of a controlled group of corporations (as defined in Code §414(b))
which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code
§414(c)) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in
Code §414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Regul ations under Code §414(o).

1.8  "Affirmative Election" means a Salary Deferral Agreement submitted by a Participant to the Administrator in accordance with Section 12.2 that provides instructions to defer a specific amount of Compensation (including an affirmative election to defer no amount) as an Elective Deferral to the Plan. A Participant's Affirmative Election is generally effective as of the first payroll period which follows
the payroll period in which the Participant made the Affirmative Election. However, a Participant may make an Affirmative Ele ction which is effective: (a) for the first payroll period in which he or she becomes a Participant if the Participant makes an Affirmati ve Election within a reasonable period following the Participant's becoming eligible to make Elective Deferrals and before the Compensation to which the Election applies becomes currently available; or (b) for the first payroll period following the effective date of the Automat ic Contribution Arrangement if the Participant makes an Affirmative Election not later than the Automa tic Contribution Arrangement's effective date.

1.9  "Alternate Payee" means an alternate payee pursuant to a qualified domestic relations order that meets the requirements of
Code §414(p).

1.10 "Anniversary Date" means the last day of the Plan Year.

1.11 "Annuity Starting Date" means, with respect to any Participant, the first day of the first period for which an amount is paid as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitles the Participant to such benefit.

1.12 "Automatic Contribution Arrangement" means the Automatic Deferral provisions described by Section 12.2 and, if applicable, Section 12.9.

1.13 "Automatic Deferral" means the amount (if any) that a Participant is deemed to defer in accordance with an Automatic Contribution Arrangement. The effective date of an Employee's Automatic Deferral will be as soon as practicable after the Employee is subject to Automatic Deferrals described by Section 12.2(b) or 12.9, consistent with (a) applicable law, and (b) the objective of afford ing the Employee a reasonable period of time after receipt of the notice to make an Affirmative Election (and, if applicable, an investment election). All Automatic Deferrals constitute Elective Deferrals.

1.14 "Beneficiary" means the person (or entity) to whom all or a portion of a deceased Participant's interest in the Plan is payable, subject to the restrictions of Sections 6.2 and 6.6.

1.15 "Catch-Up Contribution" means an Elective Deferral made to the Plan by a Catch-Up Eligible Participant that, during any taxable year of such Participant, exceeds one of the following:

(a)   a statutory dollar limit on Elective Deferrals or "annual additions" as provided in Code §401(a)(30), 402(h), 403(b), 408, 415(c), or 457(b)(2) (without regard to Code §457(b)(3)), as applicable; or

(b)   any Plan limit on Elective Deferrals other than a limit described in (a) above; or the limit imposed by the ADP test under Code
§401(k)(3) which Excess Contributions would otherwise be distributed pursuant to Section 12.5(b) to a Highly Compensated
Employee who is a Catch-Up Eligible Participant.

Catch-Up Contributions for a Participant for a Participant's taxable year may not exceed the dollar limit on Catch -Up Contributions under Code §414(v) for the Participant's taxable year. The dollar limit on Catch-Up Contributions under Code §414(v)(2)(B)(i) was $5,000 for taxable years beginning in 2006. After 2006, the $5,000 is adjusted by the Secretary of the Treasury for cost-of-living increases under Code §414(v)(2)(C). Any such adjustments shall be in multiples of $500. Notwithstanding the preceding, different dollar limit s apply to Catch-Up Contributions under SIMPLE 401(k) plans.

1.16 "Catch-Up Eligible Participant" means a Participant who:

(a)   is eligible to make Elective Deferrals to the Plan pursuant to Section 12.2; and

(b)   will attain age 50 or older by the end of such taxable year.

1.17 "Code" means the Internal Revenue Code of 1986, as it may be amended from time to time.

1.18 "Compensation" means, with respect to any Participant, the amount determined in accordance with the following provisions, except as otherwise provided in the Adoption Agreement.

(a)   Base definition. One of the following, as elected in the Adoption Agreement:

(1)   Information required to be reported under Code §§6041, 6051 and 6052 (Wages, tips and other compensation as reported on Form W-2). Compensation means wages, within the meaning of Code §3401(a), and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code §§6041(d), 6051(a)(3) and 6052. Compensation must be determined without regard to any rules under Code §3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code §3401(a)(2)).

(2)   Code §3401(a) Wages. Compensation means an Employee's wages within the meaning of Code §3401(a) for the purposes of income tax withholding at the source but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code
§3401(a)(2)).

(3)   415 safe harbor compensation. Compensation means wages, salaries, for Plan Years beginning after December 31, 2008, Military Differential Pay, and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, commissions paid salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or other expense allowances under a nonaccountable plan (as described in Regulation §1.62-2(c))), and excluding the following:

(i)    Employer contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan to the extent
such contributions are excludable from the Employee's gross income, or any distributions from a plan of deferred
compensation;

(ii)   Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

(iii)  Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and

(iv)  Other amounts which receive special tax benefits, or contributions made by the Employer (whether or not under a salary deferral agreement) towards the purchase of an annuity contract described in Code §403(b) (whether or not the contributions are actually excludable from the gross income of the Employee).

(b)   Earned Income for Self-Employed Individual. Notwithstanding the foregoing, Compensation for any Self-Employed Individual shall be equal to Earned Income. Furthermore, the contributions on behalf of any "owner -Employee" shall be made only with respect to the Earned Income for such "owner-Employee" which is derived from the trade or business with respect to which such Plan is established. For this purpose, an "owner-Employee" means a sole proprietor who owns the entire interest in the Employer or a partner (or member in the case of a limited liability company treated as a partnership or sole proprietorship for federal income tax purposes) who owns more than ten percent (10%) of either the capital interest or the profits interest in the Employer and who receives income for personal services from the Employer.

(c)   Paid during "determination period." Compensation shall include only that Compensation which is actually paid to the Participant during the "determination period." Except as otherwise provided in this Plan, the "determinati on period" is the period elected by the Employer in the Adoption Agreement. If the Employer makes no election, the "determination period" shall be the Plan Year.

(d)   Inclusion of deferrals. Notwithstanding the above, unless otherwise elected in the Adoption Agreement, Compensation shall include all of the following types of elective contributions and all of the following types of deferred compensation:

(1)   Elective contributions that are made by the Employer on behalf of a Participant that are not includible in gross income under
Code §§125, 402(e)(3), 402(h)(1)(B), 402(k), 403(b), and 132(f)(4). However, regardless of any election in the Adoption

Agreement to the contrary, amounts described in the preceding sentence will be included in Compensation for purposes of making Elective Deferrals or receiving any Employer matching contributions under this Plan. If specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), amounts under Code §125 shall be deemed to include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code §125 pursuant to the preceding sentence only if the Employer does not request or collect information regarding the Participant's other health cove rage as part of the enrollment process for the health plan. Roth Elective Deferrals will be treated as Pre-tax Elective Deferrals for purposes of determining Compensation if the Employer elects to exclude from Compensation the items described in this Subsection (d)(1).

(2)   Compensation deferred under an eligible deferred compensation plan within the meaning of Code §457(b).

(3)   Employee contributions (under governmental plans) described in Code §414(h)(2) that are picked up by the employing unit and thus are treated as Employer contributions.

(e)   Post-severance compensation – Code §415 Regulations. The Administrator shall adjust Compensation, for Plan Years beginning on or after July 1, 2007 (or such other date as the Employer specifies in the Compensation Section of the Adoption Agreement), for amounts that would otherwise be included in the definition of Compensation but are paid by the later of 2 1/2 months after a Participant's severance from employment with the Employer or the end of the Plan Year that includes the date of the Participant's severance from employment with the Employer, in accordance with the following, as elected in the Compensation
Section of the Adoption Agreement. The preceding time period, however, does not apply with respect to payments described in
Subsections (4) and (5) below. Any other payment of compensation paid after severance of employment that is not described in the following types of compensation is not considered Compensation, even if payment is made within the time period specified above.

(1)   Regular pay. Compensation shall include regular pay after severance of employment (to the extent otherwise included in the definition of Compensation) if:

(i)    The payment is regular compensation for services during the Participant's regular working hours, or compensation for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and

(ii)   The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer.

(2)   Leave cash-outs. Compensation shall include leave cash-outs if those amounts would have been included in the definition of Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are for unused accrued bona fide sick, vacation, or other leave, but only if the Particip ant would have been able to use the leave if employment had continued.

(3)   Deferred compensation. Compensation shall include deferred compensation if those amounts would have been included in the definition of Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid if the Participant had continued in employment with the Employer and only to the extent the payment is includible in the Participant's gross income.

(4)   Military Differential Pay. Compensation shall include payments to an individual who does not currently perform services for the Employer by reason of qualified military service (as that term is used in Code §414(u)(1)) to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service.

(5)   Disability pay. Compensation shall include compensation paid to a Participant who is permanently and totally disabled, as defined in Code §22(e)(3), provided, as elected by the Employer in the Compensation Section of the Adoption Agreement, salary continuation applies to all Participants who are permanently and totally disabled for a fixed or determinable period, or the Participant was not a Highly Compensated Employee immediately before becoming disabled.

(f)    Dollar limitation. Compensation in excess of $200,000 shall be disregarded for all purposes other than for purposes of Elective
Deferrals. Such amount shall be adjusted by the Commissioner for increases in the cost -of-living in accordance with Code
§401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to any "determination period" beginning with or within such calendar year. If a "determination period" consists of fewer than twelve (12) months, the $200,000 annual Compens ation
limit will be multiplied by a fraction, the numerator of which is the number of months in the "determination period," and the
denominator of which is twelve (12). In applying any Plan limitation on the amount of matching contributions or any Plan limit on Elective Deferrals which are subject to matching contributions, where such limits are expressed as a percentage of Compensation, the Administrator may apply the Compensation limit under this Section annually, even if the matching contribution formula is appl ied on any time interval which is less than the full Plan Year or the Administrator may pro rate the Compensation limit.

(g)   Noneligible Employee. If, in the Adoption Agreement, the Employer elects to exclude a class of Employees from the Plan, then Compensation for any Employee who becomes eligible or ceases to be eligible to participate during a "determination period" sh all only include Compensation while the Employee is an Eligible Employee. In addition, with respect to the determination of any matching contributions, the Plan will disregard Elective Deferrals made while the Participant is not eligible for the matchin g contribution component of the Plan.

(h)   Amendment. If, in connection with the adoption of any amendment, the definition of Compensation has been modified, then, except as otherwise provided herein, for Plan Years prior to the Plan Year which includes the adoption date of such amendment , Compensation means compensation determined pursuant to the terms of the Plan then in effect.

1.19 "Contract" or "Policy" means any life insurance policy, retirement income policy, or annuity contract (group or individual) issued by the Insurer. In the event of any conflict between the terms of this Plan and the terms of any contract purchased hereunder , the Plan provisions shall control.

1.20 "Custodian" means a person or entity that has custody of all or any portion of the Plan assets.

1.21 "Directed Trustee" means a Trustee who, with respect to the investment of Plan assets, is subject to the direction of the Administrator, the Employer, a properly appointed Investment Manager, a named Fiduciary, or Plan Participant. To the extent the Trustee is a Directed Trustee, the Trustee does not have any discretionary authority with respect to the investment of Plan assets. In addition, the Trustee is not responsible for the propriety of any directed investment made pursuant to this Section and shall not be required to consult or advise the Employer regarding the investment quality of any directed investment held under the Plan.

1.22 "Discretionary Trustee" means a Trustee who has the authority and discretion to invest, manage or control any portion of the Plan assets.

1.23 "Early Retirement Date" means the date specified in the Adoption Agreement on which a Participant has satisfied the requirements specified in the Adoption Agreement (Early Retirement Age). If elected in the Adoption Agreement, a Participant shall become fully Vested upon satisfying such requirements if the Participant is still employed at the Early Retirement Age.

A Participant who severs from employment after satisfying any service requirement but before satisfying the age requirement f or Early Retirement Age and who thereafter reaches the age requirement contained herein shall be entitled to receive benefits under this Plan (other than any accelerated vesting and allocations of Employer contributions) as though the requirements for Early Retiremen t Age had been satisfied.

1.24 "Earned Income" means the net earnings from self-employment in the trade or business with respect to which the Plan is established, for which the personal services of the individual are a material income-producing factor. Net earnings will be determined without regard to items not included in gross income and the deductions allocable to such items. Net earnings are reduced by contributions made by the Employer to a qualified plan to the extent deductible under Code §404. In addition, net earnings shall be determined with regard to the deduction allowed to the taxpayer by Code §164(f).

If Compensation is defined to exclude any items of Compensation (other than safe harbor adjustments permitted under the
Code §414(s) Regulations or limiting Compensation to periods of Plan participation), then for purposes of determining the Compensa tion of a Self-Employed Individual, Earned Income shall be adjusted by multiplying Earned Income by the percentage of total compensation
that is included for the eligible Participants who are Nonhighly Compensated Employees. That percentage is determined by calc ulating the
percentage of each eligible Nonhighly Compensated Participant's total Compensation prior to excluding any non-safe harbor adjustments selected in the Adjustments to Compensation Section of the Adoption Agreement that are included in the definition of Compensation and averaging those percentages.

1.25 "Effective Date" means the date this Plan, including any restatement or amendment of this Plan, is effective. Where the Plan is restated or amended, a reference to Effective Date is the effective date of the restatement or amendment, except where the context indicates a reference to an earlier Effective Date. If any provision of this Plan is retroactively effective, then provisions of this Plan generally control. However, if a provision of this Plan is different from the provision of the Employer's prior plan document and, after the retroactive
Effective Date of this Plan, the Employer operated in compliance with the provisions of the prior plan, then the provision of such prior plan is incorporated into this Plan for purposes of determining whether the Employer operated the Plan in compliance with its terms, provided operation in compliance with the terms of the prior plan do not violate any qualification requirements under the Code, Regulations, or other IRS guidance.

The Employer may designate special effective dates for individual provisions under the Plan where provided in the Adoption Agreement or under Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). If one or more qualified retirement plans have been merged into this Plan, the provisions of the merging plan(s) will remain in full force and effect until the effective date of the plan merger(s).

1.26 "Elective Deferrals" means the Employer's contributions to the Plan that are made pursuant to a Participant's salary deferral election in accordance with Section 12.2. Elective Deferrals shall be subject to the requirements of Sections 12.2(d) and 12.2(e) and shall, except as

otherwise provided herein, be required to satisfy the nondiscrimination requirements of the Code §401(k) Regulations. The term "Elective
Deferrals" includes Pre-Tax Elective Deferrals and, if permitted by the Plan, Roth Elective Deferrals.

1.27 "Eligible Automatic Contribution Arrangement" (EACA) means an Automatic Contribution Arrangement that is intended to comply as such for purposes of Code §414(w) and that therefore complies with the Automatic Deferral provisions described i n the EACA provisions set forth in Section 12.2(b).

1.28 "Eligible Employee" means any Eligible Employee as elected in the Adoption Agreement and as provided herein. With respect to a volume submitter or non-standardized Adoption Agreement, an individual shall not be an Eligible Employee if such individual is not reported on the payroll records of the Employer as a common law employee. In particular, it is expressly intended that indivi duals not treated as common law employees by the Employer on its payroll records and out-sourced workers, are not Eligible Employees and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law emp loyees and not independent contractors. However, the two preceding sentences shall not apply to partners or other Self-Employed Individuals unless the Employer treats them as independent contractors. Furthermore, with respect to a volume submitter or non -standardized Adoption Agreement, Employees of an Affiliated Employer will not be treated as Eligible Employees prior to the date the Affiliated Employer adopts the Plan as a Participating Employer.

Employees who became Employees as the result of a "Code §410(b)(6)(C) transaction" will, unless otherwise sp ecified in the Adoption Agreement, only be Eligible Employees after the expiration of the transition period beginning on the date of the tra nsaction and ending on the last day of the first Plan Year beginning after the date of the transaction. A "Code §410(b)(6)(C) transaction" is an asset or stock acquisition, merger, or similar transaction involving a change in the Employer of the Employees of a trade or business that is subject to the special rules set forth in Code §410(b)(6)(C). However, regardless of any election made in the Adoption Agreement, if a separate entity becomes an Affiliated Employer as the result of a "Code §410(b)(6)(C) transaction," then Employees of such separate en tity will not be treated as Eligible Employees prior to the date the entity adopts the Plan as a Participating Employer or, with respect to a standardized Adoption Agreement, if earlier, the expiration of the transition period set forth above.

If, in the Adoption Agreement, the Employer elects to exclude union employees, then Employees whose employment is governed by a collective bargaining agreement between the Employer and "employee representatives" under which retirement benefits were the subject of good faith bargaining and if two percent (2%) or less of the Employees covered pursuant to that agreement are professionals as d efined in Regulation §1.410(b)-9, shall not be eligible to participate in this Plan to the extent of employment covered by such agreement, unless the agreement provides for coverage in the Plan (see Section 4.1(d)). For this purpose, the term "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers, or executives of the Employer. If a Participant performs services both as a collectively bargained Employee and as a non-collectively bargained Employee, then the Participant's Hours of Service in each respective category are treated separately.

If, in the Adoption Agreement, the Employer elects to exclude nonresident aliens, then Employees who are nonresident aliens (within the meaning of Code §7701(b)(1)(B)) who received no earned income (within the meaning of Code §911(d)(2)) from the Employer which constitutes income from sources within the United States (within the meaning of Code §861(a)(3)) shall not be eligible to participate in this Plan. In addition, this paragraph shall also apply to exclude from participation in the Plan an Employee who is a nonresident alien (within the meaning of Code §7701(b)(1)(B)) but who receives earned income (within the meaning of Code §911(d)(2)) from the Employer that constitutes income from sources within the United States (within the meaning of Code §861(a)(3)), if all of the Employee's earned income from the Employer from sources within the United States is exempt from United States income tax under an applicable income tax convention. The preceding sentence will apply only if all Employees described in the preceding sentence ar e excluded from the Plan.

If, in the Adoption Agreement, the Employer elects to exclude Part-Time/Temporary/Seasonal Employees, then notwithstanding any such exclusion, if any such excluded Employee actually completes or completed a Year of Service, then such Employee will cease to be within this particular excluded class.

1.29 "Employee" means any person who is employed by the Employer. The term "Employee" shall also include any person who is an employee of an Affiliated Employer and any Leased Employee deemed to be an Employee as provided in Code §414(n) or (o).

1.30 "Employer" means the entity specified in the Adoption Agreement, any successor which shall maintain this Plan and any predecessor which has maintained this Plan. In addition, unless the context means otherwise, the term "Employer" shall include any Partic ipating Employer which shall adopt this Plan.

1.31 "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of:

(a)   The aggregate "contribution percentage amounts" (as defined in Section 12.6) actually made on behalf of Highly Compensated
Participants for such Plan Year and taken into account in computing the numerator of the ACP, over

(b)   The maximum "contribution percentage amounts" permitted by the ACP test in Section 12.6 (determined by hypothetical ly reducing contributions made on behalf of Highly Compensated Participants in order of their "contribution percentages" beginni ng with the highest of such percentages).

Such determination shall be made after first taking into account corrections of any Excess Deferrals pursuant to Section 12.2 and then taking into account adjustments of any Excess Contributions pursuant to Section 12.5.

1.32 "Excess Compensation" means, with respect to a Plan that is integrated with Social Security (permitted disparity), a Participant's Compensation which is in excess of the integration level elected in the Adoption Agreement. However, if Compensation is based on less than a twelve (12) month "determination period," Excess Compensation shall be determined by reducing the integration level by a fraction, the numerator of which is the number of full months in the short period and the denominator of which is twelve (12). A "deter mination period" is not less than twelve (12) months solely because a Participant's Compensation does not include Compensation paid during a "determination period" while the Participant was not a Participant in this component of the Plan.

1.33 "Excess Contributions" means, with respect to any Plan Year, the excess of:

(a)   The aggregate amount of Employer contributions actually made on behalf of Highly Compensated Participa nts for such Plan
Year and taken into account in computing the numerator of the ADP, over

(b)   The maximum amount of such contributions permitted by the ADP test in Section 12.4 (determined by hypothetically reducing contributions made on behalf of Highly Compensated Participants in order of the actual deferral ratios, beginning with the highest of such ratios).

In determining the amount of Excess Contributions to be distributed and/or recharacterized with respect to an affected Highly Compensated Participant as determined herein, such amount shall be reduced by any Excess Deferrals previously distributed to such affected Highly Compensated Participant for the Participant's taxable year ending with or within such Plan Year.

1.34 "Excess Deferrals" means, with respect to any taxable year of a Participant, either (a) those elective deferrals within the meaning of Code §§402(g) or 402A that are made during the Participant's taxable year and exceed the dollar limitation under Code §402(g) (including, if applicable, the dollar limitation on Catch-Up Contributions defined in Code §414(v)) for such year; or (b) are made during a calendar year and exceed the dollar limitation under Code §§402(g) and 402A (including, if applicable, the dollar limitation on C atch-Up Contributions defined in Code §414(v)) for the Participant's taxable year beginning in such calendar year, counting only Elective Deferrals made under this Plan and any other plan, contract or arrangement maintained by the Employer.

1.35 "Fiduciary" means any person who (a) exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets, (b) renders investment advice for a fee or other compensation, direct or indirect, with respect to any monies or other property of the Plan or has any authority or resp onsibility to do so, or (c) has any discretionary authority or discretionary responsibility in the administration of t he Plan.

1.36 "Fiscal Year" means the Employer's accounting year.

1.37 "Forfeiture" means that portion of a Participant's Account that is not Vested and is disposed of in accordance with the provisions of the Plan. Unless otherwise elected in the Adoption Agreement, Forfeitures occur pursuant to (a) below.

(a)   A Forfeiture will occur on the earlier of:

(1)   The last day of the Plan Year in which a Participant incurs five (5) consecutive 1-Year Breaks in Service, or

(2)   The distribution of the entire Vested portion of the Participant's Account of a Participant who has severed employment with the Employer. For purposes of this provision, if the Participant has a Vested benefit of zero, then such Participant shall be deemed to have received a distribution of such Vested benefit as of the year in which the severance of employment occurs. For this purpose, a Participant's Vested benefit shall not include: (i) the Participant's Qualified Voluntary Employee Contribution Account, and (ii) the Participant's Rollover Account.

(b)   If elected in the Adoption Agreement, a Forfeiture will occur as of the last day of the Pla n Year in which a Participant incurs five (5) consecutive 1-Year Breaks in Service.

Regardless of the preceding, if a Participant is eligible to share in the allocation of Forfeitures in the year in which the Forfeiture
would otherwise occur, then the Forfeiture will not occur until the end of the first Plan Year for which the Participant is not eligible to share in the allocation of Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts deemed to be Forfeitures purs uant to any
other provision of this Plan.

1.38 "Former Employee" means an individual who has severed employment with the Employer or an Affiliated Employer.

1.39 "414(s) Compensation" means Compensation as defined in Section 1.18. However, the Employer may operationally elect to use any other definition of compensation for 414(s) Compensation provided such definition satisfies the nondiscrimination requirement s of Code
§414(s) and the Regulations thereunder. For purposes of applying the ADP and ACP tests, the period for determining 414(s) Compensation must be either the Plan Year or the calendar year ending with or within the Plan Year. For all other purposes, the period of determining
414(s) Compensation must be the Plan Year or another twelve (12) month period of time ending in the Plan Year. An Employer ma y

further limit the period taken into account to that part of the determination period in which an Employee was a Participant in the component of the Plan being tested. The period used to determine 414(s) Compensation must be applied uniformly to all Participants for the Plan Year.

1.40 "415 Compensation" means, with respect to any Participant, such Participant's (a) Wages, tips and other compensation on Form
W-2, (b) Code §3401(a) wages or (c) 415 safe harbor compensation as elected in the Adoption Agreement for purposes of Compensation
(and as defined in Subsections 1.18(a)(1)-(3) respectively). 415 Compensation shall be based on the full Limitation Year regardless of when participation in the Plan commences. Furthermore, regardless of any election made in the Adoption Agreement, 415 Com pensation
shall include any elective deferral (as defined in Code §§402(e)(3), 402(k) and 402(h)(1)(B)) and any amount which is contrib uted or
deferred by the Employer at the election of the Participant and which is not includible in the gross income of the Participant by reason of
Code §§125, 457, and 132(f)(4). In addition, for years beginning after December 31, 2008 Military Differential Pay is treated as 415
Compensation.

(a)   Deemed 125 compensation. If elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), amounts under Code §125 shall be deemed to include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code §125 pursuant to the preceding sentence only if the Employer does not request or collect information regarding the Participant's other health coverage as part of the enrollment process for the health plan.

(b)   Post-severance compensation. The Administrator shall adjust 415 Compensation, for Limitation Years beginning on or after July 1, 2007, or such earlier date as the Employer specifies in the Compensation Section of the Adoption Agreement, for amounts that would otherwise be included in the definition of 415 Compensation but are paid by the later of 2 1/2 months after a Participant's severance from employment with the Employer or the end of the Limitation Year that includes the date of the Participant's sever ance from employment with the Employer, in accordance with the following, as elected in the Compensation Section of the Adoption Agreement. The preceding time period, however, does not apply with respect to payments described in Subsections (4) and (5) bel ow. Any other payment of compensation paid after severance of employment that is not described in the following types of compensa tion is not considered 415 Compensation, even if payment is made within the time period specified above.

(1)   Regular pay. 415 Compensation shall include regular pay after severance of employment (to the extent otherwise included in the definition of 415 Compensation) if:

(i)    The payment is regular compensation for services during the Participant's regular working hours, or compensation for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and

(ii)   The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer.

(2)   Leave cash-outs. 415 Compensation shall include leave cash-outs if those amounts would have been included in the definition of 415 Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are for unused accrued bona fide sick, vacation, or other leave, but only if the Participant would have been able to use the leave if employment had continued.

(3)   Deferred compensation. 415 Compensation shall include deferred compensation if those amounts would have been included in the definition of 415 Compensation if they were paid prior to the Participant's severance from employment with th e Employer, and the amounts are received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid if the Participant had continued in employment with the Employer and only to the extent the payment is includible in the Participant's gross income.

(4)   Military Differential Pay. 415 Compensation shall include payments to an individual who does not currently perform services for the Employer by reason of qualified military service (as that term is used in Code §414(u)(1)) to the extent tho se payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service.

(5)   Disability pay. 415 Compensation shall include compensation paid to a Participant who is permanently and totally disabled, as defined in Code §22(e)(3), provided, as elected by the Employer in the Compensation Section of the Adoption Agreement, salary continuation applies to all Participants who are permanently and totally disabled for a fixed or determinable period, or the Participant was not a Highly Compensated Employee immediately before becoming disabled.

(c)   Administrative delay ("the first few weeks") rule. 415 Compensation for a Limitation Year shall generally not include
amounts earned but not paid during the Limitation Year solely because of the timing of pay periods and pay dates. However, if elected
in the Compensation Section of the Adoption Agreement, 415 Compensation for a Limitation Year shall include amounts earned but not paid during the Limitation Year solely because of the timing of pay periods and pay dates, provided the amounts are paid during the first few weeks of the next Limitation Year, the amounts are included on a uniform and consistent basis with respect to all similarly situated Participants, and no Compensation is included in more than one Limitation Year.

(d)   Inclusion of certain nonqualified deferred compensation amounts. If this is a PPA restatement and prior to the restatement
414(s) Compensation included all items includible in compensation under Regulation §1.415(c)-2(b) (Regulation §1.415-2(d)(2) under the Regulations in effect for Limitation Years beginning prior to July 1, 2007), then 415 Compensation for Limitation Years prior to
the adoption of this restatement shall include amounts that are includible in the gross income of a Participant under the rul es of Code
§409A or Code §457(f)(1)(A) or because the amounts are constructively received by the Participant. For Plan Years beginning on and after the Plan Year in which this restatement is adopted, the Plan does not provide for a definition of 415 Compensation incl uding all
items in Regulation §1.415(c)-2(b).

(e)   Back pay. Back pay, within the meaning of Regulations §1.415(c)-2(g)(8), shall be treated as Compensation for the Limitation Year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.

(f)    Dollar limitation. 415 Compensation will be limited to the same dollar limitations set forth in Section 1.18(f) adjusted in such manner as permitted under Code §415(d).

(g)   Amendment. Except as otherwise provided herein, if, in connection with the adoption of any amendment, the definition of 415
Compensation has been modified, then for Plan Years prior to the Plan Year which includes the adoption date of such amendment,
415 Compensation means compensation determined pursuant to the terms of the Plan then in effect.

1.41 "Highly Compensated Employee" means an Employee described in Code §414(q) and the Regulations thereunder, and generally means any Employee who:

(a)   was a "five percent (5%) owner" as defined in Section 1.47(b) at any time during the "determination year" or the "look -back year"; or

(b)   for the "look-back year" had 415 Compensation from the Employer in excess of $80,000 and, if elected in the Adoption Agreement, was in the Top-Paid Group for the "look-back year." The $80,000 amount is adjusted at the same time and in the same manner as under Code §415(d). In applying this rule, the Employer may adopt any rounding or tie-breaking rules it desires, so long as such rules are reasonable, nondiscriminatory, and uniformly and consistently applied.

The "determination year" means the Plan Year for which testing is being performed and the "look-back year" means the immediately preceding twelve (12) month period. However, if the calendar year data election is made in the Adoption Agreement, for purpos es of (b) above, the "look-back year" shall be the calendar year beginning within the twelve (12) month period immediately preceding the "determination year."

A Highly Compensated Former Employee is based on the rules applicable to determining Highly Compensated Employee status as in effect for that "determination year," in accordance with Regulation §1.414(q)-1T, A-4 and IRS Notice 97-45 (or any superseding guidance).

In determining who is a Highly Compensated Employee, Employees who are nonresident aliens and who received no earned income (within the meaning of Code §911(d)) from the Employer constituting United States source income within the meaning of Code §861(a)(3) shall not be treated as Employees. If a nonresident alien Employee has U.S. source income, that Employee is treated as satisfying this definition if all of such Employee's U.S. source income from the Employer is exempt from U.S. income tax under an applicable income tax treaty. Additionally, all Affiliated Employers shall be taken into account as a single Employer and Leased Employees within the meaning
of Code §§414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased Employees are covered by a plan described in Code
§414(n)(5) and are not covered in any qualified plan maintained by the Employer. The exclusion of Leased Employees for this purpose shall be applied on a uniform and consistent basis for all of the Employer's retirement plans. Highly Compensated Former Empl oyees shall be treated as Highly Compensated Employees without regard to whether they performed services during the "determination year."

1.42 "Highly Compensated Participant" means any Highly Compensated Employee who is eligible to participate in the component of the Plan being tested.

1.43 "Hour of Service" means (a) each hour for which an Employee is directly or indirectly compensated or entitled to Compensation by the Employer for the performance of duties during the applicable computation period (these hours will be credited to the Employee for the computation period in which the duties are performed); (b) each hour for which an Employee is directly or indirectly compensa ted or entitled to Compensation by the Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, incapacity (including disability), jury duty, lay-off, military duty or leave of absence) during the applicable computation period (these hours will be calculated and credited pursuant to Department of Labor Regulation
§2530.200b-2 which is incorporated herein by reference); (c) each hour for which back pay is awarded or agreed to by the Employer without regard to mitigation of damages (these hours will be credited to the Employee for the computation period or periods t o which the
award or agreement pertains rather than the computation period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (a) or (b), as the case may be, and under (c).

Notwithstanding (b) above, (1) no more than 501 Hours of Service will be credited to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period); (2) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are

performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for th e purpose of complying with applicable workers' compensation, or unemployment compensation or disability insurance laws; and (3) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses i ncurred by the Employee. Furthermore, for purposes of (b) above, a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly, or indirectly through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate.

Hours of Service will be credited for employment with all Affiliated Employers and for any individual considered to be a Leased Employee pursuant to Code §414(n) or 414(o) and the Regulations thereunder. Furthermore, the provisions of Department of Labor Regulations §2530.200b-2(b) and (c) are incorporated herein by reference.

Hours of Service will be determined using the actual hours method unless one of the methods below is elected in the Adoption Agreement. If the actual hours method is used to determine Hours of Service, an Employee is credited with the actual Hours of Service the Employee completes with the Employer or the number of Hours of Service for which the Employee is paid (or entitled to payment ).

If the days worked method is elected, an Employee will be credited with ten (10) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour of Service during the day.

If the weeks worked method is elected, an Employee will be credited with forty-five (45) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service during the week.

If the semi-monthly payroll periods worked method is elected, an Employee will be credited with ninety-five (95) Hours of Service if under the Plan such Employee would be credited with at least one (1) Hour of Service during the semi -monthly payroll period.

If the months worked method is elected, an Employee will be credited with one hundred ninety (190) Hours of Service if under the
Plan such Employee would be credited with at least one (1) Hour of Service during the month.

If the bi-weekly payroll periods worked method is elected, an Employee will be credited with ninety (90) Hours of Service if unde r the Plan such Employee would be credited with at least one (1) Hour of Service during the bi -weekly payroll period.

1.44 "Insurer" means any legal reserve insurance company which has issued or shall issue one or more Contracts or Policies under the
Plan.

1.45 "Investment Manager" means a Fiduciary as described in Act §3(38).

1.46 "Joint and Survivor Annuity" means an immediate annuity for the life of a Participant with a survivor annuity for the life of the Participant's Spouse which is not less than fifty percent (50%), nor more than one hundred percent (100%) of the amount of th e annuity payable during the joint lives of the Participant and the Participant's Spouse which can be purchased with the Participant's Vested interest in the Plan reduced by any outstanding loan balances pursuant to Section 7.6.

1.47 "Key Employee" means an Employee as defined in Code §416(i) and the Regulations thereunder. Generally, for purposes of determining top-heavy status, any Employee or Former Employee (including any deceased Employee as well as each of the Employee's or Former Employee's Beneficiaries) is considered a Key Employee if the Employee or Former Employee, at any time during the Plan Year that contains the "determination date," has been included in one of the following categories:

(a)   an officer of the Employer (as that term is defined within the meaning of the Regulations under Code §416) having annual 415
Compensation greater than $130,000 (as adjusted under Code §416(i)(1));

(b)   a "five percent (5%) owner" of the Employer. "Five percent (5%) owner" means any person who owns (or is considered as owning within the meaning of Code §318) more than five percent (5%) of the value of the outstanding stock of the Employer or stock possessing more than five percent (5%) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated business, any person who owns more than five percent (5%) of the capital or profits interest in the Employer; and

(c)   a "one percent (1%) owner" of the Employer having annual 415 Compensation from the Employer of more than $150,000. "One percent (1%) owner" means any person who owns (or is considered as owning within the meaning of Code §318) more than one percent (1%) of the value of the outstanding stock of the Employer or stock possessing more than one percent (1%) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated busi ness, any person who owns more than one percent (1%) of the capital or profits interest in the Employer.

In determining percentage ownership hereunder, employers that would otherwise be aggregated under Code §§414(b), (c), (m) and (o)
shall be treated as separate employers. In determining whether an individual has 415 Compensation of more than $150,000, 415
Compensation from each employer required to be aggregated under Code §§414(b), (c), (m) and (o) shall be taken into account.

Notwithstanding the foregoing, for purposes of determining Participants who are entitled to the minimum top -heavy contribution, the determination of Key Employees and Non-Key Employees will be made based on the Plan Year (rather than the Plan Year that contains the "determination date") for which the top-heavy contribution is being made.

1.48 "Late Retirement Date" means the date of, or the first day of the month or the Anniversary Date coinciding with or next following, whichever corresponds to the election in the Adoption Agreement for the Normal Retirement Date, a Participant's actual retire ment after having reached the Normal Retirement Date.

1.49 "Leased Employee" means any person (other than an Employee of the recipient Employer) who, pursuant to an agreement between the recipient Employer and any other person or entity ("leasing organization"), has performed ser vices for the recipient (or for the recipient and related persons determined in accordance with Code §414(n)(6)) on a substantially full time basis for a period of at least one year (unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)), and such services are performed under primary direction or control by the recipient Employer. Contributions or benefits provided a Lea sed Employee by the leasing organization which are attributable to services performed for the recipient Employer shall be treated as provided by the recipient Employer. Furthermore, Compensation for a Leased Employee shall only include compensation from the leasing organization that is attributable to services performed for the recipient Employer.

A Leased Employee shall not be considered an employee of the recipient Employer if: (a) such employee is covered by a money purchase pension plan providing: (1) a non-integrated employer contribution rate of at least ten percent (10%) of compensation, as defined in Code §415(c)(3), (2) immediate participation, and (3) full and immediate vesting; and (b) leased employees do not constitute more than twenty percent (20%) of the recipient Employer's nonhighly compensated workforce.

1.50 "Limitation Year" means the "determination period" used to determine Compensation. However, the Employer may elect a different Limitation Year in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). All qualified plans maintained by the Employer must use the same Limitation Year. Furthermore, unless there is a change to a new Limitation Year, the Limitation Year will be a twelve (12) consecutive month period. In the case of an initial Limitation Year, the Limitation Year will be the twelve (12) consecutive month period ending on the last day of the period specified in the Adoption Agreement. If the Limitation Yea r is amended to a different twelve (12) consecutive month period, the new "Limitation Year" must begin on a date within the "Limitation Year" in which the amendment is made. For Limitation Years beginning on and after July 1, 2007, the Limitation Year may only be cha nged by a Plan amendment. Furthermore, if the Plan is terminated effective as of a date other than the last day of the Plan's Limitatio n Year, then the Plan is treated as if the Plan had been amended to change its Limitation Year.

1.51 "Military Differential Pay" means, for any Plan or Limitation Year beginning after June 30, 2007, any differential wage payments made to an individual that represents an amount which, when added to the individual's military pay, approximates the amount of compensation that was paid to the individual while working for the Employer. Notwithstanding the preceding sentence, for Comp ensation "determination periods" beginning after December 31, 2008, an individual receiving a differential wage payment, as defined by
Code §3401(h)(2), is treated as an Employee of the Employer making the payment.

The Plan is not treated as failing to meet the requirements of any provision described in Code §414(u)(1)(C) (or cor responding Plan provisions, including, but not limited to, Plan provisions related to the ADP or ACP test) by reason of any contribution or b enefit which is based on the Military Differential Pay. The preceding sentence applies only if all Employees of the Employer performing service in the uniformed services described in Code §3401(h)(2)(A) are entitled to receive differential wage payments (as defined in Code §3401(h)(2)) on reasonably equivalent terms and, if eligible to participate in a retirement plan maintained by the Employer, to make contributions based on the payments on reasonably equivalent terms (taking into account Code §§410(b)(3), (4), and (5)).

1.52 "Nonelective Contribution" means the Employer's contributions to the Plan other than Elective Deferrals, any Qualified Nonelective Contributions and any Qualified Matching Contributions. Employer matching contributions which are not Qualified Matching Contributions shall be considered a Nonelective Contribution for purposes of the Plan.

1.53 "Nonhighly Compensated Employee/Participant" means any Employee/Participant who is not a Highly Compensated Employee. However, if pursuant to Sections 12.4 or 12.6 the prior year testing method is used to calculate the ADP or the ACP, a Nonhighly Compensated Employee/Participant shall be determined using the definition of Highly Compensated Employee in effect for the pr eceding Plan Year.

1.54 "Non-Key Employee" means any Employee or Former Employee (and such Employee's or Former Employee's Beneficiaries) who is not a Key Employee.

1.55 "Normal Retirement Age" means the age elected in the Adoption Agreement at which time a Participant's Account shall be nonforfeitable (if the Participant is employed by the Employer on or after that date). For money purchase pension plans, if t he Employer enforces a mandatory retirement age, then the Normal Retirement Age is the lesser of that mandatory age or the age specified in the Adoption Agreement. Furthermore, effective for Plan Years beginning after the adoption of this Plan, the Employer may not dee m the Social Security retirement age (as defined in Code §415(b)(8)) as the Normal Retirement Age for purposes of nondiscrimination testing under Code §401(a)(4).

1.56 "Normal Retirement Date" means the date elected in the Adoption Agreement.

1.57 "1-Year Break in Service" means, if the Hour of Service method is used, the applicable computation period that is used to determine a Year of Service during which an Employee or Former Employee has not completed more than 500 Hours of Service. However, if the Employer selected, in the Service Crediting Method Section of the Adoption Agreement, to define a Year of Service as less tha n 1,000
Hours of Service, then the 500 Hours of Service in this definition of 1-Year Break in Service shall be proportionately reduced. Further, solely for the purpose of determining whether an Employee has incurred a 1-Year Break in Service, Hours of Service shall be recognized
for "authorized leaves of absence" and "maternity and paternity leaves of absence." For this purpose, Hours of Service shall be credited for the computation period in which the absence from work begins, only if credit therefore is necessary to prevent the Employee f rom incurring a 1-Year Break in Service, or, in any other case, in the immediately following computation period. The Hours of Service credited for a "maternity or paternity leave of absence" shall be those which would normally have been credited but for such absence, or, in any case in which the Administrator is unable to determine such hours normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence" shall not exceed the number of Hours of Servi ce needed to prevent the Employee from incurring a 1-Year Break in Service.

"Authorized leave of absence" means an unpaid, temporary cessation from active employment with the Employer pursuant to an established nondiscriminatory policy, whether occasioned by illness, military service, or any other reason.

A "maternity or paternity leave of absence" means an absence from work for any period by reason of the Employee's pregnancy, birth of the Employee's child, placement of a child with the Employee in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement.

If the elapsed time method is elected in the Service Crediting Method Section of the Adoption Agreement, then a "1-Year Break in Service" means a twelve (12) consecutive month period beginning on the severance from service date or any anniversary thereof and ending on the next succeeding anniversary of such date; provided, however, that the Employee or Former Employee does not perform an Hour of Service for the Employer during such twelve (12) consecutive month period.

1.58 "Participant" means any Employee or Former Employee who has satisfied the requirements of Sections 3.1 and 3.2 and entered the Plan and is eligible to accrue benefits under the Plan. In addition, the term "Participant" also includes any individu al who was a Participant (as defined in the preceding sentence) and who must continue to be taken into account under a particular provision of the Plan (e.g., because the individual has an Account balance in the Plan).

1.59 "Participant Directed Account" means that portion of a Participant's interest in the Plan with respect to which the Participant has directed the investment in accordance with the Participant Direction Procedures.

1.60 "Participant Direction Procedures" means such instructions, guidelines or policies, the terms of which are incorporated herein, as shall be established pursuant to Section 4.10 and observed by the Administrator and applied and provided to Participants who have Participant Directed Accounts.

1.61 "Participating Employer" means an Employer which, with the consent of the "lead Employer" adopts the Plan pursuant to Section
11.1 or Article XIV. In addition, unless the context means otherwise, the term "Employer" shall include any Participating Employer which shall adopt this Plan.

1.62 "Period of Service" means the aggregate of all periods of service commencing with an Employee's first day of employment or reemployment with the Employer or an Affiliated Employer and ending on the first day of a Period of Severance, or for benefit accrua l purposes, ending on the severance from service date. The first day of employment or reemployment is the first day the Employe e performs an Hour of Service. An Employee who incurs a Period of Severance of twelve (12) months or less will also receive service -spanning credit by treating any such period as a Period of Service for purposes of eligibility and vesting (but not benefit accr ual). For purposes of benefit accrual, a Participant's whole year Periods of Service is equal to the sum of all full and partial periods of service, whethe r or not such service is continuous or contiguous, expressed in the number of whole years represented by such sum. For this purpose, fractional periods of a year will be expressed in terms of days.

Periods of Service with any Affiliated Employer shall be recognized. Furthermore, Peri ods of Service with any predecessor employer that maintained this Plan shall be recognized. Periods of Service with any other predecessor employer shall be recognized as elected in the Adoption Agreement. However, for a standardized Adoption Agreement, the recognition of service with any other employer (1) is limited to the period which does not exceed 5 years immediately preceding the year in which an amendment crediting such service becom es effective, (2) must be credited to all Employees on a reasonably uniform basis, and (3) must otherwise comply with Regulation
§1.401(a)(4)-5(a)(3).

In determining Periods of Service for purposes of vesting under the Plan, Periods of Service will be excluded as elected in t he
Adoption Agreement and as specified in Section 3.5.

In the event the method of crediting service is amended from the Hour of Service method to the elapsed time method, an Employee will receive credit for a Period of Service consisting of:

(a)   A number of years equal to the number of Years of Service credited to the Employee before the computation period during which the amendment occurs; and

(b)   The greater of (1) the Periods of Service that would be credited to the Employee under the elapsed time method for service during the entire computation period in which the transfer occurs or (2) the service taken into account under the Hour of Service method as of the date of the amendment.

In addition, the Employee will receive credit for service subsequent to the amendment commencing on the day after the last day of the computation period in which the transfer occurs.

1.63 "Period of Severance" means a continuous period of time during which an Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service.

In the case of an individual who is absent from work for "maternity or paternity" reasons, the twelve (12) consecutive month period beginning on the first anniversary of the first day of such absence shall not constit ute a one year Period of Severance. For purposes of this paragraph, an absence from work for "maternity or paternity" reasons means an absence (a) by reason of the pregnancy of the i ndividual, (b) by reason of the birth of a child of the individual, (c) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (d) for purposes of caring for such child for a period beginning immediately following such birth or placement.

1.64 "Plan" means this instrument hereinafter referred to as Vanguard Fiduciary Trust Company Defined Contribution Volume Submitter Plan and Trust (Basic Plan Document #07 and the Adoption Agreement) as adopted by the Employer, including all amendments thereto and any appendix which is specifically permitted pursuant to the terms of the Plan.

1.65 "Plan Year" means the Plan's accounting year as specified in the Adoption Agreement. Unless there is a Short Plan Year, the Plan
Year will be a twelve-consecutive month period.

1.66 "Pre-Retirement Survivor Annuity" means an immediate annuity for the life of a Participant's Spouse, the payments under which must be equal to the benefit which can be provided with the percentage, as specified in the Adoption Agreement, of the Partic ipant's Vested interest in the Plan as of the date of death. If no election is made in the Adoption Agreement, the percentage shall be equal to fifty percent (50%). Furthermore, if less than one hundred percent (100%) of the Participant's Vested interest in the Plan is used to provi de the
Pre-Retirement Survivor Annuity, a proportionate share of each of the Participant's Accounts subject to the Pre-Retirement Survivor
Annuity shall be used to provide the Pre-Retirement Survivor Annuity.

1.67 "Pre-Tax Elective Deferrals" means a Participant's Elective Deferrals that are not includible in the Participant's gross income at the time deferred.

1.68 "Qualified Automatic Contribution Arrangement" (QACA) means an automatic contribution arrangement which meets the requirements of Section 12.9.

1.69 "Qualified Matching Contribution" (QMAC) means any Employer matching contributions that are made pursuant to
Sections 12.1(a)(2) (if elected in the Adoption Agreement), 12.5 and 12.7 or pursuant to any other Plan provision which provides for such contributions.

1.70 "Qualified Nonelective Contribution" (QNEC) means the Employer's contributions to the Plan that are made pursuant to
Sections 12.1(a)(4), 12.5 and 12.7 or pursuant to any other Plan provision which provides for such contributions.

1.71 "Regulation" means the Income Tax Regulations as promulgated by the Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as amended from time to time.

1.72 "Retirement Date" means the date as of which a Participant retires for reasons other than Total and Permanent Disability, regardless of whether such retirement occurs on a Participant's Normal Retirement Date, Early Retirement Date or Late Retirement Date ( see
Section 6.1).

1.73 "Roth Elective Deferrals" means a Participant's Elective Deferrals that are includible in the Participant's gross income at the time deferred and have been irrevocably designated as Roth Elective Deferrals at the time of the deferral. Roth Elective Deferrals shall be subject to the requirements of Sections 12.2(d) and 12.2(e) and shall, except as otherwise provided herein, be required to satisfy the nondiscrimination requirements of Regulation §1.401(k)-1(b), the provisions of which are incorporated herein by reference. A Participant's Roth Elective Deferrals will be maintained in a separate account containing only the Participant's Roth Elective Deferrals an d gains and losses attributable to those Roth Elective Deferrals. In addition, the Administrator shall, to the extent necessary for proper reporting, separately account for any "in-Plan Roth rollover contributions" (as defined in Section 12.11) that are transferred to a Participant's Roth

Elective Deferral Account. The portion of a Participant's Account attributable to "in-Plan Roth rollover contributions" is not subject to the distribution restrictions of Section 12.2(e).

1.74 "Salary Deferral Agreement" means an agreement between a Participant and the Employer, whereby the Participant elects to reduce Compensation by a specific dollar amount or percentage and the Employer agrees to contribute such amount into the 401(k) Plan . A Salary Deferral Agreement may require that an election be stated in specific percentage increments (not greater than one percent (1% ) increments) or in specific dollar amount increments (not greater than dollar increments that could exceed one percent (1%) of Compensation).

A Salary Deferral Agreement may not be effective prior to the later of: (a) the date the Employee becomes a Participant; (b) the date the Participant agrees (including by automatic consent) to the Salary Deferral Agreement; or (c) the date the 401(k) plan is adopted by the Employer or applicable Participating Employer. A Salary Deferral Agreement is valid even though it is executed by an Employee before he or she actually becomes a Participant, so long as the Salary Deferral Agreement is not effective before the date the Employee becomes a Participant. A Salary Deferral Agreement may only apply to Compensation that becomes currently available to the Employee afte r the effective date of the Salary Deferral Agreement.

A Salary Deferral Agreement (or other written procedures) must designate a uniform period during which an Employee may change or terminate his or her deferral election under the Salary Deferral Agreement. A Participant's right to change or terminate a Sa lary Deferral Agreement may not be available on a less frequent basis than once per Plan Year.

1.75 "Self-Employed Individual" means an individual who has Earned Income for the taxable year from the trade or business for which the Plan is established, and, also, an individual who would have had Earned Income but for the fact that the trade or busines s had no net profits for the taxable year. A Self-Employed Individual shall be treated as an Employee.

1.76 "Short Plan Year" means, if specified in the Adoption Agreement or as the result of an amendment, a Plan Year of less than a twelve (12) month period. If there is a Short Plan Year, the following rules shall apply in the administration of this Plan. In determining whether an Employee has completed a Year of Service (or Period of Service if the elapsed time method is used) for benefit accrual
purposes in the Short Plan Year, the number of the Hours of Service (or months of service if the elapsed time method is used) required shall
be proportionately reduced based on the number of days (or months) in the Short Plan Year. The determination of whether an Em ployee has completed a Year of Service (or Period of Service) for vesting and eligibility purposes shall be made in accordance with Department of Labor Regulation §2530.203-2(c). In addition, if this Plan is integrated with Social Security, then the integration level shall be proportionately reduced based on the number of months in the Short Plan Year.

1.77 "Spouse" means a spouse as determined under federal tax law. In addition, with respect to benefits or rights not mandated by law (e.g., Section 6.2(e)(1) with respect to death benefits in excess of the Pre-Retirement Survivor Annuity), Spouse also includes a spouse as elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). The Employer may also elect, in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), to require that a Participan t be married for at least one (1) year before the Participant is treated as married (and having a Spouse) for all purposes of the Plan other than for purposes of determining eligible hardship distribution expenses.

1.78 "Taxable Wage Base" means, with respect to any Plan Year, the contribution and benefit base under Section 230 of the Social
Security Act at the beginning of such Plan Year.

1.79 "Terminated Participant" means a person who has been a Participant, but whose employment has been terminated with the Employer (including an Affiliated Employer) or applicable Participating Employer, other than by death, Total and Permanent Disability or retirement.

1.80 "Top-Heavy Plan" means a plan described in Section 9.2(a).

1.81 "Top-Heavy Plan Year" means a Plan Year during which the Plan is a Top-Heavy Plan.

1.82 "Top-Paid Group" shall be determined pursuant to Code §414(q) and the Regulations thereunder and generally means the top twenty percent (20%) of Employees who performed services for the Employer during the applicable year, ranked according to the amount of 415
Compensation received from the Employer during such year. All Affiliated Employers shall be taken into account as a single em ployer, and Leased Employees shall be treated as Employees if required pursuant to Code §414(n) or (o). Employees who are nonresident alie ns who received no earned income (within the meaning of Code §911(d)(2)) from the Employer constituting United States source income within
the meaning of Code §861(a)(3) shall not be treated as Employees. Furthermore, for the purpose of determining the number of E mployees in any year, the following additional Employees may also be excluded, however, such Employees shall still be consi dered for the purpose of identifying the particular Employees in the Top-Paid Group:

(a)   Employees with less than six (6) months of service;

(b)   Employees who normally work less than 17 1/2 hours per week;

(c)   Employees who normally work less than six (6) months during a year; and

(d)   Employees who have not yet attained age twenty-one (21).

In addition, if ninety percent (90%) or more of the Employees of the Employer are covered under agreements the Secretary of Labor finds to be collective bargaining agreements between Employee representatives and the Employer, and the Plan covers only Empl oyees who are not covered under such agreements, then Employees covered by such agreements shall be excluded fr om both the total number of active Employees as well as from the identification of particular Employees in the Top -Paid Group.

The foregoing exclusions set forth in this Section shall be applied on a uniform and consistent basis for all purposes for which the Code §414(q) definition is applicable. Furthermore, in applying such exclusions, the Employer may substitute any lesser servi ce, hours or age.

1.83 "Total and Permanent Disability" means, unless otherwise specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous per iod of not less than twelve (12) months. The disability of a Participant shall be determined by a licensed physician. However, if the condition constitutes total disability under the federal Social Security Acts, the Administrator may rely upon such determination that the Participant is Totally and Permanently Disabled for the purposes of this Plan. The determination shall be applied uniformly to all Participants.

1.84 "Trustee" means any person or entity that is named in the Adoption Agreement or has otherwise agreed to serve as Trustee, or any successors thereto. In addition, unless the context means, or the Plan provides, otherwise, the term "Trustee" shall mean the Insurer if the Plan is fully insured.

If the sponsor of this prototype or volume submitter practitioner is a bank, savings and loan, trust company, credit union or similar institution, a person or entity other than such sponsor or practitioner (or its affiliates or subsidiaries) may not serve as Trustee without the consent of such sponsor or practitioner.

1.85 "Trust Fund" means, if the Plan is funded with a trust, the assets of the Plan and Trust as the same shall exist from time to time.

1.86 "Valuation Date" means the date or dates specified in the Adoption Agreement. Regardless of any election to the contrary, for purposes of the determination and allocation of earnings and losses, the Valuation Date shall include the Anniversary Date an d may include any other date or dates deemed necessary or appropriate by the Administrator for the valuation of Participants' Accounts during the Plan Year, which may include any day that the Trustee (or Insurer), any transfer agent appointed by the Trustee (or Insurer) or th e Employer, or any stock exchange used by such agent, are open for business.

1.87 "Vested" means the nonforfeitable portion of any Account maintained on behalf of a Participant.

1.88 "Year of Service" means the computation period of twelve (12) consecutive months, herein set forth, and during which an Employee has completed at least 1,000 Hours of Service (unless a lower number of Hours of Service is specified in the Adoption Agreeme nt).

For purposes of eligibility for participation, the initial computation period shall begin with the date on which the Employee firs t performs an Hour of Service (employment commencement date). Unless otherwise elected in the Service Crediting Method Section of the Adoption Agreement, the succeeding computation periods shall begin on the anniversary of the Employee's employment commenceme nt date. However, unless otherwise elected in the Adoption Agreement, if one (1) Year of Service or less is required as a condition of eligibility, then the computation period after the initial computation period shall shift to the current Plan Year which incl udes the anniversary of the date on which the Employee first performed an Hour of Service, and subsequent computation period s shall be the Plan Year. If there is a shift to the Plan Year, an Employee who is credited with the number of Hours of Service to be credited wi th a Year of Service in both the initial eligibility computation period and the first Plan Year which commences prior to the first anniversary of the Employee's initial eligibility computation period will be credited with two (2) Years of Service for purposes of eligibility to participate.

If two (2) Years of Service are required as a condition of eligibility, a Participant will only have completed two (2) Years of Service for eligibility purposes upon completing two (2) consecutive Years of Service without an intervening 1-Year Break in Service (referred to as the two (2) 1-Year Breaks in Service rule).

For vesting purposes, and all other purposes not specifically addressed in this Section, the computation period shall be the period elected in the Service Crediting Method Section of the Adoption Agreement. If no election is made in the Service Crediting Method Section of the Adoption Agreement, then the computation period shall be the Plan Year.

In determining Years of Service for purposes of vesting under the Plan, Years of Service will be e xcluded as elected in the Adoption
Agreement and as specified in Section 3.5.

Years of Service and 1-Year Breaks in Service for eligibility purposes will be measured on the same eligibility computation period. Years of Service and 1-Year Breaks in Service for vesting purposes will be measured on the same vesting computation period.

Years of Service with any Affiliated Employer shall be recognized. Furthermore, Years of Service with an y predecessor employer that maintained this Plan shall be recognized. Years of Service with any other employer shall be recognized as elected in the Adop tion Agreement. However, for a standardized Adoption Agreement, the recognition of service with any oth er employer (1) is limited to the period which does not exceed 5 years immediately preceding the year in which an amendment crediting such service becomes effe ctive, (2) must be credited to all Employees on a reasonably uniform basis, and (3) must otherwise comply with Regulation §1.401(a)(4)-5(a)(3).

In the event the method of crediting service is amended from the elapsed time method to the Hour of Service method, an Employee will receive credit for Years of Service equal to:

(a)   The number of Years of Service equal to the number of 1-year Periods of Service credited to the Employee as of the date of the amendment; and

(b)   In the computation period which includes the date of the amendment, a number of Hours of Service (using th e Hours of Service equivalency method, if any, elected in the Adoption Agreement) to any fractional part of a year credited to the Employee unde r this Section as of the date of the amendment.

ARTICLE II ADMINISTRATION

2.1  POWERS AND RESPONSIBILITIES OF THE EMPLOYER

(a)   Appointment of Trustee (or Insurer) and Administrator. In addition to the general powers and responsibilities otherwise provided for in this Plan, the Employer shall be empowered to appoint and remove one or more Trustees (or Insurers) and Administrators from time to time as it deems necessary for the proper administration of the Plan to ensure that the Plan is being operated for the exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of the Plan, the Code, and the Act. The Employer may appoint counsel, specialists, advisers, agents (including any nonfiduciary agent) and other persons as the Employer deems necessary or desirable in connection with the exercise of its fiduciary duties under this Plan. The Employer m ay
compensate such agents or advisers from the assets of the Plan as fiduciary expenses (but not including any business (settlor) expenses of the Employer), to the extent not paid by the Employer.

(b)   Funding policy and method. The Employer shall establish a "funding policy and method," i.e., it shall determine whether the Plan has a short run need for liquidity (e.g., to pay benefits) or whether liquidity is a long run goal and investment growth (and stability of same) is a more current need, or shall appoint a qualified person to do so. If the Trustee (or Insurer) has discretionary authority, the Employer or its delegate shall communicate such needs and goals to the Trustee (or Insurer), who shall coordin ate such Plan needs with its investment policy. The communication of such a "funding policy and met hod" shall not, however, constitute a
directive to the Trustee (or Insurer) as to the investment of the Trust Funds. Such "funding policy and method" shall be cons istent with
the objectives of this Plan and with the requirements of Title I of the Act.

(c)   Appointment of Investment Manager. The Employer may appoint, at its option, one or more Investment Managers, investment advisers, or other agents to provide investment direction to the Trustee (or Insurer) with respect to any or all of the Plan assets. Such appointment shall be given by the Employer in writing in a form acceptable to the Trustee (or Insurer) and shall specifically identify the Plan assets with respect to which the Investment Manager or other agent shall have the authority to direct the investment.

(d)   Review of fiduciary performance. The Employer shall periodically review the performance of any Fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or pursuant to procedures established hereunder. This requirement may be satisfied by formal periodic review by the Employer or by a qualified person specifically designated by the Employer, through day-to-day conduct and evaluation, or through other appropriate ways.

2.2  DESIGNATION OF ADMINISTRATIVE AUTHORITY

The Employer may appoint one or more Administrators. If the Employer does not appoint an Administrator, the Employer will be the Administrator. Any person, including, but not limited to, the Employees of the Employer, shall be eligible to serve as an Administrator. Any person so appointed shall signify acceptance by filing written acceptance with the Employer. An Administrator may resign by
delivering a written resignation to the Employer or be removed by the Employer by delivery of written notice of removal, to take effect at a date specified therein, or upon delivery to the Administrator if no date is specified. Upon the resignation or removal of an Administrator, the Employer may designate in writing a successor to this position.

2.3  ALLOCATION AND DELEGATION OF RESPONSIBILITIES

If more than one person is appointed as Administrator, then the responsibilities of each Administrator may be specified by the Employer and accepted in writing by each Administrator. If no such delegation is made by the Employer, then the Administrator s may allocate the responsibilities among themselves, in which event the Administrators shall notify the Employer and the Trustee (or Insurer) in writing of such action and specify the responsibilities of each Administrator. The Trustee (or Insurer) thereafter shall acce pt and rely upon any documents executed by the appropriate Administrator until such time as the Employer or the Administrators file with the Trustee (or Insurer) a written revocation of such designation.

2.4  POWERS AND DUTIES OF THE ADMINISTRATOR

The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and t heir Beneficiaries, subject to the specific terms of the Plan. The Administrator shall administer the Plan in accordance with its terms an d shall have the power and discretion to construe the terms of the Plan and determine all questions arising in connection with the administration, interpretation, and application of the Plan. Benefits under this Plan will be paid only if the Administrator decides in its d iscretion that the applicant is entitled to them. Any such determination by the Administrator shall be conclusive a nd binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such ma nner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan continue to be deemed a qualified plan under the terms of Code §401(a), and shall comply with the terms of the Act and all regulations issued pursuant thereto. The Administrator shall have all powers necessary or appropriate to accomplish its duties under this Plan.

The Administrator shall be charged with the duties of the general administration of the Plan and the powers necessary to carr y out such duties as set forth under the terms of the Plan, including, but not limited to, the following:

(a)   the discretion to determine all questions relating to the eligibility of an Employee to participate or remain a Participant hereu nder and to receive benefits under the Plan;

(b)   the authority to review and settle all claims against the Plan, including claims where the settlement amount cannot be calculated or is not calculated in accordance with the Plan's benefit formula. This authority specifically permits the Administrator to settle disputed claims for benefits and any other disputed claims made against the Plan;

(c)   to compute, certify, and direct the Trustee (or Insurer) with respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;

(d)   to authorize and direct the Trustee (or Insurer) with respect to all discretionary or otherwise directed disbursements from the
Trust Fund;

(e)   to maintain all necessary records for the administration of the Plan;

(f)    to interpret the provisions of the Plan and to make and publish such rules for regulation of the Plan that are consistent wit h the terms hereof;

(g)   to determine the size and type of any Contract to be purchased from any Insurer, and to designate the Insurer from which such
Contract shall be purchased;

(h)   to compute and certify to the Employer and to the Trustee (or Insurer) from time to time the sums of money necessary or desirable to be contributed to the Plan;

(i)    to consult with the Employer and the Trustee (or Insurer) regarding the short and long-term liquidity needs of the Plan in order that the Trustee (or Insurer) can exercise any investment discretion (if the Trustee (or Insurer) has such discretion), in a manner designed to accomplish specific objectives;

(j)    to prepare and implement a procedure for notifying Participants and Beneficiaries of their rights to elect Joint and Survivor
Annuities and Pre-Retirement Survivor Annuities if required by the Plan, Code and Regulations thereunder;

(k)   to assist Participants regarding their rights, benefits, or elections available under the Plan;

(l)    to act as the named Fiduciary responsible for communicating with Participants as needed to maintain Plan compliance with Act
§404(c) (if the Employer intends to comply with Act §404(c)) including, but not limited to, the receipt and transmission of Participants' directions as to the investment of their Accounts under the Plan and the formation of policies, rules, and procedures pursuant to which Participants may give investment instructions with respect to the investment of their Accounts; and

(m)  to determine the validity of, and take appropriate action with respect to, any "qualified domestic relations order" received by it.

2.5  RECORDS AND REPORTS

The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may
be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to the Internal Revenue
Service, Department of Labor, Participants, Beneficiaries and others as required by law.

2.6  APPOINTMENT OF ADVISERS

The Administrator may appoint counsel, specialists, advisers, agents (including nonfiduciary agents) and other persons as the Administrator deems necessary or desirable in connection with the administration of this Plan, including but not limited to a gents and advisers to assist with the administration and management of the Plan, and thereby to provide, among such other duties as the Administrator may appoint, assistance with maintaining Plan records and the providing of investment information to the Plan's investment fiduciaries and, if applicable, to Plan Participants.

2.7  INFORMATION FROM EMPLOYER

The Employer shall supply full and timely information to the Administrator on all pertinent facts as the Administrator may require in order to perform its functions hereunder and the Administrator shall advise the Trustee (or Insurer) of such of the foregoing facts as may be pertinent to the Trustee's (or Insurer's) duties under the Plan. The Administrator may rely upon such information as is suppl ied by the Employer and shall have no duty or responsibility to verify such information.

2.8  PAYMENT OF EXPENSES

All reasonable expenses of administration may be paid out of the Plan assets unless paid by the Employer. Such expenses shall include any expenses incident to the functioning of the Administrator, or any person or persons retained or appointed by any named Fi duciary incident to the exercise of their duties under the Plan, including, but not limited to, fees of accountants, counsel, Inves tment Managers, agents (including nonfiduciary agents) appointed for the purpose of assisting the Administrator or Trustee (or Insurer) in carrying out the instructions of Participants as to the directed investment of their Accounts (if permitted) and other specialists and their agents, the costs of any bonds required pursuant to Act §412, and other costs of administering the Plan. In addition, unless specifically prohibit ed under statute, regulation or other guidance of general applicability, the Administrator may charge to the Account of an individual Participant a reasonable charge to offset the cost of making a distribution to the Participant, Beneficiary, or Alternate Payee. If liquid assets of t he Plan are insufficient to cover the fees of the Trustee (or Insurer) or the Administrator, then Plan assets shall be liquidated to the extent necessary for such fees. In the event any part of the Plan assets becomes subject to tax, all taxes incurred will be paid from the Plan ass ets. Until paid, the expenses shall constitute a liability of the Trust Fund.

2.9  MAJORITY ACTIONS

Except where there has been an allocation and delegation of administrative authority pursuant to Section 2.3, if there is more than one
Administrator, then they shall act by a majority of their number, but may authorize one or more of them to sign all papers on their behalf.

2.10 CLAIMS PROCEDURES

(a)   Initial Claim. Claims for benefits under the Plan may be filed in writing with the Administrator. Written or electronic notice of the disposition of a claim shall be furnished to the claimant within ninety (90) days (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts) after the application is filed, or such period as is required by applica ble law or Department of Labor regulation. Any electronic notification shall comply with the standards imposed by Department of La bor Regulation §2520.104b-1(c)(1)(i), (iii) and (iv) or any subsequent guidance. In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent p rovisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided. In addi tion, the claimant shall be furnished with an explanation of the Plan's claims review procedure.

(b)   Claims review. Any Employee, Former Employee, or Beneficiary of either, who has been denied a benefit by a decision of the Administrator pursuant to Section 2.10 shall be entitled to request the Administrator to give further consideration to the claim by filing with the Administrator a written request. Such request, together with a written statement of the reasons why the claimant bel ieves such claim should be allowed, shall be filed with the Administrator no later than sixty (60) days after receipt of the written notification provided for in Section 2.10. A final decision as to the allowance of the claim shall be made by the Administrator within sixty (60) days (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts) of receipt of the appeal (unless there has been an extension of sixty (60) days (45 days if the claim involves disability benefits and disability is not based on
the Social Security Acts) due to special circumstances, provided the delay and the special circumstances occasioning it are communicated to the claimant within the sixty (60) day period (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts)). Such communication shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. The communication may be written or electronic (provided the electronic communication complies with the standards imposed by Department of Labor Regulation §2520.104b-1(c)(1)(i), (iii) and (iv) or any subsequent guidance). Notwithstanding the preceding, to the extent any of the time periods specified in this Section are amended by law or Department of Labor regulation, then the t ime frames specified herein shall automatically be changed in accordance with such law or regulation.

(c)   Civil action. If the Administrator, pursuant to the claims review procedure, makes a final written determination denying a Participant's or Beneficiary's benefit claim, then in order to preserve the claim, the Participant or Beneficiary must file a civil action under Act Section 502(a) with respect to the denied claim not later than one hundred eighty (180) days following the date of the Administrator's final determination.

(d)   Deadline to file claim. To be considered timely under the Plan's claims procedures, a claim must be filed under Sections 2.10(a) or (b) above within one year after the claimant knew or reasonably should have known of the principal facts upon which the cl aim is based. Knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to the claimant for the purpose of applying this deadline.

(e)   Exhaustion of administrative remedies. The exhaustion of the claims procedures is mandatory for resolving every claim and dispute arising under this Plan. As to such claims and disputes: (1) no claimant shall be permitted to commence any legal act ion to recover Plan benefits or to enforce or clarify rights under the Plan under Act §502 or §510 or under any other provision of law, whether or not statutory, until the claims procedures set forth in Subsections (a) and (b) above have been exhausted in their entirety; and (2) in any such legal action all explicit and all implicit determinations by the Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.

(f)    Deadline to file action. No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Act §502 or
§510 or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to this Plan unless the legal action is commenced in the proper forum before the earlier of: (1) 30 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based, or (2) six months after the claimant has exhausted the claims procedure under this Plan. Knowledge of all facts that the Participant knew or reasonably should have known shall be
imputed to every claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant for the purpose of applying the previously specified periods.

(g)   Plan Administrator discretion; court review. The Administrator and all persons determining or reviewing claims have full discretion to determine benefit claims under the Plan. Any interpretation, determination or other action of such persons shal l be
subject to review only if it is arbitrary or capricious or otherwise an abuse of discretion. Any review of a final decision or action of the persons reviewing a claim shall be based only on such evidence presented to or considered by such persons at the time they ma de the decision that is the subject of review.

ARTICLE III ELIGIBILITY

3.1  CONDITIONS OF ELIGIBILITY

An Eligible Employee shall be eligible to participate hereunder on the date such Employee has satisfied the conditions of eli gibility, if any, elected in the Adoption Agreement.

3.2  EFFECTIVE DATE OF PARTICIPATION

(a)   General rule. An Eligible Employee who has satisfied the conditions of eligibility pursuant to Section 3.1 shall become a Participant effective as of the date elected in the Adoption Agreement. Regardless of any election in the Adoption Agreement to the contrary, an Eligible Employee who has satisfied the maximum age (21) and service requirements (one (1) Year (or Period) of Service (or, with respect to contributions other than Elective Deferrals, more than one (1) year if full and immediate vesting)) and who is otherwise entitled to participate, will become a Participant no later than the earlier of (1) six (6) months after such requi rements are satisfied, or (2) the first day of the first Plan Year after such requirements are satisfied, unless the Employee separates from service before such participation date.

(b)   Rehired Employee. If an Eligible Employee is not employed on the date determined pursuant to (a) above, but is reemployed before a 1-Year Break in Service has occurred, then such Eligible Employee shall become a Participant on the date of reemployment or, if later, the date that the Employee would have otherwise entered the Plan had the Employee not terminated employment. If such Employee incurs a 1-Year Break in Service, then eligibility will be determined under the 1-Year Break in Service rules set forth in Section 3.5.

(c)   Recognition of predecessor service. Unless specifically provided otherwise in the Adoption Agreement, an Eligible Employee who satisfies the Plan's eligibility requirement conditions by reason of recognition of service with a predecessor employer w ill become a Participant as of the day the Plan credits service with a predecessor employer or, if later, the date the Employee would have
otherwise entered the Plan had the service with the predecessor employer been service with the Employer.

(d)   Noneligible to eligible class. If an Employee, who has satisfied the Plan's eligibility requirements and would otherwise have become a Participant, shall go from a classification of a noneligible Employee to an Eligible Employee, such Employee shall b ecome a Participant on the date such Employee becomes an Eligible Employee or, if later, the date that the Employee would have otherwise entered the Plan had the Employee always been an Eligible Employee.

(e)   Eligible to noneligible class. If an Employee, who has satisfied the Plan's eligibility requirements and would otherwise become a Participant, shall go from a classification of an Eligible Employee to a noneligible class of Employees, such Employee shall become a Participant in the Plan on the date such Employee again becomes an Eligible Employee, or, if later, the date that the Employee would

have otherwise entered the Plan had the Employee always been an Eligible Employee. However, if such Employee incurs a 1 -Year
Break in Service, eligibility will be determined under the 1-Year Break in Service rules set forth in Section 3.5.

(f)    Matching contributions. With respect to the determination of any matching contributions, the Plan will disregard Elective Deferrals made while a Participant is not eligible for the matching contribution component of the Plan unless otherwise elected in the Adoption Agreement.

3.3  DETERMINATION OF ELIGIBILITY

The Administrator shall determine the eligibility of each Employee for participation in the Plan based upon information furni shed by the Employer. Such determination shall be conclusive and binding upon all persons, as long as the same is made pursuant to the Plan and the Act. Such determination shall be subject to review pursuant to Section 2.10(b).

3.4  TERMINATION OF ELIGIBILITY

In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee, such Participant shall continue to vest in the Plan for each Year of Service (or Period of Service, if the elapsed time method is used) completed while an ineligible Employee, until such time as the Participant's Account is forfeited or distributed pursuant to the terms of the Pl an. Additionally, the Participant's interest in the Plan shall continue to share in the earnings of the Trust Fund in the same manner as Participants.

3.5  REHIRED EMPLOYEES AND 1-YEAR BREAKS IN SERVICE

(a)   Rehired Participant/immediate re-entry. If any Former Employee who had been a Participant is reemployed by the Employer, then the Employee shall become a Participant as of the reemployment date, unless the Employee is not an Eligible Employee, the Employee does not satisfy the eligibility conditions taking into account prior service to the extent such prior service is not disregarded pursuant to Section 3.5(d) or (e) below. If such prior service is disregarded, then the rehired Eligible Employe e shall be treated as a new hire.

(b)   Rehired Eligible Employee who satisfied eligibility. If any Eligible Employee had satisfied the Plan's eligibility requirements but, due to a severance of employment, did not become a Participant, then such Eligible Employee shall become a Participant as of the later of (1) the entry date on which he or she would have entered the Plan had there been no severance of employment, or (2) the date of his or her re-employment. Notwithstanding the preceding, if the rehired Eligible Employee's prior service is disregarded pursuant to Section 3.5(d) or (e) below, then the rehired Eligible Employee shall be treated as a new hire.

(c)   Rehired Eligible Employee who had not satisfied eligibility. If any Eligible Employee who had not satisfied the Plan's eligibility requirements is rehired after severance from employment, then such Eligible Employee shall become a Participant i n the Plan in accordance with the eligibility requirements set forth in the Adoption Agreement and the Plan. However, in applying any shift in an eligibility computation period, the Eligible Employee is not treated as a new hire unless prior service is disregarded in accordance with Section 3.5(d) or (e) below.

(d)   Reemployed after five (5) 1-Year Breaks in Service ("rule of parity" provisions). If any Employee is reemployed after five (5) 1-Year Breaks in Service has occurred, Years of Service (or Periods of Service if the elapsed time method is being used) shall include Years of Service (or Periods of Service if the elapsed time method is being used) prior to the five (5) 1 -Year Breaks in Service subject to the rules set forth below. The Employer may elect in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections) to make the provisions of this paragraph inapplicable for purposes of eligibility and/or vesting.

(1)   In the case of a Former Employee who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions, Years of Service (or Periods of Service) before a period of 1 -Year Breaks in Service will not be taken into account if the number of consecutive 1-Year Breaks in Service equals or exceeds the greater of (i) five (5) or (ii) the aggregate number of pre-break Years of Service (or Periods of Service). Such aggregate number of Years of Service (or Periods of Service) will not include any Years of Service (or Periods of Service) disregarded under the preceding sentence by reason of prior 1-Year Breaks in Service;

(2)   A Former Employee who has not had Years of Service (or Periods of Service) before a 1-Year Break in Service disregarded pursuant to (1) above, shall participate in the Plan as of the date of reemployment, or if later, as of the date the Former Emplo yee would otherwise enter the Plan pursuant to Sections 3.1 and 3.2 taking into account all service not disregarded.

(e)   One-Year Hold-Out Rule. If elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), the "one-year hold-out" rule under Code §410(a)(5)(C) applies. Under this rule, a Participant who has severed employment will incur a suspension of participation in the Plan after incurring a 1-Year Break in Service and the Plan disregards a Participant's service completed prior to a 1-Year Break in Service until the Participant completes one Year of Service following the 1-Year Break
in Service. The Plan suspends the Participant's participation in the Plan as of the first day of the eligibility computation period following the eligibility computation period in which the Participant incurs the 1-Year Break in Service.

(1)   Completion of one Year of Service. If a Participant completes one Year of Service following a 1-Year Break in Service, the Plan restores the Participant's pre-break service retroactively to the first day of the eligibility computation period in which the Participant first completes one Year of Service following the 1-Year Break in Service.

(2)   Eligibility computation period. The Administrator measures the initial eligibility computation period under this Subsection from the date the Participant first receives credit for an Hour of Service following the 1-Year Break in Service. The
Administrator measures any subsequent eligibility computation periods, if necessary, in a manner consistent with the eligibility computation periods, using the re-employment commencement date in determining the anniversary of the date of hire, if applicable.

(3)   Application to Employee who did not enter. The Administrator also will apply the one-year hold-out rule, if applicable, to an Employee who satisfies the Plan's eligibility conditions, but who incurs a separation from service and a 1 -Year Break in Service prior to becoming a Participant.

(4)   No restoration under two (2) 1-Year Breaks in Service rule. The Administrator in applying this Subsection does not restore any service disregarded under the two (2) 1-Year Breaks in Service rule in Section 1.88.

(5)   No application to Elective Deferrals. The Administrator will not apply the provisions of this Subsection with respect to eligibility to make Elective Deferrals under the Plan.

(6)   USERRA. An Employee who has completed qualified military service and who the Employer has rehired under the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA), does not incur a 1-Year Break in Service under the Plan by reason of the period of such qualified military service.

(f)    Vesting after five (5) 1-Year Breaks in Service. If a Participant incurs five (5) consecutive 1-Year Breaks in Service, the
Vested portion of such Participant's Account attributable to pre-break service shall not be increased as a result of post-break service. In such case, separate accounts will be maintained as follows:

(1)   one account for nonforfeitable benefits attributable to pre-break service; and
(2)   one account representing the Participant's Employer-derived Account balance in the Plan attributable to post-break service. (g)   Buyback provisions. If any Former Employee who had been a Participant is reemployed by the Employer before five (5)
consecutive 1-Year Breaks in Service, and such Participant had received a distribution of the entire Vested interest prior to reemployment, then the forfeited account shall be reinstated only if the Participant repays the full amount which had been di stributed (including amounts from Accounts that were fully Vested such as the Elective Deferral Account). The Employer, may, however, on a
uniform and nondiscriminatory basis, only require the Participant to repay amounts that relate to the Account that was not fu lly Vested. Such repayment must be made before the earlier of five (5) years after the first date on which the Participant is subsequently reemployed by the Employer or the close of the first period of five (5) consecutive 1-Year Breaks in Service commencing after the distribution. If a distribution occurs for any reason other than a severance of employment, the time for repayment may not end earlier than five (5) years after the date of distribution. If the Participant repays the distribution with after -tax amounts, such amounts are not after-tax voluntary Employee contributions subject to the ACP Test set forth in Section 12.6.

In the event the Participant repays the full amount distributed, the undistributed forfeited portion of the Participant's Acc ount must be restored in full, unadjusted by any gains or losses occurring subsequent to the Valuation Date preceding the distribution. The source for such reinstatement may be Forfeitures occurring during the Plan Year. If such source is insufficient, then the Employer will contribute an amount which is sufficient to restore the Participant's Account, provided, however, that if a discretionary contribution i s made for such year, such contribution will first be applied to restore any such accounts and the remainder shall be allocated in accordance with the terms of the Plan. If a non-Vested Participant was deemed to have received a distribution and such Participant is reemployed by the Employer before five (5) consecutive 1-Year Breaks in Service, then such Participant will be deemed to have repaid the deemed distribution as of the date of reemployment.

(h)   Waiver of allocation or contribution conditions. If the Employer elects in the Adoption Agreement to waive allocations or contributions due to retirement (early or normal retirement), then a Participant shall only be entitled to one such waiver. Accordingly, if a Participant retires and allocation or contribution conditions are waived, then the Plan will not waive the allocation or contribution conditions if the Participant is rehired and then retires again.

3.6  ELECTION NOT TO PARTICIPATE

(a)   Prototype plans. If this is a prototype plan, then an Employee is not permitted to elect not to participate in the Plan. Notwithstanding the preceding, in case of a non-standardized Adoption Agreement, any irrevocable elections not to participate in any component of this Plan shall remain in effect provided such elections were made prior to the date of the adoption of this restatement.

(b)   Volume submitter plan. If this is a volume submitter plan, then an Employee may, subject to the approval of the Employer, elect voluntarily not to participate in any component of the Plan before the Employee first becomes eligible to participate in any

qualified plan (subject to Code §401(a)) maintained by the Employer. Such election must be made upon inception of the Plan or at any time prior to the time the Employee first becomes eligible to participate under any such plan maintained by the Employer. The election not to participate must be irrevocable and communicated to the Employer, in writing, within a reasonable period of time before the
date the Employee would have otherwise entered the Plan. Notwithstanding anything in this Section to the contrary, if any pri or Plan document of this Plan contained a provision permitting an Employee to make a revocable election not to participate and an Employee made such revocable election not to participate while that prior Plan document was in effect, then such Employee's waiver shall continue to be in effect.

(c)   Effect of election. An Employee who elects, or had previously elected, not to participate under the Plan is treated as a nonbenefiting Employee for purposes of the minimum coverage requirements under Code §410(b) and, if such election applies to Elective Deferrals, the Employee is not an eligible Participant for purposes of the ADP test set forth in Section 12.4 or the ACP test set forth in Section 12.6.

3.7  OMISSION OF ELIGIBLE EMPLOYEE; INCLUSION OF INELIGIBLE EMPLOYEE

If, in any Plan Year, any Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by the Employer for the year has been made and allocated, or any person who should not have been included as a Participant in the Plan is erroneously included, then the Employer may take corrective actions consis tent with, the IRS Employee Plans Compliance Resolution System (i.e., Rev. Proc. 2013-12 or any subsequent guidance).

ARTICLE IV CONTRIBUTION AND ALLOCATION

4.1  FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION

(a)   For a Money Purchase Plan:

(1)   The Employer will make contributions on the following basis. On behalf of each Participant eligible to share in allocations, for each year of such Participant's participation in this Plan, the Employer will contribute the amount elected in the Adoption Agreement. All contributions by the Employer will be made in cash. In the event a funding waiver is obtained, this Plan shall be deemed to be an individually designed plan.

(2)   Notwithstanding the foregoing, with respect to an Employer which is not a tax-exempt entity, the Employer's contribution for any Fiscal Year shall not exceed the maximum amount allowable as a deduction to the Employer under the provisions of Code §404. However, to the extent necessary to provide the top-heavy minimum allocations, the Employer shall make a contribution even if it exceeds the amount that is deductible under Code §404.

(b)   For a Profit Sharing Plan:

(1)   For each Plan Year, the Employer may (or will in the case of a "prevailing wage contribution" as set forth in the Profit Sharing Formula Section of the Adoption Agreement) contribute to the Plan such amount as elected by the Employer in the Adoption Agreement. In addition, the Employer may make a discretionary "gateway contribution" pursuant to Section 4.3(b)(4).

(2)   Additionally, the Employer will contribute to the Plan the amount necessary, if any, to provide the top-heavy minimum allocations even if it exceeds current or accumulated net profit or the amount that is deductible under Code §404.

(3)   Subject to the consent of the Trustee (or Insurer), the Employer may make its contribution to the Plan in the form of unencumbered property instead of cash, provided the contribution of property is not a prohibited transaction. The decision to make a contribution of property is subject to the general fiduciary rules under the Act.

(c)   Frozen Plans. The Employer may designate that the Plan is a frozen Plan at the Contribution Types Section of the Adoption Agreement. As a frozen Plan, the Employer will not make any Employer contributions with respect to Compensation earned after the date the Plan is frozen, and if the Plan is a 401(k) Plan, no Participant will be permitted to make Elective Deferrals to the Plan for any period following such date. In addition, once a Plan is frozen, no additional Employees shall become Participants.

(d)   Union Employees. Regardless of any provision in this Plan to the contrary, Employees whose employment is governed by a collective bargaining agreement between the Employer and "employee representatives" under which retirement benefits were the subject of good faith bargaining shall be eligible to participate in this Plan to the extent of employment covered by such agreement provided the agreement provides for coverage in the Plan. The benefits, including but not limited to, contributions, allocations and vesting, under this Plan shall be those set forth in the collective bargaining agreement, which is hereby incorporated by ref erence and attached as an addendum to the Adoption Agreement. For this purpose, the term "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers, or executives of the Employer. The provisions of this Subsection only apply if no more than two percent (2%) of the Employees covered pursuant to the agreement are professionals as defined in Regulation §1.410(b)-9. If a Participant performs services both as a collectively bargained Employee and

as a non-collectively bargained Employee, then the Participant's Hours of Service and Compensation in each respective category are treated separately for purposes of the Plan.

4.2  TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION

Unless otherwise provided by contract or law, the Employer may make its contribution to the Plan for a particular Plan Year a t such time as the Employer, in its sole discretion, determines. However, if pursuant to Section 12.8, the "ADP test safe harbor contribution" being made to the Plan (including a contribution being made pursuant to a QACA as described in Section 12.9) is a matching contribution that is made on a basis other than the Plan Year, then the matching contributions must be contributed to the Plan by the last day of the Plan Year quarter immediately following the Plan Year quarter to which the contributions relate. If the Employer makes a contribution f or a particular Plan Year after the close of that Plan Year, the Employer will designate to the Administrator the Plan Year for which the Employer is making its contribution.

4.3  ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS

(a)   Separate accounting. The Administrator shall establish and maintain an Account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other Valuation Date, all amounts allocated to each such Participant as set forth herein.

(b)   Allocation of contributions. The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contribution, if any, for each Plan Year. Within a reasonable period of time after the date
of receipt by the Administrator of such information, the Administrator shall allocate any contributions as follows:

(1)   Money Purchase allocation. For a Money Purchase Plan (other than a Money Purchase Plan which is integrated by allocation):

(i)    The Employer's contribution shall be allocated to each Participant's Account in the manner set forth in Section 4.1 herein and as specified in the Adoption Agreement.

(ii)   Notwithstanding the preceding provisions, a Participant shall only be eligible to share in the allocations of the Employer's contribution for the year if the Participant is an Eligible Employee at any time during the year and the condition s set forth in the Adoption Agreement and Section 3.5(h) are satisfied, unless a top-heavy contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the
allocation of the Employer's contribution for the year if the Participant completes more than five hundred (500) Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year. Furthermore, with respect to a volume submitter or
non-standardized Adoption Agreement, regardless of any election in the Adoption Agreement to the contrary, for the Plan Year in which this Plan terminates, a Participant shall only be eligible to share in the allocation of the Employer's contributions for the Plan Year if the Participant is employed at the end of the Plan Year and has completed a Year of Service (or Period of Service if the elapsed time method is elected).

(2)   Permitted disparity allocation. For an integrated Profit Sharing Plan or 401(k) Profit Sharing Plan allocation or a Money
Purchase Plan which is integrated by allocation:

(i)    Subject to the "overall permitted disparity limits," the Employer's contribution shall be allocated to each Participant's Account in a dollar amount equal to 5.7% of the sum of each Participant's Compensation plus Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that each such Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus the total Excess Compensation of all Participants for that year. However, in the case of any Participant who has exceeded the "cumulative permitted disparity limit," the allocation set forth in this paragraph shall be based on such Participant's Compensation rather than Compensation plus Excess Compensation.

Regardless of the preceding, 4.3% shall be substituted for 5.7% above if Excess Compensation is based on more than
20% and less than or equal to 80% of the Taxable Wage Base. If Excess Compensation is based on less than 100% and more than 80% of the Taxable Wage Base, then 5.4% shall be substituted for 5.7% above.

(ii)   The balance of the Employer's contribution over the amount allocated above, if any, shall be allocated to each Participant's Account in the same proportion that each such Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for such year.

(iii)  Notwithstanding the preceding provisions, a Participant shall only be eligible to share in the allocations of the Employer's contribution for the year if the Participant is an Eligible Employee at any time during the year and the condition s set forth in the Adoption Agreement and Section 3.5(h) are satisfied, unless a top-heavy contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the
allocation of the Employer's contribution for the year if the Participant completes more than five hundred (500) Hours of

Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year.

(iv)  The following "overall permitted disparity limits" (which consist of the "annual overall permitted disparity limit" and the "cumulative permitted disparity limit") apply to the allocations set forth above.

(A)  "Annual overall permitted disparity limit." Notwithstanding the preceding paragraphs, if in any Plan Year this Plan "benefits" any Participant who "benefits" under another qualified plan or simplified employee pension, as defined in Code §408(k), maintained by the Employer that either provides for or imputes permitted disparity (integrates), then such plans will be considered to be one plan and will be considered to comply with the permitted disparity rules if the extent of the permitted disparity of all such plans does not exceed 100%. For purposes of the preceding sentence, the extent of the permitted disparity of a plan is the ratio, expressed as a percentage, which the actual benefits, benefit rate, offset rate, or employer contribution rate, whatever is applicable under the Plan, bears to the limitation under Code
§401(l) applicable to such Plan.

(B)  "Cumulative permitted disparity limit." With respect to a Participant who "benefits" or "has benefited" under a defined benefit or target benefit plan of the Employer, the "cumulative permitted disparity limit" for the Participant is thirty-five (35) total cumulative permitted disparity years. Total cumulative permitted disparity years means the number of years credited to the Participant for allocation or accrual purposes under the Plan, any other qualified plan or simplified employee pension plan (whether or not terminated) ever maintained by the Employer, while such plan either provides for or imputes permitted disparity. For purposes of determining the Participant's "cumulative permitted disparity limit," all years ending in the same calendar year are treated as the same year. If the Participant has not "benefited" under a defined benefit or target benefit plan which neither provides for nor imputes permitted disparity for any year beginning on or after January 1, 1994, then such Participant has no cumulative disparity limit.

For purposes of this Section, "benefiting" means benefiting under the Plan for any Plan Year during which a Participant received or is deemed to receive an allocation in accordance with Regulation §1.410(b) -3(a).

(3)   Other profit sharing allocations. For a Profit Sharing Plan or 401(k) Profit Sharing Plan with a non-integrated allocation formula, a uniform points allocation formula, a "prevailing wage contribution" allocation formula, an "age -weighted method" allocation formula, or a "grouping method" allocation formula as elected in the Employer Profit Sharing Contribution Section of the Adoption Agreement:

(i)    The Employer's contribution shall be allocated to each Participant's Account in accordance with the allocation method below that corresponds to the elections in the Adoption Agreement. The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contribution for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the allocation shall be made in accordance with the provisions below. The "gateway contribution" for plans with a cross -tested allocation formula shall be made in accordance with the provisions of Subsection (4) below.

(ii)   If the Employer's contribution is fixed, the Employer shall allocate the contribution in a set percentage to each Participant. If the Employer elects to contribute a uniform dollar amount for each Participant, the pro rata allocation shall allocate that uniform dollar amount to each Participant.

(iii)  If the Employer's contribution is discretionary and non-integrated, the contribution shall be allocated either in the same ratio as each Participant's Compensation bears to the total of such Compensation of all Participants, in the same dollar amount to all Participants (per capita), or in the same dollar amount per Hour of Service completed by each Participant.

(iv)  If the Employer's Contribution is allocated under a uniform points allocation formula, the allocation for each Participant shall be determined based on the Participant's total points for the Plan Year, as determined under the Adoption Agreement. A Participant's allocation of the Employer Contribution is determined by multiplying the Employer Contribution by a fraction, the numerator of which is the Participant's total points for the Plan Year and the denominator of which is the sum of the points for all Participants for the Plan Year. A Participant shall receive points for each year(s) of age and/or each Year(s) of Service. In addition, a Participant also may receive points based on his or her Compensation.

(v)   If the Employer's contribution is a "prevailing wage contribution", it shall be allocated to each Participant who performs services subject to the Service Contract Act, Davis-Bacon Act or similar federal, state, or municipal prevailing wage statutes. The "prevailing wage contribution" will be an amount equal to the balance of the prevailing wage defined bona fide fringe benefit amount based on the Participant's employment classification as designated on the prevailing wage determination appropriate for that classification. Notwithstanding anything in the Plan to the contrary, the "prevailing wage contribution" shall be fully Vested. Furthermore, the "prevailing wage contribution" shall not be subject to any age, service or employment condition requirements set forth in the Adoption Agreement and the Employer shall make such contribution to the Plan as frequently as is required under applicable law.

(vi)  If the Employer's contribution is allocated according to a "grouping method," the Employer may contribute to the Plan on behalf of each of the classifications of Participants set forth in the Adoption Agreement such amount as shall be determined by the Employer. The Employer shall provide the Administrator, if other than the Employer, with written notification of the amount of the contribution to be allocated to each classification on or before the due date of the Employer's tax return for the year of allocation, through written instructions from the Employer to the Administrator. The Employer may elect to specify any number of classifications and a classification may consist of any number of Participants.

(vii) If the Employer's contribution is allocated according to an "age-weighting method," the Employer's contribution for the
Plan Year shall be allocated to each Participant's Account in the same proportion that each such Participant's total points with respect to such year, bear to the total points awarded to all Participants with respect to such year. The conditional allocation provided for in the preceding sentence shall become the final allocation for the year only if it is not a Top -Heavy
Plan Year; or if the minimum allocation required for Top-Heavy Plan Years is provided to all Employees eligible to receive such minimum allocation. If any such Employee does not receive the top-heavy minimum allocation, then in lieu of the conditional allocation, the Employer's contribution shall instead be allocated first to the affected Employees in an amount equal to their conditional allocation plus any additional amount necessary to provide the top-heavy minimum allocation.

The remainder of the Employer's contribution shall then be allocated as provided under the conditional allocation method, but for this purpose, those Employees who did not receive the top-heavy minimum allocation under the initial conditional allocation shall not be considered. If under the secondary allocation provided in the preceding senten ce, an Employee who received a top-heavy minimum contribution under the conditional allocation no longer receives the same, then the steps outlined in the preceding paragraph and sentence shall be repeated until such time as all affected Employees have been allocated the top-heavy minimum contribution and the remaining contribution has been allocated, at which time, the allocations for the year shall be final.

A Participant's points with respect to any Plan Year shall be computed as follows: (A)  Multiply the Participant's Compensation for the Plan Year by 1%.
(B)  Multiply the product for each Participant as determined in (a) above by the product of:

1.     the factor in Table I in Exhibit A to the Adoption Agreement, such factor to be determined by reference to the
Participant's Normal Retirement Age, and

2.     the factor in Table II of Exhibit A to the Adoption Agreement, such factor to be determined by reference to the number of years remaining from the Participant's attained age as of the allocation date to his or her Normal Retirement Age.

The schedule of Age-Weighted Allocation Factors is set forth in Exhibit A to the Adoption Agreement, (which is hereby incorporated by reference and made a part of the Plan) and shall be based on the interest rate selected in the Adoption Agreement (if no selection is made, 8.5% interest shall be deemed to have been elected).

3.     The resulting number shall be the number of points allocated to the Participant.

(viii) Notwithstanding the preceding provisions, a Participant shall only be eligible to share in the allocations of the Employer's contribution for the year if the Participant is an Eligible Employee at any time during the year and the conditions set forth in the Adoption Agreement and Section 3.5(h) are satisfied, unless a top-heavy contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the
allocation of the Employer's contribution for the year if the Participant completes more than five hundred (500) Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year.

(4)   Gateway contribution. The Employer may make an additional discretionary Employer contribution ("gateway contribution") as set forth below (i.e., the minimum allocation gateway requirement described in Regulation
§1.401(a)(4)-8(b)(1)(vi)). In applying the provisions of this Subsection (4), the term "Employer contributions" shall also include
any Forfeitures that are allocated to a Participant, other than Forfeitures that are subject to Code §401(m) because they are allocated as a matching contribution. Furthermore, in applying the provisions of this Subsection (4) to a 401(k) Profit Sharing Plan, the term "Employer contributions" means any Employer Nonelective Contributions, nonelective "ADP test safe harbor contributions," and, except as otherwise provided in Subsections (4)(ii) and (iv) below, Qualified Nonelective Contributions, and
such term excludes any matching contributions.

(i)    Any "gateway contribution" made pursuant to this Subsection for a Plan Year will be allocated to each Nonhighly Compensated Participant who receives an allocation of other "Employer contributions," for such Plan Year. The "gateway contribution" will be allocated without regard to any allocation conditions otherwise applicable to "Employer contributions" under the Plan. However, Participants who the Administrator disaggregates pursuant to Regulation §1.410(b)-7(c)(3) because they have not satisfied the greatest minimum age and service conditions permissible under Code §410(a) shall not

be eligible to receive an allocation of any "gateway contribution" made pursuant to this Subsection unless such an allocation is necessary to satisfy Code §401(a)(4).

(ii)   The "gateway contribution" will be allocated pro rata on the basis of Compensation (as defined in (iii) or (iv) below, whichever is applicable) of each eligible Participant (as described in Subsection (i) above) but in no event will an allocation of the "gateway contribution" exceed the lesser of: (A) five percent (5%) of Compensation or (B) one -third (1/3) of the highest allocation rate for any Highly Compensated Participant for the Plan Year. Any allocation under the prior sentence will be reduced by the amount of any other "Employer contributions," excluding any Qualified Nonelective Contributions that are used to satisfy the ADP test set forth in Section 12.4 or the ACP test set forth in Section 12.6, allocated for the same Plan Year to such Participant, provided that if an eligible Participant is receiving only a Qualified Nonelective Contribution and such contribution amount equals or exceeds the "gateway contribution," then the contribution satisfies the "gateway contribution" requirement as to that Participant.

(iii)  For allocation purposes under the 5% "gateway contribution" under (A) of Subsection (ii) above, Compensation means
415 Compensation except that it shall be determined for the Plan Year (rather than the Limitation Year) and shall exclude
415 Compensation paid while an Employee is not a Participant in the Plan.

(iv)  For purposes of the 1/3 "gateway contribution" alternative under (B) of Subsection (ii) above, the Administrator will (A) determine the allocation rate, and (B) allocate the "gateway contribution," using a Participant's Compensation, provided the definition of Compensation satisfies Regulation §1.414(s). In addition, the allocation rate for any Participant is determined by dividing the total "Employer contribution" made on behalf of such Participant by the Participant's Compensation (as defined in the preceding sentence). However, solely for purposes of determining the allocation rate of any Nonhighly Compensated Participant, Qualified Nonelective Contributions that are used to satisfy the ADP test set forth in Section 12.4 or the ACP test set forth in Section 12.6, shall not be taken into account.

(v)   Notwithstanding the foregoing, the Employer may increase the "gateway contribution" to satisfy the provisions of Regulation §1.401(a)(4)-9(b)(2)(v)(D) if the plan (for nondiscrimination testing purposes) consists of one or more defined contribution plans and one or more defined benefit plans.

(c)   Gains or losses. Except as otherwise elected in the Adoption Agreement or as provided in Section 4.10 with respect to Participant Directed Accounts, as of each Valuation Date, before allocation of any Employer contributions and Forfeitures, an y earnings or losses (net appreciation or net depreciation) of the Trust Fund (exclusive of assets segregated for distribution) shall be allocated in the same proportion that each Participant's nonsegregated accounts bear to the total of all Participants' nonsegregated accounts as of such date. Unless otherwise specified in the Adoption Agreement, the nonsegregated account will be reduced by any distributions made prior to the Valuation Date.

ERISA recapture account. The Administrator in its discretion may use an "ERISA Recapture Account" to pay non-settlor Plan expenses and may allocate funds in the "ERISA Recapture Account" (or excess funds therein after payment of Plan Expenses) as earnings or as otherwise permitted by applicable law. The Plan Administrator will exercise its discre tion in a reasonable, uniform and nondiscriminatory manner. An "ERISA Recapture Account" is an account designated to receive amounts which a Plan service provider receives in the form of 12b-1 fees, sub-transfer agency fees, shareholder servicing fees or similar amounts (also known as "revenue sharing"), which are received by the service provider from a source other than the Plan and which the service provid er may remit to the Plan.

Late trading and market timing settlement. In the event the Plan becomes entitled to a settlement from a mutual fund or other investment relating to late trading, market timing or other activities, the Plan Administrator will allocate the settlement p roceeds to Participants and Beneficiaries in accordance with Department of Labor Field Assistance Bulletin 2006-01 or other applicable law.

(d)   Contracts. Participants' Accounts shall be debited for any insurance or annuity premiums paid, if any, and credited with any dividends or interest received on Contracts.

(e)   Forfeitures. Forfeitures must be disposed of no later than the last day of the Plan Year following the Plan Year in which the Forfeiture occurs. The Employer must direct the Administrator to use Forfeitures to reinstate previously forfeited Account balances of Participants, if any, in accordance with Section 3.5(g), to satisfy any contribution that may be required pursuant to Section 6.10, or, to pay any Plan expenses. With respect to a Money Purchase Plan, any remaining Forfeitures will be disposed of in accordance with the elections in the Adoption Agreement. With respect to all other plans, the Employer must direct the Administrator to use any r emaining Forfeitures in accordance with any combination of the following methods, including a different method based on the source of such Forfeitures. Forfeitures may be:

(1)   Added to any Employer discretionary contribution (e.g., matching or profit sharing) and allocated in the same manner; (2)   Used to reduce any Employer contribution (e.g., matching or profit sharing);

(3)   Added to any Employer matching contribution and allocated as an additional matching contribution; or

(4)   Allocated to all Participants in the same proportion that each Participant's Compensation for the Plan Year bears to the
Compensation of all Participants for such year.

Notwithstanding (e)(2) above, effective for Plan Years beginning after the Plan Year in which this Plan document is adopted, Forfeitures may not be used to reduce any Employer contributions which are required pursuant to the Code to be fully Vested when contributed to the Plan (such as QMACs, QNECs and "ADP test safe harbor contributions" other than QACA "ADP test safe harbor contributions."

If Forfeitures are allocated to Participants (rather than used to reduce Employer contributions) then the Employer must also direct the Administrator as to which Participants are eligible to share in such allocation. The maximum allocation conditions the Employer may require are that Participants complete one (1) Year of Service (or Period of Service) and be employed on the last day of the Plan Year in order to share in the allocation of Forfeitures for such Plan Year. Notwithstanding the foregoing, i f this is a standardized Plan, then the maximum allocation conditions are that Participants complete more than five hundred (500) Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or be employed
on the last day of the Plan Year.

(f)    Minimum allocations required for Top-Heavy Plan Years. Notwithstanding the foregoing, for any Top-Heavy Plan Year, the sum of the Employer's contributions and Forfeitures allocated to the Participant's Combined Account of each Non -Key Employee or each Participant, if elected in the Adoption Agreement, shall be equal to at least three percent (3%) of such Employee's 415
Compensation for the Plan Year or the calendar year ending within the Plan Year (reduced by contributions and Forfeitures, if any, allocated to each such Employee in any defined contribution plan included with this Plan in a "required aggregation group" (as defined in Section 9.2(f)). However, if (1) the sum of the Employer's contributions and Forfeitures allocated to the Participant's Combined Account of each Key Employee for such Top-Heavy Plan Year is less than three percent (3%) of each Key Employee's 415
Compensation and (2) this Plan is not required to be included in a "required aggregation group" (as defined in Section 9.2(f)) to enable a defined benefit plan to meet the requirements of Code §401(a)(4) or 410, the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Combined Account of each Employee entitled to the top-heavy minimum contribution shall be equal to the largest percentage allocated to the Participant's Combined Account of any Key Employee. The minimum allocation required (to the extent required to be nonforfeitable under Code §416(b)) may not be forfeited under Code §411(a)(3)(B) or 411(a)(3)(D).

However, for each Employee who is a Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan and a Money Purchase Plan, the minimum three percent (3%) allocation specified above shall be provided in the Money Purchase Plan unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections).

If this is an integrated prototype Plan, then for any Top-Heavy Plan Year the Employer's contribution shall be allocated as follows and shall still be required to satisfy the other provisions of this Subsection:

(1)   An amount equal to three percent (3%) multiplied by each Participant's Compensation for the Plan Year shall be allocated to each Participant's Account. If the Employer does not contribute such amount for all Participants, the amount shall be allocated to each Participant's Account in the same proportion that such Participant's total Compensation for the Plan Year bears to the t otal Compensation of all Participants for such year. Notwithstanding any contrary allocation conditions set forth in this Plan, Participants who are entitled to receive the top-heavy minimum allocation set forth in this Section shall be eligible to share in this first tier allocation.

(2)   The balance of the Employer's contribution over the amount allocated under subparagraph (1) hereof shall be allocated to each Participant's Account in a dollar amount equal to three percent (3%) multiplied by a Participant's Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that such Participant's Excess Compensation bears to the total Excess Compensation of all Participants for that year. For purposes of this paragraph, in the case of any Participant who has exceeded the "cumulative permitted disparity limit" described in Section 4.3(b)(2), such Participant's total Compensation will be taken into account.

(3)   The balance of the Employer's contribution over the amount allocated under subparagraph (2) hereof shall be allocated to each Participant's Account in a dollar amount equal to 2.7% multiplied by the sum of each Participant's total Compensation pl us Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that such Participant's total Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for that year. For purposes of this paragraph, in the case of any Participant who has exceeded the "cumulative permitted disparity limit" described in
Section 4.3(b)(2), such Participant's total Compensation rather than Compensation plus Excess Compensation will be taken into account.

Regardless of the preceding, 1.3% shall be substituted for 2.7% above if Excess Compensation is based on more than 20% and less than or equal to 80% of the Taxable Wage Base. If Excess Compensation is based on less than 100% and more than 80% of the Taxable Wage Base, then 2.4% shall be substituted for 2.7% above.

(4)   The balance of the Employer's contributions over the amount allocated above, if any, shall be allocated to each Participant's Account in the same proportion that such Participant's total Compensation for the Plan Year bears to the total Compensation of all Participants for such year.

For each Employee who is a Participant in this Plan and another defined contribution plan maintained by the Employer or an Affiliated Employer, the minimum three percent (3%) allocation specified above shall be provided as specified in the Adoption Agreement Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections).

(g)   Top-heavy contribution allocation. For purposes of the minimum allocations set forth above, the percentage allocated to the Participant's Combined Account of any Key Employee shall be equal to the ratio of the sum of the Employer's contributions and Forfeitures allocated on behalf of such Key Employee divided by the 415 Compensation for such Key Employee.

(h)   Participants eligible for top-heavy allocation. Notwithstanding anything in this Plan to the contrary, for any Top-Heavy Plan Year, the minimum allocations set forth in this Section shall only be allocated to the Participant's Combined Account of all Non-Key Employees, and Key Employees if elected in the Adoption Agreement, who are Participants and who are employed by the Employer on the last day of the Plan Year (unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)), including Employees who have (1) failed to complete a Year of Service; (2) declined to make mandatory contributions (if required) or, in the case of a cash or deferred arrangement, Elective Deferrals to the Plan; or (3) Compens ation less than a stated amount. In addition, pursuant to Code §416(i)(4), Participants whose employment is governed by a collective bargaining agreement between the Employer and employee representatives under which retirement benefits were the subject of good faith bargaining shall not be eligible to receive the top-heavy minimum allocations unless otherwise provided in the collective bargaining agreement.

(i)    Top-heavy allocation if DB and DC plans maintained. Notwithstanding anything herein to the contrary, in any Plan Year in which the Employer maintains both this Plan and a non-frozen defined benefit pension plan included in a "required aggregation group" (as defined in Section 9.2(f)) which is top-heavy, the Employer will not be required (unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)) to provide Employees with both the full separate minimum defined benefit plan benefit and the full separate defined contribution plan top-heavy minimum allocations. In such case, the top-heavy minimum benefits will be provided as elected in the Adoption Agreement and, if applicable, as follows:

(1)   If the 5% defined contribution minimum is elected in the Adoption Agreement:

(i)    The requirements of Section 9.1 will apply except that each Employee who accrues a benefit in the Profit Sharing Plan or Money Purchase Plan and who accrues a benefit in the Defined Benefit Plan will receive a minimum allocation of five percent (5%) of such Participant's 415 Compensation from the "applicable defined contribution plan(s)."

(ii)   For each Employee who is a participant only in the Defined Benefit Plan, the Employer will provid e a minimum non-integrated benefit equal to two percent (2%) of such participant's highest five (5) consecutive year average 415
Compensation for each Year of Service while a participant in such plan, in which the Plan is top-heavy, not to exceed ten (10) such years.

(iii)  For each Employee who is a Participant only in this defined contribution plan, the Employer will provide a minimum allocation equal to three percent (3%) of such Participant's 415 Compensation.

(2)   If the 2% defined benefit minimum is elected in the Adoption Agreement, then for each Employee who is a participant only in the defined benefit plan, the Employer will provide a minimum non-integrated benefit equal to two percent (2%) of such participant's highest five (5) consecutive year average of 415 Compensation for each Year of Service while a participant in the plan, in which the plan is top-heavy, not to exceed ten (10) such years.

(j)    Matching contributions used to satisfy top-heavy contribution. Unless otherwise specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), Employer matching contributions shall be taken into accoun t for purposes of satisfying the minimum contribution requirements of Code §416(c)(2) and the Plan. The preceding sentence shall ap ply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shal l be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requireme nts shall be treated as matching contributions for purposes of the ACP test and other requirements of Code §401(m).

(k)   Contributions under other plans. The Employer may provide, in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), that the minimum benefit requirement shall be met in another plan (including another pl an that consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(12) and matching contributions with respect to which the requirements of Code §401(m)(11) apply). The Employer must specify the name of the other plan, the minimum benefit that will be provided under such other plan, and the Employees who will receive the minimum benefit under such other plan.

(l)    Delay in processing transactions. Notwithstanding anything in this Section to the contrary, all information necessary to properly reflect a given transaction may not be available until after the date specified herein for processing such transaction, in which case the transaction will be reflected when such information is received and processed. Subject to express limits that may be imposed under the

Code, the processing of any contribution, distribution or other transaction may be delayed for any legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the transmission of data, force majeure, the failure of a service provider to timely receive values or prices, and correction for errors or omissions or the errors or omissions of any service provider). The processing date of a transaction will be binding for all purposes of the Plan.

(m)  410(b) ratio percentage fail-safe provisions. Notwithstanding anything in this Section to the contrary, the provisions of this Subsection apply for any Plan Year if, in the volume submitter or non-standardized Adoption Agreement, the Employer elected to apply the 410(b) ratio percentage fail-safe provisions and the Plan fails to satisfy the "ratio percentage test" due to a last day of the Plan Year allocation condition or an Hours of Service (or months of service) allocation condition. A plan satisfies the "rati o percentage test" if, on the last day of the Plan Year, the "benefiting ratio" of the Nonhighly Compensated Employees w ho are "includible" is at least 70% of the "benefiting ratio" of the Highly Compensated Employees who are "includible." The "benefit ing ratio" of the Nonhighly Compensated Employees is the number of "includible" Nonhighly Compensated Employees "benefiting" under the Plan divided by the number of "includible" Employees who are Nonhighly Compensated Employees. The "benefiting ratio" of the Highly Compensated Employees is the number of Highly Compensated Employees "benefiting" under the Plan divided by the number of "includible" Highly Compensated Employees. "Includible" Employees are all Employees other than: (1) those Employees
excluded from participating in the Plan for the entire Plan Year by reason of the collective bargaining unit exclusion or the nonresident alien exclusion described in the Code or by reason of the age and service requirements of Article III; and (2) any Employee w ho
incurs a separation from service during the Plan Year and fails to complete at least 501 Hours of Service (or three (3) mon ths of service if the elapsed time method is being used) during such Plan Year.

For purposes of this Subsection, an Employee is "benefiting" under the Plan on a particular date if, under the Plan, the Employee is entitled to an Employer contribution or an allocation of Forfeitures for the Plan Year.

If this Subsection applies and the Hours of Service method is used, then the Administrator will suspend the allocation condit ions and expand the group of the "includible" Nonhighly Compensated Employees who are Participants by including the minimum number of Participants eligible to share in the contribution, beginning first with the "includible" Employees employed by the Employer on the last day of the Plan Year who have completed the greatest number of Hours of Service in the Plan Year, then the "includible" Employees who have completed the greatest number of Hours of Service during the Plan Year, and continuing to suspend the allocation conditions for each "includible" Employee who completed Hours of Service, from the greatest number of Hours of Service to the least, until the Plan satisfies the "ratio percentage test" for the Plan Year. If two or more "includible" Employees have the same number of Hours of Service, then the Administrator will suspend the allocation conditions for all such "includible" Employees , irrespective of whether the Plan can satisfy the "ratio percentage test" by accruing benefits for fewer than all such "includ ible" Employees. If the Plan for any Plan Year suspends the allocation conditions for an "includible" Employee, then that Employee will share in the allocation for that Plan Year of the Employer contribution and Forfeitures, if any, without regard to whether the Employee has satisfied the other allocation conditions set forth in this Section.

If this Subsection applies and the elapsed time method is used, then the Administrator will susp end the allocation conditions for the "includible" Nonhighly Compensated Employees who are Participants, beginning first with the "includible" Employees employed by the Employer on the last day of the Plan Year, then the "includible" Employees who have the latest separation from service during the Plan Year, and continuing to suspend the allocation conditions for each "includible" Employee who incurred an earlier sep aration from service, from the latest to the earliest separation from service date, until the Plan satisfies the "ratio percentage test" for the Plan Year. If two or more "includible" Employees have a separation from service on the same day, then the Administrator will suspe nd the allocation conditions for all such "includible" Employees, irrespective of whether the Plan can satisfy the "ratio percentage test" by accruing benefits for fewer than all such "includible" Employees. If the Plan for any Plan Year suspends the allocation condi tions for an "includible" Employee, then that Employee will share in the allocation for that Plan Year of the Employer contribution and Forfeitures, if any, without regard to whether the Employee has satisfied the other allocation conditions set forth in this S ection.

Notwithstanding the foregoing, if the portion of the Plan which is not a Code §401(k) or 401(m) plan would fail to satisfy Code
§410(b) if the coverage tests were applied by treating those Participants whose only allocation would otherwise be provided under the top-heavy formula as if they were not currently benefiting under the Plan, then, for purposes of applying this Subsection (m), such Participants shall be treated as not benefiting.

4.4  MAXIMUM ANNUAL ADDITIONS

(a)   Calculation of "annual additions."

(1)   If a Participant does not participate in, and has never participated in another qualified plan maintained by the "employer," or a welfare benefit fund (as defined in Code §419(e)) maintained by the "employer," or an individual medical benefit account (as defined in Code §415(l)(2)) maintained by the "employer," or a simplified employee pension (as defined in Code §408(k)) maintained by the "employer" which provides "annual additions," the amount of "annual additions" which may be credited to the Participant's Accounts for any Limitation Year shall not exceed the lesser of the "maximum permissible amount" or any other limitation contained in this Plan. If the "employer" contribution that would otherwise be contributed or allocated to the Participant's Accounts would cause the "annual additions" for the Limitation Year to exceed the "maximum permissible amount," the amount contributed or allocated will be reduced so that the "annual additions" for the Limitation Year will equal the

"maximum permissible amount," and any amount in excess of the "maximum permissible amount" which would have been allocated to such Participant may be allocated to other Participants.

(2)   Prior to determining the Participant's actual 415 Compensation for the Limitation Year, the "employer" may determine the "maximum permissible amount" for a Participant on the basis of a reasonable estimation of the P articipant's 415 Compensation for the Limitation Year, uniformly determined for all Participants similarly situated.

(3)   As soon as is administratively feasible after the end of the Limitation Year the "maximum permissible amount" for such
Limitation Year shall be determined on the basis of the Participant's actual 415 Compensation for such Limitation Year.

(b)   "Annual additions" if a Participant is in more than one plan.

(1)   Except as provided in Subsection (c) below, this Subsection applies if, in addition to this Plan, a Participant is covered un der another "employer" maintained qualified defined contribution plan, welfare benefit fund (as defined in Code §419(e)), individual medical benefit account (as defined in Code §415(l)(2)), or simplified employee pension (as defined in Code §408(k)), which provides "annual additions," during any Limitation Year. The "annual additions" which may be cr edited to a Participant's Accounts under this Plan for any such Limitation Year shall not exceed the "maximum permissible amount" reduced by the "annual additions" credited to a Participant's accounts under the other plans and welfare benefit funds, indivi dual medical benefit accounts, and simplified employee pensions for the same Limitation Year. If the "annual additions" with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the "employer" are less t han the "maximum permissible amount" and the "employer" contribution that would otherwise be contributed or allocated to the Participant's
accounts under this Plan would cause the "annual additions" for the Limitation Year to exceed this limitation, the am ount contributed or allocated will be reduced so that the "annual additions" under all such plans and welfare benefit funds for th e Limitation Year will equal the "maximum permissible amount," and any amount in excess of the "maximum permissible amount" which would have been allocated to such Participant may be allocated to other Participants. If the "annual additions" with resp ect to the Participant under such other defined contribution plans, welfare benefit funds, individual medical benefit accounts an d simplified employee pensions in the aggregate are equal to or greater than the "maximum permissible amount," no amount will
be contributed or allocated to the Participant's Account under this Plan for the Limitation Year.

(2)   Prior to determining the Participant's actual 415 Compensation for the Limitation Year, the "employer" may determine the "maximum permissible amount" for a Participant on the basis of a reasonable estimation of the Participant's 415 Compensation for the Limitation Year, uniformly determined for all Participants similarly situated.

(3)   As soon as is administratively feasible after the end of the Limitation Year, the "maximum permissible amount " for the
Limitation Year will be determined on the basis of the Participant's actual 415 Compensation for the Limitation Year.

(4)   If, pursuant to Section 4.4(b)(2), a Participant's "annual additions" under this Plan and such other plans would result in an "excess amount" for a Limitation Year, the "excess amount" will be deemed to consist of the "annual additions" last allocated, except that "annual additions" attributable to a simplified employee pension will be deemed to have been allocated first, followed by "annual additions" to a welfare benefit fund or individual medical benefit account, and then by "annual additions" to a pl an subject to Code §412, regardless of the actual allocation date.

(5)   If an "excess amount" was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the "excess amount" attributed to this Plan will be the product of:

(i)    the total "excess amount" allocated as of such date, times

(ii)   the ratio of (A) the "annual additions" allocated to the Participant for the Limitation Year as of such date under this Plan to (B) the total "annual additions" allocated to the Participant for the Limitation Year as of such date under this and all the other qualified defined contribution plans.

(c)   Coverage under another plan. If the Participant is covered under another qualified defined contribution plan maintained by the "employer," "annual additions" which may be credited to the Participant's Accounts under this Plan for any Limitation Year wi ll be limited in accordance with Section 4.4(b), unless the "employer" provides other limitations in Appe ndix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections).

(d)   Time when "annual additions" credited. An "annual addition" is credited to the Account of a Participant for a particular Limitation Year if it as allocated to the Participant's Account under the Plan as of any date within that Limitation Year. Ho wever, an amount is not deemed allocated as of any date within a Limitation Year if such allocation is dependent upon participation in the Plan as of any date subsequent to such date.

For purposes of this subparagraph, "employer" contributions are not deemed credited to a Participant's Account for a particul ar Limitation Year unless the contributions are actually made to the Plan no later than thirty (30) days after the end of the period described in Code §404(a)(6) applicable to the taxable year with or within which the particular Limitation Year ends. In the case of an Employer that is exempt from federal income tax (including a governmental employer), Employer contributions are treated as credited

to a Participant's Account for a particular Limitation Year only if the contributions are actually made to the Plan no later than the 15th day of the tenth calendar month following the end of the calendar year or Fiscal Year (as applicable, depending on the basis on which the Employer keeps its books) with or within which the particular Limitation Year ends.

(e)   Definitions. For purposes of this Section, the following terms shall be defined as follows:

(1)   "Annual additions" means the sum credited to a Participant's accounts for any Limitation Year of (a) "employer" contributions, (b) Employee contributions (except as provided below), (c) Forfeitures, (d) amounts allocated to an individual medical benefit account, as defined in Code §415(l)(2), which is part of a pension or annuity plan maintained by the "employe r," (e) amounts derived from contributions paid or accrued which are attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code §419A(d)(3)) under a welfare benefit fund (as defined in Code §419(e)) maintained by the "employer" and (f) allocations under a simplified employee pension. Except, however, the Compensation percentage limitation referred to in paragraph (e)(6)(ii) below shall not apply to: (1) any contribution for medical benefits (within the meaning of Code §419A(f)(2)) after separation from service which is otherwise treated as an "annual addition," or (2) any amount otherwise treated as an "annual addition" under Code §415(l)(1).

(i)    Restorative payments. "Annual additions" for purposes of Code §415 and this Section shall not include restorative payments. A restorative payment is a payment made to restore losses to a Plan resulting from actions by a Fiduciary for which there is reasonable risk of liability for breach of a fiduciary duty under the Act or under other applicable federal or state law, where Participants who are similarly situated are treated similarly with respect to the payments. Generally, payments are restorative payments only if the payments are made in order to restore some or all of the Plan's losses due to an action (or a failure to act) that creates a reasonable risk of liability for such a breach of fiduciary duty (other than a br each of fiduciary duty arising from failure to remit contributions to the Plan). This includes payments to a plan made pursuant to a Department of Labor order, the Department of Labor's Voluntary Fiduciary Correction Program, or a court -approved settlement, to restore losses to a qualified defined contribution plan on account of the breach of fiduciary duty (other than a breach of fiduciary duty arising from failure to remit contributions to the Plan). Payments made to the Plan to make up for losses due merely to market fluctuations and other payments that are not made on account of a reasonable risk of liability for breach of a fiduciary duty under the Act are not restorative payments and generally constitute contributions that are considered "annual additions."

(ii)   Other amounts. "Annual additions" for purposes of Code §415 and this Section shall not include: (A) The direct transfer of a benefit or employee contributions from a qualified plan to this Plan; (B) Rollover contributions (as described in Code §§401(a)(31), 402(c)(1), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)); (C) Repayments of loans made to a Participant from the Plan; and (D) Repayments of amounts described in Code §411(a)(7)(B) (in accordance with
Code §411(a)(7)(C)) and Code §411(a)(3)(D) or repayment of contributions to a governmental plan (as defined in
Code §414(d)) as described in Code §415(k)(3), as well as Employer restorations of benefits that are required pursuant to
such repayments.

(2)   "Defined contribution dollar limitation" means $40,000 as adjusted under Code §415(d).

(3)   "Employer" means, for purposes of this Section, the Employer that adopts this Plan and all Affiliated Employers, except that for purposes of this Section, the determination of whether an entity is an Affiliated Employer shall be made by applying Code §415(h).

(4)   "Excess amount" means the excess of the Participant's "annual additions" for the Limitation Year over the "maximum permissible amount."

(5)   "Master or prototype plan" means a plan the form of which is the subject of a favorable opinion letter from the Interna l
Revenue Service.

(6)   "Maximum permissible amount" means, except to the extent permitted under this Plan and Code §414(v), the maximum "annual addition" that may be contributed or allocated to a Participant's Accounts under the Plan for any Limitation Year, which shall not exceed the lesser of:

(i)    the "defined contribution dollar limitation," or

(ii)   one hundred percent (100%) of the Participant's 415 Compensation for the Limitation Year.

The 415 Compensation Limitation referred to in (ii) shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code §§401(h) or 419A(f)(2)) which is otherwise treated as an "annual addition."

If a short Limitation Year is created because of an amendment changing the Limitation Year to a different twelve (12)
consecutive month period, the "maximum permissible amount" will not exceed the "defined contribution dollar limitation"

multiplied by a fraction, the numerator of which is the number of months in the short Limitation Year and the denomina tor of which is twelve (12).

(f)    Special rules.

(1)   Aggregation of plans. For purposes of applying the limitations of Code §415, all defined contribution plans (without regard to whether a plan has been terminated) ever maintained by the "employer" (or a "predecessor employer") under which the Participant receives "annual additions" are treated as one defined contribution plan. For purposes of this Section:

(i)    A former "employer" is a "predecessor employer" with respect to a participant in a plan maintained by an "employer" if the "employer" maintains a plan under which the participant had accrued a benefit while performing services for the former "employer," but only if that benefit is provided under the plan maintained by the "employer." For this purpose, the "formerly affiliated plan" rules in Regulation §1.415(f)-1(b)(2) apply as if the "employer" and "predecessor employer" constituted a single employer under the rules described in Regulation §1.415(a)-1(f)(1) and (2) immediately prior to the "cessation of affiliation" (and as if they constituted two, unrelated employers under the rules described in Regulation §1.415(a) -1(f)(1)
and (2) immediately after the "cessation of affiliation") and "cessation of affiliation" was the event that gives rise to the
"predecessor employer" relationship, such as a transfer of benefits or plan sponsorship.

(ii)   With respect to an "employer" of a Participant, a former entity that antedates the "employer" is a "predecessor employer" with respect to the Participant if, under the facts and circumstances, the "employer" constitutes a continuation of all or a portion of the trade or business of the former entity.

(2)   Break-up of an affiliated employer or an affiliated service group. For purposes of aggregating plans for Code §415, a "formerly affiliated plan" of an "employer" is taken into account for purposes of applying the Code §415 limitations to the "employer," but the "formerly affiliated plan" is treated as if it had terminated immediately prior to the "cessation of affiliation." For purposes of this paragraph, a "formerly affiliated plan" of an "employer" is a plan that, immediately prior to the "cessa tion of affiliation," was actually maintained by one or more of the entities that constitute the "employer" (as determined under the employer affiliation rules described in Regulation §1.415(a)-1(f)(1) and (2)), and immediately after the "cessation of affiliation," is not actually maintained by any of the entities that constitute the "employer" (as determined under the employer affiliation rules described in Regulation §1.415(a)-1(f)(1) and (2)). For purposes of this paragraph, a "cessation of affiliation" means the event that causes an entity to no longer be aggregated with one or more other entities as a single "employer" under the employer affiliation rules described in Regulation §1.415(a)-1(f)(1) and (2) (such as the sale of a subsidiary outside a controlled group), or
that causes a plan to not actually be maintained by any of the entities that constitute the "employer" under the employer affiliation rules of Regulation §1.415(a)-1(f)(1) and (2) (such as a transfer of plan sponsorship outside of a controlled group).

(3)   Mid-year aggregation. Two or more defined contribution plans that are not required to be aggregated pursuant to Code
§415(f) and the Regulations thereunder as of the first day of a Limitation Year do not fail to satisfy the requirements of Code
§415 with respect to a Participant for the Limitation Year merely because they are aggregated later in that Limitation Year, provided that no "annual additions" are credited to the Participant's Account after the date on which the plans are required to be aggregated.

4.5  ADJUSTMENT FOR EXCESS ANNUAL ADDITIONS

Notwithstanding any provision of the Plan to the contrary, if the "annual additions" (as defined in Section 4.4) are exceeded for any Participant, then the Plan may only correct such excess in accordance with the Employee Plans Compliance Resolution System (E PCRS) as set forth in Revenue Procedure 2008-50 or any superseding guidance.

4.6  ROLLOVERS

(a)   Acceptance of "rollovers" into the Plan. If elected in the Adoption Agreement and with the consent of the Administrator (such consent must be exercised in a nondiscriminatory manner and applied uniformly to all Participants), the Plan may accept a "rollover," provided the "rollover" will not jeopardize the tax-exempt status of the Plan or create adverse tax consequences for the Employer. The amounts rolled over shall be separately accounted for in a "Participant's Rollover Account." Furthermore, any Roth Elective Deferrals that are accepted as "rollovers" in this Plan on or after January 1, 2006 shall be separately accounted for. A Participant's Rollover Account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason. For purposes of this Section, the term Participant shall include any Eligible Employee who is not yet a Participant, if, pursuant to the Adoption Agreement, "rollov ers" are permitted to be accepted from Eligible Employees. In addition, for purposes of this Section the term Participant shall also include Former Employees if the Employer and Administrator consent to accept "rollovers" of distributions made to Former Employees fr om any plan of the Employer.

(b)   Treatment of "rollovers" under the Plan. Amounts in a Participant's Rollover Account shall be held by the Trustee (or Insurer) pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as elected in the Adoption Agreement and Subsection (c) below. The Trustee (or Insurer) shall have no duty or responsibility to inquire
as to the propriety of the amount, value or type of assets transferred, nor to conduct any due diligence with respect to such assets;
provided, however, that such assets are otherwise eligible to be held by the Trustee (or Insurer) under the terms of this Plan.

(c)   Distribution of "rollovers." At such time as the conditions set forth in the Adoption Agreement have been satisfied, the Administrator, at the election of the Participant, shall direct the distribution of up to the entire amount credited to the R ollover Account maintained on behalf of such Participant. Any distribution of amounts held in a Participant's Rollover Account shall be made in a manner which is consistent with and satisfies the provisions of Sections 6.5 and 6.6, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. Furthermore, unless otherwise elected in the Adoption Agreement, such amounts shall be considered to be part of a Participant's benefit in determining whether an involunt ary cash-out of benefits may be made without Participant consent.

(d)   "Rollovers" maintained in a separate account. The Administrator may direct that "rollovers" made after a Valuation Date be segregated into a separate account for each Participant until such time as the allocations pursuant to thi s Plan have been made, at which time they may remain segregated, invested as part of the general Trust Fund or, if elected in the Adoption Agreement, d irected by the Participant.

(e)   Limits on accepting "rollovers." Prior to accepting any "rollovers" to which this Section applies, the Administrator may require the Employee to establish (by providing opinion of counsel or otherwise) that the amounts to be rolled over to this Plan meet the requirements of this Section. The Employer may instruct the Administrator, operationally and on a nondiscriminatory basis, to limit
the source of "rollover" contributions that may be accepted by the Plan.

(f)    Definitions. For purposes of this Section, the following definitions shall apply:

(1)   A "rollover" means: (i) amounts transferred to this Plan directly from another "eligible retirement plan;" (ii) distributions received by an Employee from other "eligible retirement plans" which are eligible for tax-free rollover to an "eligible retirement plan" and which are transferred by the Employee to this Plan within sixty (60) days following receipt thereof; and (iii) any other amounts which are eligible to be rolled over to this Plan pursuant to the Code or any other federally enacted legislation.

(2)   An "eligible retirement plan" means an individual retirement account described in Code §408(a), an individual retirement annuity described in Code §408(b) (other than an endowment contract), a qualified trust (an employees' trust described in Code
§401(a) which is exempt from tax under Code §501(a)), an annuity plan described in Code §403(a), an eligible deferred
compensation plan described in Code §457(b) which is maintained by an eligible employer described in Code §457(e)(1)(A), and an annuity contract described in Code §403(b).

4.7  PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS

(a)   Transfers into this Plan. With the consent of the Administrator, amounts may be transferred (within the meaning of
Code §414(l)) to this Plan from other tax qualified plans under Code §401(a), provided the plan from which such funds are transferred
permits the transfer to be made and the transfer will not jeopardize the tax-exempt status of the Plan or Trust or create adverse tax consequences for the Employer. Prior to accepting any transfers to which this Section applies, the Administrator may require an opinion of counsel that the amounts to be transferred meet the requirements of this Section. The amounts transferred shall be set up in a separate account herein referred to as a "Participant's Transfer Account." Furthermore, for vesting purposes, the Participant's Transfer Account shall be treated as a separate "Participant's Account."

(b)   Accounting of transfers. Amounts in a Participant's Transfer Account shall be held by the Trustee (or Insurer) pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as electe d in the Adoption Agreement and Subsection (d) below, provided the restrictions of Subsection (c) below and Section 6.16 are satisfied. The Trustee (or Insurer) shall have no duty or responsibility to inquire as to the propriety of the amount, value or type of assets transferred, nor to conduct any due diligence with respect to such assets; provided, however, that such assets are otherwise eligible to be he ld by the Trustee (or Insurer) under the terms of this Plan. Notwithstanding anything in this Section to the contrary, transferred amounts are not required to be separately accounted for and may be combined with the corresponding Account maintained in this Plan provid ed all rights, benefits and features and other attributes are identical with respect to each account, or are identical after the combination and such combination does not result in the impermissible elimination of any Code §411(d)(6) protected benefits.

(c)   Restrictions on Elective Deferrals. Except as permitted by Regulations (including Regulation §1.411(d)-4), amounts
attributable to elective contributions (as defined in Regulation §1.401(k)-6), including amounts treated as elective contributions, which are transferred from another qualified plan in a plan-to-plan transfer (other than a direct rollover) shall be subject to the distribution limitations provided for in the Code §401(k) Regulations.

(d)   Distribution of plan-to-plan transfer amounts. At Normal Retirement Date, or such other date when the Participant or the Participant's Beneficiary shall be entitled to receive benefits, the Participant's Transfer Account shall be used to provide additional benefits to the Participant or the Participant's Beneficiary. Any distribution of amounts held in a Participant's Transfer Account shall be made in a manner which is consistent with and satisfies the provisions of Sections 6.5 and 6.6, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. Furthermore, such amounts shall be considered to be part of a Participant's benefit in determining whether an involuntary cash-out of benefits may be made without Participant consent.

(e)   Segregation. The Administrator may direct that Employee transfers made after a Valuation Date be segregated into a separate account for each Participant until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated, invested as part of the general Trust Fund or, if elected in the Adoption Agreement, directed by the Participant.

(f)    Protected benefits. Notwithstanding anything herein to the contrary, a transfer directly to this Plan from another qualified plan (or a transaction having the effect of such a transfer) shall not result in the elimination or reduction of any "Section 411(d)(6) protected benefit" (as described in Section 8.1(e)) that may not be eliminated or reduced pursuant to Regulation § 1.411(d)-4.

4.8  AFTER-TAX VOLUNTARY EMPLOYEE CONTRIBUTIONS

(a)   Not permitted in Money Purchase or Profit Sharing Plan. Except as provided in Section 4.8(b) below, this Plan will not accept after-tax voluntary Employee contributions. If this is an amendment to a Plan that had previously al lowed after-tax voluntary Employee contributions, then this Plan will not accept after-tax voluntary Employee contributions for Plan Years beginning after the Plan Year in which this Plan is adopted by the Employer.

(b)   After-tax voluntary Employee contributions allowed in 401(k) Plans. For 401(k) Plans, if elected in the Adoption Agreement, each Participant who is eligible to make Elective Deferrals may, in accordance with nondiscriminatory procedures established by the Administrator, elect to make after-tax voluntary Employee contributions to this Plan. Such contributions must generally be paid to the Trustee (or Insurer) within a reasonable period of time after being received by the Employer. An after -tax voluntary Employee contribution is any contribution (other than Roth Elective Deferrals) made to the Plan by or on behalf of a Participant that is included
in the Participant's gross income in the year in which made and that is separately accounted for under the Plan.

(c)   Full vesting. The balance in each Participant's Voluntary Contribution Account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason.

(d)   Distribution at any time. A Participant may elect at any time to withdraw after-tax voluntary Employee contributions from such Participant's Voluntary Contribution Account and the actual earnings thereon in a manner which is consistent with and satisfi es the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. If the Administrator maintains sub-accounts with respect to after-tax voluntary Employee contributions (and earnings thereon) which were made on or before a specified date, a Participant shall be permitted to designate which sub -account shall be the source for the withdrawal. Forfeitures of Employer contributions shall not occur solely as a result of an Employee's withdrawal of after-tax voluntary Employee contributions.

In the event a Participant has received a hardship distribution under the safe harbor hardship provisions of the Code §401(k) Regulations from any plan maintained by the Employer, then the Participant shall be barred from making any after-tax voluntary Employee contributions for a period of six (6) months after receipt of the hardship distribution. Any prior elections to make after-tax voluntary Employee contributions will become void upon the receipt of the hardship distribution that triggers the suspension period of this paragraph.

(e)   Used to provide benefits. At Normal Retirement Date, or such other date when the Participant or the Participant's Beneficiary is entitled to receive benefits, the Participant's Voluntary Contribution Account shall be used to provide additional benefits t o the Participant or the Participant's Beneficiary.

(f)    Prior mandatory contributions. To the extent a Participant has previously made mandatory Employee contributions under prior provisions of this Plan, such contributions will be treated as after-tax voluntary Employee contributions, except that the provisions of Subsection (d) above permitting a distribution at any time shall not apply to mandatory Employee contributions.

4.9  QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS

(a)   Maintenance of existing QVEC Accounts. If this is an amendment to a Plan that previously permitted deductible voluntary
Employee contributions, then each Participant who made "qualified voluntary Employee contributions" within the meaning of Code
§219(e)(2) as it existed prior to the enactment of the Tax Reform Act of 1986, shall have such contributions held in a separate Qualified Voluntary Employee Contribution Account which shall be fully Vested at all times. Such contributions, however, shall not be permitted for taxable years beginning after December 31, 1986.

(b)   Distribution from QVEC Account. A Participant may, upon written request delivered to the Administrator, make withdrawals from such Participant's Qualified Voluntary Employee Contribution Account. Any distribution shall be made in a manner which i s consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code
§§411(a)(11) and 417 and the Regulations thereunder.

(c)   Used to provide benefits. At Normal Retirement Date, or such other date when the Participant or the Participant's Beneficiary is entitled to receive benefits, the Qualified Voluntary Employee Contribution Account shall be used to provide additional benefits to the Participant or the Participant's Beneficiary.

4.10 PARTICIPANT DIRECTED INVESTMENTS

(a)   Directed investment options allowed. If elected in the Adoption Agreement, all Participants may direct the Trustee (or Insurer) as to the investment of all or a portion of their individual Account balances as set forth in the Adoption Agreement and with in limits set by the Employer. Participants may direct the Trustee (or Insurer), in writing (or in such other form which is acceptable to the Trustee (or Insurer)), to invest their accounts in specific assets, specific funds or other investments permitted under the P lan and the Participant Direction Procedures. That portion of the Account of any Participant that is subject to investment direction of such Participant will be considered a Participant Directed Account.

(b)   Establishment of Participant Direction Procedures. The Administrator will establish Participant Direction Procedures, to be applied in a uniform and nondiscriminatory manner, setting forth the permissible investment options under this Section, how often changes between investments may be made, and any other limitations and provisions that the Administrator may impose on a Participant's right to direct investments.

(c)   Administrative discretion. The Administrator may, in its discretion, include or exclude by amendment or other action from the Participant Direction Procedures such instructions, guidelines or policies as it deems necessary or appropriate to ensure pro per administration of the Plan, and may interpret the same accordingly.

(d)   Allocation of gains or losses. As of each Valuation Date, all Participant Directed Accounts shall be charged or credited with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in the market value using pu blicly listed fair market values when available or appropriate as follows:

(1)   to the extent the assets in a Participant Directed Account are accounted for as pooled assets or investments, the allocation of earnings, gains and losses of each Participant's Account shall be based upon the total amount of funds so invested in a manner proportionate to the Participant's share of such pooled investment; and

(2)   to the extent the assets in a Participant Directed Account are accounted for as segregated assets, the allocation of earnings, gains on and losses from such assets shall be made on a separate and distinct basis.

(e)   Plan will follow investment directions. Investment directions will be processed as soon as administratively practicable after proper investment directions are received from the Participant. No guarantee is made by the Plan, Employer, Administrator or Trustee (or Insurer) that investment directions will be processed on a daily basis, and no guarantee is ma de in any respect regarding the processing time of an investment direction. Notwithstanding any other provision of the Plan, the Employer, Administrator or Discretionary Trustee (or Insurer) reserves the right to not value an investment option on any given Valuation Date for any reason deemed appropriate by the Employer, Administrator or Discretionary Trustee (or Insurer). Furthermore, the processing of any investment transaction may be delayed for any legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the transmission of data, the failure of a service provider to timely receive values or pri ces, and correction for errors or omissions or the errors or omissions of any service provider) or force majeure. The processing date of a transaction will be binding for all purposes of the Plan and considered the applicable Valuation Date for an investment trans action.

(f)    Other documents required by directed investments. Any information regarding investments available under the Plan, to the extent not required to be described in the Participant Direction Procedures, may be provided to Participants in one or more d ocuments (or in any other form, including, but not limited to, electronic media) which are separate from the Participant Direction Procedures and are not thereby incorporated by reference into this Plan.

4.11 INTEGRATION IN MORE THAN ONE PLAN

If the Employer maintains qualified retirement plans that provide for permitted disparity (integration), the provisions of
Section 4.3(b)(2) will apply.

4.12 QUALIFIED MILITARY SERVICE

(a)   USERRA. Notwithstanding any provisions of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code §414(u). Furthermore, loan repayments may be suspended un der this Plan as permitted under Code §414(u)(4).

(b)   Benefit accrual. If the Employer elects in the Adoption Agreement to apply this Subsection, then effective as of the date specified in the Adoption Agreement but no earlier than the first day of the 2007 Plan Year, for benefit accrual purposes, th e Plan treats an individual who becomes Totally and Permanently disabled or dies while performing "qualified military service" (as defined in Code §414(u)) with respect to the Employer as if the individual had resumed employment in accordance with the individual's reemployment rights under Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA), on the day preceding Total and Permanent Disability and terminated employment on the actual date of Total and Permanent Disability.

The Plan will determine the amount of after-tax voluntary Employee contributions and Elective Deferrals of an individual treated as reemployed under this Section for purposes of applying paragraph Code §414(u)(8)(C) on the basis of the individual's avera ge

actual after-tax voluntary Employee contributions or Elective Deferrals for the lesser of: (1) the 12-month period of service with the Employer immediately prior to "qualified military service" (as defined in Code §414(u)); or (2) the actual length of continuous service with the Employer.

(c)   Death benefits. In the case of a death occurring on or after January 1, 2007, if a Participant dies while performing "qualified military service" (as defined in Code §414(u)), the Participant's Beneficiary is entitled to any addit ional benefits (other than benefit accruals (unless otherwise elected in the Adoption Agreement) relating to the period of "qualified military service" but incl uding vesting credit for such period and any other ancillary life insurance or other survivor benefits) provided under the Plan as if the Participant had resumed employment and then terminated employment on account of death. Moreover, the Plan will credit the Participant's "qualified military service" as service for vesting purposes, as though the Pa rticipant had resumed employment under Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA) immediately prior to the Participant's death.

4.13 TRANSFER OF ASSETS FROM TERMINATED EMPLOYER DEFINED BENEFIT PENSION PLAN

(a)   Transferred DB Assets. The Employer may transfer an amount to this Plan from the Employer's terminated defined benefit plan in accordance with Code §4980(d)(2)(B). The amounts transferred into this Plan shall be held in a "transferred assets suspension account." Amounts released from the "transferred assets suspension account" pursuant to the provisions of this Section shall be allocated in the same manner and to the same Participants that Employer Nonelective Contributions are allocated, as described in Section 4.3. If the Plan does not provide for Nonelective Contributions, then the amounts released from the "transferred assets suspension account" pursuant to the provisions of this Section shall be allocated to each Participant eligible to share in al locations in the same ratio as such Participant's Compensation bears to the total Compensation of all Participants eligible to share in allocations.

The Employer will determine, in its discretion, the amount to be released from the "transferred suspension account." However,
the minimum amount that shall be released from the "transferred assets suspension account" for any Plan Year is the percentage of the account based on the following table:

	
		
	Years Since Transfer

0
	Percentage of Suspense Account

14.2857%

	1
	16.6667%

	2
	20.0000%

	3
	25.0000%

	4
	33.3333%

	5
	50.0000%

	6
	100.0000%

(b)   Earnings. The amount in the "transferred suspension account" shall be credited with earnings and losses as of each Valu ation Date in accordance with Section 4.3, except that Participants may not direct the investment of amounts in the "transferred su spension account." Amounts released from the account prior to the last day of a Plan Year shall not share in such earnings or losses.

(c)   Annual additions. Notwithstanding anything in the Plan to the contrary, amounts in the "transferred suspension account" shall not be treated as "annual additions" pursuant to Section 4.4 until such amounts are released and allocated to Participants.

(d)   Plan termination. If upon the termination of the Plan any amount credited to the "transferred suspension account" remains unallocated, then such amount shall be allocated as provided above to the Accounts of Participants as of such date of Plan termination, but limited as to each Participant to avoid allocating exceeding the limitations of Code §415 as set forth in Section 4.4. An y amount that cannot be allocated to a Participant under the preceding sentence shall be reall ocated to remaining Participants, but only to the extent that no Participant receives an amount that exceeds the limitations of Code §415 as set forth in Section 4.4. The real location process will continue until all amounts in the "transferred suspension account" have been reallocated. If all Participants have received the maximum "annual addition" permitted pursuant to Section 4.4, then any remaining amounts shall revert to the Employer.

ARTICLE V VALUATIONS

5.1  VALUATION OF THE TRUST FUND

The Administrator shall direct the Trustee (or Insurer), as of each Valuation Date, to determine the net worth of the assets comprising the Trust Fund as it exists on the Valuation Date. In determining such net worth, the Trustee (or Insurer) shall value the assets comprising the Trust Fund at their fair market value as of the Valuation Date and may deduct all expenses for which the Trustee (or Insu rer) has not yet been paid by the Employer or the Trust Fund. The Trustee (or Insurer), when determining the net worth of the assets, may update the value of any shares held in a Participant Directed Account by reference to the number of shares held on behalf of the Participant, priced at the market value as of the Valuation Date.

5.2  METHOD OF VALUATION

In determining the fair market value of securities held in the Trust Fund which are listed on a registered stock exchange, the Administrator shall direct the Trustee (or Insurer) to value the same at the prices they were last traded on such exchange pr eceding the close of business on the Valuation Date. If such securities were not traded on the Valuation Date, or if the exchange on which they are
traded was not open for business on the Valuation Date, then the securities shall be valued at the prices at which they were last traded prior to the Valuation Date. Any unlisted security held in the Trust Fund shall be valued at its bid price next preceding the close of business on
the Valuation Date, which bid price shall be obtained from a registered broker or an investment banker. In determining the fair market
value of assets other than securities for which trading or bid prices can be obtained, the Trustee, the Administrator (if the Trustee is a directed Trustee), or Insurer may appraise such assets itself (assuming it has the appropriate expertise), or in its discreti on, employ one or more appraisers for that purpose and rely on the values established by such appraiser or appraisers.

ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1  DETERMINATION OF BENEFITS UPON RETIREMENT

Every Participant may terminate employment with the Employer and retire for purposes hereof on the Participant's Normal Retirement Date or Early Retirement Date. However, a Participant may postpone the severance of employment with the Employer to a later d ate, in which event the participation of such Participant in the Plan, including the right to receive allocations pursuant to Section 4.3, shall
continue until such Participant's Retirement Date. Upon a Participant's Retirement Date, or if elected in the Adoption Agreement, the attainment of Normal Retirement Date without severance of employment with the Employer (subject to Sections 6.11 and 12.2(e)) , or as
soon thereafter as is practicable, the Administrator shall direct the distribution, at the election of the Participant, of the Participant's entire
Vested interest in the Plan in accordance with Section 6.5.

6.2  DETERMINATION OF BENEFITS UPON DEATH

(a)   100% vesting on death. Upon the death of a Participant before the Participant's Retirement Date or other severance of employment, all amounts credited to such Participant's Combined Account shall, if elected in the Adoption Agreement, become f ully Vested. The Administrator shall direct, in accordance with the provisions of Sections 6.6 and 6.7, the distribution of the deceased Participant's Vested accounts to the Participant's Beneficiary.

(b)   Distribution upon death. Upon the death of a Participant, the Administrator shall direct, in accordance with the provisions of Sections 6.6 and 6.7, the distribution of any remaining Vested amounts credited to the accounts of such deceased Participant to such Participant's Beneficiary.

(c)   Determination of death benefit by Administrator. The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the account of a deceased Participant as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclus ive.

(d)   Beneficiary designation. Unless otherwise elected in the manner prescribed in Section 6.6, the Beneficiary of the Pre -Retirement Survivor Annuity shall be the Participant's surviving Spouse. Except, however, the Participant may designate a Beneficiary ot her than the Spouse for the Pre-Retirement Survivor Annuity if:

(1)   the Participant and the Participant's Spouse have validly waived the Pre-Retirement Survivor Annuity in the manner prescribed in Section 6.6, and the Spouse has waived the right to be the Participant's Beneficiary,

(2)   the Participant is legally separated or has been abandoned (within the meaning of local law) and the Participant has a court order to such effect (and there is no "qualified domestic relations order" as defined in Code §41 4(p) which provides otherwise),

(3)   the Participant has no Spouse, or

(4)   the Spouse cannot be located.

In such event, the designation of a Beneficiary shall be made on a form satisfactory to the Administrator. A Participant may at any time revoke a designation of a Beneficiary or change a Beneficiary by filing written (or in such other form as permitted by the IRS) notice of such revocation or change with the Administrator. However, the Participant's Spouse must again consent in wr iting (or in such other form as permitted by the IRS) to any change in Beneficiary unless the original consent acknowledged that the Sp ouse had the right to limit consent only to a specific Beneficiary and that the Spouse voluntarily elected to relinquish such right.

(e)   Beneficiary if no Beneficiary elected by Participant. A Participant may, at any time, designate a Beneficiary for death benefits, if any, payable under the Plan that are in excess of the Pre-Retirement Survivor Annuity without the waiver or consent of the Participant's Spouse. In the event no valid designation of Beneficiary exists, or if the Beneficiary with respect to a portion of a Participant's death benefit is not alive at the time of the Participant's death and no contingent Beneficiary has been design ated, then such portion of the death benefit will be paid in the following order of priority, unless the Employer specifies a different order of priority in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), to:

(1)   The Participant's surviving Spouse; (2)   The Participant's issue, per stirpes;
(3)   The Participant's surviving parents, in equal shares; or

(4)   The Participant's estate.

If the Beneficiary does not predecease the Participant, but dies prior to distribution of the death benefit, the death benefit will be paid to the Beneficiary's "designated Beneficiary" (or if there is no "designated Beneficiary," to the Beneficiary's estate). For purposes of these provisions, and with respect to any Beneficiary designations, adopted children shall be treated as children.

(f)    Divorce revokes spousal Beneficiary designation. Notwithstanding anything in this Section to the contrary, unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), if a Participant has designated the Spouse as a Beneficiary, then a divorce decree that relates to such Spouse shall revoke the Participant's designation of the Spouse as a Beneficiary unless the decree or a "qualified domestic relations order" (within the meaning of Code §414(p)) provides otherwise or a subsequent Beneficiary designation is made.

(g)   Simultaneous death of Participant and Beneficiary. If a Participant and his or her Beneficiary should die simultaneously, or under circumstances that render it difficult or impossible to determine who predeceased the other, then unless the Participan t's Beneficiary designation otherwise specifies, the Administrator will presume conclusively that the Beneficiary predeceased the Participant.

(h)   Slayer statute. The Administrator may apply slayer statutes, or similar rules which prohibit inheritance by a person who murders someone from whom he or she stands to inherit, under applicable state laws without regard to federal pre -emption of such state laws.

(i)    Insured death benefit. If the Plan provides an insured death benefit and a Participant dies before any insurance coverage to which the Participant is entitled under the Plan is effected, the death benefit from such insurance coverage shall be limite d to the premium which was or otherwise would have been used for such purpose.

(j)    Plan terms control. In the event of any conflict between the terms of this Plan and the terms of any Contract issued hereunder, the Plan provisions shall control.

6.3  DETERMINATION OF BENEFITS IN EVENT OF DISABILITY

In the event of a Participant's Total and Permanent Disability prior to the Participant's Retirement Date or other severance of employment, all amounts credited to such Participant's Combined Account shall, if elected in the Adoption Agreement, become f ully Vested. In the event of a Participant's Total and Permanent Disability, the Participant's entire Vested interest in the Plan will be distributable and may be distributed in accordance with the provisions of Sections 6.5 and 6.7.

6.4  DETERMINATION OF BENEFITS UPON TERMINATION

(a)   Payment on severance of employment. If a Participant's employment with the Employer and any Affiliated Employer is severed for any reason other than death, Total and Permanent Disability, or attainment of the Participant's Retirement Date, then suc h Participant shall be entitled to such benefits as are provided herein.

Distribution of the funds due to a Terminated Participant shall be made on the occurrence of an event which would result in t he distribution had the Terminated Participant remained in the employ of the Employer (upon the Participant's death, Total and Permanent Disability, Early or Normal Retirement). However, at the election of the Participant, the Administrator shall direct that the entire Vested portion of the Terminated Participant's Combined Account be payable to such Terminated Participant provided the conditions, if any, s et forth in the Adoption Agreement have been satisfied. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including but not limited to, all notice and consent requirements of Code §§411(a)(11) and
417 and the Regulations thereunder.

Regardless of whether distributions in kind are permitted, in the event the amount of the Vested portion of the Terminated Participant's Combined Account equals or exceeds the fair market value of any insurance Contracts, the Trustee (or Insurer), when so directed by the Administrator and agreed to by the Terminated Participant, shall assign, transfer, and set over to such Terminated Participan t all Contracts on such Terminated Participant's life in such form or with such endorsements, so that the settlement options and forms of payment are

consistent with the provisions of Section 6.5. In the event that the Terminated Participant's Vested portion does not at least equal the fair market value of the Contracts, if any, the Terminated Participant may pay over to the Trustee (or Insurer) the sum needed to make the distribution equal to the value of the Contracts being assigned or transferred, or the Trustee (or Insurer), pursuant to the Participant's election, may borrow the cash value of the Contracts from the Insurer so that the value of the Contracts is equal to the Vested portion of the Terminated Participant's Combined Account and then assign the Contracts to the Terminated Participant.

Notwithstanding the above, unless otherwise elected in the Adoption Agreement, if the value of a Terminated Participant's Vested benefit derived from Employer and Employee contributions does not exceed $5,000 (or such lower amount as elected in the Ad option Agreement), the Administrator shall direct that the entire Vested benefit be paid to such Participant in a single lump -sum as soon as practical without regard to the consent of the Participant, provided the conditions, if any, set forth in the Adopt ion Agreement have been satisfied. A Participant's Vested benefit shall not include (1) qualified voluntary employee contributions within the meaning of Code
§72(o)(5)(B) and (2) if selected in the Conditions for Distributions Upon Severance of Employment Section of the Adoption Agreement, the Participant's Rollover Account. If a mandatory distribution is made pursuant to this paragraph and such distribution is greater than
$1,000 and the Participant does not elect to have such distribution paid directly to an "eligible retirement plan" specified by the Participant in a "direct rollover" in accordance with Section 6.15 or to receive the distribution directly, then the Administrator shall transfer such amount to an individual retirement account described in Code §408(a) or an individual retirement annuity described in Code §408(b) designated by the Administrator. However, if the Participant elects to receive or make a "direct rollover" of such amount, th en the Administrator shall direct the Trustee (or Insurer) to cause the entire Vested benefit to be paid to such Participant in a single lump sum, or make a "direct rollover" pursuant to Section 6.15, provided the conditions, if any, set forth in the Adoption Agreement have been satisfied.
The Administrator may establish a uniform and nondiscriminatory procedure as to whether a Participant who fails to make an Affirmative Election with respect to a mandatory distribution of $1,000 or less is treated as having made a "direct rollover" election. F or purposes of determining whether the $1,000 threshold set forth in this paragraph is met, the mandatory distribution includes amounts in a Participant's Rollover Account. For purposes of determining whether the $5,000 threshold in this paragraph is met, a Participant's Rollover Account is taken into account unless otherwise elected in the Adoption Agreement. Furthermore, the Administrator may apply this paragraph by treating a Participant's Roth Elective Deferral Account separately from the Participant's other Accounts.

(b)   Vesting schedule. The Vested portion of any Participant's Account shall be a percentage of such Participant's Account determined on the basis of the Participant's number of Years of Service (or Periods of Service if the elapsed time method is elected) according to the vesting schedule specified in the Adoption Agreement. However, a Participant's entire interest in the Plan s hall be non-forfeitable upon the Participant's Normal Retirement Age (if the Participant is employed by the Employer on or after such date).

(c)   EGTRRA matching vesting schedule. If the Employer maintained a vesting schedule for matching contributions that did not comply with Code §411(a)(2) as in effect prior to the enactment of the Economic Growth and Tax Relie f Reconciliation Act of 2001, then the matching contribution vesting schedule selected in the Adoption Agreement shall apply to Participants who complete a n Hour of Service in a Plan Year beginning after December 31, 2001, unless a provision was adopted to have the vesting schedule apply to all Participants. However, if specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted
Elections), the matching contribution vesting schedule set forth in the Adoption Agreement shal l only apply to the portion of the Participant's Account attributable to matching contributions made after December 31, 2001 and matching contributions made pri or to the first day of the first Plan Year beginning after December 31, 2001 will vest in accordance with the vesting schedule then in effect.

(d)   PPA Employer Nonelective profit sharing vesting schedule. For Plan Years beginning after December 31, 2006, if the
Employer maintained a vesting schedule for Employer Nonelective profit sharing contributions that did not comply with Code
§411(a)(2) as in effect prior to the enactment of the Pension Protection Act of 2006, then the vesting schedule selected in t he Adoption
Agreement for Employer Nonelective profit sharing contributions shall apply to Participants who complete an Hour of Service in a Plan Year beginning after December 31, 2006, unless a provision was adopted to have the vesting schedule apply to all Partici pants. However, if specified in the Adoption Agreement, the Employer Nonelective profit sharing contribution vesting schedule set forth in the Adoption Agreement shall only apply to the portion of the Participant's Account attributable to such contributions made after December 31, 2006 and contributions made prior to such date will vest in accordance with the vesting schedule then in effect.

(e)   Top-heavy vesting schedule. For any Top-Heavy Plan Year, the minimum top-heavy vesting schedule elected by the Employer in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections) will automatically apply to the Plan. The minimum top-heavy vesting schedule applies to all benefits within the meaning of Code §411(a)(7) except those attributable to Employee contributions, including benefits accrued before the effective date of Code §416 and benefits accrued before the Plan became top-heavy. Further, no decrease in a Participant's Vested percentage shall occur in the event the Plan's status as top-heavy changes for any Plan Year. However, this Subsection does not apply to the Account balances of any Employee who does not have an Hour of Service after the Plan has initially become top-heavy and the Vested percentage of such Employee's Participant's Account
shall be determined without regard to this Section 6.4(e). Furthermore, pursuant to Code §416(i)(4), Participants whose employment is governed by a collective bargaining agreement between the Employer and employee representatives under which retirement benefits
were the subject of good faith bargaining will not be subject to this Subsection unless otherwise provided in the collective bargaining agreement.

If in any subsequent Plan Year the Plan ceases to be a Top-Heavy Plan, then unless a specific Plan amendment is made to provide otherwise, the Administrator will continue to use the vesting schedule in effect while the Plan was a Top -Heavy Plan.

(f)    100% vesting on partial or full Plan termination. Upon the complete discontinuance of the Employer's contributions to the Plan (if this is a profit sharing plan) or upon any full or partial termination of the Plan, all amounts then credited to the Account of any affected Participant shall become 100% Vested and shall not thereafter be subject to Forfeiture.

(g)   No reduction in Vested percentage due to change in vesting schedule. If this is an amended or restated Plan, then notwithstanding the vesting schedule specified in the Adoption Agreement, the Vested percentage of a Participant's Account sh all not be less than the Vested percentage attained as of the later of the Effective Date or adoption date of this amendment and restatement. The computation of a Participant's nonforfeitable percentage of such Participant's interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Article, or due to changes in the Plan's status as a Top-Heavy Plan. Furthermore, if the Plan's vesting schedule is amended (including a change in the calculation of Years of Service or Periods or Service), then th e amended schedule will only apply to those Participants who complete an Hour of Service after the effective date of the amendment.

(h)   Continuation of old schedule if 3 Years of Service. If the Plan's vesting schedule is amended, or if the Plan is amended in any way that directly or indirectly affects the computation of the Participant's nonforfeitable percentage or if the Plan is deem ed amended by an automatic change to a top-heavy vesting schedule, then each Participant with at least three (3) Years of Service (or Periods of Service if the elapsed time method is elected) as of the expiration date of the election period may elect to have such Partic ipant's nonforfeitable percentage computed under the Plan without regard to such amendment or change. If a Participant fails to make such election, then such Participant shall be subject to the new vesting schedule. The Participant's election period shall commence on the adoption date of the amendment, or deemed adoption date, and shall end sixty (60) days after the latest of:

(1)   the adoption date, or deemed adoption date, of the amendment, (2)   the effective date of the amendment, or
(3)   the date the Participant receives written notice of the amendment from the Employer or Administrator.

(i)    Excludable service for vesting. In determining Years of Service or Periods of Service for purposes of vesting under the Plan, Years of Service or Periods of Service shall be excluded as elected in the Adoption Agreement. For this purpose, a predecessor plan is described in Regulation §1.411(a)-5(b)(3).

6.5  DISTRIBUTION OF BENEFITS

(a)   Qualified Joint and Survivor Annuity.

(1)   Unless otherwise elected as provided below, a Participant who is married on the Annuity Starting Date and who does not die before the Annuity Starting Date shall receive the value of all Plan benefits in the form of a Joint and Survivor Annuity. Th e Joint and Survivor Annuity is an annuity that commences immediately and shall be equal in value to a single life annuity. Such joint and survivor benefits following the Participant's death shall continue to the Spouse during the Spouse's lifetime at a rate equal to either fifty percent (50%), seventy-five percent (75%) (or, sixty-six and two-thirds percent (66 2/3%) if the Insurer used to
provide the annuity does not offer a joint and seventy-five percent (75%) survivor annuity), or one hundred percent (100%) of the rate at which such benefits were payable to the Participant. Unless otherwise elected in the Adoption Agreement, a joint and fifty percent (50%) survivor annuity shall be considered the designated qualified Joint and Survivor Annuity and the normal form of payment for the purposes of this Plan. However, the Participant may, without spousal consent, elect an alternative Joint and
Survivor Annuity, which alternative shall be equal in value to the designated qualified Joint and Survivor Annuity. An unmarr ied
Participant shall receive the value of such Participant's benefit in the form of a life annuity. Such unmarried Participant, however, may elect to waive the life annuity. The election must comply with the provisions of this Section as if it were an election t o waive the Joint and Survivor Annuity by a married Participant, but without fulfilling the spousal consent requirement. The Participant may elect to have any annuity provided for in this Section distributed upon the attainment of the "earliest retirement age" u nder the Plan. The "earliest retirement age" is the earliest date on which, under the Plan, the Participant could elect to receive
retirement benefits.

(2)   Any election to waive the Joint and Survivor Annuity must be made by the Participant in writing (or in such other form as permitted by the IRS) during the election period and be consented to in writing (or in such other form as permitted by the IR S) by the Participant's Spouse. If the Spouse is legally incompetent to give consent, the Spouse's legal guardian, even if such guardian
is the Participant, may give consent. Such election shall designate a Beneficiary (or a form of benefits) that may not be cha nged without spousal consent (unless the consent of the Spouse expressly permits designations by the Participant without the requirement of further consent by the Spouse). Such Spouse's consent shall be irrevocable and must acknowledge the effect of such election and be witnessed by a Plan representative or a notary public. Such consent shal l not be required if it is established
to the satisfaction of the Administrator that the required consent cannot be obtained because there is no Spouse, the Spouse cannot be located, or other circumstances that may be prescribed by Regulations. The election made by the Participant and
consented to by such Participant's Spouse may be revoked by the Participant in writing (or in such other form as permitted by the IRS) without the consent of the Spouse at any time during the election period. A revocation of a prior election shall cause the Participant's benefits to be distributed as a Joint and Survivor Annuity. The number of revocations shall not be limited. Any new election must comply with the requirements of this paragraph. A former Spouse's waiver shall n ot be binding on a new Spouse.

(3)   The election period to waive the Joint and Survivor Annuity shall be the one-hundred eighty (180) (ninety (90) for Plan
Years beginning before January 1, 2007) day period ending on the Annuity Starting Date.

(4)   For purposes of this Section and Section 6.6, Spouse or surviving Spouse means the Spouse or surviving Spouse of the Participant, provided that a former Spouse will be treated as the Spouse or surviving Spouse and a current Spouse will not b e treated as the Spouse or surviving Spouse to the extent provided under a "qualified domestic relations order" as described in Code
§414(p).

(5)   With regard to the election, except as otherwise provided herein, the Administrator shall, in accordance with Regulation
§1.417(a)(3)-1, provide to the Participant no less than thirty (30) days and no more than one-hundred eighty (180) (ninety (90) for
Plan Years beginning before January 1, 2007) days before the Annuity Starting Date a written (or such other form as permitted by
the IRS) explanation of:

(i)    the terms and conditions of the qualified Joint and Survivor Annuity, and, effective for Plan Years beginning on or after
January 1, 2007, the "qualified optional survivor annuity" that is payable in lieu of the qualified Joint and Survivor Annuit y,

(ii)   the Participant's right to make and the effect of an election to waive the Joint and Survivor Annuity,

(iii)  the right of the Participant's Spouse to consent to any election to waive the Joint and Survivor Annuity, and

(iv)  the right of the Participant to revoke such election, and the effect of such revocation.

(6)   Any distribution provided for in this Section may commence less than thirty (30) days after the notice required by Code
§417(a)(3) is given provided the following requirements are satisfied:

(i)    the Administrator clearly informs the Participant that the Participant has a right to a period of thirty (30) days after receiving the notice to consider whether to waive the Joint and Survivor Annuity and to elect (with spousal consent) a form of distribution other than a Joint and Survivor Annuity;

(ii)   the Participant is permitted to revoke any affirmative distribution election at least until the Annuity Starting Date or, if later, at any time prior to the expiration of the seven (7) day period that begins the day after the explanation of the Joint and Survivor Annuity is provided to the Participant;

(iii)  the Annuity Starting Date is after the time that the explanation of the Joint and Survivor Annuity is provided to the Participant. However, the Annuity Starting Date may be before the date that any affirmative distribution election is made by the Participant and before the date that the distribution is permitted to commence under (iv) below; and

(iv)  distribution in accordance with the affirmative distribution election does not commence before the expiration of the seven (7) day period that begins the day after the explanation of the Joint and Survivor Annuity is provided to the Participant.

(b)   Alternative forms of distributions. In the event a married Participant duly elects pursuant to paragraph (a)(2) above not to receive the benefit in the form of a Joint and Survivor Annuity, or if such Participant is not married, in the form of a life annuity, the Administrator, pursuant to the election of the Participant, shall direct the distribution to a Participant or Beneficiary any amount to which the Participant or Beneficiary is entitled under the Plan in one or more of the following methods which are permitted p ursuant to the Adoption Agreement.

(1)   One lump-sum payment in cash or in property, provided that if a distribution of property is permitted, it shall be limited to property that is specifically allocated and identifiable with respect to such Participant.

(2)   Partial withdrawals.

(3)   Payments over a period certain in monthly, quarterly, semi-annual, or annual cash installments. The period over which such payment is to be made shall not extend beyond the earlier of the Participant's life expectancy (or the joint life expectancy of the Participant and the Participant's designated Beneficiary). Once payments have begun, a Participant may elect to accelerate the payments (reduce the term and increase payments).

(4)   Purchase of or providing an annuity. However, such annuity may not be in any form that will provide for payments over a period extending beyond the life of the Participant (or the lives of the Participant and the Participant's designated Beneficiary) or the life expectancy of the Participant (or the life expectancy of the Participant and the Participant's designated Benefic iary).

(c)   Consent to distributions. Benefits may not be paid without the Participant's and the Participant's Spouse's consent if the present value of the Participant's Joint and Survivor Annuity derived from Employer and Employee contributions exceeds $5,000 and the benefit is "immediately distributable." However, spousal consent is not required if the distribution will be made in the form of a qualified Joint and Survivor Annuity and the benefit is "immediately distributable." A benefit is "immediately distributable" if any part

of the benefit could be distributed to the Participant (or surviving Spouse) before the Participant attains (or would have at tained if not deceased) the later of the Participant's Normal Retirement Age or age 62.

Notwithstanding the foregoing, if the value of the Participant's benefit derived from Employer and Employee contributions doe s not exceed $5,000, then the Administrator will distribute such benefit in a lump-sum. No distribution may be made under the preceding sentence after the Annuity Starting Date unless the Participant and the Participant's Spouse consent in writing (or in such other form as permitted by the IRS) to such distribution. Any consent required under this paragraph must be obtained not more than one-hundred eighty (180) (ninety (90) for Plan Years beginning before January 1, 2007) days before commencement of the distribution and shall be made in a manner consistent with Section 6.5(a)(2).

For purposes of this Subsection, the Participant's benefit derived from Employer and Employee contributions shall not include : (1) the Participant's Qualified Voluntary Employee Contribution Account, and (2) if selected in the Conditions for Distributions Upon Severance of Employment Section of the Adoption Agreement, the Participant's Rollover Account.
(d)   Obtaining consent. The following rules will apply with respect to the consent requirements set forth in Subsection (c): (1)   No consent shall be valid unless the Participant has received a general description of the material features and an
explanation of the relative values of the optional forms of benefit available under the Plan that would satisfy the notice
requirements of Code §417;

(2)   The Participant must be informed of the right, if any, to defer receipt of the distribution, and for Plan Years beginning on or after January 1, 2007 a description of the consequences of failing to defer any distribution. If a Participant fails to consent, it shall be deemed an election to defer the commencement of payment of any benefit. However, any election to defer the receipt of benefits shall not apply with respect to distributions that are required under Section 6.8;

(3)   Notice of the rights specified under this paragraph shall be provided no less than thirty (30) days and no more than
one-hundred eighty (180) (ninety (90) for Plan Years beginning before January 1, 2007) days before the Annuity Starting Date;

(4)   Written (or such other form as permitted by the IRS) consent of the Participant to the distribution must not be made before the Participant receives the notice and must not be made more than one-hundred eighty (180) (ninety (90) for Plan Years beginning before January 1, 2007) days before the Annuity Starting Date; and

(5)   No consent shall be valid if a significant detriment is imposed under the Plan on any Participant who does not consent to the distribution.

(e)   Required minimum distributions (Code §401(a)(9)). Notwithstanding any provision in the Plan to the contrary, the distribution of a Participant's benefits, whether under the Plan or through the purchase of an annuity Contract, shall be made in accordance with
the requirements of Section 6.8.

(f)    Annuity Contracts. All annuity Contracts under this Plan shall be non-transferable when distributed. Furthermore, the terms of any annuity Contract purchased and distributed to a Participant or Spouse shall comply with all of the requirements of this Plan.

(g)   TEFRA 242(b)(2) election. The provisions of this Section shall not apply to distributions made in accordance with Plan Section
6.8(a)(4).

(h)   Distribution from partially Vested Account. If a distribution is made to a Participant who has not severed employment and who is not fully Vested in the Participant's Account, and the Participant may increase the Vested percentage in such Account, then at any relevant time the Participant's Vested portion of the Account will be equal to an amount ("X") determined by the formula:

X = P (AB plus D) - D

For purposes of applying the formula: P is the Vested percentage at the relevant time, AB is the Account balance at the relev ant time, D is the amount of distribution, and the relevant time is the time at which, under the Plan, the Vested percentage in the Account cannot increase.

(i)    Transition rules.

(1)   Any living Participant not receiving benefits on August 23, 1984, who would otherwise not receive the benefits prescribed by the previous Subsections of this Section must be given the opportunity to elect to have such prior Subsections apply if su ch Participant is credited with at least one Hour of Service under this Plan or a predecessor plan in a Plan Year beginning on or after January 1, 1976, and such Participant had at least ten (10) years of vesting service when he or she separated from service .

(2)   Any living Participant not receiving benefits on August 23, 1984, who was credited with at least one Hour of Service under this Plan or a predecessor plan on or after September 2, 1974, and who is not otherwise credited with any service i n a Plan Year

beginning on or after January 1, 1976, must be given the opportunity to have his or her benefits paid in accordance with
Subsection (4) below.

(3)   The respective opportunities to elect (as described in Subsections (1) and (2) above) must be afforded to the appropriate Participants during the period commencing on August 23, 1984, and ending on the date benefits would otherwise commence to said Participants.

(4)   Any Participant who has elected pursuant to Subsection (2) above and any Participant who does not elect under Subsection (1) or who meets the requirements of Subsection (1) except that such Participant does not have at least ten (10) years of ves ting service when he or she separates from service, shall have his or her benefits distributed in accordance with all of the following requirements if benefits would have been payable in the form of a life annuity:

(i)    If benefits in the form of a life annuity become payable to a married Participant who: (A)  begins to receive payments under the Plan on or after Normal Retirement Age; or (B)  dies on or after Normal Retirement Age while still working for the Employer; or (C)  begins to receive payments on or after the "qualified early retirement age"; or
(D)  separates from service on or after attaining Normal Retirement Age (or the "qualified early retirement age") and after satisfying the eligibility requirements for the payment of benefits under the Plan and thereafter dies before beginning to receive such benefits;

then such benefits will be received under this Plan in the form of a qualified Joint and Survivor Annuity, unless the Participant has elected otherwise during the election period. The election period must begin at least six (6) months before the Participant attains "qualified early retirement age" and end not more than one-hundred eighty (180) (ninety (90) days for
Plan Years beginning before January 1, 2007) before the commencement of benefits. Any election hereunder will be in writing and may be changed by the Participant at any time.

(ii)   A Participant who is employed after attaining the "qualified early retirement age" will be given the opportunity to elect, during the election period, to have a survivor annuity payable on death. If the Participant elects the survivor annuity, payments under such annuity must not be less than the payments which would have been made to the Spouse under the qualified Joint and Survivor Annuity if the Participant had retired on the day before his or her death. Any election under this provision will be in writing and may be changed by the Participant at any time. The election period begins on the later of (A) the 90th day before the Participant attains the "qualified early retirement age," or (B) the date on which Participation begi ns, and ends on the date the Participant terminates employment.

(iii)  For purposes of this Subsection, the "qualified early retirement age" means the latest of: (A) the earliest date, under the Plan, on which the Participant may elect to receive retirement benefits, (B) the first day of the 120th month beginning before the Participant reaches Normal Retirement Age, or (C) the date the Participant begins participation.

(j)    Qualified optional survivor annuity

(1)   Right to elect "qualified optional survivor annuity." Notwithstanding the preceding, effective with respect to Plan Years beginning after December 31, 2007 and prior to the date this Plan is adopted, the Plan satisfied the "qualified optional survivor annuity" provisions set forth in this Subsection. A Participant who elected to waive the qualified Joint and Survivor Annuity for m of benefit was entitled to elect the "qualified optional survivor annuity" at any time during the applicable election period. Furthermore, the written explanation of the Joint and Survivor Annuity explains the terms and conditions of the "qualified optional survivor annuity."

(2)   Definition of "qualified optional survivor annuity."

(i)    General. For purposes of this Article, the term "qualified optional survivor annuity" means an annuity:

(A)  For the life of the Participant with a survivor annuity for the life of the Participant's Spouse which is equal to the "applicable percentage" of the amount of the annuity which is payable during the joint lives of the Participant and the Participant's Spouse, and

(B)  Which is the actuarial equivalent of a single annuity for the life of the Participant.

Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence.

(ii)   Applicable percentage. For purposes of this Subsection, the "applicable percentage" is based on the survivor annuity percentage (i.e., the percentage which the survivor annuity under the Plan's qualified Joint and Survivor Annuity bears to th e

annuity payable during the joint lives of the Participant and the Participant's Spouse). If th e survivor annuity percentage is less than seventy-five percent (75%), then the "applicable percentage" is seventy-five percent (75%); otherwise, the "applicable percentage" is fifty percent (50%).

6.6  DISTRIBUTION OF BENEFITS UPON DEATH

(a)   Qualified Pre-Retirement Survivor Annuity (QPSA). Unless otherwise elected as provided below, a Vested Participant who dies before the Annuity Starting Date and who has a surviving Spouse shall have the Pre-Retirement Survivor Annuity paid to the surviving Spouse. The Participant's Spouse may direct that payment of the Pre-Retirement Survivor Annuity commence within a reasonable period after the Participant's death. If the Spouse does not so direct, payment of such benefit will commence at t he time the Participant would have attained the later of Normal Retirement Age or age 62. However, the Spouse may elect a later commencement date. Any distribution to the Participant's Spouse shall be subject to the rules specified in Section 6.8.

(b)   Election to waive QPSA. Any election to waive the Pre-Retirement Survivor Annuity before the Participant's death must be made by the Participant in writing (or in such other form as permitted by the IRS) during the election period and shall requi re the Spouse's irrevocable consent in the same manner provided for in Section 6.5(a)(2). Further, the Spouse's consent must acknowledge the specific non-Spouse Beneficiary. Notwithstanding the foregoing, the non-Spouse Beneficiary need not be acknowledged, provided the consent of the Spouse acknowledges that the Spouse has the right to limit consent only to a specific Beneficiary and that the Spouse voluntarily elects to relinquish such right.

(c)   Time to waive QPSA. The election period to waive the Pre-Retirement Survivor Annuity shall begin on the first day of the Plan Year in which the Participant attains age 35 and end on the date of the Participant's death. An earlier waiver (with spousal consent) may be made provided a written (or such other form as permitted by the IRS) explanation of the Pre -Retirement Survivor Annuity is given to the Participant and such waiver becomes invalid at the beginning of the Plan Year in which the Participant turns age 35. In the event a Participant separates from service prior to the beginning of the election period, the elect ion period shall begin on the date of such separation from service.

(d)   QPSA notice. With regard to the election, the Administrator shall provide each Participant within th e applicable election period, with respect to such Participant (and consistent with Regulations), a written (or such other form as permitted by the IRS) ex planation of the Pre-Retirement Survivor Annuity containing comparable information to that required pursuant to Section 6.5(a)(5). For the purposes of this paragraph, the term "applicable period" means, with respect to a Participant, whichever of the following periods ends last:

(1)   The period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35;

(2)   A reasonable period after the individual becomes a Participant;

(3)   A reasonable period ending after the Plan no longer fully subsidizes the cost of the Pre-Retirement Survivor Annuity with respect to the Participant; or

(4)   A reasonable period ending after Code §401(a)(11) applies to the Participant.

For purposes of applying this Subsection, a reasonable period ending after the enumerated events described in (2), (3) and (4) is the end of the two (2) year period beginning one (1) year prior to the date the applicable event occurs, and ending one (1) year after that date. In the case of a Participant who separates from service before the Plan Year in which age 35 is attained, notice s hall be provided within the two (2) year period beginning one (1) year prior to separation and ending one (1) year after separation. If such a Participant thereafter returns to employment with the Employer, the "applicable period" for such Participant shall be redeter mined.

(e)   Pre-REA. The Pre-Retirement Survivor Annuity provided for in this Section shall apply only to Participants who are credited with an Hour of Service on or after August 23, 1984. Participants who are not credited with an Hour of Service on or after
August 23, 1984, shall be provided with rights to the Pre-Retirement Survivor Annuity in accordance with Section 303(e)(2) of the
Retirement Equity Act of 1984.

(f)    Consent. If the value of the Pre-Retirement Survivor Annuity derived from Employer and Employee contributions does not exceed $5,000, the Administrator shall direct the distribution of such amount to the Participant's Spouse in a single lump -sum as soon as practicable. No distribution may be made under the preceding sentence after the Annuity Starting Date unless the Sp ouse consents in writing (or in such other form as permitted by the IRS). If the value exceeds $5,000, an immediate distribution of the ent ire amount may be made to the surviving Spouse, provided such surviving Spouse consents in writing (or in such other form as permitted by the IRS) to such distribution. Any consent required under this paragraph must be obtained not more than one -hundred eighty (180) days (ninety (90) days for Plan Years beginning before January 1, 2007) before commencement of the distrib ution and shall be made in a manner consistent with Section 6.5(a)(2).

(g)   Alternative forms of distribution. Death benefits may be paid to a Participant's Beneficiary in one of the following optional forms of benefits subject to the rules specified in Section 6.8 and the elections made in the Adoption Agreement. Such optional forms of distributions may be elected by the Participant in the event there is an election to waive the Pre-Retirement Survivor Annuity, and for any death benefits in excess of the Pre-Retirement Survivor Annuity. However, if no optional form of distribution was elected by the Participant prior to death, then the Participant's Beneficiary may elect the form of distribution.

(1)   One lump-sum payment in cash or in property that is allocated to the Accounts of the Participant at the time of the distribution.

(2)   Partial withdrawals.

(3)   Payment in monthly, quarterly, semi-annual, or annual cash installments over a period to be determined by the Participant or the Participant's Beneficiary. In order to provide such installment payments, the Administrator ma y (A) segregate the aggregate amount thereof in a separate, federally insured savings account, certificate of deposit in a bank or savings and loan associa tion, money market certificate or other liquid short-term security or (B) purchase a nontransferable annuity Contract for a term certain (with no life contingencies) providing for such payment. After periodic installments commence, the Beneficiary shall have the right to reduce the period over which such periodic installments shall be made, and the cash a mount of such periodic installments shall be adjusted accordingly.

(4)   In the form of an annuity over the life expectancy of the Beneficiary.

(5)   If death benefits in excess of the Pre-Retirement Survivor Annuity are to be paid to the surviving Spouse, such benefits may be paid pursuant to (1), (2) or (3) above, or used to purchase an annuity so as to increase the payments made pursuant to the
Pre-Retirement Survivor Annuity.

(h)   Required minimum distributions (Code §401(a)(9)). Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant shall comply with the requirements of Section 6.8.

(i)    Payment to a child. For purposes of this Section, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving Spouse if the amount becomes payable to the surviving Spouse when the child reaches the age of majority.

(j)    Voluntary Contribution Account. In the event that less than one hundred percent (100%) of a Participant's interest in the Plan is distributed to such Participant's Spouse, the portion of the distribution attributable to the Participant's Voluntary Contribution Account shall be in the same proportion that the Participant's Voluntary Contribution Account bears to the Participant's total intere st in the
Plan.

(k)   TEFRA 242(b)(2) election. The provisions of this Section shall not apply to distributions made in accordance with Section
6.8(a)(4).

6.7  TIME OF DISTRIBUTION

Except as limited by Section 6.8, whenever a distribution is to be made, or a series of payments are to commence, the distribution or series of payments may be made or begun as soon as practicable. Notwithstanding anythi ng in the Plan to the contrary, unless a Participant otherwise elects, payments of benefits under the Plan will begin not later than the sixtieth (60th) day after the close of the Plan Year in which the latest of the following events occurs: (a) the date on which the Participant attains the earlier of age 65 or the Normal Retirement Age specified herein; (b) the tenth (10th) anniversary of the year in which the Participant commenced participation in the Plan; or (c) the date the Participant terminates service with the Employer. The failure of a Participant and, if applicable, the Participant's Spouse, to request a distribution shall be deemed to be an election to defer the commencement of payment of any benefit until the time otherwise permitted under the Plan.

6.8     REQUIRED MINIMUM DISTRIBUTIONS

(a)   General rules

(1)   Effective Date. Subject to the Joint and Survivor Annuity requirements set forth in Plan Section 6.5, the requirements of this Section shall apply to any distribution of a Participant's interest in the Plan and will take precedence over any inconsisten t provisions of this Plan.

(2)   Requirements of Treasury Regulations incorporated. All distributions required under this Section will be determined and made in accordance with the Regulations under Code §401(a)(9) and the minimum distribution incidental benefit requir ement of Code §401(a)(9)(G).

(3)   Limits on distribution periods. As of the first "distribution calendar year," distributions to a Participant may only be made in accordance with the selections made in the Form of Distributions Section of the Adoption Agreement. If such distributions are not made in a single-sum, then they may only be made over one of the following periods: (i) the life of the Participant, (ii) the

joint lives of the Participant and a "designated Beneficiary," (iii) a period certain not extending beyond the "life expectan cy" of the Participant, or (iv) a period certain not extending beyond the joint life and last survivor expectancy of the Participant and a "designated Beneficiary."

(4)   TEFRA Section 242(b)(2) elections.

(i)    Notwithstanding the other provisions of this Section, other than the Spouse's right of consent afforded under the Plan, distributions may be made on behalf of any Participant, including a five percent (5%) owner, who has made a designa tion in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and in accordance with all of the following requirements (regardless of when such distribution commences):

(A)  The distribution by the Plan is one which would not have disqualified such Plan under Code §401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984.

(B)  The distribution is in accordance with a method of distribution designated by the Participant whos e interest in the
Plan is being distributed or, if the Participant is deceased, by a Beneficiary of such Participant.

(C)  Such designation was in writing, was signed by the Participant or the Beneficiary, and was made before January 1,
1984.

(D)  The Participant had accrued a benefit under the Plan as of December 31, 1983.

(E)  The method of distribution designated by the Participant or the Beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the Participant's death, the Beneficiaries of the Participant listed in order of priority.

(ii)   A distribution upon death will not be covered by the transitional rule of this Subsection unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the Participant.

(iii)  For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Participant, or the Beneficiary, to whom such distribution is being made, will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in (i)(A) and (i)(E) of this Subsection.

(iv)  If a designation is revoked, any subsequent distribution must satisfy the requirements of Code §401(a)(9) and the Regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the Plan must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Code §401(a)(9) and the Regulations thereunder, but for the Section 242(b)(2) election. For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements. Any changes in the designation will be considered to
be a revocation of the designation. However, the mere substitution or addition of another Beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution
or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life).

(v)   In the case in which an amount is transferred or rolled over from one plan to another plan, the rules in Regulation
§1.401(a)(9)-8, Q&A-14 and Q&A-15, shall apply.

(b)   Time and manner of distribution

(1)   Required beginning date. The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's "required beginning date."

(2)   Death of Participant before distributions begin. If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows as elected in the Distributions Upon Death Section of the Adoption Agreement (or if no election is made, then the Beneficiary may elect either the lifetime method or the five-year method):

(i)    Lifetime method (Spouse). If the Participant's surviving Spouse is the Participant's sole "designated Beneficiary," then, except as otherwise provided herein, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later.

(ii)   Lifetime method (non-Spouse). If the Participant's surviving Spouse is not the Participant's sole "designated Beneficiary," then, except as provided in Section 6.8(b)(3) below, distributions to the "designated Beneficiary" will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(iii)  Five-year method. If there is no "designated Beneficiary" as of September 30 of the year following the year of the Participant's death or if otherwise elected pursuant to the Adoption Agreement with respect to a "designated Beneficiary," the Participant's entire interest will be distributed by December 31 of the calendar year con taining the fifth anniversary of the Participant's death.

(iv)  Death of Spouse. If the Participant's surviving Spouse is the Participant's sole "designated Beneficiary" and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Section 6.8(b)(2), other than Section 6.8(b)(2)(i), will apply as if the surviving Spouse were the Participant.

For purposes of this Section 6.8(b)(2) and Section 6.8(b)(3), unless Section 6.8(b)(2)(iv) applies, distributions are considered to begin on the Participant's "required beginning date." If Section 6.8(b)(2)(iv) applies, distributions are considered to be gin on
the date distributions are required to begin to the surviving Spouse under Section 6.8(b)(2)(i) . If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's "required beginning date " (or to the Participant's surviving Spouse before the date distributions are required to begin to the surviving Spouse under Section
6.8(b)(2)(i)), the date distributions are considered to begin is the date distributions actually commence.

(3)   Forms of distribution. Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the "required beginning date," as of the first "distribution calendar year" distribut ions will be made in accordance with Sections 6.8(c) and 6.8(d) and only in a form of distribution provided in Section 6.5 or 6.6, as
applicable. If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distr ibutions thereunder will be made in accordance with the requirements of Code §401(a)(9) and the Regulations thereunder.

(c)   Required minimum distributions during Participant's lifetime

(1)   Amount of required minimum distribution for each "distribution calendar year." During the Participant's lifetime, the minimum amount that will be distributed for each "distribution calendar year" is the lesser of the following, as elected in t he Form of Distributions Section of the Adoption Agreement:

(i)    the quotient obtained by dividing the "Participant's account balance" by the distribution period in the Uniform Lifetime Table set forth in Regulation §1.401(a)(9)-9, using the Participant's age as of the Participant's birthday in the "distri bution calendar year"; or

(ii)   if the Participant's sole "designated Beneficiary" for the "distribution calendar year" is the Participant's Spouse, the quotient obtained by dividing the "Participant's account balance" by the number in the Joint and Last Survivor Table set forth in Regulation §1.401(a)(9)-9, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the "distribution calendar year."

(2)   Lifetime required minimum distributions continue through year of Participant's death. Required minimum distributions will be determined under this Section 6.8(c) beginning with the first "distribution calendar year" and up to an d including the "distribution calendar year" that includes the Participant's date of death.

(d)   Required minimum distributions after Participant's death

(1)   Death on or after date distributions begin.

(i)    Participant survived by "designated Beneficiary." If the Participant dies on or after the date distributions begin and there is a "designated Beneficiary," the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by dividing the "Participant's account balance" by the longer of the remaining "life expectancy" of the Participant or the remaining "life expectancy" of the Participant's "designated Beneficiary," determined as follows:

(A)  The Participant's remaining "life expectancy" is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.

(B)  If the Participant's surviving Spouse is the Participant's sole "designated Beneficiary," the remaining "life expectancy" of the surviving Spouse is calculated for each "distribution calendar year" after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For "distribution calendar years" after
the year of the surviving Spouse's death, the remaining "life expectancy" of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death, reduced by one for each subsequent calendar year.

(C)  If the Participant's surviving Spouse is not the Participant's sole "designated Beneficiary," the "designated Beneficiary's" remaining "life expectancy" is calculated using the age of the Beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year.

(ii)   No "designated Beneficiary." If the Participant dies on or after the date distributions begin and there is no "designated Beneficiary" as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by divid ing the "Participant's account balance" by the Participant's remaining "life expectancy" calculated using the age of the
Participant in the year of death, reduced by one for each subsequent year.

(2)   Death before date distributions begin.

(i)    Participant survived by "designated Beneficiary." Except as provided in Sections 6.8(b)(2) and 6.8(b)(3), if the Participant dies before the date distributions begin and there is a "designated Beneficiary," the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by dividing the "Participant's account balance" by the remaining "life expectancy" of the Participant's "designated Beneficiary," determined as provided in Section 6.8(d)(1).

(ii)   No "designated Beneficiary." If the Participant dies before the date distributions begin and there is no "designated Beneficiary" as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.

(iii)  Death of surviving Spouse before distributions to surviving Spouse are required to begin. If the Participant dies before the date distributions begin, the Participant's surviving Spouse is the Participant's sole "designated Beneficiary," and the surviving Spouse dies before distributions are required to begin to the surviving Spouse under Section 6.8(b)(2)(i), this Section 6.8(d)(2) will apply as if the surviving Spouse were the Participant.

(e)   Definitions. For purposes of this Section, the following definitions apply:

(1)   "Designated Beneficiary" means the individual who is designated as the Beneficiary under the Plan and is the "designated
Beneficiary" under Code §401(a)(9) and Regulation §1.401(a)(9)-4.

(2)   "Distribution calendar year" means a calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first "distribution calendar year" is the calendar year immediately preceding t he calendar year which contains the Participant's "required beginning date." For distributions beginning after the Participant's death, the first "distribution calendar year" is the calendar year in which distributions are required to begin under Section 6.8(b) . The required minimum distribution for the Participant's first "distribution calendar year" will be made on or before the Participant's "required beginning date." The required minimum distribution for other "distribution calendar years," including the required minimum distribution for the "distribution calendar year" in which the Participant's "required beginning date" occurs, will be made on or before December 31 of that "distribution calendar year."
(3)   "Life expectancy" means the life expectancy as computed by use of the Single Life Table in Regulation §1.401(a)(9) -9. (4)   "Participant's account balance" means the Participant's account balance as of the last Valuation Date in the calendar year
immediately preceding the "distribution calendar year" (valuation calendar year) increased by the amount of any contributions
made and allocated or Forfeitures allocated to the account balance as of the dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. For this purpose, the Administrator may exclude contributions that are allocated to the account balance as of dates in the valuation calendar year after the Valuation Date, but that are not actually made during the valuation calendar year. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the "distribution calendar year" if distributed or transferred in the valuation calendar year.

(5)   "Required beginning date" means, except as otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), with respect to any Participant, April 1 of the calendar year following the later of th e calendar year in which the Participant attains age 70 1/2 or the calendar year in which the Participant retires, except that benefit distributions to a "5-percent owner" must commence by April 1 of the calendar year following the calendar year in which the Participant attains age 70 1/2.

(6)   "5-percent owner" means a Participant who is a 5-percent owner as defined in Code §416 at any time during the Plan Year ending with or within the calendar year in which such owner attains age 70 1/2. Once distributions have begun to a 5-percent owner under this Section they must continue to be distributed, even if the Participant ceases to be a 5 -percent owner in a subsequent year.

(f)    Waiver of 2009 required distributions

(1)   Suspension of RMDs unless otherwise elected by Participant. This paragraph does not apply if the Employer elected options a., b., or c. at the WRERA – RMD Waivers for 2009 Section of the Adoption Agreement. Notwithstanding the provisions of the Plan relating to required minimum distributions under Code §401(a)(9), a Participant or Beneficiary who would have bee n required to receive required minimum distributions for 2009 but for the enactment of Code §401(a)( 9)(H) ("2009 RMDs"), and who would have satisfied that requirement by receiving distributions that are (i) equal to the "2009 RMDs" or (ii) one or mor e payments in a series of substantially equal distributions (that include the "2009 RMDs") made at least a nnually and expected to last for the life (or "life expectancy") of the Participant, the joint lives (or joint "life expectancy") of the Participant and the Participant's "designated Beneficiary," or for a period of at least 10 years ("Extended 2009 RMDs") , did not receive those distributions for 2009 unless the Participant or Beneficiary chooses to receive such distributions. Participants and Benefici aries described in the preceding sentence were given the opportunity to elect to receive the distributions described in the preceding sentence.

(2)   Continuation of RMDs unless otherwise elected by Participant. This paragraph applies if the Employer elected option b. at the WRERA – RMD Waivers for 2009 Section of the Adoption Agreement. Notwithstanding the provisions of the Plan relating to required minimum distributions under Code §401(a)(9), a Participant or Beneficiary who would have been required t o receive required minimum distributions for 2009 but for the enactment of Code §401(a)(9)(H) ("2009 RMDs"), and who would have satisfied that requirement by receiving distributions that are (i) equal to the "2009 RMDs" or (ii) one or more payments in a series of substantially equal distributions (that include the "2009 RMDs") made at least annually and e xpected to last for the life (or "life expectancy") of the Participant, the joint lives (or joint "life expectancy") of the Participant and the Participan t's "designated Beneficiary," or for a period of at least 10 years ("Extended 2009 RMDs"), did not receive those distributions for
2009 unless the Participant or Beneficiary choose not to receive such distributions. Participants and Beneficiaries described in the preceding sentence were given the opportunity to elect to stop receiving the distributions des cribed in the preceding sentence.

(3)   Direct rollovers. Notwithstanding the provisions of the Plan relating to required minimum distributions under Code
§401(a)(9), and solely for purposes of applying the direct rollover provisions of the Plan, certain additional distributions in 2009,
as elected by the Employer in the WRERA – RMD Waivers for 2009 Section of the Adoption Agreement, were treated as eligible rollover distributions. If no election was made by the Employer in the Adoption Agreement, then a direct rollover was offered only for distributions that would have been eligible rollover distributions without regard to Code §401(a)(9)(H).

6.9  DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL

If, in the opinion of the Administrator, a Participant or Beneficiary entitled to a distribution is not able to care for his or her affairs because of a mental condition, a physical condition, or by reason of age, then the Administrator shall direct the distribution to the Participant's or Beneficiary's guardian, conservator, trustee, custodian (including under a Uniform Transfers or Gifts to Min ors Act) or to his or her attorney-in-fact or to other legal representative, upon furnishing evidence of such status satisfactory to the Administrator. The Administrator and the Trustee (or Insurer) do not have any liability with respect to payments so made and neither the Administrator nor the Trustee (or Insurer) has any duty to make inquiry as to the competence of any person entitled to receive payments under the Plan.

6.10 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN

In the event that all, or any portion, of the distribution payable to a Participant or Beneficiary hereunder shall, at the la ter of the Participant's attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of the inability of the Administr ator to ascertain the whereabouts of such Participant or Beneficiary, the amount so distributable may, in the sole discretion of t he Administrator, either be treated as a Forfeiture or be paid directly to an individual retirement account described in Code §408(a) or an ind ividual
retirement annuity described in Code §408(b). In addition, if the Plan provides for mandatory distributions and the amount to be distributed to a Participant or Beneficiary does not exceed $1,000, then the amount distributable may, in the sole discretion of the Admi nistrator, either be treated as a Forfeiture, or be paid directly to an individual retirement account described in Code §408(a) or an individual retirement annuity described in Code §408(b) at the time it is determined that the whereabouts of the Participant or the Participant's B eneficiary
cannot be ascertained. In the event a Participant or Beneficiary is located subsequent to the Forfeiture, such benefit shall be restored, first
from Forfeitures, if any, and then from an additional Employer contribution if necessary. Upon Plan termination, the portion of the distributable amount that is an "eligible rollover distribution" as defined in Section 6.15(b)(1) may be paid directly to an individual retirement account described in Code §408(a) or an individual retirement annuity described in Code §408(b). However, regardless of the preceding, a benefit that is lost by reason of escheat under applicable state law is not treated as a Forfeiture for purposes of this Section nor as an impermissible forfeiture under the Code.

6.11 IN-SERVICE DISTRIBUTION

If elected in the Adoption Agreement, at such time as the conditions set forth in the Adoption Agreement have been satisfied, then the Administrator, at the election of a Participant who has not severed employment with the Employer, shall direct the distribution of up to the entire Vested amount then credited to the Accounts as elected in the Adoption Agreement maintained on behalf of such Particip ant. For purposes of this Section, a Participant shall include an Employee who has an Account balance in the Plan. In the event that the Administrator makes such a distribution, the Participant shall continue to be eligible to participate in the Plan on the same basis as any other Employee. Any distribution made pursuant to this Section shall be made in a manner consistent with Section 6.5, including, but not

limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. The Plan may, however, make a partial distribution pursuant to this Section regardless of whether partial distributions are otherwise permitted purs uant to the Adoption Agreement. Furthermore, if an in-service distribution is permitted from more than one account type, the Administrator may determine any ordering of a Participant's in-service distribution from such accounts.

6.12 ADVANCE DISTRIBUTION FOR HARDSHIP

(a)   Hardship events. For Profit Sharing Plans and 401(k) Plans (except to the extent Section 12.10 applies), if elected in the Adoption Agreement, the Administrator, at the election of the Participant, shall dir ect the distribution to any Participant in any one Plan Year up to the lesser of 100% of the Vested interest of the Accounts selected in the Adoption Agreement, valued as of th e last Valuation Date or the amount necessary to satisfy the immediate and heavy financial need of the Participant. For purposes of this Section, a Participant shall include an Employee who has an Account balance in the Plan. Any distribution made pursuant to th is Section shall be deemed to be made as of the first day of the Plan Year or, if later, the Valuation Date immediately preceding the date
of distribution, and the Account from which the distribution is made shall be reduced accordingly. Withdrawal under this Sect ion shall be authorized only if the distribution is for an immediate and heavy financial need. The Administrator will determine whether there is an immediate and heavy financial need based on the facts and circumstances. An immediate and heavy financial need includes, but is not limited to, a distribution for one of the following:

(1)   Expenses for (or necessary to obtain) medical care (as defined in Code §213(d));

(2)   Costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

(3)   Payments for burial or funeral expenses for the Participant's deceased parent, Spouse, children or dependents (as defined in
Code §152, and without regard to Code §152(d)(1)(B));

(4)   Payment of tuition, related educational fees, and room and board expenses, for up to the next twelve (12) months of post-secondary education for the Participant, the Participant's Spouse, children, or dependents (as defined in Code §152, and without regard to Code §§152(b)(1), (b)(2), and (d)(1)(B));

(5)   Payments necessary to prevent the eviction of the Participant from the Participant's principal residence or foreclosure on th e mortgage on that residence; or

(6)   Expenses for the repair of damage to the Participant's principal residence that would qualify for the casualty deduction under
Code §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income).

(b)   Beneficiary-based distribution. If elected in Adoption Agreement, then effective as of the date specified in the Adoption Agreement, but no earlier than August 17, 2006, a Participant's hardship event includes an immediate and heavy financial need of the Participant's "primary Beneficiary under the Plan," that would constitute a hardship event if it occurred with respect to the Participant's Spouse or dependent as defined under Code §152 (such hardship events being limited to educational expenses, funeral expenses and certain medical expenses). For purposes of this Section, a Participant's "primary Beneficiary under the Plan" is an individual who is named as a Beneficiary under the Plan (by the Participant or pursuant to Section 6.2(d)) and has an unconditional right to al l or a portion of the Participant's Account balance under the Plan upon the Participant's death.

(c)   Other limits and conditions. If elected in the Adoption Agreement, no distribution shall be made pursuant to this Section from the Participant's Account until such Account has become fully Vested. Furthermore, if a hardship distribution is permitted from more than one Account, the Administrator may determine any ordering of a Participant's hardship distribution from such Accounts.

(d)   Distribution rules apply. Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder.

6.13 SPECIAL RULE FOR CERTAIN PROFIT SHARING PLANS

(a)   The provisions of this Section apply to a Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan to the extent el ected in the Adoption Agreement. However, unless otherwise permitted pursuant to Regulation §1.411(d) -4, this Section shall not apply with respect to amounts that are transferred directly or indirectly (i.e., other than by a rollover) to this Plan from a defined b enefit plan, money purchase pension plan, target benefit plan, or stock bonus or profit sharing plan which is subject to the survivor annuity requirements of Code §§401(a)(11) and 417.

(b)   If an election is made to not offer life annuities as a form of distribution, then a Participant shall be prohibited from ele cting benefits in the form of a life annuity and the Joint and Survivor Annuity provisions of Section 6.5 shall not apply.

(c)   If an election is made to offer life annuities as a form of distribution but not as the normal form of distribution, then the Joint and Survivor Annuity provisions of Section 6.5 shall not apply if a Participant does not elect an annuity form of distribution. Furthermore, Subsection (e) shall not apply if a Participant elects an annuity form of distribution.

(d)   Notwithstanding anything in Sections 6.2 and 6.6 to the contrary, upon the death of a Participant, the automatic form of distribution will be a lump-sum rather than a Qualified Pre-Retirement Survivor Annuity. Furthermore, the Participant's Spouse will be the Beneficiary of the Participant's entire Vested interest in the Plan unless an election is made to waive the Spouse as Beneficiary. The other provisions in Section 6.2 shall be applied by treating the death benefit in this Subsection as though it is a Qualified
Pre-Retirement Survivor Annuity.

(e)   Except to the extent otherwise provided in this Section, the provisions of Sections 6.2 and 6.5 regarding spousal consent shall be inoperative with respect to this Plan.

(f)    If a distribution is one to which Code §§401(a)(11) and 417 do not apply, such distribution may commence less than thirty (30)
days after the notice required under Regulation §1.411(a)-11(c) is given, provided that:

(1)   the Administrator clearly informs the Participant that the Participant has a right to a period of at least thirty (30) days a fter
the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distr ibution option), and

(2)   the Participant, after receiving the notice, affirmatively elects a distribution.

6.14 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION

All benefits provided to a Participant in this Plan shall be subject to the rights afforded to any Alternate Payee under a "q ualified domestic relations order." Furthermore, unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), a distribution to an Alternate Payee shall be permitted if such distribution is authorized by a "qualified domestic relations order," even if the affected Participant has not reached the "earliest retirement age." For the purposes of this Section, "qualified domestic relations order" and "earliest retirement age" shall have the meanings set forth under Code §414(p).

Effective as of April 6, 2007, a domestic relations order that otherwise satisfies the requirements for a "qualified domestic relations order" will not fail to be a "qualified domestic relations order": (i) solely because the order is issued after, or revises, another domestic relations order or "qualified domestic relations order"; or (ii) solely because of the time at which the order is issued, including issuance after the Annuity Starting Date or after the Participant's death.

6.15 DIRECT ROLLOVERS

(a)   Right to direct rollover. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a "distributee's" election under this Section, a "distributee" may elect, at the time and in the manner prescribed by the Administrator, to have an "eligible rollover distribution" paid directly to an "eligible retirement plan" specified by the "distributee" in a "direct rollover." However, if less than the entire amount of the "eligible rollover distribution" is being paid directly to an "eligible retire ment plan," then the Administrator may require that the amount paid directly to such plan be at least $500. Furthermore, the Administrator may apply this Section by treating a Participant's Roth Elective Deferral Account separately from the Participant's other Account s.

(b)   Definitions. For purposes of this Section, the following definitions shall apply:

(1)   Eligible rollover distribution. An "eligible rollover distribution" means any distribution described in Code §402(c)(4) and generally includes any distribution of all or any portion of the balance to the credit of the "distributee," except that an "eligible rollover distribution" does not include: any distribution that is one of a series of substantially equal periodic payments (n ot less frequently than annually) made for the life (or life expectancy) of the "distributee" or the joint lives (or joint life expectanci es) of the "distributee" and the "distributee's" "designated Beneficiary," or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under Code §401(a)(9); any hardship distribution; the portion of any other distribution(s) that is not includible in gross income (determined without regard to the exclusion for net unrealized appre ciation with respect to employer securities); and any other distribution reasonably expected to total less than $200 during a year. F or purposes of the $200 rule, a distribution from a designated Roth account and a distribution from other accounts under th e Plan may be treated as made under separate plans. In addition, Section 6.8(f) applies with respect to distributions made in 2009.

Notwithstanding the above, a portion of a distribution shall not fail to be an "eligible rollover distribution" merely because the portion consists of after-tax voluntary Employee contributions which are not includible in gross income. However, such portion may be transferred only to:

(i)    a traditional individual retirement account or annuity described in Code §408(a) or (b) (a "traditional IRA")

(ii)   for taxable years beginning after December 31, 2006, a Roth individual account or annuity described in Code §408A (a
"Roth IRA"), or

(iii)  a qualified defined contribution plan or an annuity contract described in Code §401(a) or Code §403(b), respectively, that agrees to separately account for amounts so transferred (and earnings thereon), including separately a ccounting for the

portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(2)   Eligible retirement plan. An "eligible retirement plan" is a "traditional IRA," for distributions made after December 31,
2007, a "Roth IRA," a qualified trust (an employees' trust) described in Code §401(a) which is exempt from tax under Code
§501(a), an annuity plan described in Code §403(a), an eligible plan under Code §457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision and which agrees to separately a ccount
for amounts transferred into such plan from this Plan, and an annuity contract described in Code §403(b), that accepts the
"distributee's" "eligible rollover distribution." The definition of "eligible retirement plan" shall also apply in the case of a distribution to a surviving Spouse, or to a Spouse or former Spouse who is an Alternate Payee. If any portion of an "eligible rollover distribution" is attributable to payments or distributions from a designated Roth account, an "eligible retirement plan"
with respect to such portion shall include only another designated Roth account of the individual from whose account the payments or distributions were made, or a Roth IRA of such individual. A "direct rollover" of a distribution from a Roth Elective Deferral Account (other than an "in-Plan Roth rollover contribution" (as defined in Section 12.11)) will only be made to another Roth Elective Deferral Account under an applicable retirement plan described in Code §402A(e)(1) or to a Roth IRA described i n Code §408A, and only to the extent that the rollover is permitted under the rules of Code §402(c). In the case of a "distributee" who is a non-Spouse designated Beneficiary, (i) the "direct rollover" may be made only to a traditional or Roth individual retirement account or an annuity described in Code §408(b) ("IRA") that is established on behalf of the designated non-Spouse Beneficiary and that will be treated as an inherited IRA pursuant to the provisions of Code §402(c)(11), and (ii) the determi nation of any required minimum distribution required under Code §401(a)(9) that is ineligible for rollover shall be made in accordance with IRS Notice 2007-7, Q&A 17 and 18.

(3)   Distributee. A "distributee" includes an Employee or Former Employee. In addition, the Employee's or Former Employee's surviving Spouse and the Employee's or Former Employee's Spouse or former Spouse who is the Alternate Payee, are "distributees" with regard to the interest of the Spouse or former Spouse.
(4)   Direct rollover. A "direct rollover" is a payment by the Plan to the "eligible retirement plan" specified by the "distributee." (c)   Participant notice. A Participant entitled to an "eligible rollover distribution" must receive a written explanation of the right to a
"direct rollover," the tax consequences of not making a "direct rollover," and, if applicable, any available special income t ax elections.
The notice must be provided within the same thirty (30) – one-hundred eighty (180) day timeframe applicable to the Participant consent notice as set forth in Section 6.5(d)(3). The "direct rollover" notice must be provided to all Participants, unless t he total amount the Participant will receive as a distribution during the calendar year is expected to be less than $200.

(d)   Non-Spouse Beneficiary rollover right. For distributions after December 31, 2009, and unless otherwise elected in the Adoption Agreement, for distributions after December 31, 2006, a non-Spouse Beneficiary who is a "designated Beneficiary" under Code §401(a)(9)(E) and the Regulations thereunder, by a direct trustee-to-trustee transfer ("direct rollover"), may roll over all or any portion an "eligible rollover distribution" to an IRA the Beneficiary establishes for purposes of receiving the distribution.

(1)   Certain requirements not applicable. Any distribution made prior to January 1, 2010 is not subject to the "direct rollover" requirements of Code §401(a)(31) (including Code §401(a)(31)(B), the notice requirements of Code §402(f) or the mandatory withholding requirements of Code §3405(c)).

(2)   Trust Beneficiary. If the Participant's named Beneficiary is a trust, the Plan may make a direct rollover to an IRA on behalf of the trust, provided the trust satisfies the requirements to be a "designated Beneficiary."

6.16 RESTRICTIONS ON DISTRIBUTION OF ASSETS TRANSFERRED FROM A MONEY PURCHASE PLAN

Notwithstanding any provision of this Plan to the contrary, to the extent that any optional form of benefit under this Plan p ermits a distribution prior to the Employee's retirement, death, Total and Permanent Disability, or severance from employment, and pri or to Plan termination, the optional form of benefit is not available with respect to benefits attributable to assets (including the post-transfer earnings thereon) and liabilities that are transferred, within the meaning of Code §414(l), to this Plan from a money purchase pension plan qualified under Code §401(a) (other than any portion of those assets and liabilities attributable to after-tax voluntary Employee contributions or to a direct or indirect rollover contribution). Notwithstanding anything in the Plan to the contrary, effective with respect to Pl an Years beginning after June 30, 2008, a Participant may not obtain an in-service distribution with respect to such transferred amounts prior to the earlier of the Participant's Normal Retirement Age or attainment of age 62.

6.17 CORRECTIVE DISTRIBUTIONS

Nothing in this Article shall preclude the Administrator from making a distribution to a Participant, to the extent such dist ribution is made to correct a qualification defect in accordance with the corrective procedures under the IRS' Employee Plans Compliance Resolution System or any other voluntary compliance programs established by the IRS or the Department of Labor.

6.18 QUALIFIED RESERVIST DISTRIBUTIONS AND HEART ACT

(a)   Qualified reservist distribution defined. A "qualified reservist distribution" is any distribution to an individual who is ordered or called to active duty after September 11, 2001, if: (1) the distribution is from amounts attributable to elective deferral s in a 401(k) plan; (2) the individual was (by reason of being a member of a reserve component, as defined in section 101 of title 37, United States Code) ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and (3) the Plan makes the distribution during the period beginning on the date of such order or call, and ending at the close of the active duty period.

(b)   Death benefits. In the case of a death occurring on or after January 1, 2007, if a Participant dies while performing qualified military service (as defined in Code §414(u)), the Participant's Beneficiary is entitled to any additional benefits (other than b enefit accruals (unless otherwise elected in the Adoption Agreement) relating to the period of qualified military service) provided under the Plan as if the Participant had resumed employment and then terminated employment on account of death. Moreover, the Plan will credit the Participant's qualified military service as service for vesting purposes, as though the Participant had resu med employment under Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA) immediately prior to the Participant's death.

(c)   Military Differential Pay. For years beginning after December 31, 2008: (1) an individual receiving Military Differential Pay is treated as an Employee of the Employer making the payment; (2) the Military Differential Pay is treated as 415 Compensation ( and Compensation unless otherwise elected in the Adoption Agreement); and (3) the Plan is not treated as failing to meet the requirements of any provision described in Code §414(u)(1)(C) (or corresponding Plan provisions, including, but not limited to, Plan provi sions related to the ADP or ACP test) by reason of any contribution or benefit which is based on the Military Differential Pay. The Administrator operationally may determine, for purposes of the provisions described in Code §414(u)(1)(C), whether to take into account any Elective Deferrals, and if applicable, any matching contributions, attributable to Military Differential Pay.

Subsection (c)(3) above applies only if all Employees of the Employer performing service in the uniformed services described in Code §3401(h)(2)(A) are entitled to receive Military Differential Pay on reasonably equivalent terms and, if eligible to participate in a retirement plan maintained by the Employer, to make contributions based on the payments on reasonably equivalent terms (takin g into account Code §410(b)(3), (4), and (5)).

(d)   Deemed Severance. Notwithstanding Subsection (c)(1) above, if elected in the Adoption Agreement, a Participant performs service in the uniformed services (as defined in Code §414(u)(12)(B)) on active duty for a period of more than 30 days, the Participant will be deemed to have a severance from employment solely for purposes of eligibility for distribution of amounts not subject to Code
§412. However, the Plan will not distribute such a Participant's Account on account of this deemed severance unless the Parti cipant specifically elects to receive a benefit distribution hereunder. If a Participant elects to receive a distribution on account of thi s deemed severance, then the individual may not make an Elective Deferral or after -tax voluntary Employee contribution during the six (6) month period beginning on the date of the distribution. If a Participant would be entitled to a distribution on account of a deemed
severance, and a distribution on account of another Plan provision (such as a "qualified reservist distribution" as d efined in Subsection
(a) above), then the other Plan provision will control and the six (6) month suspension will not apply.

ARTICLE VII TRUSTEE AND CUSTODIAN

7.1  BASIC RESPONSIBILITIES OF THE TRUSTEE

(a)   Application of Article. The provisions of this Article, other than Sections 7.6 and 7.15, shall not apply to this Plan if a separate trust agreement is being used. Furthermore, the provisions of this Article, other than Sections 7.5, 7.6 and 7.15, shall not apply if the Plan is fully insured. If the Employer has appointed two or more Trustees to hold Plan assets, then each Trustee shall be the Trustee only with respect to those Plan assets specifically deposited by the Employer in the Trust Fund for which such Trustee is the trustee. References in the Plan to the responsibilities, power or duties of the Trustee and any other provisions in the Plan relating to the Trustee shall be interpreted as applying to each Trustee only with respect to the assets of the Trust Fund for which su ch Trustee is the Trustee. Each Trustee shall have no responsibility for, or liability with respect to, any of the Plan assets other than the assets for which it serves as Trustee.

(b)   Duty to collect contributions. The Trustee is obligated to collect any amounts owed to the Trust, except as otherwise provided in Section 7.3(c), even if such amounts are owed by the Employer, unless another person or entity has been designated with such duty in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections) or other written agreement (including a designation made pursuant to Section 7.3(c)). In determining how to discharge any duty to collect contributions, the Trustee should weigh the value of the Plan assets involved, the likelihood of a successful recovery, and the expenses expected to be incurred.

(c)   Reliance on Administrator's directions. The Trustee will credit and distribute the Trust Fund as directed by the Administrator. The Trustee is not obligated to inquire as to whether any payee or distributee is entitled to any payment or whether the dist ribution is proper or within the terms of the Plan, or whether the manner of making any payment or distribution is proper. The Trustee is accountable only to the Administrator for any payment or distribution made by it in good faith on the order or direction of t he Administrator.

(d)   Directions by others. In the event that the Trustee shall be directed by a Participant (pursuant to the Participant Direction Procedures if the Plan permits Participant directed investments), the Employer, or an Investment Manager or other agent appoi nted by the Employer with respect to the investment of any or all Plan assets, the Trustee shall have no liability with respect to th e investment of such assets, but shall be responsible only to execute such investment instructions as so directed.

(1)   The Trustee shall be entitled to rely fully on the written (or other form acceptable to the Administrator and the Trustee, including but not limited to, voice recorded) instructions of a Participant (pursuant to the Participant Direction Procedures), the Employer, or any Fiduciary or nonfiduciary agent of the Employer, in the discharge of such duties, and shall not be liable for any loss or other liability resulting from such direction (or lack of direction) of the investment of any part of the Plan assets.

(2)   The Trustee may delegate the duty of executing such instructions to any nonfiduciary agent, which may be an affiliate of the
Trustee or any Plan representative.

(3)   The Trustee may refuse to comply with any direction from the Participant in the event the Trustee, in its sole and absolute discretion, deems such direction improper by virtue of applicable law. The Trustee shall not be responsible or liable for any loss or expense that may result from the Trustee's refusal or failure to comply with any direction from the Participant.

(4)   Any costs and expenses related to compliance with the Participant's directions shall be borne by the Partici pant's Directed
Account, unless paid by the Employer.

(5)   Notwithstanding anything herein above to the contrary, the Trustee shall not invest any portion of a Participant's Directed
Account in "collectibles" within the meaning of Code §408(m).

(e)   Records. The Trustee will maintain records of receipts and disbursements and furnish to the Employer and/or Administrator for each Plan Year a written annual report pursuant to Section 7.9.

(f)    Employment of bank or trust company. The Trustee may employ a bank or trust company pursuant to the terms of its usual and customary bank agency agreement, under which the duties of such bank or trust company shall be of a custodial, clerical a nd record-keeping nature.

(g)   Payment of expenses. The Trustee may employ and pay from the Trust Fund reasonable compensation to agents, attorneys, accountants and other persons to advise the Trustee as in its opinion may be necessary. The Trustee may delegate to any agent , attorney, accountant or other person selected by it any non-Trustee power or duty vested in it by the Plan, and the Trustee may act or refrain from acting on the advice or opinion of any such person.

7.2  INVESTMENT POWERS AND DUTIES OF DISCRETIONARY TRUSTEE

(a)   Discretionary authority. This Section applies if the Employer, in the Adoption Agreement or as otherwise agreed upon by the Employer and the Trustee, designates the Trustee to administer all or a portion of the trust as a Discretionary Trustee. If s o designated, then the Trustee has the discretion and authority to invest, manage, and control those Plan assets except, however, with resp ect to
those assets which are subject to the investment direction of a Participant (if Participant directed investments are permitted), or an
Investment Manager, the Administrator, or other agent appointed by the Employer. The exercise of any investment discretion hereunder shall be consistent with the "funding policy and method" determined by the Employer.

(b)   Duties. The Trustee shall, except as otherwise provided in this Plan, invest and reinvest the Trust Fund to keep the Trust Fund invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Trustee shall deem advisable, including, but not limited to, common or preferred stocks, open -end or closed-end mutual funds, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. The Trustee shall at all times in making investments of the Trust Fund consider, among other factors, the short and long-term financial needs of the Plan on the basis of information furnished by the Employer. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give d ue regard to any limitations imposed by the Code or the Act so that at all times this Plan may qualify as a qualified Plan and Trust. The Trustee shall discharge its duties with respect to the Plan solely in the interest of the Participants and Beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

(c)   Powers. The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of this Plan, shall have the following powers and authorities to be exercised in the Trustee's sole discreti on:

(1)   To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained;

(2)   To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the

application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement;

(3)   To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; an d generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;

(4)   To cause any securities or other property to be registered in the Trustee's own name, or in the name of a nominee or in a street name provided such securities or other property are held on behalf of the Plan by (i) a bank or trust company, (ii) a broker or dealer registered under the Securities Exchange Act of 1934, or a nominee of such broker or dealer, or (iii) a clearing agency as defined in Section 3(a)(23) of the Securities Exchange Act of 1934;

(5)   To invest in a common, collective, or pooled trust fund (the provisions of which are incorporated herein by reference) maintained by any Trustee (or any affiliate of such Trustee) hereunder pursuant to Revenue Ruling 81-100 (as modified by Rev. Rul. 2011-1 or any subsequent guidance), all or such part of the Trust Fund as the Trustee may deem advisable, and the part of the Trust Fund so transferred shall be subject to all the terms and provisions of the common, collective, or pooled trust fund
which contemplate the commingling for investment purposes of such trust assets with trust assets of other trusts. The name of the
trust fund may be specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). The Trustee may withdraw from such common, collective, or pooled trust fund all or such part of the Trust Fund as the Trustee may deem advisable;

(6)   To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund; and no person lending money to the Trustee shall be bound to see to the application
of the money lent or to inquire into the validity, expediency, or propriety of any borrowing;

(7)   To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as
Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder;

(8)   To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;

(9)   To settle, compromise, or submit to arbitration (provided such arbitration does not apply to qualification issues nor to Participants or Beneficiaries) any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings;

(10) To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agents or counsel may or may not be an agent or counsel for the Employer;

(11) To apply for and procure from the Insurer as an investment of the Trust Fund any annuity or other Contracts (on the life of any Participant, or in the case of a Profit Sharing Plan (including a 401(k) Plan), on the life of any person in whom a Parti cipant has an insurable interest, or on the joint lives of a Participant and any person in whom the Participant has an insurable interest) as the Administrator shall deem proper; to exercise, at any time or from time to time, whatever rights and privileges may be gra nted under such annuity, or other Contracts; to collect, receive, and settle for the proceeds of all such annuity, or other Contracts as
and when entitled to do so under the provisions thereof;

(12) To invest funds of the Trust in time deposits or savings accounts bearing a reasonable rate of interest or in cash or cash balances without liability for interest thereon, including the specific authority to invest in any type of deposit of the Tru stee (or of a financial institution related to the Trustee);

(13) To invest in Treasury Bills and other forms of United States government obligations;

(14) To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange regar dless of whether such options are covered;

(15) To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations including the specific authority to make deposit into any savings accounts or certificates of deposit of the Trustee (or a financial institution related to the Trustee);

(16) To pool all or any of the Trust Fund, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or any Affiliated Employer, and to commingle such assets and make joint or common

investments and carry joint accounts on behalf of this Plan and Trust and such other trust or trusts, allocating undivided sh ares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests; and

(17) To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan.

(d)   Appointment of Investment Manager or others. The Trustee may appoint, at its option, an Investment Manager, investment adviser, or other agent to provide direction to the Trustee with respect to the investment of any or all of the Plan assets. Such appointment shall be in writing and shall specifically identify the Plan assets with respect to which the Investment Manager or other agent shall have the authority to direct the investment.

7.3  INVESTMENT POWERS AND DUTIES OF NONDISCRETIONARY TRUSTEE

(a)   No discretionary powers. This Section applies if the Employer, in the Adoption Agreement or as otherwise agreed upon by th e Employer and the Trustee, designates the Trustee to administer all or a portion of the trust as a nondiscretionary Trustee. If so designated, then the Trustee shall have no discretionary authority to invest, manage, or control those Plan assets, but must act solely as a Directed Trustee of those Plan assets. A nondiscretionary Trustee, as Directed Trustee of the Plan funds it holds, is authorized and empowered, by way of limitation, with the powers, rights and duties set forth herein and in Section 7.14, each of which the nondiscretionary Trustee exercises solely as Directed Trustee in accordance with the direction of the party which has the aut hority to manage and control the investment of the Plan assets. If no directions are provided to the Trustee, the Employer will provide necessary direction. Furthermore, the Employer and the nondiscretionary Trustee may, in writing, limit the powers of the nondiscretiona ry Trustee to any combination of powers listed within this Section. The party which has the authority to manage and control the investment of the Plan assets shall discharge its duties with respect to the Plan solely in the interest of the Participants and
Beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims .

(b)   Powers. The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of this Plan, shall have the following powers and authorities:

(1)   To invest the assets, without distinction between principal and income, in securities or property, real or personal, wherever situated, including, but not limited to, common or preferred stocks, open-end or closed-end mutual funds, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investmen ts; however, the Trustee shall give due regard to any limitations imposed by the Code or the Act so that at all times this Plan may qualify as a qualified Plan and Trust;

(2)   To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained;

(3)   To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposi tion, with or without advertisement;

(4)   At the direction of the party which has the authority or discretion, to vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate powers, and pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stock s, bonds, securities, or other property;

(5)   To cause any securities or other property to be registered in the Trustee's own name, or in the name of a nominee or in a street name provided such securities or other property are held on behalf of the Plan by (i) a bank or trust company, (ii) a broker or dealer registered under the Securities Exchange Act of 1934, or a nominee of such broker or dealer, or (iii) a clearing agency as defined in Section 3(a)(23) of the Securities Exchange Act of 1934;

(6)   To invest in a common, collective, or pooled trust fund (the provisions of which are incorporated herein by reference) maintained by any Trustee (or any affiliate of such Trustee) hereunder pursuant to Revenue Ruling 81-100 (as modified by Rev. Rul. 2011-1 or any subsequent guidance), all or such part of the Trust Fund as the party which has the authority to manage and control the investment of the assets shall deem advisable, and the part of the Trust Fund so transferred shall be subject to all the terms and provisions of the common, collective, or pooled trust fund which contemplate the commingling for investment purposes of such trust assets with trust assets of other trusts. The name of the trust fund may be specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections);

(7)   To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund; and no person lending money to the Trustee shall be bound to see to the applica tion
of the money lent or to inquire into the validity, expediency, or propriety of any borrowing;

(8)   To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;

(9)   To settle, compromise, or submit to arbitration (provided such arbitration does not apply to qualification issues nor to Participants or Beneficiaries) any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings;

(10) To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel may or may not be an agent or counsel for the Employer;

(11) To apply for and procure from the Insurer as an investment of the Trust Fund any annuity or other Contracts (on the life of any Participant, or in the case of a Profit Sharing Plan (including a 401(k) Plan), on the life of any person in whom a Participant has an insurable interest, or on the joint lives of a Participant and any person in whom the Participant has an insurable int erest) as the Administrator shall deem proper; to exercise, at the direction of the person with the authority to do so, whatever rights and privileges may be granted under such annuity or other Contracts; to collect, receive, and settle for the proceeds of all such annuity or other Contracts as and when entitled to do so under the provisions thereof;

(12) To invest funds of the Trust in time deposits or savings accounts bearing a reasonable rate of interest or in cash or cash balances without liability for interest thereon, including the specific authority to invest in any type of deposit of the Trustee (or of a financial institution related to the Trustee);

(13) To invest in Treasury Bills and other forms of United States government obligations;

(14) To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange regardless of whether such options are covered;

(15) To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations including the specific authority to make deposit into any savings accounts or certificates of deposit of the Trustee (or a fi nancial institution related to the Trustee); and

(16) To pool all or any of the Trust Fund, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or any Affiliated Employer, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests.

(c)   The Trustee shall have no responsibility to enforce the collection from the Employer of any contribution to the Plan or deter mine the correctness of the amount or timing any contribution. The Employer is responsible for transmit ting contributions to the Trustee at such times and in such manner as is mutually agreed upon by the Employer and the Trustee and as required by the Plan and appl icable law. Further, the Employer represents and warrants that it either has responsibility as a "named fiduciary" (as defined in Act
§402(a)(2)) or has properly delegated the responsibility to a Plan fiduciary, other than the nondiscretionary Trustee, for determining the correctness, amount and timing of contributions and for the collection of contributions.

7.4  POWERS AND DUTIES OF CUSTODIAN

The Employer may appoint a Custodian of the Plan assets. A Custodian has the same powers, rights and duties as a nondiscretionary Trustee. Any reference in the Plan to a Trustee also is a reference to a Custodian unless the context of the Plan indicates otherwise. A limitation of the Trustee's liability by Plan provision also acts as a limitation of the Custodian's liability. The Custodian will be protected from any liability with respect to actions taken pursuant to the direction of the Trustee, Administrator, the Employer, an In vestment Manager, a named Fiduciary or other third party with authority to provide direction to the Custodian. The resignation or removal of the Custodian shall be made in accordance with Section 7.11 as though the Custodian were a Trustee.

7.5  LIFE INSURANCE

(a)   Permitted insurance. The Trustee (or Insurer), in accordance with nondiscriminatory operational procedures of the Administrator, shall ratably apply for, own, and pay all premiums on Contracts on the lives of the Participants or, in the case of a Profit Sharing Plan (including a 401(k) Plan), on the life of a member of the Participant's family or on the joint lives of a Participant and a member of the Participant's family. Furthermore, if a Contract is purchased on the joint lives of the Participant and another person and such other person predeceases the Participant, then the Contract may not be maintained under this Plan. Any initia l or

additional Contract purchased on behalf of a Participant shall have a face amount of not less than $1,000, an amount set forth in the Administrator's procedures, or the limitation of the Insurer, whichever is greater. If a life insurance Contract is to be pur chased for a Participant, then the aggregate premium for ordinary life insurance for each Participant must be less than 50% of the aggrega te contributions and Forfeitures allocated to the Participant's Combined Account. For purposes of this limitation, ordin ary life insurance Contracts are Contracts with both non-decreasing death benefits and non-increasing premiums. If term insurance or universal life insurance is purchased, then the aggregate premium must be 25% or less of the aggregate contributions and Forfeitures allocated to the Participant's Combined Account. If both term insurance and ordinary life insurance are purchased, then the premium for term
insurance plus one-half of the premium for ordinary life insurance may not in the aggregate exceed 25% of the aggregate Employer contributions and Forfeitures allocated to the Participant's Combined Account. Notwithstanding the preceding, the limitations imposed herein with respect to the purchase of life insurance shall not apply, in the case of a Profit Sha ring Plan (including a 401(k) Plan), to
the portion of the Participant's Account, other than the Participant's Elective Deferral Account, Qualified Matching Account and
Qualified Nonelective Contribution Account, that has accumulated for at least two (2) Plan Years or to the entire Participant's Account if the Participant has been a Participant in the Plan for at least five (5) years. In addition, amounts transferred to this Plan in
accordance with Section 4.6(f)(1)(ii) or (iii) and a Participant's Voluntary Contribution Account may be used to purchase Contracts without limitation. Thus, amounts that are not subject to the limitations contained herein may be used to purchase life insur ance on
any person in whom a Participant has an insurable interest or on the joint lives of a Participant and any person in whom the Participant has an insurable interest, and without regard to the amount of premiums paid to purchase any life insurance hereunder.

(b)   Contract conversion at retirement. Subject to the survivor annuity requirements of Sections 6.5 and 6.6 (if applicable), the Trustee (or Insurer) must distribute the Contracts to the Participant or convert the entire value of the Contracts at or before retirement into cash or provide for a periodic income so that no portion of such value may be used to continue life insurance protection beyond the date on which benefits commence.

(c)   Limitations on purchase. Notwithstanding anything herein above to the contrary, amounts credited to a Participant's Qualified Voluntary Employee Contribution Account pursuant to Section 4.9, shall not be applied to the purchase of life insurance Contracts. Furthermore, no life insurance Contracts shall be required to be obtained on an individual's life if, for any reason (other than the nonpayment of premiums) the Insurer will not issue a Contract on such individual's life.

(d)   Proceeds payable to Plan. The Trustee (or Insurer) will be the owner of any life insurance Contract purchased under the terms of this Plan. The Contract must provide that the proceeds will be payable to the Trustee (or Insurer); however, the Trustee ( or Insurer) shall be required to pay over all proceeds of the Contract to the Participant's "designated Beneficiary" in accordance with the distribution provisions of Article VI. A Participant's Spouse will be the "designated Beneficiary" pursuant to Section 6.2, u nless a qualified election has been made in accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no circumstances shall the Trust retain any part of the proceeds that are in excess of the cash surrender value immediately prior to death. However, the Trustee
(or Insurer) shall not pay the proceeds in a method that would violate the requirements of the Retirement Equity Act of 1984, as stated in Article VI of the Plan, or Code §401(a)(9) and the Regulations thereunder. In the event of any conflict between the terms of this
Plan and the terms of any insurance Contract purchased hereunder, the Plan provisions shall control.

(e)   No responsibility for act of Insurer. The Employer, the Administrator and the Trustee shall not be responsible for the validity
of the provisions under a Contract issued hereunder or for the failure or refusal by the Insurer to provide benefits under su ch Contract. The Employer, Administrator and the Trustee are also not responsible for any action or failure to act by the Insurer or any other person which results in the delay of a payment under the Contract or which renders the Contract invalid or unenforceable in whole or in part.

7.6  LOANS TO PARTICIPANTS

(a)   Permitted loans. The Trustee (or the Administrator if the Trustee is a nondiscretionary Trustee or if loans are treated as
Participant directed investments) may, in the Trustee's (or, if applicable, the Administrator's) sole discretion, make loans to
Participants or Beneficiaries. If loans are permitted, then the following shall apply: (1) loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Participants; (3) loans shall bear a reasonable rate of interest; (4) loans shall
be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time. Furthermore, no
Participant loan shall exceed the Participant's Vested interest in the Plan. For purposes of this Section, the term Participa nt shall include any Eligible Employee who is not yet a Participant, if, pursuant to the Adoption Agreement, "rollovers" are permitted to be accepted from Eligible Employees.

(b)   Prohibited assignment or pledge. An assignment or pledge of any portion of a Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance Contract purchased under the Plan, shall be treated as a loan under this Section.

(c)   Spousal consent. If the Vested interest of a Participant is used to secure any loan made pursuant to this Section, then the written
(or such other form as permitted by the IRS) consent of the Participant's Spouse shall be required in a manner consistent wit h Section
6.5(a), provided the spousal consent requirements of such Section apply to the Plan. Such consent must be obtained within the
one-hundred eighty (180) (ninety (90) for Plan Years beginning before January 1, 2007) day period prior to the date the loan is made. A new consent shall be required if the Vested interest of a Participant is used for renegotiation, extension, renewal or othe r revision of the loan. However, unless the loan program established pursuant to this Section provides otherwise, no spousal conse nt shall be required under this paragraph if the total interest subject to the security is not in excess of $5,000. If a valid spousal consent has been

obtained in accordance with this Subsection, then, notwithstanding any other provision of this Plan, the portion of the Participant's Vested Account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the ti me of death or distribution, but only if the reduction is used as repayment of the loan. If less than 100% of the Participant's Vested Account balance (determined without regard
to the preceding sentence) is payable to the surviving Spouse, then the Account balance shall be adjusted by first reducing the Vested
Account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving Spouse.

(d)   Loan program. The Administrator shall be authorized to establish a Participant loan program to provide for loans under the Plan. The loan program shall be established in accordance with Department of Labor Regulation §2550.408(b) -1(d)(2) providing for loans by the Plan to parties-in-interest under said Plan, such as Participants or Beneficiaries. In order for the Administrator to implement such loan program, a separate written document forming a part of this Plan must be adopted, which document shall specifically include, but need not be limited to, the following:

(1)   the identity of the person or positions authorized to administer the Participant loan program; (2)   a procedure for applying for loans;
(3)   the basis on which loans will be approved or denied;

(4)   limitations, if any, on the types and amounts of loans offered;

(5)   the procedure under the program for determining a reasonable rate of interest; (6)   the types of collateral which may secure a Participant loan; and
(7)   the events constituting default and the steps that will be taken to preserve Plan assets in the event such default.

(e)   Loan default. Notwithstanding anything in this Plan to the contrary, if a Participant or Beneficiary defaults on a loan made pursuant to this Section that is secured by the Participant's interest in the Plan, then a Participant's interest may be offs et by the amount subject to the security to the extent there is a distributable event permitted by the Code or Regulations.

(f)    Loans subject to Plan terms. Notwithstanding anything in this Section to the contrary, if this is an amendment and restatement of an existing Plan, any loans made prior to the date this amendment and restatement is adopted shall be subject to the terms of the Plan in effect at the time such loan was made.

7.7  ALLOCATION AND DELEGATION OF RESPONSIBILITIES

If there is more than one Trustee, then the responsibilities of each Trustee may be specified by the Employer and accepted in writing by each Trustee. If no such delegation is made by the Employer, then the Trustees may allocate the responsibilities among the mselves, in which event the Trustees shall notify the Employer and the Administrator in writing of such action and specify the responsibilities of each Trustee. Except where there has been an allocation and delegation of powers, if there shall be more than one Trustee, they sh all act by a majority of their number, but may authorize one or more of them to sign papers on their behalf.

7.8  TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES

The Trustee shall be paid such reasonable compensation as set forth in the Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in writing by the Employer and the Trustee. However, an individual serving as Trustee who already receives full-time compensation from the Employer shall not receive compensation from this Plan. In addition, the Trustee shall be reimbursed for any reasonable expenses, including reasonable counsel fees incurred by it as Trustee. Such compensation and expenses shall be pai d from the Trust Fund unless paid or advanced by the Employer. All taxes of any kind whatsoever that may be levied or assessed under existing or future laws upon, or in respect of, the Trust Fund or the income thereof, shall be paid from the Trust Fund.

7.9  ANNUAL REPORT OF THE TRUSTEE

(a)   Annual report. Within a reasonable period of time after the later of the Anniversary Date or receipt of the Employer's contribution for each Plan Year, the Trustee, or its agent, shall furnish to the Employer and Administrator a written stateme nt of account with respect to the Plan Year for which such contribution was made setting forth:

(1)   the net income, or loss, of the Trust Fund;

(2)   the gains, or losses, realized by the Trust Fund upon sales or other disposition of the assets; (3)   the increase, or decrease, in the value of the Trust Fund;

(4)   all payments and distributions made from the Trust Fund; and

(5)   such further information as the Trustee and/or Administrator deems appropriate.

(b)   Employer approval of report. The Employer, promptly upon its receipt of each such statement of account, shall acknowledge receipt thereof in writing and advise the Trustee and/or Administrator of its approval or disapproval thereof. Failure by the Employer to disapprove any such statement of account within thirty (30) days after its receipt thereof shall be deemed an approval thereof. The approval by the Employer of any statement of account shall be binding on the Employer and the Trustee as to all matters contained in the statement to the same extent as if the account of the Trustee had been settled by judgment or decree in an action for a judicial settlement of its account in a court of competent jurisdiction in which the Trustee, the Employer and all persons having or claiming an interest in the Plan were parties. However, nothing contained in this Section shall deprive the Trustee of its right to have its accounts judicially settled if the Trustee so desires.

7.10 AUDIT

(a)   Duty to engage accountant. If an audit of the Plan's records shall be required by the Act and the regulations thereunder for any Plan Year, the Administrator shall engage on behalf of all Participants an independent qualified public accountant for that purpose. Such accountant shall, after an audit of the books and records of the Plan in accordance with generally accepted auditing sta ndards, within a reasonable period after the close of the Plan Year, furnish to the Administrator and the Trustee a report of the audit setting forth the accountant's opinion as to whether any statements, schedules or lists, that are required by Act §103 or the Secreta ry of Labor to be filed with the Plan's annual report, are presented fairly in conformity with generally accepted accounting principles applied consistently.

(b)   Payment of fees. All auditing and accounting fees shall be an expense of and may, at the election of the Employer, be paid from the Trust Fund.

(c)   Information to be provided to Administrator. If some or all of the information necessary to enable the Administrator to comply with Act §103 is maintained by a bank, insurance company, or similar institution, regulated, supervised, and subject t o periodic examination by a state or federal agency, then it shall transmit and certify the accuracy of that information to the Administrator as provided in Act §103(b) within one hundred twenty (120) days after the end of the Plan Year or such other date as may be prescribed under regulations of the Secretary of Labor.

7.11 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE

(a)   Trustee resignation. Unless otherwise agreed to by both the Trustee and the Employer, a Trustee may resign at any time by delivering to the Employer, at least thirty (30) days before its effective date, a written notice of resignation.

(b)   Trustee removal. Unless otherwise agreed to by both the Trustee and the Employer, the Employer may remove a Trustee at any time by delivering to the Trustee, at least thirty (30) days before its effective date, a written notice of such Trustee's removal.

(c)   Appointment of successor. Upon the death, resignation, incapacity, or removal of any Trustee, a successor may be appointed by the Employer; and such successor, upon accepting such appointment in writing and delivering same to the Employer, shall, without further act, become vested with all the powers and responsibilities of the predecessor as if such successor had been original ly named
as a Trustee herein. Until such a successor is appointed, any remaining Trustee or Trustees shall have full authority to act under the
terms of the Plan.

(d)   Appointment of successor prior to removal of predecessor. The Employer may designate one or more successors prior to the death, resignation, incapacity, or removal of a Trustee. In the event a successor is so designated by the Employer and accept s such designation, the successor shall, without further act, become vested with all the powers and responsibilities of the predecessor as if such successor had been originally named as Trustee herein immediately upon the death, resignation, incapacity, or removal of the predecessor.

(e)   Trustee's statement upon cessation of being Trustee. Whenever any Trustee hereunder ceases to serve as such, the Trustee shall furnish to the Employer and Administrator a written statement of account with respect to the portion of the Plan Year during which the individual or entity served as Trustee. This statement shall be either (i) included as part of the annual statement of account for the Plan Year required under Section 7.9 or (ii) set forth in a special statement. Any such special statement of account should be rendered to the Employer no later than the due date of the annual statement of account for the Plan Year. The procedures set forth in Section 7.9 for the approval by the Employer of annual statements of account shall apply to any special statement of account rendered hereunder and approval by the Employer of any such special statement in the manner provided in Section 7.9 shall have the same effect upon the statement as the Employer's approval of an annual statement of account. No successor to the Trustee shall have any duty or responsibility to investigate the acts or transactions of any predecessor who has rendered all statements of account required by Section 7.9 and this subparagraph.

7.12 TRANSFER OF INTEREST

Notwithstanding any other provision contained in this Plan, the Trustee at the direction of the Administrator shall transfer the interest, if any, of a Participant to another trust forming part of a pension, profit shari ng, or stock bonus plan that meets the requirements of Code
§401(a), provided that the trust to which such transfers are made permits the transfer to be made and further provided that t he terms of the
transferee plan properly allocates the funds in each account to a transferee account that preserves all the required features and restrictions applicable to such account under this Plan. However, the transfer of amounts from this Plan to a nonqualified foreign trust i s treated as a
distribution and the transfer of assets and liabilities from this Plan to a plan that satisfies Section 1165 of the Puerto Rico Code is also
treated as distribution from the transferor plan.

7.13 TRUSTEE INDEMNIFICATION

To the extent permitted by the Code and the Act, the Employer agrees to indemnify and hold harmless the Trustee against any a nd all claims, losses, damages, expenses and liabilities the Trustee may incur in the exercise and performance of the Trustee's powers and duties hereunder, unless the same are determined to be due to gross negligence or willful misconduct.

7.14 EMPLOYER SECURITIES AND REAL PROPERTY

Subject to the provisions of Section 7.15, the Trustee shall be empowered to acquire and hold "qualifying employer securities " and "qualifying employer real property," as those terms are defined in the Act. However, no more than one hundred percent (100%), in the case of a Profit Sharing Plan or 401(k) Plan, or ten percent (10%), in the case of a Money Purchase Plan, of the fair marke t value of all the assets in the Trust Fund may be invested in "qualifying employer securities" and "qualifying employer real property."

Any such investment shall only be made upon written direction of the Employer who shall be solely responsible for the propriety of such investment, except to the extent Participants direct the investment of their Accounts in such investment. Additional dir ectives regarding the purchase, sale, or retention of such securities may be addressed in a funding policy, statement of investment policy, or other separate procedures or documents governing the investment of Plan assets. In the event of any conflicts between the Plan docu ment and a separate investment trust agreement, the Plan document shall prevail.

Notwithstanding the preceding, if the Plan does not permit Participants to direct the investment of their Elective Deferral Accounts, then the Trustee shall only be permitted to acquire or hold "qualifying employer securities" and "qualifying employer real pr operty" to the extent permitted under Act §407.

7.15 DIVESTMENT OF EMPLOYER SECURITIES

(a)   Application of Section. This Section only applies to a Plan that is an "applicable defined contribution plan." Except as provided herein or in Regulations, an "applicable defined contribution plan" means a defined contribution plan that holds employer securities (within the meaning of Regulation §1.401(a)(35)-1(f)(3)) that are publicly traded (within the meaning of Regulation
§1.401(a)(35)-1(f)(5)). An "applicable defined contribution plan" does not include a one-participant plan, as defined in Code
§401(a)(35)(E)(iv) or an employee stock ownership plan ("ESOP") as defined in Code §4975(e)(7) if: (1) the ESOP holds no contributions (or related earnings) that are (or were ever) subject to Code §§401(k) or 401(m); and (2) the ESOP is a separate plan, for purposes of Code §414(l), from any other defined benefit plan or defined contribution plan maintained by the same employer or employers. Except as provided in Regulation §1.401(a)(35)-1(f)(2)(iv) or in Code §401(a)(35)(F)(ii) (relating to certain controlled
groups), the Plan is treated as holding publicly traded Employer securities if any Employer corporation, or any member of a controlled
group of corporations which includes such Employer corporation (as defined in Code §401(a)(35)(F)(iii)) has issued a class of stock which is a "publicly traded Employer security."

(b)   Effective date. The provisions of Code §401(a)(35) generally apply to Plan Years beginning after December 31, 2006. However, the effective date of the provisions relating to Regulation §1.401(a)(35)-1 are applicable to Plan Years beginning on or after January 1,
2011.

(c)   Rule applicable to Elective Deferrals, Employee contributions and rollovers. If any portion of an "applicable individual's" account attributable to Elective Deferrals, after-tax voluntary Employee contributions or rollover contributions is invested in
publicly-traded Employer securities, then, except as otherwise provided herein, the "applicable individual" may elect to direct the Pl an
to divest any such securities, and to reinvest an equivalent amount in other investment options which satisfy the requirements of Subsection (e). For purposes of this Section, an "applicable individual" means: (1) a Participant; (2) an Alternate Payee who has an account under the Plan; or (3) a Beneficiary of a deceased Participant.

(d)   Rule applicable to Employer contributions. If any portion of an "applicable individual's" account attributable to Employer contributions (other than Elective Deferrals) is invested in publicly-traded Employer securities, then, except as otherwise provided herein, the "applicable individual" may elect to direct the Plan to divest any such securities, and to reinvest an equivalent amount in other investment options which satisfy the requirements of Subsection (e) below.

(1)   Definition of "Applicable individual." For purposes of this Subsection, an "applicable individual" means: (i) a Participant who has completed at least three (3) Years of Service; (ii) an Alternate Payee who has an account under the Plan with respect to a

Participant who has completed at least three (3) Years of Service; or (iii) a Beneficiary of a deceased Participant. For this purpose, a Participant completes three (3) Years of Service on the last day of the vesting computation period provided for under the Plan that constitutes the completion of the third year of service under Code §411(a)(5). However, if the Plan uses the elapsed time method of crediting service for vesting purposes (or the Plan provides for immediate vesting without using a vesting computation period or the elapsed time method of determining vesting), a Participant completes three (3) years of service on the day immediately preceding the third anniversary of the Participant's date of hire.

(2)   Definition of "publicly traded Employer security." For purposes of this Section, a "publicly traded Employer security" means a security which is traded on a national securities exchange that is registered under Section 6 of the Securities Excha nge Act of 1935 or which is traded on a foreign national securities exchange that i s officially recognized, sanctioned, or supervised by a governmental authority and the security is deemed by the securities and Exchange commission as having a "ready market"
under SEC Rule 14c3-1 (17 CFR 240.15c3). In addition, if the Employer, or any member of a controlled group of corporations (as described in Regulation §1.401(a)(35)-1(f)(2)(iv)(A) which includes the Employer, has issued a class of stock which is a publicly traded employer security, and the Plan hold employer securities which are not pu blicly traded Employer securities, then the Plan shall be treated as holding publicly traded Employer securities.

(3)   Three-year phase-in applicable to Employer contributions. For Employer securities acquired with Employer contributions (other than Elective Deferrals) during a Plan Year beginning before January 1, 2007, the rule described in this Subsection on ly applies to the percentage of the Employer securities (applied separately for each class of securities) as follows:

Plan Year     Percentage
2007     33
2008     66
2009     100

(4)   Exception to phase-in for certain age 55 Participants. The 3-year phase-in rule in paragraph (3) above does not apply to a Participant who has attained age 55 and who has completed at least three (3) years of service (as defined in paragraph (1) above before the first Plan Year beginning after December 31, 2005.

(e)   Investment options. For purposes of this Section, other investment options must include not less than three (3) investment options, other than Employer securities, to which the individual who the right to divest under Subsections (c) or (d) may dir ect the proceeds from the divestment of Employer securities. Each of the three (3) investment options must be diversified and have materially different risk and return characteristics. For this purpose, investment options that constitute a broad range of investment alternatives within the meaning of Department of Labor Regulation §2550.404c–1(b)(3) are treated as being diversified and having materially different risk and return characteristics.

(f)    Restrictions or conditions on investments in Employer securities. The Plan must provide reasonable divestment and reinvestment opportunities at least quarterly. Furthermore, except as permitted by Regulation §1.401(a)(35) -1(e), the Plan may not impose restrictions or conditions on the investment of Employer securities which the Plan does not impose on the investment of other Plan assets.

ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS

8.1  AMENDMENT

(a)   General rule on Employer amendment. The Employer shall have the right at any time to amend this Plan subject to the limitations of this Section. However, any amendment that affects the rights, duties or responsibilities of the Trustee (or In surer) or Administrator may only be made with the Trustee's (or Insurer's) or Administrator's written consent. Any such amendment shall become effective as provided therein upon its execution. The Trustee (or Insurer) shall not be required to execute any such a mendment unless the amendment affects the duties of the Trustee (or Insurer) hereunder.

(b)   Permissible amendments. The Employer may amend the Plan to accomplish any of the following items without affecting reliance on the opinion or advisory letter: (1) change the choice of options in the Adoption Agreement, (2) add any a ppendix to the Adoption Agreement that is specifically permitted pursuant to the terms of the Plan (e.g., Appendix A to the Adoption Agreeme nt (Special Effective Dates and Other Permitted Elections)); (3) amend administrative trust or custodial provisions in the case of a volume submitter or non-standardized Plan and make more limited amendments in the case of a standardized Plan such as the name of the Plan, Employer, Trustee or Custodian, (4) add certain sample or model amendments published by the Internal Revenue Service or other required good-faith amendments which specifically provide that their adoption will not cause the Plan to be treated as an individually designed plan, (5) add or change provisions permitted under the Plan and/or specify or change the effective date of a provision as permitted under the Plan, (6) add a list of any "Section 411(d)(6) protected benefits" which must be preserved, (7) conform to the requirements of Act Section 402(a) (relating to named fiduciaries), Act Section 503 (rel ating to claims procedures), or DOL Field Assistance Bulletin 2008-01 (relating to the duty to collect delinquent contributions), (8) adjust the limitations under Code
§§415, 402(g), 401(a)(17) and 414(q)(1)(B) to reflect annual cost-of-living increases, and (9) change the prototype sponsor's or volume submitter practitioner's name. An Employer that amends the Plan for any other reason, including a waiver of the minimu m

funding requirement under Code §412(c) (or for Plan Years beginning on or before December 31, 2007, Code §412(d)), will no longer participate in this prototype or volume submitter Plan and this Plan will be considered to be an individually designed plan f or purposes of reliance.

(c)   Sponsoring organization/volume submitter practitioner amendments. The Employer (and every Participating Employer) expressly delegates authority to the sponsoring organization of this prototype Plan or volume submitter practitioner, the right to amend the Plan by submitting a copy of the amendment to each Employer (and Participating Employer) who has adopted this prototype or volume submitter plan, after first having received a ruling or favorable determination from the Internal Reven ue Service that the prototype or volume submitter Plan as amended qualifies under Code §401(a) (unless a ruling or determination is not required by the IRS). For purposes of this Section, the mass submitter shall be recognized as the agent of the sponsor. If the sponsor does not adopt
any amendment made by the mass submitter, it will no longer be identical to, or a minor modifier of, the mass submitter plan.

(d)   Impermissible amendments. No amendment to the Plan shall be effective if it authorizes or permits any part of the Trust Fund (other than such part as is required to pay taxes and administration expenses) to be used for or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries or estates; or causes any reduction in the amount credited t o the account of any Participant; or causes or permits any portion of the Trust Fund to revert to or become property of the Em ployer.

(e)   Anti-cutback restrictions. No Plan amendment or transaction having the effect of a Plan amendment (such as a merger, plan transfer or similar transaction) shall be effective if it eliminates or reduces any "Section 411(d)(6) protect ed benefit" or adds or modifies conditions relating to "Section 411(d)(6) protected benefits" which results in a further restriction on such benefit s (even if the amendment merely adds a restriction or condition that is permitted under the vesting rules in Code §§411(a)(3) – (11)) unless such "Section 411(d)(6) protected benefits" are preserved in operation with respect to benefits accrued as of the later of the adoption date or effective date of the amendment. Notwithstanding the preceding, "Section 411(d)(6) protected benefits" may be eliminated or reduced to the extent permitted by Code §412(d)(2) or Regulations (including Regulation §§1.411(d)-3 and 1.411(d)-4 ) or other IRS guidance. For purposes of this Subsection, a plan amendment which has the effect of decreasing a Participant's "Section 411(d)(6) protected benefits" with respect to benefits attributable to service before the amendment shall be treated as reducing a "Section 411(d)(6) protected benefit." "Section 411(d)(6) protected benefits" are benefits described in Code §411(d)(6)(A), early retirement benefits and retirement-type subsidies, and optional forms of benefit. The preceding shall not apply to a Plan amendment that eliminates or restricts the ability of a Participant to receive payment of his or her Account under a particular optional form of benefit if the amendment provides a single-sum distribution form that is otherwise identical to the optional form of benefit being eliminated or restricted. For
this purpose, a single-sum distribution form is otherwise identical only if the single-sum distribution form is identical in all respects to the eliminated or restricted optional form of benefit (or would be identical except that it provides greater rights to the Pa rticipant) except with respect to the timing of payments after commencement.

8.2  TERMINATION

(a)   Termination of Plan. The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee (or Insurer) and Administrator written notice of such termination. Upon any full or partial termination or upon the complete discontinuance of the Employer's Contributions to the Plan (in the case of a Profit Sharing Plan), all amounts credited to the affected Participants' Combined Accounts shall become 100% Vested and shall not thereafter be subject to Forfeiture.

(b)   Distribution of assets. Upon the full termination of the Plan, the Employer shall direct the distribution of the assets to Participants in a manner that is consistent with and satisfies the provisions of Section 6.5, except that no Participant or s pousal consent is required. Distributions to a Participant shall be made in cash (or in property if permitted in the Adoption Agreement) or through the purchase of irrevocable nontransferable deferred commitments from the Insurer. Except as permitted by Regulations, the termination
of the Plan shall not result in the reduction of "Section 411(d)(6) protected benefits" as described in Section 8.1(e). In addition, to the extent Section 6.13 (Special Rule for Certain Profit Sharing Plans) could apply to all or a portion of the assets, then, subj ect to Section
12.2, the Administrator will direct the distribution of assets to Participants in a lump-sum distribution. Such distribution will be made as soon as reasonable after the Plan termination, regardless of: (1) the amount of the Participant's Vested Account balance; (2) the Participant's age; and (3) whether the Participant consents to the distribution. Furthermore, to the extent a distribution is required to be made pursuant to this Section and the Participant does not consent to such distribution, then the Administrator may make a direct
distribution to an individual retirement account described in Code §408(a) or an individual retirement annuity described in C ode
§408(b).

(c)   Abandoned plan. If the Employer, in accordance with DOL guidance, abandons the Plan, then the Trustee (or Insurer) or other party permitted to take action as a qualified terminal administrator (QTA), may terminate the Plan in accordance with applica ble DOL and IRS regulations and other guidance.

8.3  MERGER, CONSOLIDATION OR TRANSFER OF ASSETS

This Plan may be merged or consolidated with, or its assets and/or liabilities may be transferred to any other plan only if the benefits which would be received by a Participant of this Plan, in the event of a termination of the plan immediately after such trans fer, merger or consolidation, are at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the transfer, merger or consolidation and such transfer, merger or consolidation does not otherwise result in the elimination or reduction of any "Section 411(d)(6) protected benefits" as described in Section 8.1(e).

ARTICLE IX
TOP-HEAVY PROVISIONS

9.1  TOP-HEAVY PLAN REQUIREMENTS

Notwithstanding anything in this Plan to the contrary, for any Top-Heavy Plan Year, the Plan shall provide the special vesting requirements of Code §416(b) pursuant to Section 6.4 of the Plan and the special minimum allocation requirements of Code §416 (c) pursuant to Section 4.3(f) of the Plan. Except as otherwise provided in the Plan, the minimum allocation shall be an Employer Nonelective Contribution and, if no vesting schedule has been selected in the Adoption Agreement or the selection is invalid, shall be su bject to the 6
Year Graded vesting schedule described in the Adoption Agreement.

Notwithstanding the above, the Top-Heavy Plan Year requirements of this Article and Code §416 shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(12) or §401(k)(13) and matching contributions meet the requirements of Code §401(m)(11) or §401(m)(12).

9.2  DETERMINATION OF TOP-HEAVY STATUS

(a)   Definition of Top-Heavy Plan. This Plan shall be a Top-Heavy Plan if any of the following conditions exists:

(1)   if the "top-heavy ratio" for this Plan exceeds sixty percent (60%) and this Plan is not part of any "required aggregation group" or "permissive aggregation group";

(2)   if this Plan is a part of a "required aggregation group" but not part of a "permissive aggregation group" and the "top -heavy ratio" for the group of plans exceeds sixty percent (60%); or

(3)   if this Plan is a part of a "required aggregation group" and part of a "permissive aggregation group" and the "top -heavy ratio" for the "permissive aggregation group" exceeds sixty percent (60%).

(b)   Top-heavy ratio. "Top-heavy ratio" means, with respect to a "determination date":

(1)   If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan (as defined in Code §408(k))) and the Employer has not maintained any defined benefit plan which during the 5 -year period ending on the "determination date" has or has had accrued benefits, the top-heavy ratio for this Plan alone or for the "required aggregation group" or "permissive aggregation group" as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the "determination date" (including any part of any Accou nt balance distributed in the 1-year period ending on the "determination date") (5-year period ending on the "determination date" in the case of a distribution made for a reason other than severance from employment, death or Total and Permanent Disability) , and the denominator of which is the sum of all Account balances (including any part of any Account balance distributed in the 1 -year period ending on the "determination date") (5-year period ending on the "determination date" in the case of a distribution made for a reason other than severance from employment, death or Total and Permanent Disability), both computed in accordance with Code §416 and the Regulations thereunder.

Both the numerator and denominator of the top-heavy ratio are increased to reflect any contribution not actually made as of the "determination date," but which is required to be taken into account on that date under Code §416 and the Regulations thereunder.

(2)   If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer maintains or has maintained one or more defined benefit plans which during the 5-year period ending on the "determination date" has or has had any accrued benefits, the top-heavy ratio for any "required aggregation group" or "permissive aggregation group" as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with (1) above, and the "present value" of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the "determination date," and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all participants, determined in accordance with (1) above, and the "present value" of accrued benefits under the defined benefit plan or plans for all participants as of the "determination date," all determined in accordance with Code §416 and the Regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the top-heavy ratio are increased for any distribution of an accrued benefit made in the 1-year period ending on the "determination date" (5-year period ending on the "determination date" in the case of a distribution made for a reason other than severance from employment, deat h
or Total and Permanent Disability).

(3)   For purposes of (1) and (2) above, the value of Account balances and the "present value" of accrued benefits will be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the "determination date," except as provided in Code §416 and the Regulations thereunder for the first and second plan years of a defined benefi t plan. The Account balances and accrued benefits of a Participant (i) who is not a Key Employee but who was a Key Employee in

a prior year, or (ii) who has not been credited with at least one Hour of Service with any Employer maintaining the Plan at a ny time during the 1-year period ending on the "determination date" will be disregarded. The calculation of the t op-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Code §416 and the Regulations thereunder. Deductible Employee contributions will not be taken into account for purposes of computing the
top-heavy ratio. When aggregating plans the value of Account balances and accrued benefits will be calculated with reference to the "determination dates" that fall within the same calendar year.

The accrued benefit of a participant other than a Key Employee shall be determined under (i) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or (ii) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Code
§411(b)(1)(C).

(c)   Determination date. "Determination date" means, for any Plan Year subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, "determination date" means the last day of that Plan Year.

(d)   Permissive aggregation group. "Permissive aggregation group" means the "required aggregation group" of plans plus any other plan or plans of the Employer or any Affiliated Employer which, when considered as a group with the "required aggregation group," would continue to satisfy the requirements of Code §§401(a)(4) and 410.

(e)   Present value. "Present value" means the present value based only on the interest and mortality rates specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections).

(f)    Required aggregation group. "Required aggregation group" means: (1) each qualified plan of the Employer or any Affiliated Employer in which at least one Key Employee participates or participated at any time during the Plan Year containing the "determination date" or any of the four preceding Plan Years (regardless of whether the plan has terminated), and (2) any other qualified plan of the Employer or any Affiliated Employer which enables a plan described in (l) to meet the requirements of C ode
§401(a)(4) or 410.

(g)   Valuation Date. Valuation Date means the date elected by the Employer in the Adoption Agreement as of which Account balances or accrued benefits are valued for purposes of calculating the "top-heavy ratio."

ARTICLE X MISCELLANEOUS

10.1 EMPLOYER ADOPTIONS

(a)   Method of adoption. Any organization may become the Employer hereunder by executing the Adoption Agreement in a form satisfactory to the Trustee (or Insurer), and it shall provide such additional information as the Trustee (or Ins urer) may require. The consent of the Trustee (or Insurer) to act as such shall be signified by its execution of the Adoption Agreement or a separat e agreement (including, if elected in the Adoption Agreement, a separate trust agreement).

(b)   Separate affiliation. Except as otherwise provided in this Plan, the affiliation of the Employer and the participation of its
Participants shall be separate and apart from that of any other employer and its participants hereunder.

10.2 PARTICIPANT'S RIGHTS

This Plan shall not be deemed to constitute a contract between the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Part icipant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon the Employee as a Participant of this P lan.

10.3 ALIENATION

(a)   General rule. Subject to the exceptions provided below and as otherwise permitted by the Code and the Act, no benefit which shall be payable to any person (including a Participant or the Participant's Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transf er, assign, pledge, encumber, or charge the same shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of any such person, nor shall it be subject to attachment or legal process for or against such person, and the same shall not be recognized except to such extent as may be required by law.

(b)   Exception for loans. Subsection (a) shall not apply to the extent a Participant or Beneficiary is indebted to the Plan by reason of a loan made pursuant to Section 7.6. At the time a distribution is to be made to or for a Participant's or Beneficiary's benefit, such portion of the amount to be distributed as shall equal such indebtedness shall be paid to the Plan, to apply against or disch arge such indebtedness. Prior to making a payment, however, the Participant or Beneficiary must be given notice by the Administrator that such indebtedness is to be so paid in whole or part from the Participant's interest in the Plan. If the Participant or Beneficiary does not agree

that the indebtedness is a valid claim against the Participant's interest in the Plan, the Participant or Beneficiary shall be entitled to a review of the validity of the claim in accordance with procedures provided in Section 2.10.

(c)   Exception for QDRO. Subsection (a) shall not apply to a "qualified domestic relations order" defined in Code §414(p), and
those other domestic relations orders permitted to be so treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former Spouse of a Participant shall be treated as the Spouse or surviving Spouse for all purposes under the Plan.

(d)   Exception for certain debts to Plan. Notwithstanding any provision of this Section to the contrary, an offset to a Participant's accrued benefit against an amount that the Participant is ordered or required to pay the Plan with respect to a judgment, ord er, or decree issued, or a settlement entered into, on or after August 5, 1997, shall be permitted in accordance with Code §§401(a)(13)(C) and (D).

10.4 PLAN COMMUNICATIONS, INTERPRETATION AND CONSTRUCTION

(a)   Applicable law. This Plan and Trust shall be construed and enforced according to the Code, the Act and the laws of the state or commonwealth in which the Employer's (or if there is a corporate Trustee, the Trustee's, or if the Plan is fully insured, the Insurer's) principal office is located (unless otherwise designated in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)), other than its laws respecting choice of law, to the extent not pre-empted by federal law.

(b)   Administrator's discretion/nondiscriminatory administration. The Administrator has total and complete discretion to interpret and construe the Plan and to determine all questions arising in the administration, interpretation and application of the Plan. Any determination the Administrator makes under the Plan is final and binding upon any affected person. The Administrator must exercise all of its Plan powers and discretion, and perform all of its duties in a uniform and nondiscriminatory manner.

(c)   Communications. All Participant or Beneficiary notices, designations, elections, consents or waivers must be made in a form the Administrator (or, as applicable, the Trustee or Insurer) specifies or otherwise approves. Any person entitled to notice under the Plan may waive the notice or shorten the notice period unless such actions are contrary to applicable law.

(d)   Evidence. Anyone, including the Employer, required to give data, statements or other information relevant under the terms of the Plan ("evidence") may do so by certificate, affidavit, document or other form which the person to act in reliance may conside r pertinent, reliable and genuine, and to have been signed, made or presented by the proper party or parties. The Administrator, Trustee and Insurer are protected fully in acting and relying upon any evidence described under the immediately preceding sentence.

(e)   Plan terms binding. The Plan is binding upon all parties, including but not limited to, the Employer, Trustee, Insurer, Administrator, Participants and Beneficiaries.

(f)    Parties to litigation. Except as otherwise provided by applicable law, a Participant or a Beneficiary is not a necessary party or required to receive notice of process in any court proceeding involving the Plan, the Trust or any Fiduciary. Any fin al judgment (not subject to further appeal) entered in any such proceeding will be binding upon all parties, including the Employer, the Administrator, Trustee, Insurer, Participants and Beneficiaries.

(g)   Fiduciaries not insurers. The Trustee, Administrator and the Employer in no way guarantee the Plan assets from loss or depreciation. The Employer does not guarantee the payment of any money which may be or becomes due to any person from the Plan. The liability of the Employer, the Administrator and the Trustee to make any distribution from the Trust at any time and all times is limited to the then available assets of the Trust.

(h)   Construction/severability. The Plan, the Adoption Agreement, the Trust and all other documents to which they refer, will be interpreted consistent with and to preserve tax qualification of the Plan under Code §401(a) and tax exemption of the Trust u nder
Code §501(a) and also consistent with the Act and other applicable law. To the extent permissible under applicable law, any provision
which a court (or other entity with binding authority to interpret the Plan) determines to be inconsistent with such construction and interpretation, is deemed severed and is of no force or effect, and the remaining Plan terms will remain in full force and effect.

(i)    Uniformity. All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner.

(j)    Headings. The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.

10.5 GENDER, NUMBER AND TENSE

Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply; whenever any words are used herein in the singular or pl ural form, they shall be construed as though they were also used in the other form in all cases where they would so apply; and whenever any w ords are

used herein in the past or present tense, they shall be construed as though they were also used in the oth er form in all cases where they would so apply.

10.6 LEGAL ACTION

In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan established hereunder to which the Trustee (or Insurer), the Employer or the Administrator may be a party, and such claim, suit, or proceeding is resolved in favor of the T rustee (or Insurer), the Employer or the Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, attorney's fees, and other expenses pertaining thereto incurred by them for which they shall have become liable.

10.7 PROHIBITION AGAINST DIVERSION OF FUNDS

(a)   General rule. Except as provided below and otherwise specifically permitted by law, it shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any Trust Fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Beneficiaries.

(b)   Mistake of fact. In the event the Employer shall make a contribution under a mistake of fact pursuant to Act §403(c)(2)(A), the Employer may demand repayment of such contribution at any time within one (1) year following the time of payment and the Trustee (or Insurer) shall return such amount to the Employer within the one (1) year period. Earnings of the Plan attributable to the contributions may not be returned to the Employer but any losses attributable thereto must reduce the amount so returned.

(c)   Contribution conditioned on deductibility. Except as specifically stated in the Plan, any contribution made by the Employer to the Plan (if the Employer is not tax-exempt) is conditioned upon the deductibility of the contribution by the Employer under the Code and, to the extent any such deduction is disallowed, the Employer may, within one (1) year following a final determination of the disallowance, whether by agreement with the Internal Revenue Service or by final decision of a court of competent jurisdictio n, demand repayment of such disallowed contribution and the Trustee (or Insurer) shall return such contribution within one (1) year following the disallowance. Earnings of the Plan attributable to the contribution may not be returned to the Employer, but an y losses attributable thereto must reduce the amount so returned.

10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE

The Employer, Administrator and Trustee, and their successors, shall not be responsible for the validity of any Contract issued hereunder or for the failure on the part of the Insurer to make payments provided by any such Contract, or for the action of any person which may delay payment or render a Contract null and void or unenforceable in whole or in part.

10.9 INSURER'S PROTECTIVE CLAUSE

Except as otherwise agreed upon in writing between the Employer and the Insurer, an Insurer which issues any Contracts hereunder shall not have any responsibility for the validity of this Plan or for the tax or legal aspects of this Plan. The Insurer sha ll be protected and held harmless in acting in accordance with any written direction of the Administrator or Trustee, and shall have no duty to s ee to the application of any funds paid to the Trustee, nor be required to question any actions directed by the Administrat or or Trustee. Regardless of any provision of this Plan, the Insurer shall not be required to take or permit any action or allow any benefit or privilege contrary to the terms of any Contract which it issues hereunder, or the rules of the Insurer.

10.10 RECEIPT AND RELEASE FOR PAYMENTS

Any payment to any Participant, the Participant's legal representative, Benefi ciary, or to any guardian or committee appointed for such Participant or Beneficiary in accordance with the provisions of this Plan, shall, to the extent thereof, be in full satisfact ion of all claims hereunder against the Trustee (or Insurer) and the Employer.

10.11 ACTION BY THE EMPLOYER

Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority.

10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY

The "named Fiduciaries" of this Plan are (a) the Employer, (b) the Administrator, (c) the Trustee (if the Trustee has discret ionary authority as elected in the Adoption Agreement or as otherwise agreed upon by the Employer and the Trustee), and (d) any Investment Manager appointed hereunder. The Employer may, however, modify the preceding sentence to add or remove named Fiduciaries. The named Fiduciaries shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under the Plan including, but not limited to, any agreement allocating or delegating their responsibilities, the terms of which are incorporated herein by reference. In general, the Employer shall have the sole responsibility for making the contributions provided for under the Plan; and shall

have the sole authority to appoint and remove the Trustee and the Administrator; to formulate the Plan's "fund ing policy and method"; and to amend the elective provisions of the Adoption Agreement or terminate, in whole or in part, the Plan. The Administrator sha ll have the sole responsibility for the administration of the Plan, which responsibility is specificall y described in the Plan. If the Trustee has discretionary authority, it shall have the sole responsibility of management of the assets held under the Trust, except those assets, the management of which has been assigned to an Investment Manager or Administrator, who shall be solely responsible for the management of the assets assigned to it, all as specifically provided in the Plan. Each named Fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan, authorizing or providing for such direction, information or action. Furthermore, each named Fiduciary may rely upon any such direction, information or action of another n amed Fiduciary as being proper under the Plan, and is not required under the Plan to inquire into the propriety of any such direction, information or action. It is intended under the Plan that each named Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under the Plan. No named Fiduciary shall guarantee the Trust Fund in any manner against investment loss or depreciation in asset value. Any person or group may serve in more than one Fiduciary capacity.

10.13 APPROVAL BY INTERNAL REVENUE SERVICE

Notwithstanding anything herein to the contrary, if, pursuant to an application for qualification is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan or an amendment to the Plan is adopted, or such later date as the Secretary of Treasury may prescribe, the Commissioner of the Internal Revenue Service or the Commissioner's delegate should determine that the Plan does not initially qualify as a tax-exempt plan under Code §§401 and 501, and such determination is not contested, or if contested, is finally upheld, then if the Plan is a new plan, it shall be void ab initio and all amounts contributed to the Plan, by the Employer, less expenses paid, shall be returned within one (1) year and the Plan shall terminate, and the Trustee (or Insurer) shall be discharged from all further obligations. If the disqualification relates to a Plan amendment, then the Plan shall operate as if it had not been amended. If the Employer's Plan fails to attain or retain qualification, such Plan will no longer participate in this prototype or volume submitter plan and will be considered an individually designed plan.

10.14 PAYMENT OF BENEFITS

Except as otherwise provided in the Plan, benefits under this Plan shall be paid, subject to Sections 6.11, 6.12 and 12.10, only upon death, Total and Permanent Disability, normal or early retirement, severance of employment, or termination of the Plan.

10.15 ELECTRONIC MEDIA

The Administrator may use any electronic medium to give or receive any Plan notice, communicate any Plan policy, conduct any written Plan communication, satisfy any Plan filing or other compliance requirement and conduct any other Plan transaction to the extent permissible under applicable law. A Participant or a Participant's Spouse, to the extent authorized by the Administrator, may use any electronic medium to make or provide any Beneficiary designation, election, notice, consent or waiver under the Plan, to the extent permissible under applicable law. Any reference in this Plan to a "form," a "notice," an "election," a "consent," a "waiver," a "designation," a "policy" or to any other Plan-related communication includes an electronic version thereof as permitted under applicable law. Notwithstanding the foregoing, any Participant or Beneficiary notices and consent that are required pursuant to the Code must satisfy Regulation §1.401(a)-21.

10.16 PLAN CORRECTION

The Administrator in conjunction with the Employer may undertake such correction of Plan errors as the Administrator deems necessary, including correction to preserve tax qualification of the Plan under Code §401(a) or to correct a fiduciary breach under the Act. Without limiting the Administrator's authority under the prior sentence, the Administrator, as it determines to be reasonable and appropriate, may undertake correction of Plan document, operational, demographic and Employer eligibility failures under a method described in the Plan or under the IRS Employee Plans Compliance Resolution System ("EPCRS") or any successor program to EPCRS.
The Administrator, as it determines to be reasonable and appropriate, also may undertake or assist the appropriate Fiduciary or Plan official in undertaking correction of a fiduciary breach, including correction under the DOL Voluntary Fiduciary Correction Program ("VFC") or any successor program to VFC. If the Plan is a 401(k) Plan, to correct an operational error, the Administrator may require th e Trustee (or
Insurer) to distribute from the Plan Elective Deferrals or Vested matching contributions, including earnings, where such amounts result
from an operational error other than a failure of Code §415, Code §402(g), or a failure of the ADP or ACP tests. Furthermore, the Employer may make corrective contributions pursuant to this Section regardless of whether the Plan otherwise permits such contribution source. In addition, the Plan is authorized to recover benefits from Participants or Beneficiaries that have been improperly distributed.

10.17 NONTRUSTEED PLANS

If the Plan is funded solely with Contracts, then notwithstanding Sections 10.7 and 10.13, no Contract will be purchased under the Plan unless such Contract or a separate definite written agreement between the Employer and the Insurer provides that no value under Contracts providing benefits under the Plan or credits determined by the Insurer (on account of dividends, earnings, or other experience rating credits, or surrender or cancellation credits) with respect to such Contracts may be paid or returned to the Employer or diverted to or used for other than the exclusive benefit of the Participants or their Beneficiaries. However, any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the contribution.

If this Plan is funded by individual Contracts that provide a Participant's benefit under the Plan, such individual Contracts shall constitute the Participant's Account balance. If this Plan is funded by group Contracts, under the group annuity or group ins urance Contract, premiums or other consideration received by the Insurer must be allocated to Participants' Accounts under the Plan.

ARTICLE XI PARTICIPATING EMPLOYERS

11.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER

Notwithstanding anything herein to the contrary, with the consent of the Employer and Trustee (or Insurer), any Employer may adopt the Employer's Plan and all of the provisions hereof, and participate herein and be known as a Participating Employer, by a properly executed document evidencing said intent and will of such Participating Employer (a participation agreement). In the event a Participating Employer is not an Affiliated Employer, then the provisions of Article XIV shall apply rather than the provision of this Arti cle XI.

11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS

(a)   Permissible variations of participation agreement. The participation agreement must identify the Participating Employer and the covered Employees and provide for the Participating Employer's signature. In addition, in the participation agreement, th e Employer shall specify which elections, if any, the Participating Employer can modify, and any restrictions on the modifications. Any such modification shall apply only to the Employees of that Participating Employer. The Participating Employer shall make any such modification by selecting the appropriate option on its participation agreement to the Employer's Adoption Agreement. To the extent that the participation agreement does not permit modification of an election, any attempt by a Participating Employer to modi fy the election shall have no effect on the Plan and the Participating Employer is bound by the Plan terms as selected by the Employer. If a Participating Employer does not make any permissible participation agreement election modifications, then with regard to any election, the Participating Employer is bound by the Adoption Agreement terms as completed by the "lead Employer." Notwithstanding the other provisions of this Section, if a standardized Plan is being used, then the elections available to P articipating Employers must be limited to the elections available to the Employer in order to ensure the Plan, by design, satisfies the minimum coverage requirements of Code §410(b) and the nondiscrimination requirements of Code §401(a)(4).

(b)   Holding and investing assets. The Trustee (or Insurer) may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof. However, the assets of the Plan shall, on an ongoing basis, be available to pay benefits to all Participants and Beneficiaries under the Plan without regard to the Employer or Participating Employer who contributed such assets.

(c)   Payment of expenses. Unless the Employer otherwise directs, any expenses of the Plan which are to be paid by the Employer or borne by the Trust Fund shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants.

11.3 DESIGNATION OF AGENT

Each Participating Employer shall be deemed to be a part of this Plan; provided, however, that with respect to all of its relations with the Trustee (or Insurer) and Administrator for purposes of this Plan, each Participating Employer shall be deemed to have des ignated irrevocably the Employer as its agent. Unless the context of the Plan clearly indicates otherwise, the word "Employer" shall be deemed to include each Participating Employer as related to its adoption of the Plan.

11.4 EMPLOYEE TRANSFERS

In the event an Employee is transferred between Participating Employers, accumulated service and eligibility shall be carried with the Employee involved. No such transfer shall effect a severance of employment hereunder, and the Participating Employer to which the Employee is transferred shall thereupon become obligated hereunder with respect to such Employee in the same manner as was the Participating Employer from whom the Employee was transferred.

11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES

For volume submitter or non-standardized Adoption Agreements, if elected by a Participating Employer in its participation agreement, then to the extent permitted under Code §411(d)(6), effective with respect to Plan Years beginning in and a fter the Plan Year in which the provisions of this Plan are adopted, any contribution and/or Forfeiture subject to allocation during each Plan Year shall be determined and allocated separately by each Participating Employer, and shall be allocated only among the Participants eligible to share in the contribution and Forfeiture allocation of the Employer or Participating Employer making the contribution or by which the forfeiting Participant was employed. Alternatively (if so elected), and with respect to standardized Adoption Agreements, any contribution or Forfeiture subject to allocation during each Plan Year shall be allocated among all Participants of all Participating Employers in accordance with the provisions of this Plan. However, if a Participating Employer is not an Affiliated Employer then any contributions made by such Participating Employer will only be allocated among the Participants eligible to share in the contribution and Forfeiture allocation of the Participating Employer.

On the basis of the information furnished by the Administrator, the Trustee (or Insurer) shall keep separate books and records concerning the affairs of each Participating Employer hereunder and as to the accounts and credits of the Employees of each P articipating Employer. The Trustee (or Insurer) may, but need not, register Contracts so as to evidence that a particular Participating Employer is the interested Employer hereunder, but in the event of an Employee transfer from one Participating Employer to another, the empl oying Employer shall immediately notify the Trustee (or Insurer) thereof.

11.6 AMENDMENT

Any Participating Employer hereby authorizes the Employer to make amendments on its behalf, unless otherwise agreed among all affected parties. If a Participating Employer is not an Affiliated Employer (due to the transition period under Code §410(b)( 6)(C)), then amendment of this Plan by the Employer at any time when there shall be a Participating Employer shall, unless otherwise agreed to by the affected parties, only be by the written action of each and every Participating Employer and with the consent of the Trustee (or Insurer) where such consent is necessary in accordance with the terms of this Plan.

11.7 DISCONTINUANCE OF PARTICIPATION

Except in the case of a standardized Plan, any Participating Employer that is an Affiliated Employer shall be permitted to discontinue
or revoke its participation in the Plan at any time. At the time of any such discontinuance or revocation, satisfactory evide nce thereof and of any applicable conditions imposed shall be delivered to the Trustee (or Insurer). The Trustee (or Insurer) shall thereafter t ransfer, deliver
and assign Contracts and other Trust Fund assets allocable to the Participants of such Participating Employer to such new trustee (or insurer) or custodian as shall have been designated by such Participating Employer, in the event that it has established a se parate qualified retirement plan for its employees provided, however, that no such transfer shall be made if the result is the elimination or reduction of any "Section 411(d)(6) protected benefits" as described in Section 8.1(e). If no successor is designated, the Trustee (or Insurer ) shall retain such assets for the Employees of said Participating Employer pursuant to the provisions of Article VII hereof. In no such event shall any part of the corpus or income of the Trust Fund as it relates to such Participating Employer be used for or diverted to purposes other than for the exclusive benefit of the Employees of such Participating Employer.

11.8 ADMINISTRATOR'S AUTHORITY

The Administrator shall have authority to make any and all necessary rules or regulations, binding upon all Participating Employers and all Participants, to effectuate the purpose of this Article.

11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE

If any Participating Employer is prevented in whole or in part from making a contribution which it would otherwise have made under the Plan by reason of having no current or accumulated earnings or profits, or because such earnings or profits are less than the contribution which it would otherwise have made, then, pursuant to Code §404(a)(3)(B), so much of the contribution which such Participatin g Employer was so prevented from making may be made, for the benefit of the participating employees of such Participating Employer, by other Participating Employers who are members of the same affiliated group within the meaning of Code §1504 to the extent of t heir current or accumulated earnings or profits, except that such contribution by each such other Participating Employer shall be limited to the proportion of its total current and accumulated earnings or profits remaining after adjustment for its contribution to the Plan made without regard to
this paragraph which the total prevented contribution bears to the total current and accumulated earnings or profits of all t he Participating
Employers remaining after adjustment for all contributions made to the Plan without regard to this paragraph.

A Participating Employer on behalf of whose employees a contribution is made under this paragraph shall not be required to reimburse the contributing Participating Employers.

ARTICLE XII
CASH OR DEFERRED PROVISIONS

Except as specifically provided elsewhere in this Plan, the provisions of this Article shall apply with respect to any 401(k) Profit
Sharing Plan regardless of any provisions in the Plan to the contrary.

12.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION

(a)   Permitted contributions. For each Plan Year, the Employer will (or may with respect to any discretionary contributions)
contribute to the Plan:

(1)   The amount of the total salary deferral elections of all Participants made pursuant to Section 12.2(a), which amount shall be deemed Elective Deferrals, plus

(2)   If elected in the Adoption Agreement, a matching contribution equal to the percentage, if any, specified in the Adoption Agreement of the Elective Deferrals of each Participant eligible to share in the allocations of the matching contribution, which amount shall be deemed an Employer matching contribution or Qualified Matching Contribution as elected in the Adoption Agreement, plus

(3)   If elected in the Adoption Agreement, a discretionary amount determined each year by the Employer, which amount if any, shall be deemed an Employer Nonelective Contribution, or a "prevailing wage contribution" as set forth in the Adoption Agreement, which amount shall be an Employer Nonelective Contribution or an Elective Contribution as elected in the Adoption Agreement, plus

(4)   A Qualified Nonelective Contribution in a discretionary amount determined by the Employer.

(5)   Regardless of any provision in the Plan to the contrary, Employees whose employment is governed by a collective bargaining agreement between the Employer and "employee representatives" under which retirement benefits were the subject of good faith bargaining shall be eligible to participate in this Plan to the extent of employment covered by such agreement provided the agreement provides for coverage in the Plan. The contributions and allocations under this Plan shall be those set forth i n the collective bargaining agreement, which is hereby incorporated by refer ence. For this purpose, the term "employee
representatives" does not include any organization more than half of whose members are employees who are owners, officers, or executives of the Employer. The provisions of this Subsection only apply if no more than two percent (2%) of the Employees covered pursuant to the agreement are professionals as defined in Regulation §1.410(b) -9.

(b)   Timing and form of contributions. Notwithstanding the foregoing, if the Employer is not a tax-exempt entity, then the Employer's contributions for any Fiscal Year may generally not exceed the maximum amount allowable as a deduction to the Employer under the provisions of Code §404. However, to the extent necessary to provide the top-heavy minimum allocations, the Employer shall make a contribution even if it exceeds current or accumulated net profit or the amount that is deductible under Code
§404. Subject to the consent of the Trustee (or Insurer), the Employer may make its contribution to the Plan in the form of p roperty, provided such contribution does not constitute a prohibited transaction under the Code or the Act. The decision to make a con tribution of property is subject to the general fiduciary rules under the Act.

12.2 PARTICIPANT'S SALARY DEFERRAL ELECTION

(a)   Salary deferral elections. Each Participant may elect to defer a portion of Compensation which would have been received in the Plan Year, but for the salary deferral election, subject to the limitations of this Section and the Adoption Agreement. A sal ary deferral election (or modification of an earlier election) may not be made with respect to Compensation which is currently available on or before the date the Participant executed such election, or if later, the later of the date the Employer adopts this cash or deferred arrangement or the date such arrangement first became effective. Any elections made pursuant to this Section, including a modification or termination of an election, shall become effective as soon as is administratively feasible following the rece ipt of such election by the Administrator. Furthermore, if the Employer elects in the Adoption Agreement to apply the Automatic Contribution Arrangement provisions, then in the event a Participant fails to make an Affirmative Election, such Participant shall be deemed to
have made a salary deferral election in accordance with the provisions selected in the Adoption Agreement and such other procedu res
that the Administrator may establish and apply in a uniform and nondiscriminatory basis.

Regardless of the definition of Compensation selected in the Adoption Agreement, the Administrator may adopt a uniform policy for purposes of determining the amount of a Participant's Elective Deferrals of excluding "non-cash Compensation." For purposes of this Section, "non-cash Compensation" means tips, fringe benefits, and other items of Compensation not regularly paid in cash or cash equivalents, or for which the Employer does not or may not have the ability to withhold Elective Deferrals in cash for the pu rpose of transmitting the Elective Deferrals to the Plan pursuant to the Participant's Salary Deferral Agreement. Additionally, the Employer may, on a uniform and nondiscriminatory basis, permit different salary deferral elections for different items of Compensation (e.g., a separate salary deferral election for bonuses), and may exclude for purposes of calculating Elective Deferrals one or more items of irregular pay (e.g., car allowance).

If elected in the Adoption Agreement, effective as of the date specified in the Adoption Agreement, a Participant may make a salary deferral election to have Roth Elective Deferrals contributed to the Plan. Roth Elective Deferrals are includible in t he Participant's gross income at the time deferred and must be irrevocably designated as Roth Elective Deferrals by the Participant in the Salary Deferral Agreement (or if applicable, in the Automatic Deferral provisions of the Plan).

The amount by which Compensation is reduced shall be that Participant's Elective Deferrals and shall be treated as an Employer contribution and allocated to that Participant's Elective Deferral Account. If the Plan permits Roth Elective Deferral contri butions, then a Participant's Pre-Tax Elective Deferrals shall be allocated to the Participant's Pre-Tax Elective Deferral Account and a Participant's Roth Elective Deferrals shall be allocated to the Participant's Roth Elective Deferral Account. Except in the c ase of an "in-Plan Roth Rollover Contribution" made pursuant to Section 12.11, Elective Deferrals contributed to the Plan as one type, either Roth Elective Deferrals or Pre-Tax Elective Deferrals, may not later be reclassified as the other type.

Notwithstanding anything in the Plan to the contrary, Participants may not make Elective Deferrals with respect to amounts th at are not 415 Compensation. However, for this purpose, 415 Compensation is not limited to the annual compensation limit of Code
§401(a)(17). Furthermore, for purposes of this Section, the annual dollar limitation of Code §401(a)(17) ($200,000 as adjuste d) shall
not apply except that the Administrator may elect to apply such limit as part of the salary deferral electi on procedures established hereunder.

Once made, a Participant's election to reduce Compensation shall remain in effect until modified or terminated. The Administrator shall establish procedures setting forth the conditions on modifications of an election. However, Participants must be permitted to modify elections at least once each Plan Year. Furthermore, terminations may be made at any time.

(b)   Eligible Automatic Contribution Arrangement (EACA). If elected in the Adoption Agreement, the Employer maintains a Plan with Automatic Deferral provisions as an Eligible Automatic Contribution Arrangement (EACA) and the following provisions will apply:

(1)   Participants subject to EACA. The Employer in its Adoption Agreement will elect which Participants are subject to the EACA Automatic Deferral on the "EACA Effective Date" thereof which may include some or all current Participants or may be limited to those Employees who become Participants after the EACA Effective Date. The "EACA Effe ctive Date" means the date on which the EACA goes into effect, either as to the overall Plan or as to an individual Participants as the context requires . An EACA becomes effective as to the Plan as of the date the Employer elects in the Adoption Agreement. A Participant's "EACA Effective Date" is as soon as practicable after the Participant is subject to Automatic Deferrals under the EACA, consistent with: (i) applicable law; and (ii) the objective of affording the Participant a reasonable period of time after receipt of the EACA notice to make an Affirmative Election (and, if applicable, an investment election).

(2)   Uniformity. The Automatic Deferral percentage must be a uniform percentage of Compensation. However, the Plan does not violate the uniform Automatic Deferral percentage requirement merely because the Plan applies any of the following provisions:

(i)    Years of participation. The Automatic Deferral percentage varies based on the number of Plan Years the Participant has participated in the Plan while the Plan has applied EACA provisions;

(ii)   No reduction from prior percentage. The Plan does not reduce a deferral percentage that, immediately prior to the
EACA's effective date was higher (for any Participant) than the Automatic Deferral percentage;

(iii)  Applying statutory limits. The Plan limits the Automatic Deferral amount so as not to exceed the limits of Code
§401(a)(17), 402(g) (determined without regard to Age 50 Catch-Up Deferrals), or 415;

(iv)  No Automatic Deferrals during hardship suspension. The Plan does not apply the Automatic Deferral during a period of suspension, under the Plan's hardship distribution provisions, of Participant's right to make Elective Deferrals to the Plan following a hardship distribution; or

(v)   Disaggregated groups. The Plan applies different default percentages to different groups if the groups can be disaggregated under Regulation §1.401(k)-1(b)(4).

(3)   EACA notice. The Administrator annually will provide a notice to each Participant covered by the EACA provisions (including, if elected in the Adoption Agreement, Participants who made an Affirmative Election) within a reasonable period of time prior to each Plan Year the Employer maintains the Plan as an EACA ("EACA Plan Year").

(i)    Deemed reasonable notice/new Participant. The Administrator is deemed to provide timely notice if the Administrator provides the EACA notice at least thirty (30) days and not more than ninety (90) days prior to the beginning of the EACA Plan Year.

(ii)   Mid-year notice/new Participant or Plan. If: (A) an Employee becomes eligible to make Elective Deferrals in the Plan during an EACA Plan Year but after the Administrator has provided the annual EACA notice for that Plan Year; or (B) the Employer adopts mid-year a new Plan as an EACA, the Administrator must provide the EACA notice no later than the date the Employee becomes eligible to make Elective Deferrals. However, if it is not practicable for the notice to be
provided on or before the date an Employee becomes a Participant, then the notice will nonetheless be treated as provided timely if it is provided as soon as practicable after that date and the Employee is permitted to elect to defer from all types of Compensation that may be deferred under the Plan earned beginning on that date.

(iii)  Content. The EACA notice must provide comprehensive information regarding the Participants' rights and obligations under the Plan and must be written in a manner calculated to be understood by the average Participant in accordance with applicable law.

(4)   EACA permissible withdrawal. If elected in the Adoption Agreement, a Participant who has Automatic Deferrals under the EACA may elect to withdraw all the Automatic Deferrals (and allocable earnings) under the provisions of this Subsection. Any distribution made pursuant to this Section will be processed in accordance with normal distribution provisions of the Plan.

(i)    Amount. If a Participant elects a permissible withdrawal under this Subsection, then the Plan must make a distribution equal to the amount (and only the amount) of the Automatic Deferrals made under the EACA (adjusted for allocable gains and losses to the date of the distribution). The Plan may separately account for Automatic Deferrals, in which case the entir e

account will be distributed. If the Plan does not separately account for the Automatic Deferrals, then the Plan must determine earnings or losses in a manner similar to the refund of Excess Contributions.

(ii)   Fees. Notwithstanding the above, the Administrator may reduce the permissible distribution amount by any generally applicable fees. However, the Plan may not charge a greater fee for distribution under this Section than applies to other distributions. The Administrator may adopt a policy regarding charging such fees consistent with this paragraph.

(iii)  Timing. The Participant may make an election to withdraw the Automatic Deferrals under the EACA no later than ninety (90) days, or such shorter period as specified in the Adoption Agreement, after the date of the first Automatic Deferral under the EACA. For this purpose, the date of the first Automatic Deferral is the date that the Compensation subject to the Automatic Deferral otherwise would have been includible in the Participant's gross income. For this purpose, EACAs under the Plan are aggregated, except that the mandatory disaggregation rules of Code §410(b) apply. In addition, a Participant's withdrawal right is not restricted due to the Participant making an Affirmative Election during the ninety (90) day period (or shorter period as specified in the Adoption Agreement).

(iv)  Rehired Employees. For purposes of paragraph (iii) above, an Employee who for an entire Plan Year did not have contributions made pursuant to a default election under the EACA will be treated as having not had such contributions for any prior Plan Year as well.

(v)   Effective date of the withdrawal election. The effective date of the permissible withdrawal will be as soon as practicable, but in no event later than the earlier of (A) the pay date of the second payroll period beginning after the elec tion is made, or (B) the first pay date that occurs at least thirty (30) days after the election is made. The election will also be deemed to be an Affirmative Election to have no Elective Deferrals made to the Plan.

(vi)  Related matching contributions. The Administrator will not take any Elective Deferrals withdrawn pursuant to this Section into account in computing and allocating matching contributions. If the Employer has already allocated matching contributions to the Participant's Account with respect to Elective Deferrals being withdrawn pursuant to this Subsection (4), then such matching contributions, as adjusted for gains and losses, must be forfeited.

(vii) Treatment of withdrawals. With regard to Elective Deferrals withdrawn pursuant to this Subsection, (A) the Administrator will disregard such Elective Deferrals in the Actual Deferral Percentage Test (if applicable); (B) the Administrator will disregard such Elective Deferrals for purposes of the limitation on Elective Deferrals under Code
§402(g); (C) such Elective Deferrals are not subject to the consent requirements of Code §401(a)(11) or 417. The Administrator will disregard any matching contributions forfeited under paragraph (vi) above in the ACP Test (if applicable).

(viii)Effect of Affirmative Election. A Participant's Affirmative Election continues in effect until the Participant subsequently revokes or modifies his or her Salary Deferral Agreement, or the Affirmative Election expires. A Participant who makes an Affirmative Election is not thereafter subject to the Automatic Deferral or to any scheduled increases thereto, even if the Participant later revokes the Affirmative Election or the Affirmati ve Election, unless the Participant is subject to the EACA. In addition, a Participant who is subject to the EACA provisions who revokes his or her Affirmative Election or whose Affirmative Election expires, will be deemed to have made an Affirmative Elect ion to have no Elective Deferrals made to the Plan.

(c)   Catch-Up Contributions. If selected in the Adoption Agreement, all Employees who are eligible to make Elective Deferrals under this Plan and who have attained age 50 before the close of the taxable year shall be eligible to make Catch -Up Contributions in accordance with, and subject to the dollar limitations of, Code §414(v)(2)(B)(i) for the taxable year. The limit will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code §414(v)(2)(C). Such Catch-Up Contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code §§402( g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code §401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416, as applicable, by reason of the making of such Catch-Up Contributions (but Catch-Up Contributions made in prior
years are counted in determining whether the Plan is a Top-Heavy Plan). If selected in the Adoption Agreement, Catch-Up Contributions shall not be treated as Elective Deferrals for purposes of applying any Employer matching contributions. Such option cannot be selected if the Plan elects to follow the safe harbor provisions of Section 12.8.

(d)   Full vesting. The balance in each Participant's Elective Deferral Account, Qualified Matching Contribution Account a nd Qualified Nonelective Contribution Account shall be fully Vested at all times and, except as otherwise provided herein, shall not be subject to Forfeiture for any reason.

(e)   Distribution restrictions. Amounts held in a Participant's Elective Deferral Account, Qualified Matching Contribution Account and Qualified Nonelective Contribution Account may only be distributable as provided in (4) below or as provided under the ot her provisions of this Plan, but in no event prior to the earlier of the following events or any other events permitted by the Code or Regulations:

(1)   the Participant's severance of employment (regardless of when the severance of employment occurred), Total and Permanent
Disability, or death;

(2)   the Participant's attainment of age 59 1/2;

(3)   the proven financial hardship of the Participant, subject to the limitations of Section 12.10(d) (or, for a volume submitter plan, Section 6.12);

(4)   the termination of the Plan without the existence at the time of Plan termination of another defined contribution plan or the establishment of a successor defined contribution plan by the Employer or an Affili ated Employer within the period ending twelve months after distribution of all assets from the Plan maintained by the Employer. For this purpose, a defined contribution plan does not include an employee stock ownership plan (as defined in Code §4975(e)(7) or 409(a)), a simplified employee pension plan (as defined in Code §408(k)), a SIMPLE individual retirement account plan (as defined in Code §408(p)), a plan or contract that satisfies the requirements of Code §403(b), or a plan that is described in Code §457(b) or (f). A distribution that is made because of this paragraph (4) must be made in a lump-sum;

(5)   the Participant's call to active duty after September 11, 2001, because of the Participant's status as a member of a reserve component, for a period of at least 180 days or for an indefinite period, i.e., a "qualified reservist distribution" within the meaning of Section 6.18; or

(6)   a Participant's service in the uniformed services while on active duty for a period of at least 30 days, i.e., a "deemed distribution" within the meaning of Section 6.18.

(f)    Code §402(g) dollar limit. A Participant's Elective Deferrals made under this Plan and all other plans, contracts or arrangements of the Employer maintaining this Plan during any calendar year shall not exceed the dollar limitation imposed by Code §402(g) , as in effect at the beginning of such calendar year, except to the extent permitted under Section 12.2(c) and Code §414(v), if applicable.
The limit will be adjusted by the Secretary of the Treasury for cost -of-living increases under Code §402(g)(4). For this purpose, "elective deferrals" means, with respect to a calendar year, the sum of all Employer contributions made on behalf of such Participant pursuant to an election to defer under any qualified cash or deferred arrangement as described in Code §401(k), any salary re duction simplified employee pension (as defined in Code §408(k)(6)), any SIMPLE IRA plan described in Code §408(p), any eligible deferred compensation plan under Code §457, any plans described under Code §501(c)(18), and any Employer contributions made on the
behalf of a Participant for the purchase of an annuity contract under Code §403(b) pursuant to a salary deferral agreement.

(g)   Excess Deferrals. If a Participant has Excess Deferrals for a taxable year, the Participant may, not later than March 1st following the close of such taxable year, notify the Administrator in writing of such excess and request that the Participant's Elective Deferrals under this Plan be reduced by an amount specified by the Participant. In such event, the Administrator shall direct the distr ibution of such excess amount (and any "income" allocable to such excess amount) to the Participant not later than the first April 15th following the close of the Participant's taxable year. Any distribution of less than the entire amount of Excess Deferrals and "income" shall be treated as a pro rata distribution of Excess Deferrals and "income." The amount distributed shall not exceed the Participant's Elective Deferrals under the Plan for the taxable year. Any distribution on or before the last day of the Participant's taxable year m ust satisfy each of the following conditions:

(1)   the Participant shall designate the distribution as Excess Deferrals;

(2)   the distribution must be made after the date on which the Plan received the Excess Deferrals; and

(3)   the Plan must designate the distribution as a distribution of Excess Deferrals.

Regardless of the preceding, if a Participant has Excess Deferrals solely from Elective Deferrals made under thi s Plan or any
other plan maintained by the Employer, a Participant will be deemed to have notified the Administrator of such excess amount and the
Administrator shall direct the distribution of such Excess Deferrals in a manner consistent with the provisions of this Subsection.

For the purpose of this Subsection, "income" means the amount of income or loss allocable to a Participant's Excess Deferrals , which amount shall be allocated in the same manner as income or losses are allocated pursuant to Section 4.3(c). For taxable years after 2007, the Administrator may not distribute "income" allocable to Excess Deferrals for the period between the end of the Participant's taxable year in which the Excess Deferral occurred and the date of the distribution (the "gap period").

Notwithstanding the above, for any years in which a Participant makes both Roth Elective Deferrals and Pre -Tax Elective Deferrals, the distribution of any Excess Deferrals for such year shall be made, as operationally determined by the Administrator, from the Participant's Pre-Tax Elective Deferral Account or Participant's Roth Elective Deferral Account. Matching contributions which

relate to Excess Elective Deferrals (regardless of whether such Excess Elective Deferrals are Pre -Tax Elective Deferrals or Roth
Elective Deferrals) shall be treated as a Forfeiture.

Any distribution of Excess Deferrals made pursuant to this Subsection shall be made first from unmatched Elective Deferrals (regardless of whether they are attributable to Pre-Tax Elective Deferrals or Roth Elective Deferrals) and, thereafter, from Elective Deferrals which are matched. Matching contributions which relate to Excess Deferrals that are distributed pursuant to this Se ction
12.2(g) shall be treated as a Forfeiture to the extent required pursuant to Code §401(a)(4) and the Regulations thereunder.

(h)   Coordination with ADP test. Notwithstanding the preceding, a Participant's Excess Deferrals shall be reduced, but not below zero, by any distribution and/or recharacterization of Excess Deferrals pursuant to Section 12.5(b) for the Plan Year beginning with or within the taxable year of the Participant.

(i)    Suspension due to hardship or deemed severance. In the event a Participant has received a hardship distribution pursuant to Regulation §1.401(k)-1(d)(3) from any other plan maintained by the Employer or from the Partici pant's Elective Deferral Account pursuant to Section 12.10, or has received a distribution on account of deemed severance on account of qualified military ser vice from this Plan or any other plan maintained by the Employer, then such Participant shall not be permitted to elect to have Elective Deferrals contributed to the Plan for a period of six (6) months following the receipt of the distribution. Furthermore, any provisions of the Plan providing for the reduction of the dollar limitation under Code §402(g) for the Participant's taxable year following the taxable year in which the hardship distribution was made shall no longer apply. Upon the expiration of the suspension period, a Participant's prior Affirmative Election will no longer apply unless the Employer provides otherwise in the Plan's administrative procedures.

(j)    Distributable based on other terms of Plan. At Normal Retirement Date, or such other date when the Participant shall be entitled to receive benefits, the fair market value of the Participant's Elective Deferral Account shall be used to provide benefits to the Participant or the Participant's Beneficiary.

(k)   Adjustment due to anticipated failure of ADP test. If during a Plan Year, it is projected that the aggregate amount of Elective Deferrals to be allocated to all Highly Compensated Participants under this Plan would cause the Plan to fail the tests set f orth in Section 12.4, then the Administrator may automatically reduce the Elective Deferrals of affected Highly Compensated Participants, beginning with the Highly Compensated Participant who has the highest actual deferral ratio until it is anticipated the Plan will pass the tests or until the actual deferral ratio equals the actual deferral ratio of the Highly Compensated Participant having the next highest actual deferral ratio. This process may continue until it is anticipated that the Plan will satisfy one of the tests set fort h in Section 12.4. Alternatively, the Employer may specify a maximum percentage of Compensation that may be deferred by Highly Compensated Participants (and any such limitation shall be a Plan-imposed limit for purposes of determining Catch-up Contributions).

(l)    Procedures must be established. The Employer and the Administrator shall establish procedures necessary to implement the salary deferral elections provided for herein. Such procedures may contain limits on salary deferral elections such as limiti ng elections to whole percentages of Compensation or to equal dollar amounts per pay period that an election is in effect.

12.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES

(a)   Separate accounting. The Administrator shall establish and maintain an account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other Valuation Date, all amounts allocated to each such Participant as set forth herein.

(b)   Contributions. The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of Employer contributions for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate contributions as follows:

(1)   With respect to Elective Deferrals made pursuant to Section 12.1(a)(1), to each Participant's Elective Deferral Account in an amount equal to each such Participant's Elective Deferrals for the year.

(2)   With respect to the Employer matching contribution made pursuant to Section 12.1(a)(2), to each Participant's Account, or
Participant's Qualified Matching Contribution Account, as elected in the Adoption Agreement, in accordance with
Section 12.1(a)(2).

Except, however, in order to be entitled to receive any Employer matching contribution, a Participant must satisfy the conditions for sharing in the Employer matching contribution as set forth in the Adoption Agreement.

(3)   With respect to the Employer Nonelective Contribution made pursuant to Section 12.1(a)(3), to each Participant's Account
in accordance with the provisions of Section 4.3(b)(2) or (3) (including the "gateway contribution" pursuant to Section 4.3(b)(4)),
whichever is applicable.

(4)   With respect to the Employer Qualified Nonelective Contribution made pursuant to Section 12.1(a)(4), to each P articipant's Qualified Nonelective Contribution Account in the same ratio as each Participant's Compensation bears to the total of such Compensation of all Participants.

(c)   Elective Deferrals not taken into account for Non-Key Employees. Notwithstanding anything in the Plan to the contrary, in determining whether a Non-Key Employee has received the required minimum allocation pursuant to Section 4.3(f) such Non-Key Employee's Elective Deferrals shall not be taken into account. In addition, unless otherwise specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), Employer matching contributions shall be taken into accoun t for purposes of satisfying the minimum contribution requirements of Code §416(c)(2) and the Plan. The preceding sentence shall ap ply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shal l be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requireme nts shall be treated as matching contributions for purposes of the ACP test and other requirements of Code §401(m).

(d)   Elective Deferrals not conditioned on service during a year. Notwithstanding anything herein to the contrary, Participants who terminated employment during the Plan Year shall share in the Elective Deferral contributions made by the Employer for th e year of termination without regard to the Hours of Service credited.

(e)   Conditions for sharing in contributions/allocations. Notwithstanding anything herein to the contrary (other than Sections
3.5(h), 4.3(f) and 12.3(f)), Participants shall only share in the allocations of the Employer matching contribution made purs uant to Section 12.1(a)(2), the Employer Nonelective Contributions made pursuant to Section 12.1(a)(3), th e Employer Qualified Nonelective Contribution made pursuant to Section 12.1(a)(4), and Forfeitures as provided in the Adoption Agreement. If no election is ma de in the Adoption Agreement, then a Participant shall be eligible to share in the allocation of t he Employer's contribution for the year if the
Participant completes more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year.

(f)    Code §410(b) fail-safe. Notwithstanding anything in this Section to the contrary, if, in the volume submitter or non -standardized
Adoption Agreement, the Employer elected to apply the 410(b) ratio percentage fail -safe provisions, then the provisions of Section
4.3(m) shall apply. Furthermore, if the Plan includes Employer matching contributions subject to ACP testing, then Section 4. 3(m)
shall be applied separately to the Code §401(m) portion of the Plan.

12.4 ACTUAL DEFERRAL PERCENTAGE TESTS

(a)   ADP test. Except as otherwise provided herein, this Subsection applies if the prior year testing method is elected in the Adoption Agreement. The "Actual Deferral Percentage" (hereinafter ADP) for a Plan Year for Participants who are Highly Compensated Employees (hereinafter "HCEs") for each Plan Year and the prior year's ADP for Participants who were Nonhighly Compensated Employees (hereinafter "NHCEs") for the prior Plan Year must satisfy one of the following tests:

(1)   The ADP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ADP for
Participants who were "NHCEs" for the prior Plan Year multiplied by 1.25; or

(2)   The ADP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ADP for Participants who were "NHCEs" for the prior Plan Year multiplied by 2.0, provided that the ADP for Participants who are "HCEs" does not exceed the prior year's ADP for Participants who were "NHCEs" in the prior Plan Year by more than two (2) percentage points.

Notwithstanding the above, for purposes of applying the foregoing tests with respect to the first Plan Year (as defined in Regulation §1.401(k)-2(c)(2)) in which the Plan permits any Participant to make Elective Deferrals, the ADP for the prior year's "NHCEs" shall be the greater of three percent (3%) or the current Plan Year's ADP for these Participants. However, the provisions of this paragraph may not be used if the Plan is a successor plan or is otherwise prohibited from using such provisions pursuant to Regulation §1.401(k)-2(c)(2).

(b)   Current year testing method. Notwithstanding the foregoing, if the current year testing method is elected in the Adoption Agreement, or if no election is made in the Adoption Agreement, and for any Plan Year for which the Employer has either reser ved the right to make a nonelective "ADP test safe harbor contribution" pursuant to Section 12.8 or amended the Plan to make an "ADP test safe harbor contribution," the ADP tests in (a)(1) and (a)(2) above shall be applied by comparing the current Plan Year's ADP for Participants who are "HCEs" with the current Plan Year's ADP (rather than the prior Plan Year's ADP) for Participants who are "NHCEs" for the current Plan Year. Once made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding 5 Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code §410(b)(6)(C)(i), the Employer maintains both a plan using prior yea r testing and a plan using current year testing and the change is made within the transition period described in Code §410(b)(6)(C)(ii).

(c)   Determination of "HCEs" and "NHCEs." A Participant is an "HCE" for a particular Plan Year if the Participant meets the definition of an "HCE" in effect for that Plan Year. Similarly, a Participant is an "NHCE" for a particular Plan Year if the Participant does not meet the definition of an "HCE" in effect for that Plan Year.

(d)   Calculation of ADP. For the purposes of this Section and Section 12.5, ADP means, for a specific group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of (1) the amount of Employer contributions actually paid over to the Plan on behalf of such Participant for the Plan Year to (2) the Participant's 414(s) Compensation

for such Plan Year. Employer contributions on behalf of any Participant shall include: (1) any Elective Deferrals made pursua nt to the Participant's salary deferral election (including Excess Deferrals of "HCEs"), but excluding (i) Excess Deferrals of "NHCEs" that arise solely from Elective Deferrals made under the plan or plans of this Employer and (ii) Elective Deferrals that are taken into account in the ACP tests set forth in Section 12.6 (provided the ADP test is satisfied both with and without exclusion of these Elective Deferrals); and (2) except as provided in Subsections (f) and (g), at the election of the Employer, Qualified Nonelective Contributions and Qualified Matching Contributions to the extent such contributions are not used to satisfy the ACP test.

The actual deferral ratio for each Participant and the ADP for each group shall be calculated to the nearest one-hundredth of one percent. Furthermore, Elective Deferrals allocated to each Highly Compensated Participant's Elective Deferral Account shall n ot be reduced by Excess Deferrals to the extent such excess amounts are made under this Plan or any other plan maintained by the Employer.

(e)   Participants taken into account. For purposes of this Section and Section 12.5, a Highly Compensated Participant and a Nonhighly Compensated Participant shall include any Employee eligible to make salary deferrals pursuant to Section 12.2 for t he Plan Year. Such Participants who fail to make Elective Deferrals shall be treated for ADP purposes as Participants on whose behalf no Elective Deferrals are made. If a Participant has no 414(s) Compensation for the Plan Year, then such Participant is disregar ded for purposes of calculating the ADP test.

(f)    Contributions taken into account. For purposes of determining the ADP and the amount of Excess Contributions pursuant to Section 12.5, only Qualified Nonelective Contributions and Qualified Matching Contributions contributed to the Plan prior to the end of the twelve (12) month period immediately following the Plan Year to which the contributions relate shall be considered. A Participant's Elective Deferrals are only taken into account for purposes of determining the ADP for a Plan Y ear if allocated to the Participant's Elective Deferral Account as of a date within that Plan Year and are only made with respect to Compensation tha t would have either been received by the Participant in the Plan Year (but for the salary deferral election ) or is attributable to services performed by the Participant in the Plan Year and would have been paid within two and one-half (2 1/2) months after the close of the Plan Year (but for the salary deferral election).

(g)   Targeted contributions. Notwithstanding the preceding, for Plan Years beginning in 2006 (or if earlier, the date the final 401(k) Regulations are effective with respect to the Plan), Qualified Nonelective Contributions cannot be taken into account in determining the ADP for a Plan Year for an "NHCE" to the extent such contributions exceed the product of that "NHCE's" 414(s) Compensation and the greater of five percent (5%) or two (2) times the Plan's "representative contribution rate." Any Qualified Nonelective Contribution taken into account under an ACP test under Regulation §1.401(m)-2(a)(6) (including the determination of the "representative contribution rate" for purposes of Regulation §1.401(m)-2(a)(6)(v)(B)), is not permitted to be taken into account for purposes of this paragraph (including the determination of the "representative contribution rate" under this Section). For purposes of this Subsection:

(1)   The Plan's "representative contribution rate" is the lowest "applicable contribution rate" of any eligible "NHCE" among a group of eligible "NHCEs" that consists of half of all eligible "NHCEs" for the Plan Year (or, if greater, the lowest "applicable contribution rate" of any eligible "NHCE" in the group of all eligible "NHCEs" for the Plan Year and who is employed by the Employer on the last day of the Plan Year), and

(2)   The "applicable contribution rate" for an eligible "NHCE" is the sum of the Qualified Matching Contributions taken into account under Subsection (d) for the eligible "NHCE" for the Plan Year and the Qualified Nonelective Contributions made for the eligible "NHCE" for the Plan Year, divided by the eligible "NHCE's" 414(s) Compensation for the same period.

Notwithstanding the above, Qualified Nonelective Contributions that are made in connection with an Employer's obligation to pay prevailing wages under the Davis-Bacon Act (46 Stat. 1494), Public Law 71-798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89-286, or similar legislation can be taken into account for a Plan Year for an "NHCE" to the extent such contributions do not exceed 10 percent (10%) of that "NHCE's" 414(s) Compensation.

Qualified Matching Contributions may only be used to calculate the ADP to the extent that such Qualified Matching Contributions are matching contributions that are not precluded from being taken into account under the ACP test for the Plan Year under the rules of Regulation §1.401(m)-2(a)(5)(ii).

Qualified Nonelective Contributions and Qualified Matching Contributions cannot be taken into account to determine the ADP to the extent such contributions are taken into account for purposes of satisfying any other ADP test, any ACP test, or the requirements
of Regulation §1.401(k)-3, 1.401(m)-3 or 1.401(k)-4. Thus, for example, matching contributions that are made pursuant to Regulation
§1.401(k)-3(c) cannot be taken into account under the ADP test. Similarly, if a plan switches from the current year testing method to the prior year testing method pursuant to Regulation §1.401(k)-2(c), Qualified Nonelective Contributions that are taken into account
under the current year testing method for a year may not be taken into account under the prior year testing method for the next year.

(h)   Aggregation with other plans. In the event this Plan satisfies the requirements of Code §401(a)(4), 401(k), or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this Section shall be applied by determining the ADP of Employees as if all such plans were a single plan. If more than ten percent (10%) of the Employer's "NHCEs" are involved in a plan coverage change as defined in Regulation

§1.401(k)-2(c)(4), then any adjustments to the "NHCEs" ADP for the prior year will be made in accordance with such Regulations, if the Employer has elected in the Adoption Agreement to use the prior year testing method. Plans may be aggregated in order to satisfy Code §401(k) only if they have the same Plan Year and use the same ADP testing method.

(i)    ADP if multiple plans. The ADP for any Participant who is an "HCE" for the Plan Year and who is eligible to have Elective Deferrals (and Qualified Nonelective Contributions or Qualified Matching Contributions, or both, if tre ated as Elective Deferrals for purposes of the ADP test) allocated to such Participant's accounts under two (2) or more arrangements described in Code §401(k), that are maintained by the Employer, shall be determined as if such Elective Deferrals (and, if applicable, such Qualified Nonelective Contributions or Qualified Matching Contributions, or both) were made under a single arrangement for purposes of determining such "HCE's" actual deferral ratio. If an "HCE" participates in two or more arrangements described in Code §401(k) of the Employer that have different plan years, all Elective Deferrals made during the Plan Year under all such arrangements shall be aggregated. For Plan Years beginning before 2006 (or if earlier, the Plan Year prior to the date the final 401(k) Regulations are effective with respect to the Plan), if the plans have different Plan Years, then all such arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under Regulations under Code §401(k).

(j)    Disaggregation and otherwise excludable Employees. Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 12.5 may be applied separately (or will be applied separately to the extent required by Regulations) to each "plan" within the meaning of Regulation §1.401(k)-6. Furthermore, the provisions of Code §401(k)(3)(F) may be used to exclude from consideration all Nonhighly Compensated Employees who have not satisfied the minimum age and service requirements of Code
§410(a)(1)(A). For purposes of applying this provision, the Administrator may use any effective date of participation that is permitted under Code §410(b) provided such date is applied on a consistent and uniform basis to all Participants.

(k)   "HCEs" as sole Eligible Employees. If, for the applicable year for determining the ADP of the "NHCEs" for a Plan Year, there are no eligible "NHCEs," then the Plan is deemed to satisfy the ADP test for the Plan Year.

12.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS

(a)   Authority to correct. In the event the Plan does not satisfy one of the tests set forth in Section 12.4, the Administrator shall adjust Excess Contributions or, if the current year testing method is being used, the Employer shall make contributions pursu ant to the options set forth below or any combination thereof.

(b)   Corrective distribution and/or recharacterization. On or before the close of the following Plan Year (or with respect to recharacterization as after-tax voluntary Employee contributions, on or before the fifteenth day of the third month following the end of each Plan Year), the Highly Compensated Participant allocated the largest amount of Elective Deferrals shall have a portion of such Elective Deferrals (and "income" allocable to such amounts) distributed (and/or, at the Participant's election, recharacterized as an
after-tax voluntary Employee contribution pursuant to Section 4.8) until the total amount of Excess Contributions has been distributed, or until the amount of the Participant's Elective Deferrals equals the Elective Deferrals of the Highly Compensated Participant having the next largest amount of Elective Deferrals allocated. This process shall continue until the total amount of Excess Contrib utions has been distributed. However, in the event the Plan permits Catch-Up Contributions, then any "HCE" who is eligible to make Catch-Up Contributions pursuant to Section 12.2(c) shall have any amount that would have otherwise been distributed pursuant to this Section recharacterized as a Catch-Up Contribution (up to the maximum catch-up dollar limitation). Any distribution and/or recharacterization of Excess Contributions shall be made in the following order:

(1)   With respect to the distribution of Excess Contributions, such distribution:

(i)    shall be made first from unmatched Elective Deferrals used in the ADP and, thereafter, simultaneously from such Elective Deferrals which are matched and matching contributions which relate to such Elective Deferrals (if the matching contributions are used in the ADP). Matching contributions which are not used in the ADP but which relate to Elective Deferrals that are distributed pursuant to this Subsection shall be forfeited unless the related matching contributions are distributed as Excess Aggregate Contributions pursuant to Section 12.7;

(ii)   shall be made, as operationally determined by the Administrator, from the Participant's Pre -Tax Elective Deferral Account or the Participant's Roth Elective Deferral Account, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year;

(iii)  shall be adjusted for "income"; and

(iv)  shall be designated by the Employer as a distribution of Excess Contributions (and "income").

(2)   With respect to the recharacterization of Excess Contributions as after-tax voluntary Employee contributions pursuant to (a)
above, such recharacterized amounts:

(i)    shall be deemed to have occurred on the date on which the last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the recharacterization and the tax consequences of such recharacterization;

(ii)   shall not exceed the amount of Elective Deferrals on behalf of any Highly Compensated Participant for any Plan Year;

(iii)  shall be treated as after-tax voluntary Employee contributions for purposes of Code §401(a)(4) and Regulation
§1.401(k)-1(b). However, for purposes of Sections 4.3(f) and 9.2 (top-heavy rules), recharacterized Excess Contributions continue to be treated as Employer contributions that are Elective Deferrals. Excess Contributions (and "income"
attributable to such amounts) recharacterized as after-tax voluntary Employee contributions shall continue to be nonforfeitable and subject to the same distribution rules provided for in Section 12.2(d); and

(iv)  are not permitted if the amount recharacterized plus after-tax voluntary Employee contributions actually made by such Highly Compensated Participant exceed the maximum amount of after-tax voluntary Employee contributions (determined prior to application of Section 12.6) that such Highly Compensated Participant is permitted to make under the Plan in the absence of recharacterization.

(3)   Any distribution and/or recharacterization of less than the entire amount of Exces s Contributions shall be treated as a pro rata distribution and/or recharacterization of Excess Contributions and "income."

(4)   For the purpose of this Section, "income" means the income or losses allocable to Excess Contributions, which amount shall be determined and allocated, at the discretion of the Administrator, using any of the methods set forth below. The method must
be used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year. However, effective for Plan Years after December 31, 2007, the Administrator will not calculate and distribute "income" for the period between t he end of the Plan Year in which the Excess Contribution and prior to the date of the distribution (the "gap period").

(i)    Method of allocating "income." The Administrator may use any reasonable method for computing the "income" allocable to Excess Contributions, provided that the method does not violate Code §401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating "income" to Participant's Accounts. A Plan will not fail to use a reasonable method for computing the "income" allocable to Excess Contributions merely because the "income" allocable to Excess Contributions is determined on a date that is no more than seven (7) days before the distribution.

(ii)   Alternative method of allocating Plan Year income. The Administrator may allocate "income" to Excess Contributions for the Plan Year by multiplying the "income" for the Plan Year allocable to the Elective Deferrals and other amounts taken into account under this Section (including contributions made for the Plan Year), by a fraction, the numerator of which is the Excess Contributions for the Employee for the Plan Year, and the denominator of which is the sum of the:

(A)  Account balance attributable to Elective Deferrals and other contributions taken into account under this Section as of the beginning of the Plan Year, and

(B)  Any additional amount of such contributions made for the Plan Year.

(iii)  Safe harbor method of allocating gap period income. The Administrator may use the safe harbor method in this paragraph to determine "income" on Excess Contributions for the "gap period." Under this safe harbor method, "income" on Excess Contributions for the "gap period" is equal to ten percent (10%) of the "income" allocable to Excess Contributions for the Plan Year that would be determined under paragraph (ii) above, multiplied by the number of calendar months that have elapsed since the end of the Plan Year. For purposes of calculating the number of calendar months that have elapsed under the safe harbor method, a corrective distribution that is made on or before the fifteenth day of a month is treated as made on the last day of the preceding month and a distribution made after the fifteenth day of a month is treated as made on the last day of the month.

(iv)  Alternative method for allocating Plan Year and gap period income. The Administrator may determine the
allocable gain or loss for the aggregate of the Plan Year and the "gap period" by applying the alternative method provided by paragraph (ii) above to this aggregate period. This is accomplished by substituting the "income" for the Plan Year and the
"gap period" for the "income" for the Plan Year and by substituting the contributions taken into account under this Section for the Plan Year and the "gap period" for the contributions taken into account under this Section for the Plan Year in determining the fraction that is multiplied by that "income."

(5)   Excess Contributions shall be treated as Employer contributions for purposes of Code §§404 and 415 even if distributed from the Plan.

(c)   Corrective contributions. Notwithstanding the above, if the current year testing method is used, then within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified Nonelective Contribution or Qualified Matching Contribution in accordance with one of the following provisions which contribution shall be allocated to the Qualified Nonele ctive Contribution Account or Qualified Matching Contribution Account of each Nonhighly Compensated Participant eligible to share in
the allocation in accordance with such provision. If the prior year testing method is used, then a Qualified Nonelective Cont ribution

and a Qualified Matching Contribution may not be made to correct the tests set forth in Section 12.4. The Employer shall provide the
Administrator with written notification of the amount of the contribution being made and to which provision it relates.

(1)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year.

(2)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during su ch Plan Year, shall not be eligible to share in the allocation and shall be disregarded.

(3)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Par ticipants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in equal amounts (per capita).

(4)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in equal amounts (per capita). However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.

(5)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Nonel ective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until the applicable ADP test set forth in Section 12.4 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of t he maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ADP test pursuant to Section 12.4(g) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 12.4 is sat isfied.

(6)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be alloca ted to the Qualified Nonelective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until one of the tests set forth in Section 12.4 is satisfied, or until such Nonhighly Compensated Participant has receive d the lesser of the maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ADP test pursuant to Section
12.4(g) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 12.4 is satisfied. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, i f this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.

(7)   A Qualified Matching Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Matching Contribution Account of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the total Elective Deferrals of all Nonhighly Compensated Participants.

(8)   A Qualified Matching Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Matching Contribution Account of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the total Elective Deferrals of all Nonhighly Compensated Participants. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.

(d)   Excise tax after 2 1/2 months (or 6 months). Any Excess Contributions (and "income") which are distributed after 2 1/2 months, or 6 months with respect to a Plan Year in which the EACA requirements of Section 12.2 are met, after the end of the Plan Year are subject to a ten percent (10%) Employer excise tax imposed by Code §4979.

12.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS

(a)   ACP test. Except as otherwise provided herein, this Subsection applies if the prior year testing method is elected in the Adoption Agreement. The "Actual Contribution Percentage" (hereinafter ACP) for Participants who are Highly Compensated Employees (hereinafter "HCEs") for each Plan Year and the prior year's ACP for Participants who were Nonhighly Compensated Employees (hereinafter "NHCEs") for the prior Plan Year must satisfy one of the following tests:

(1)   The ACP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ACP for
Participants who were "NHCEs" for the prior Plan Year multiplied by 1.25; or

(2)   The ACP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ACP for Participants who were "NHCEs" for the prior Plan Year multiplied by 2.0, provided that the ACP for Participants who are "HCEs" does not exceed the prior year's ACP for Participants who were "NHCEs" in the prior Plan Year by more than two (2) percentage points.

Notwithstanding the above, for purposes of applying the foregoing tests with respect to the first Plan Year (as defined in Regulation §1.401(m)-2(c)(2)) in which the Plan permits any Participant to make "Employee contributions", provides for "matching contributions", or both, the ACP for the prior year's "NHCEs" shall be the greater of three percent (3%) or the current Plan Year's ACP for these Participants. However, the provisions of this paragraph may not be used if the Plan is a successor plan or is other wise prohibited from using such provisions pursuant to Regulation §1.401(m)-2(c)(2).

(b)   Current year testing method. Notwithstanding the preceding, if the current year testing method is elected in the Adoption Agreement or if no election is made in the Adoption Agreement, and for any Plan Year for which the Employer has either reserved the right to make a nonelective "ADP test safe harbor contribution" pursuant to Section 12.8 or amended the Plan to make an "ADP test safe harbor contribution," the ACP tests in (a)(1) and (a)(2) above shall be applied by comparing the current Plan Year's ACP for Participants who are "HCEs" with the current Plan Year's ACP (rather than the prior Plan Year's ACP) for Participants who are "NHCEs" for the current Plan Year. Once made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding 5 Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code §410(b)(6)(C)(i), the Employer maintains both a plan using prior yea r testing and a plan using current year testing and the change is made within the transition period described in Code §410(b)(6)(C)(ii).

(c)   Determination of "HCEs" and "NHCEs." A Participant is an "HCE" for a particular Plan Year if the Participant meets the definition of an "HCE" in effect for that Plan Year. Similarly, a Participant is an "NHCE" for a particular Plan Year if the Participant does not meet the definition of an "HCE" in effect for that Plan Year.

(d)   Calculation of ACP. For the purposes of this Section and Section 12.7, ACP for a specific group of Participants for a Plan Year means the average of the "contribution percentages" (calculated separately for each Participant in such group). For this purpose, "contribution percentage" means the ratio (expressed as a percentage) of the Participant's "contribution percentage amounts" to the Participant's 414(s) Compensation. The actual contribution ratio for each Participant and the ACP for each group, shall be calculated to the nearest one-hundredth of one percent of the Participant's 414(s) Compensation.

(e)   Amounts included in ACP. "Contribution percentage amounts" means the sum of (1) after-tax voluntary Employee contributions, (2) Employer "matching contributions" made pursuant to Section 12.1(a)(2) (including Qualified Matching
Contributions to the extent such Qualified Matching Contributions are not used to satisfy the tests set forth in Section 12.4), (3) Excess
Contributions recharacterized as nondeductible voluntary Employee contributions pursuant to Section 12.5, and (4) Qualified
Nonelective Contributions, to the extent the Qualified Nonelective Contributions are not used to satisfy the tests set forth in Section
12.4 and do not exceed the limitations of the targeted contribution limitation of Section 12.4(g). However, "contribution per centage amounts" shall not include "matching contributions" that are forfeited either to correct Excess Aggregate Contributions or due to Code
§401(a)(4) and the Regulations thereunder because the contributions to which they relate are Excess Deferrals, Excess Contrib utions, or Excess Aggregate Contributions. In addition, "contribution percentage amounts" may include Elective Deferrals provided the ADP test in Section 12.4 is met before the Elective Deferrals are used in the ACP test and continues to be met following the excl usion of
those Elective Deferrals that are used to meet the ACP test.

(f)    Participants taken into account. For purposes of this Section and Section 12.7, a Highly Compensated Participant and a
Nonhighly Compensated Participant shall include any Employee eligible to have "matching contributions" made pursuant to Section
12.1(a)(2) (whether or not a salary deferral election was made or suspended pursuant to the Plan) allocated to such Participant's Account for the Plan Year or to make after-tax voluntary Employee contributions pursuant to Section 4.8 (whether or not after-tax voluntary Employee contributions are made) allocated to the Participant's Account for the Plan Year.

(g)   Allocations taken into account. For purposes of determining the ACP test, "Employee contributions" are considered to have been made in the Plan Year in which contributed to the Plan. "Matching contributions" and Qualified Nonelective Contributions will be considered made for a Plan Year if made no later than the end of the twelve (12) month period beginning on the date after the close of the Plan Year. Excess Contributions recharacterized as after-tax voluntary Employee contributions pursuant to Section 12.5(b)(2) are taken into account in the ACP for the Plan Year in which the contribution would have been received in cash if there had not been a salary deferral election. A "matching contribution" will be taken into account in the ACP for a Plan Year only if (1) it is m ade on

account of the Participant's nondeductible voluntary "employee contributions" or on account of a Participant's Elective Deferrals under a plan maintained by the Employer for that Plan Year and (2) it is allocated to the Participant's Account as of any date with in that Plan Year.

(h)   Definition of "matching contribution" and "employee contribution." For purposes of this Section and Section 12.7, "matching contribution" means an Employer contribution made to the Plan, or to a contract describe d in Code §403(b), on behalf of a Participant on account of a nondeductible voluntary "employee contribution" made by such Participant, or on account of a
Participant's elective deferrals under a plan maintained by the Employer. "Employee contribution" mea ns any contribution (other than Roth Elective Deferrals) made to the Plan by or on behalf of a Participant that is included in the Participant's gross income in the year in which made and that is maintained under separate account to which earnings and losses are allocated.

(i)    Targeted matching contributions. Notwithstanding the preceding, for Plan Years beginning in 2006 (or if earlier, the date the final 401(m) Regulations are effective with respect to the Plan), a "matching contribution" with respect to an Elective Deferral for a year is not taken into account in determining the ACP for "NHCEs" to the extent it exceeds the greatest of:

(1)   five percent (5%) of the Participant's 414(s) Compensation for the year; (2)   the Employee's Elective Deferrals for the year; or
(3)   the product of two (2) times the Plan's "representative matching rate" and the Participant's Elective Deferrals for the year.

For purposes of this Subsection, the Plan's "representative matching rate" is the lowest "matching rate" for any eligible "NHCE" among a group of "NHCEs" that consists of half of all eligible "NHCEs" in the Plan for the Plan Year who make Elective Deferr als
for the Plan Year (or, if greater, the lowest "matching rate" for all eligible "NHCEs" in the Plan who are employed by the Employer on the last day of the Plan Year and who make Elective Deferrals for the Plan Year).

For purposes of this Subsection, the "matching rate" for an Employee generally is the "matching contributions" made for such Employee divided by the Employee's Elective Deferrals for the year. If the "matching rate" is not the same for all levels of Elective Deferrals for an Employee, the Employee's "matching rate" is determined assuming that an Employee's Elective Deferrals are equal to six percent (6%) of 414(s) Compensation.

If the Plan provides a match with respect to the sum of the Employee's after-tax voluntary Employee contributions and Elective Deferrals, then for purposes of this Subsection, that sum is substituted for the amount of the Employee's Elective Deferrals and Employees who make either after-tax voluntary Employee contributions or Elective Deferrals are taken int o account in determining the Plan's "representative matching rate." Similarly, if the Plan provides a match with respect to the Employee's after -tax voluntary
Employee contributions, but not Elective Deferrals, then for purposes of this Subsection, the Employee's after-tax voluntary Employee
contributions are substituted for the amount of the Employee's Elective Deferrals and Employees who make after -tax voluntary
Employee contributions are taken into account in determining the Plan's "representative matchi ng rate."

(j)    Aggregation with other plans. In the event that this Plan satisfies the requirements of Code §401(a)(4), 401(m), or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this Section shall be applied by determining the ACP of Employees as if all such plans were a single plan. If more than ten percent (10%) of the Employer's "NHCEs" are involved in a plan coverage change as defined in Regulation
§1.401(m)-2(c)(4), then any adjustments to the "NHCE's" ACP for the prior year will be made in accordance with such Regulations, if
the Employer has elected in the Adoption Agreement to use the prior year testing method. Plans may be aggregated in order to satisfy
Code §401(m) only if they have the same Plan Year and use the same ACP testing method.

(k)   ACP if multiple plans. For the purposes of this Section, if an HCE is a Participant under two (2) or more plans (other than an employee stock ownership plan as defined in Code §4975(e)(7)) which are maintained by the Employer or an Affiliated Employer to which "matching contributions," nondeductible voluntary Employee contributions, or both, are made, all such contributions on behalf of such HCE shall be aggregated for purposes of determining such HCE's actual contribution ratio. However, if the plans have different plan years, then for purposes of Plan Years beginning prior to 2006 (or if earlier, the date the final 401(m) Regulations are effective with respect to the Plan), this paragraph shall be applied by treating all plans ending with or within the same cal endar year as a single plan. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under Regulations under Code §401(m).

(l)    Disaggregation and otherwise excludable Employees. Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 12.7 may be applied separately (or will be applied separately to the extent required by Regulations) to each "plan" within the meaning of Regulation §1.401(m)-5. Furthermore, the provisions of Code §401(m)(5)(C) may be used to exclude from consideration all Nonhighly Compensated Employees who have not satisfied the minimum age and service requirements of Cod e
§410(a)(1)(A). For purposes of applying this provision, the Administrator may use any effective d ate of participation that is permitted under Code §410(a) provided such date is applied on a consistent and uniform basis to all Participants.

(m)  "HCEs" as sole Eligible Employees. If, for the applicable year for determining the ACP of the "NHCEs" for a Plan Year, there are no eligible "NHCEs," then the Plan is deemed to satisfy the ACP test for the Plan Year.

12.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS

(a)   Authority to correct. In the event the Plan does not satisfy one of the tests set forth in Section 12.6, the Administrator shall adjust Excess Aggregate Contributions or, if the current year testing method is used, the Employer shall make contributions p ursuant to the options set forth below or any combination thereof.

(b)   Corrective distribution or Forfeiture. On or before the close of the following Plan Year, the Highly Compensated Participant having the largest allocation of "contribution percentage amounts" shall have a portion of such "contribution percentage amounts" (and "income" allocable to such amounts) distributed or, if non-Vested, Forfeited (including "income" allocable to such Forfeitures) until the total amount of Excess Aggregate Contributions has been distributed, or until the amount of the Participant's "contribution percentage amounts" equals the "contribution percentage amounts" of the Highly Compensated Participant having the next larges t amount of "contribution percentage amounts." This process shall continue until the total amount of Excess Aggregate Contributions has been distributed or forfeited. Any distribution and/or Forfeiture of "contribution percentage amounts" shall be made in t he following order:

(1)   Employer "matching contributions" distributed and/or forfeited pursuant to Section 12.5(b)(1);

(2)   After-tax voluntary Employee contributions including Excess Contributions recharacterized as after-tax voluntary Employee contributions pursuant to Section 12.5(b)(2);

(3)   Unmatched Elective Deferrals used in the ACP and, thereafter, simultaneously from such Elective Deferrals used in the
ACP which are matched and "matching contributions" which relate to such Elective Deferrals (if the "matching contributions" are used in the ACP). "Matching contributions" which are not used in the ACP but which relate to Elective Deferrals that are distributed to Highly Compensated Participants pursuant to this Subsection shall be forfeited unless the related "matching contributions" are distributed as Excess Aggregate Contributions pursuant to this Subsection;

(4)   To the extent Elective Deferrals are distributed pursuant to the preceding paragraph, then the distribution shall be made, as operationally determined by the Administrator, from the Participant's Pre-Tax Elective Deferral Account or the Participant's Roth Elective Deferral Account, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year; and

(5)   Remaining Employer "matching contributions."

(c)   Source of corrective distribution or Forfeiture. Any distribution or Forfeiture of less than the entire amount of Excess Aggregate Contributions (and "income") shall be treated as a pro rata distribution of Excess Aggregate Contributions and "income." Distribution of Excess Aggregate Contributions shall be designated by the Employer as a distribution of Excess Aggregate Contributions (and "income"). Forfeitures of Excess Aggregate Contributions shall be treated in accordance with Section 4.3. However, no such Forfeiture may be allocated to a Highly Compensated Participant whose contributions are reduced pursuant to this Section.

(d)   Determination of income or loss. For the purpose of this Section, "income" means the income or losses allocable to Excess Aggregate Contributions, which amount shall be determined and allocated, at the discretion of the Administrator, using any of the methods set forth in Section 12.5(b)(4) with respect to the calculation of "income" for Excess Contributions (applied by substituting Excess Contributions with Excess Aggregate Contributions and by substituting amounts taken into account under the ACP test for amounts taken into account under the ADP test in Section 12.4). However, effective with respect to Plan Years beginning after December 31, 2007 the Administrator will not calculate and distribute "income" for the period between the end of the Plan Yea r in which the Excess Aggregate Contribution and prior to the date of the distribution (the "gap period").

(e)   Treatment of excess amounts. Excess Aggregate Contributions attributable to amounts other than nondeductible voluntary
Employee contributions, including forfeited "matching contributions," shall be treated as Employer contributions for purposes of Code
§§404 and 415 even if distributed from the Plan.

(f)    Ordering of tests. The determination of the amount of Excess Aggregate Contributions with respect to any Plan Year shall be made after first determining the Excess Contributions, if any, to be treated as nondeductible voluntary Employee contribution s due to recharacterization for the Plan Year of any other qualified cash or deferred arrangement (as defined in Code §401(k)) maintained by the Employer that ends with or within the Plan Year or which are treated as after -tax voluntary Employee contributions due to recharacterization pursuant to Section 12.5.

(g)   Corrective contributions. Notwithstanding the above, if the current year testing method is being used, then within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified Nonelective Contribution or Employer matching contribution in accordance with one of the following provisions which contribution shall be allocated to the Qualified Nonele ctive Contribution Account or with respect to Employer "matching contributions," to the Participant's Account of each Nonhighly Compensated Participant eligible to share in the allocation in accordance with such provision. If the prior year testing meth od is used, then a Qualified Nonelective Contribution or an Employer "matching contributi on" may not be made to correct the tests set forth in

Section 12.6. The Employer shall provide the Administrator with written notification of the amount of the contribution being made and to which provision it relates.

(1)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year.

(2)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.

(3)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in equal amounts (per capita).

(4)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in equal amounts (per capita). However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligibl e to share in the allocation and shall be disregarded.

(5)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated to the Qualified Nonelective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until the applicable test set forth in Section 12.6 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of the maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ACP test pursuant to Section 12.6(i) (Targeted Contributions). This process shall continue until one of the tests set forth in Se ction 12.6 is satisfied.

(6)   A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated to the Qualified Nonelective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until the applicable test set forth in Section 12.6 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of the maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ACP test pursuant to Section 12.6(i) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 1 2.6 is satisfied. However, for purposes of this contribution, Nonhighly Compensated Employees who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive
calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligibl e to share in the allocation and shall be disregarded.

(7)   A "matching contribution" may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated on behalf of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the
total Elective Deferrals of all Nonhighly Compensated Participants. The Employer shall designate, at the time the contribution is made, whether the contribution made pursuant to this provision shall be a Qualified Matching Contribution or an Employer Nonelective Contribution.

(8)   A "matching contribution" may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated on behalf of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for t he year bears to the
total Elective Deferrals of all Nonhighly Compensated Participants. The Employer shall designate, at the time the contribution is made, whether the contribution made pursuant to this provision shall be a Qualified Matching Contribution or an Employer Nonelective Contribution. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Ser vice
(or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan
Year, shall not be eligible to share in the allocation and shall be disregarded.

(h)   Excise tax after 2 1/2 months (or 6 months). Any Excess Aggregate Contributions (and "income") which are distributed after
2 1/2 months, or 6 months with respect to a Plan Year in which the EACA requirements of Section 12.2(b) are met, after the end of the
Plan Year shall be subject to the ten percent (10%) Employer excise tax imposed by Code §4979.

12.8 401(k) ADP TEST SAFE HARBOR PROVISIONS

(a)   Election of "ADP test safe harbor." The provisions of this Section will apply if the Employer has elected, in the 401(k) ADP Test Safe Harbor Provisions Section of the Adoption Agreement, to use the "ADP test safe harbor" or "ACP test safe harbor." If the Employer has elected to use the "ADP test safe harbor" for a Plan Year, then the provisions relating to the ADP test describe d in Section 12.4 and in Code §401(k)(3) do not apply for such Plan Year to the group of Participants subject to the "ADP test safe harbor" provisions. In addition, if the Employer has also elected to use the "ACP test safe harbor" for a Plan Year, then the provisi ons relating to the ACP test described in Section 12.6 and in Code §401(m)(2) do not apply for such Plan Year to the group of Participants subject to the "ACP test safe harbor" provisions. Furthermore, to the extent any other provision of the Plan is inconsistent with the provisions of this Section, the provisions of this Section will govern. In accordance with Regulation §1.401(k)-1(e)(7) and Regulation §1.401(m)-
1(c)(2), it is impermissible for the Employer to use the ADP test or the ACP test for a Plan Year in which it is intended for the Plan,
through its written terms, to use the "ADP test safe harbor" or "ACP test safe harbor" and the Employer fails to satisfy the requirements of such safe harbors for the Plan Year.

(b)   Definitions. For purposes of this Section and Section 12.9, the following definitions apply:

(1)   "ACP test safe harbor" means the method described in Subsection (d) below for satisfying the ACP test of Code §401(m)(2). (2)   "ACP test safe harbor matching contributions" means "matching contributions" described in Subsection (d)(1).
(3)   "ADP test safe harbor" means the method described in Subsection (c) for satisfying the ADP test of Code §401(k)(3). (4)   "ADP test safe harbor contributions" means the contributions made pursuant to Subsection (c)(1) below.
(5)   "Compensation" means Compensation as defined in Section 1.18, except, for purposes of this Section, no dollar limit, other than the limit imposed by Code §401(a)(17), applies to the Compensation of a Nonhighly Compensated Employee.

(6)   "Eligible Participant" means a Participant who is eligible to make Elective Deferrals under the Plan for any part of the Plan Year (or who would be eligible to make Elective Deferrals but for a suspension due to a hardship distribution described in Section 12.10 or to statutory limitations, such as Code §§402(g) and 415) and who is not excluded as an "eligible Participant" in the 401(k) ADP Test Safe Harbor Provisions Section of the Adoption Agreement.

(7)   "Matching contributions" means contributions made by the Employer on account of an "eligible Participant's" Elective
Deferrals.
(c)   Satisfying ADP safe harbor. The provisions of this Subsection apply for purposes of satisfying the "ADP test safe harbor." (1)   The "ADP test safe harbor contribution" is the contribution, elected by the Employer in the 401(k) ADP Test Safe Harbor
Provisions Section of the Adoption Agreement, to be used to satisfy the "ADP test safe harbor." However, if no contribution is
elected in the Adoption Agreement, the Employer will contribute to the Plan for the Plan Year a "basic matching contribution" on behalf of each Eligible Employee. The "basic matching contribution" is equal to (i) one hundred percent (100%) of the amount of an "eligible Participant's" Elective Deferrals that do not exceed three percent (3%) of the Participant's "Compensation" for the Plan Year, plus (ii) fifty percent (50%) of the amount of the Participant's Elective Deferrals that exceed three percent (3%) of the
Participant's "Compensation" but do not exceed five percent (5%) of the Participant's "Compensation." However, if the
contribution is being made pursuant to a QACA as described in Section 12.9, then the "basic matching contribution" is equal to (i) one hundred percent (100%) of the amount of an "eligible Participant's" Elective Deferrals that do not exceed one percent (1%) of the Participant's "Compensation" for the Plan Year, plus (ii) fifty percent (50%) of the amount of the Participant's Elective Deferrals that exceed one percent (1%) of the Participant's "Compensation" but do not exceed six percent (6%) of the Participant's "Compensation." If pursuant to this Section, the "ADP test safe harbor contribution" being made to the Plan (including a contribution being made pursuant to a QACA as described in Section 12.9) is a matching contribution that is made on a basis other than the Plan Year, then the matching contributions must be contributed to the Plan by the last day of the Plan Year quarter immediately following the Plan Year quarter to which the contributions relate.

(2)   Except as provided in Subsection (e) below, for purposes of the Plan, a "basic matching contribution" or an "enhanced matching contribution" will be treated as a Qualified Matching Contribution and a nonelective "ADP test safe harbor contribution" will be treated as a Qualified Nonelective Contribution. Accordingly, "ADP test safe harbor contributions" will be fully Vested and subject to the distribution restrictions set forth in Section 12.2(e) other than on account of a hardship (i.e., may generally not be distributed earlier than severance of employment, death, Total and Permanent Disability, an event described in Code §401(k)(10), or, in case of a profit sharing plan, the attainment of age 59 1/2.). In addition, such contributions must satisfy the "ADP test safe harbor" without regard to permitted disparity under Code §401(l). An "enhanced matching contribution" is a matching contribution that, at rate of Elective Deferrals, is at least equal to what the matching contribution would be if un der the "basic matching contribution."

(3)   Notwithstanding the requirement that the Employer make the "ADP test safe harbor contribution" to this Plan, if the
Employer so elects in the Adoption Agreement, the "ADP test safe harbor contribution" will be made to the defined contribution

plan indicated in the Adoption Agreement. However, such contributions will be made to this Plan unless (i) each Employee eligible under this Plan is also eligible under the other plan, and (ii) the other plan has the same Plan Year as this Plan.

(4)   Within a reasonable period before the beginning of the Plan Year (or, in the year an Eligible Employee becomes a Participant, within a reasonable period before the Employee becomes eligible), the Employer will provide each "eligible Participant" a comprehensive notice of the Participant's rights and obligations under the Plan, written in a manner calculate d to be understood by the average Participant. The determination of whether a notice satisfies the timing requirement of this paragraph is based on all of the relevant facts and circumstances. However, the timing requirement of the notice is deemed to be satisfied if at least thirty (30) days, but not more than ninety (90) days, before the beginning of the Plan Year, the Employer will provide each "eligible Participant" a comprehensive notice of the Participant's rights and obligations under the Plan, written in a manner calculated to be understood by the average Participant. However, if an Employee becomes eligible after the 90th day before the beginning of the Plan Year and does not receive the notice for that reason, the notice must be provided no more than ninety ( 90) days before the Employee becomes eligible but not later than the date the Employee becomes eligible.

(5)   In addition to any other election periods provided under the Plan, each "eligible Participant" may make or modify a salary deferral election during the thirty (30) day period immediately following receipt of the notice described in Subsection (4) above. Furthermore, if the "ADP test safe harbor contribution" is a "matching contribution" each Eligible Employee must be permitted to elect sufficient Elective Deferrals to receive the maximum amount of "matching contribut ions" available to the Participant under the Plan.

(d)   Application of "ACP test safe harbor." The provisions of this Subsection apply if the Employer has elected to satisfy the "ACP
test safe harbor."

(1)   In addition to the "ADP test safe harbor contributions," the Employer will make any "matching contributions" in accordance with elections made in the Adoption Agreement. Such additional "matching contributi ons" will be considered "ACP test safe harbor matching contributions." "Matching contributions" are taken into account for a Plan Year purposes of the "ACP test safe harbor" in accordance with the allocation and timing rules of Regulation §1.401(m) -2(a), which provides that a matching contribution will be taken into account for a Plan Year only if (1) it is made on account of the Participant's nondeductible voluntary "employee contributions" or elective deferrals under a plan maintained by the Employer for that Plan Year and (2) it is allocated to the Participant's account as of any date within that Plan Year, and (3) it is actually paid to the plan no later than twelve (12) months after the close of the Plan Year.

(2)   Notwithstanding any election in the Adoption Agreement to the contrary, an "eligible Participant's" Elective Deferrals in excess of six percent (6%) of "Compensation" may not be taken into account in applying "ACP test safe harbor matching contributions." In addition, any portion of an "ACP test safe harbor matching contribution" attributable to a discretionary "matching contribution" may not exceed four percent (4%) of an "eligible Participant's" "Compensation."

(e)   Application of ACP test. The Plan is required to satisfy the ACP test of Code §401(m)(2), using the current year testing method, if the Plan permits after-tax voluntary Employee contributions or if matching contributions that do not satisfy the "ACP test safe harbor" may be made to the Plan. In such event, only "ADP test safe harbor contributions" or "ACP test safe harbor contributi ons" that exceed the amount needed to satisfy the "ADP test safe harbor" or "ACP test safe harbor" (if t he Employer has elected to use the
"ACP test safe harbor") may be treated as Qualified Nonelective Contributions or Qualified Matching Contributions in applying the
ACP test. In addition, in applying the ACP test, elective contributions may not be treated as "matching contributions" under Code
§401(m)(3). Furthermore, in applying the ACP test, the Employer may operationally elect to disregard with respect to all "eli gible Participants" (1) all "matching contributions" if the Plan satisfies the "ACP test safe harbor" and (2) "matching contributions" that do not exceed four percent (4%) (3 1/2% if a QACA) of each Participant's "Compensation" if the Plan satisfies the "ADP test safe harbor" using "matching contributions" (the "basic matching contribution" or the "enhanced matching contribution") and the "ACP test safe harbor" is not satisfied.

(f)    Modification of top-heavy rules. The top-heavy requirements of Code §416 and the Plan shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(12) and "matching contributions" with respect to which the requirements of Code §401(m)(11) are met.

(g)   Plan Year requirement. Except as provided in Regulation §1.401(k)-3(e), the Plan will fail to satisfy the requirements of Code
§401(k)(12) and this Section for a Plan Year unless such provisions remain in effect for an entire twelve (12) month Plan Yea r.

(h)   Discretionary safe harbor nonelective contribution. If the Employer has elected in the Adoption Agreement to either not use the 401(k) safe harbor provisions of this Section or to utilize the "maybe" election with respect to the nonelective "ADP test safe harbor contribution," then the Employer may elect to utilize the "ADP test safe harbor" provisions for a Plan Year after the Plan Year has commenced in accordance with the provisions of this Subsection. In order to utilize this Sub section, the Employer must provide a
notice in accordance with Section 12.8(c)(4) above, except that the notice must provide that the Employer may provide the non elective "ADP test safe harbor contribution" and that a supplemental notice will be provided at least thirty (30) days prior to the last day of the Plan Year if the Employer decides to make the nonelective "ADP test safe harbor contribution". In order to implement the 401( k) safe harbor provisions of this Section for the Plan Year, the Employer must (1) amend the Adoption Agreement to provide for the nonelective "ADP test safe harbor contribution" and, (2) provide a supplemental notice to Participants indicating its intenti on to

provide such nonelective "ADP test safe harbor contribution". The supplemental notice indicating the Employer's intention to make the nonelective "ADP test safe harbor contribution" must be provided no later than thirty (30) days prior to the last day of the Plan Year for the Plan in order for the provisions of this Section to apply.

(i)    Elimination of safe harbor contributions or matching contributions. The Employer may amend the Plan during a Plan Year to reduce or eliminate "ADP test safe harbor contributions" or matching contributions for such Plan Year subject to the following provisions.

(1)   An amendment may be made during a Plan Year to reduce or eliminate prospectively any or all "ADP test safe harbor contributions" provided a supplemental notice is given to all "eligible Participants" explaining the consequences and effective date of the amendment, and that such "eligible Participants" have a reasonable opportunity (including a reasonable period) to change their Elective Deferral (and if applicable, their Voluntary Employee Contribution) elections. An amendment reducing or eliminating an "ADP test safe harbor contribution" must be effective no earlier than the later of: (i) thirty (30) days after "eligible Participants" are given the supplemental notice or (ii) the date the amendment is adopted. If the Employer amends the Plan to reduce or eliminate the "ADP test safe harbor contributions," then except as provided in Code §§401(k) and 401(m) and the Regulations thereunder, the Plan is subject to the ADP test set forth in Section 12.4 and the ACP test set forth in Section 12.6 for the entire Plan Year using current year testing and the Employer must also satisfy the provisions of this Section 12.8 until the amendment becomes effective.

(2)   Notwithstanding the preceding, an amendment may be made during a Plan Year to eliminate a nonelective "ADP test safe harbor contribution" for such Plan Year only in accordance with the provisions of Regulation 1.401(k) -3(g) and, if applicable, Regulation §1.401(m)-3(h)).

(3)   If the Employer eliminates a matching contribution that is not an "ADP test safe harbor contribution," then the "ADP test safe harbor" provisions of this Section continue to apply (i.e., the provisions relating to the ADP test described in Section 12.4 and in Code §401(k)(3) do not apply for such Plan Year to the group of Participants subject to the "ADP test safe harbor" provisions).

12.9 QUALIFIED AUTOMATIC CONTRIBUTION ARRANGEMENT

(a)   Qualified Automatic Contribution Arrangement (QACA). If elected in the Adoption Agreement, the Employer maintains a Plan with Automatic Deferral provisions as a Qualified Automatic Contribution Arrangement (QACA) and the provisions of this Section will apply. Except as otherwise provided in this Section, the Plan's "ADP test safe harbor" and "ACP test safe harbor" provisions set forth in Section 12.8 apply. The Employer will contribute on behalf of the Participants specified in the Adopt ion Agreement, "ADP test safe harbor contributions," as elected in the Adoption Agreement.

(b)   Participants subject to the QACA. The Employer in its Adoption Agreement will elect which Participants are subject to the QACA Automatic Deferral on the "QACA Effective Date" thereof which may include some or all current Participants or may be limited to those Employees who become Participants after the "QACA Effective Date." The "QACA Effective Date" means the date on which the QACA goes into effect, either as to the overall Plan or as to an individual Participants as the context requires. A QACA becomes effective as to the Plan as of the date the Employer elects in the Adoption Agreement. A Participant's "QACA Effectiv e Date" is as soon as practicable after the Participant is subject to Automatic Deferrals under the QACA, consistent with: (A) applicable law; and (B) the objective of affording the Participant a reasonable period of time after receipt of the QACA notice to make an Affirmative Election (and, if applicable, an investment election).

(c)   QACA Automatic Deferral amount. Except as provided in Subsection (d) below (relating to uniformity requirements), the Plan must apply to all Participants subject to the QACA, a uniform Automatic Deferral amount, as a percentage of each Participant's Compensation, which does not exceed ten percent (10%), and which is at least the following minimum amount:

(1)   Initial period. 3% for the period that begins when the Participant first has contributions made pursuant to a default election under the QACA and ends on the last day of the following Plan Year;

(2)   Third Plan Year. 4% for the third Plan Year of the Participant's participation in the QACA;

(3)   Fourth Plan Year. 5% for the fourth Plan Year of the Participant's participation in the QACA; and

(4)   Fifth and later Plan Years. 6% for the fifth Plan Year of the Participant's participation in the QACA and for each subsequent Plan Year.

For purposes of the above, the Plan will treat an Employee who for an entire Plan Year did not have contributions made pursuant to a default election under the QACA as not having made such contributions for any prior Plan Year.

(d)   Uniformity. The "Automatic Deferral Percentage" must be a uniform percentage of Compensation. The "Automatic Deferral Percentage" is the percentage of Automatic Deferral which the Employer elects in the Adoption Agreement (including any schedu led increase to the "Automatic Deferral Percentage"). However, the Plan does not violate the uniform "Automatic Deferral Percentage" merely because:

(1)   Years of participation. The "Automatic Deferral Percentage" varies based on the number of Plan Years the Parti cipant has participated in the Plan while the Plan has applied the QACA provisions;

(2)   No reduction from prior default percentage. The Plan does not reduce an "Automatic Deferral Percentage" that, immediately prior to the QACA's effective date was higher (for any Participant) than the "Automatic Deferral Percentage."

(3)   Applying statutory limits. The Plan limits the Automatic Deferral amount so as not to exceed the limits of Code
§401(a)(17), 402(g) (determined without regard to Catch-Up Contributions), or 415;

(4)   No Automatic Deferrals during hardship suspension. The Plan does not apply the Automatic Deferral during a period of suspension, under the Plan's hardship distribution provisions, of Participant's right to make Elective Deferrals to the Plan following a hardship distribution; or

(5)   Disaggregated groups. The Plan applies different default percentages to different groups if the groups can be disaggregated under Regulation §1.401(k)-1(b)(4).

(e)   Safe harbor notice. The Plan's safe harbor notice provisions apply as set forth in Section 12.8, except the Employer must provide the initial QACA safe harbor notice sufficiently early so that an Employee has a reasonable period after receiving the notice and before the first Automatic Deferral to make an Affirmative Election. In addition, the notice must state: (1) the Automati c Deferral amount that will apply in absence of the Employee's Affirmative Election; (2) the Employee's right to elect not to have any Automatic Deferral amount made on the Employee's behalf or to elect to make Elective Deferrals in a different amount or percentage of Compensation; and (iii) how the Plan will invest the Automatic Deferrals. However, if it is not practicable for the notice to be provided on or before the date an Employee becomes a Participant, then the notice nonetheless will be treated as provided tim ely if it is provided as soon as practicable after that date and the Employee is permitted to elect to defer from all types of Compensation that may be deferred under the Plan earned beginning on that date. For this purpose, the Administrator is deemed to provide timely notice if the Administrator provides the notice at least thirty (30) days and not more than ninety (90) days prior to the beginning of the
QACA Plan Year.

(f)    Distributions. A Participant's Account balance attributable to QACA "ADP test safe harbor contributions" is subject to the distribution restrictions set forth in Section 12.2(e) other than on account of a hardship (i.e., may generally not be distributed earlier than severance of employment, death, Total and Permanent Disability, an event described in Code §401(k)(1 0), or, in case of a profit sharing plan, the attainment of age 59 1/2).

(g)   Vesting. A Participant's Account balance attributable to QACA "ADP test safe harbor contributions" is Vested in accordance with the vesting schedule, if any, elected in the Adoption Agreement.

(h)   Compensation. Compensation for purposes of determining the "Automatic Deferral Percentage" has the same meaning as
Compensation with regard to Elective Deferrals.

(i)    Modification of top-heavy rules. The top-heavy requirements of Code §416 and the Plan shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(13) and "matchi ng contributions" with respect to which the requirements of Code §401(m)(12) is met.

12.10     ADVANCE DISTRIBUTION FOR HARDSHIP

(a)   Hardship events. If elected in the Adoption Agreement, the Administrator, at the election of a Participant, shall direct the Trustee (or Insurer) to distribute to the Participant in any one Plan Year up to the lesser of (1) 100% of the Accounts as selected in the Adoption Agreement valued as of the last Valuation Date or (2) the amount necessary to satisfy the immediate and heavy financial need of the Participant. For purposes of this Section, a Participant shall include an Employee who has an Account balance i n the Plan. Any distribution made pursuant to this Section shall be deemed to be made as of the first day of the Plan Year or, if later, the Valuation Date immediately preceding the date of distribution, and the Account from which the distribution is made shall be reduced accordingly. Effective with respect to Plan Years beginning in 2006 (or if earlier, the date the final 401(k) Regulations are effective with respect to the Plan), withdrawal under this Section shall be authorized only if the distribution i s for one of the following or any other item permitted under Regulation §1.401(k)-1(d)(3)(iii)(B) or any other federally enacted legislation:

(1)   expenses for (or necessary to obtain) medical care (as defined in Code §213(d));

(2)   costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

(3)   payments for burial or funeral expenses for the Participant's deceased parent, Spouse, children or dependents (as defined in
Code §152, and without regard to Code §152(d)(1)(B));

(4)   payment of tuition, related educational fees, and room and board expenses, for up to the next twelve (12) mont hs of
post-secondary education for the Participant, the Participant's Spouse, children, or dependents (as defined in Code §152, and without regard to Code §152(b)(1), (b)(2), and (d)(1)(B));

(5)   payments necessary to prevent the eviction of the Participant from the Participant's principal residence or foreclosure on the mortgage on that residence; or

(6)   expenses for the repair of damage to the Participant's principal residence that would qualify for the casualty deduction under
Code §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income).

(b)   Beneficiary-based distribution. If elected in Adoption Agreement, then effective as of the date specified in the Adoption Agreement, but no earlier than August 17, 2006, a Participant's hardship event includes an immediate and heavy financial need of the Participant's "primary Beneficiary under the Plan," that would constitute a hardship event if it occurred with respect to the Participant's Spouse or dependent as defined under Code §152 (such hardship events being limited to educational expenses, funeral expenses and certain medical expenses). For purposes of this Section, a Participant's "primary Beneficiary under the Plan" is an individual who is named as a Beneficiary under the Plan (by the Participant or pursuant to Section 6.2(d)) and has an unconditional right to al l or a portion of the Participant's Account balance under the Plan upon the Participant's death.

(c)   Other limits and conditions. No distribution shall be made pursuant to this Section unless the Administrator, based upon the Participant's representation and such other facts as are known to the Administrator, determines that all of the following con ditions are satisfied:

(1)   The distribution is not in excess of the amount of the immediate and heavy financial need of the Participant (including any amounts necessary to pay any federal, state, or local taxes or penalties reasonably anticipated to result from the distrib ution);

(2)   The Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans maintained by the Employer (to the extent the loan would not increase the hardship); and

(3)   The Plan, and all other plans maintained by the Employer, provide that the Participant's Elective Deferrals and nondeductible voluntary Employee contributions will be suspended, for at least six (6) months after receipt of the hardship distribution.

(d)   Limitation on Account withdrawals. Notwithstanding the above, distributions from the Participant's Elective Deferral Account, Qualified Matching Contribution Account and Qualified Nonelective Contribution Account pursuant to this Section shall be limited solely to the Participant's Elective Deferrals and any income attributable thereto credited to the Participant's Elective Def erral Account as of December 31, 1988.

(e)   Other limits and conditions. If elected in the Adoption Agreement, no distribution shall be made pursuant to this Section from the Participant's Account until such Account has become fully Vested. Furthermore, if a hardship distributi on is permitted from more than one Account, the Administrator may determine any ordering of a Participant's hardship distribution from such Accounts.

(f)    Distribution rules apply. Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder.

12.11     IN-PLAN ROTH ROLLOVER CONTRIBUTIONS

(a)   Right to elect In-Plan Roth Rollover Contribution. If elected in the Adoption Agreement, then effective as of the date specified in the Adoption Agreement, but no earlier than September 28, 2010, a Participant may elect to roll over a distribut ion
directly to an In-Plan Roth Rollover Contribution Account in accordance with the provisions of the Plan, this Section and the elections made in the Adoption Agreement. "In-Plan Roth rollover contributions" will be subject to the Plan rules related to designated Roth accounts.

(b)   Eligibility for distribution and rollover. A Participant must be eligible for a distribution in order to roll over a distribution to an In-Plan Roth Rollover Contribution Account in accordance with this Section. A Participant may not make an "in -Plan Roth rollover contribution" with regard to an amount which is not an "eligible rollover distribution" as defined in Section 6.15.

(c)   Form of rollover. The Administrator may permit an "in-Plan Roth rollover contribution" either by converting to cash any non-cash investments prior to rolling over the Participant's distribution election amount to the In-Plan Roth Rollover Contribution Account, or by rolling over the Participant's current investments to the In-Plan Roth Rollover Contribution Account. A Plan loan so transferred in a direct rollover (if such transfer is permitted) without changing the repayment schedule is not treated as a new loan .

(d)   Treatment of In-Plan Roth Rollover Contributions.

(1)   Amount of In-Plan Roth Rollover Contribution. If specified in the Adoption Agreement, a Participant may take an
in-service distribution only for purposes of electing a direct rollover to an In-Plan Roth Rollover Contribution Account. If elected in the Adoption Agreement, a portion of the amount that is eligible to be rolled over to an In -Plan Roth Rollover Contribution Account may be distributed solely for the purpose of federal or state income tax withholding for the Participa nt's anticipated tax obligations regarding the amount includible in the Participant's gross income by reason of the In -Plan Roth Rollover Contribution (and the amount withheld for income taxes). The Administrator may limit the amount of the 100% withholdin g distribution to the amount the Administrator reasonably determines is sufficient to satisfy the Participant's federal and/or state income tax lia bility relating to the Plan distribution.

(2)   No rollover or distribution treatment. Notwithstanding any other Plan provision, a direct In-Plan Roth Rollover Contribution is not a rollover contribution for purposes of the Plan. Accordingly, the Plan will take into account the amount s attributable to an "in-Plan Roth rollover contribution" in determining whether a Participant's Vested Account balance exceeds
$5,000 for purposes of Code §411(a)(11). In addition, an "in-Plan Roth rollover contribution" is not a distribution for purposes of Code §§401(a)(11) (relating to spousal consent) and 3405(c) (relating to mandatory income tax withholding). Furthermore, it is not a distribution for purposes of applying any limitations that a Plan may impose with respect to the number of in -service distributions permitted by the Plan.

(3)   Withdrawal of In-Plan Roth Rollover Contributions. A Participant may withdraw amounts from the Participant's In-Plan Roth Rollover Contribution Account only when the Participant is eligible for a distribution from the Plan account that is the source of the "in-Plan Roth rollover contribution." This Section does not expand (except, if elected, for distributions for withholding) or eliminate any distribution rights on amounts that a Participant elects to treat as an "in -Plan Roth rollover contribution."

(e)   Definitions and other rules.

(1)   In-Plan Roth Rollover Contribution. An "in-Plan Roth rollover contribution" means a rollover contribution to the Plan that consists of a distribution from a Participant's Plan account, other than a designated Roth account, that the Participant rolls over to the Participant's designated In-Plan Roth Rollover Contribution Account in the Plan, in accordance with Code §402(c)(4). An "in-Plan Roth rollover contribution" may occur only by a direct rollover.

(2)   Participant includes spousal Beneficiary/Alternate Payee. For purposes of eligibility for an "in-Plan Roth rollover contribution," the Plan will treat a Participant's surviving Spouse Beneficiary or Alternate Payee Spouse or former Spouse as a Participant (unless the right to elect an "in-Plan Roth rollover contribution" is limited to Employees). A non-Spouse Beneficiary may not make an "in-Plan Roth rollover contribution."

(3)   Distribution from partially Vested account. Distributions (i.e., the source of the "in-Plan Roth rollover contribution" amounts) are permitted only from Vested amounts allocated to a qualifying source as identified in the Adoption Agreement. If a distribution is made to a Participant who has not severed employment and who is not fully Vested in the Participant's Account from which the rollover is to be made, and the Participant may increase the Vested percentage in such account, then at any relevant time the Participant's Vested portion of the account will be determined in the manner set forth in Section 6.5(h).

ARTICLE XIII SIMPLE 401(K) PROVISIONS

13.1 SIMPLE 401(k) PROVISIONS

(a)   If elected in the Adoption Agreement, this Plan is intended to be a SIMPLE 401(k) plan which satisfies the requirements of Code
§§401(k)(11) and 401(m)(10).

(b)   The provisions of this Article apply for a "year" only if the following conditions are met:

(1)   The Employer adopting this Plan is an "eligible employer." An "eligible employer" means, with respect to any "year," an Employer that had no more than 100 Employees who received at least $5,000 of "compensation" from the Employe r for the preceding "year." In applying the preceding sentence, all employees of an Affiliated Employer and Leased Employees are taken into account.

An "eligible employer" that has elected to use the SIMPLE 401(k) provisions but fails to be an "eligible e mployer" for any subsequent "year," is treated as an "eligible employer" for the two (2) "years" following the last "year" the Employer was an "eligible employer." If the failure is due to any acquisition, disposition, or similar transaction involving an " eligible employer," the preceding sentence applies only if the provisions of Code §410(b)(6)(C)(i) are satisfied.

(2)   No contributions are made, or benefits accrued for services during the "year," on behalf of any "eligible employee" under any other plan, contract, pension, or trust described in Code §219(g)(5)(A) or (B), maintained by the Employer.

(c)   To the extent that any other provision of the Plan is inconsistent with the provisions of this Article, the provisions of thi s Article govern.

13.2 DEFINITIONS

(a)   "Compensation" means, for purposes of this Article, the sum of the wages, tips, and other compensation from the Employer subject to federal income tax withholding (as described in Code §6051(a)(3)) and the Employee's salary deferral contributions made under this or any other 401(k) plan, and, if applicable, elective deferrals under a Code §408(p) SIMPLE plan, a SARSEP, or a Code
§403(b) annuity contract and compensation deferred under a Code §457 plan, required to be reported by the Employer on Form W-2 (as described in Code §6051(a)(8)). For Self-Employed Individuals, "compensation" means net earnings from self-employment
determined under Code §1402(a) prior to subtracting any contributions made under this Plan on behalf of the individual. "Compensation" also includes amounts paid for domestic service (as described in Code §3401(a)(3)). The provisions of the Plan implementing the limit on Compensation under Code §401(a)(17) apply to the "compensation" under this Article.

(b)   "Eligible employee" means, for purposes of this Article, any Participant who is entitled to make Elective Deferrals described in
Code §402(g) under the terms of the Plan.

(c)   "Year" means the calendar year.

13.3 CONTRIBUTIONS

(a)   Salary deferral contributions

(1)   Each "eligible employee" may make a salary deferral election to have "compensation" reduced for the "year" in any amount selected by the Employee subject to the limitation in Subsection (c) below. The Employer will make a salary deferral contribution to the Plan, as an Elective Deferral, in the amount by which the Employee's "compensation" has been reduced.

(2)   The total salary deferral contribution for the "year" for any Employee cannot exceed the limitation on salary deferral contributions in effect for the "year" pursuant to Code §408(p)(2). The limit will be adjusted by the Secretary of the Treasu ry for cost-of living increases under Code §408(p)(2)(E). Any such adjustments will be in multiples of $500. The amount of an Employee's salary deferral contributions permitted for a "year" is increased for Employees aged 50 or over by the end of the "year" by the amount of allowable Catch-Up Contributions pursuant to Code §414(v)(2). The limit will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code §414(v)(2)(C). Any such adjustments will be in multiples of
$500. Catch-Up Contributions are otherwise treated the same as other salary deferral contributions.

(b)   Other contributions

(1)   Matching contributions. Unless (2) below is elected, each "year" the Employer will make a matching contrib ution to the Plan on behalf of each Employee who makes a salary deferral election under Section 13.3(a). The amount of the matching contribution will be equal to the Employee's salary deferral contribution up to a limit of three percent (3%) of the Employe e's "compensation" for the full "year."

(2)   Nonelective Contributions. For any "year," instead of a matching contribution, the Employer may elect to contribute a Nonelective Contribution of two percent (2%) of "compensation" for the full "year" for each "eligible employee" who received at least $5,000 of "compensation" from the Employer for the "year."

(c)   Limitation on Other Contributions

No Employer or Employee contributions may be made to this Plan for the "year" other than salar y deferral contributions described in Section 13.3(a), matching or Nonelective Contributions described in Section 13.3(b) and rollover contributions described in Regulation §1.402(c)-2, Q&A-1(a). Furthermore, the provisions of Section 4.4 which implement the limitations of Code §415 apply to contributions made pursuant to this Section (other than Catch-Up Contributions).

13.4 ELECTION AND NOTICE REQUIREMENTS

(a)   Election period

(1)   In addition to any other election periods provided under the Plan, each "eligible employee" may make or modify a salary deferral election during the 60-day period immediately preceding each January 1st.

(2)   For the "year" an Employee becomes eligible to make salary deferral contributions under this Article, the 60 -day election period requirement of Subsection (a)(1) is deemed satisfied if the Employee may make or modify a salary deferral election during a 60-day period that includes either the date the Employee becomes eligible or the day before.

(3)   Each "eligible employee" may terminate a salary deferral election at any time durin g the "year." (b)   Notice requirements
(1)   The Employer will notify each "eligible employee" prior to the 60-day election period described in Section 13.4(a) that a salary deferral election or a modification to a prior election may be made during that period.

(2)   The notification described in (1) above will indicate whether the Employer will provide a matching contribution described in
Section 13.3(b)(1) or a two percent (2%) Nonelective Contribution described in Section 13.3(b)(2) for that "year."

13.5 VESTING REQUIREMENTS

All benefits attributable to contributions made pursuant to this Article are nonforfeitable at all times, and all previous contributions made under the Plan are nonforfeitable as of the beginning of the Plan Year that the 401(k) SIMPLE provisions apply.

13.6 TOP-HEAVY RULES

The Plan is not treated as a top-heavy plan under Code §416 for any "year" for which the provisions of this Article are effective and satisfied.

13.7 NONDISCRIMINATION TESTS

The Plan is treated as meeting the requirements of Code §§401(k)(3)(A)(ii) and 401(m)(2) for any "year" for which the provisions of this Article are effective and satisfied. Accordingly, Sections 12.4, 12.5, 12.6 and 12.7 shall not apply to the Plan for any "year" for which this Article applies.

ARTICLE XIV
MULTIPLE EMPLOYER PROVISIONS

14.1  ELECTION AND OVERRIDING EFFECT

If a Participating Employer that is not an Affiliated Employer adopts this Plan, then the provisions of this Article XIV shal l apply to such Participating Employer as of the Effective Date specified in its participation agreement and supersede any contrary provisions in the basic Plan document or the Adoption Agreement. If this Article XIV applies, then the Plan shall be a multiple employer plan a s described
in Code §413(c). In this case, the Employer and each Participating Employer acknowledge that the Plan is a multiple employer plan subj ect to the rules of Code §413(c) and the Regulations thereunder, which are hereby incorporated by reference, and specific annual reporting
requirements.

14.2  DEFINITIONS

The following definitions shall apply to this Article XIV and shall supersede any conflicting definitions in the Plan:

(a)   Employee. "Employee" means any common law employee, Self-Employed Individual, Leased Employee or other person the Code treats as an employee of a Participating Employer for purposes of the Participating Employer's qualified plan. Either the Adoption Agreement or a participation agreement to the Adoption Agreement may designate any Employee, or class of Employees, as not eligible to participate in the Plan.

(b)   Lead Employer. "Lead Employer" means the signatory Employer to the Adoption Agreement execution page, and does not include any Affiliated Employer or Participating Employer. The "lead Employer" has the same meaning as the Employer for purposes of making Plan amendments and other purposes regardless of whether the "lead Employer" is also a Participating Employer under this Article XIV.

14.3  PARTICIPATING EMPLOYER ELECTIONS

The participation agreement must identify the Participating Employer and the covered Employees and provide for the Participat ing Employer's signature. In addition, in the participation agreement, the "lead Employer" shall sp ecify which elections, if any, the Participating Employer can modify, and any restrictions on the modifications. Any such modification shall apply only to the e mployees of that Participating Employer. The Participating Employer shall make any such modifica tion by selecting the appropriate option on its participation agreement to the "lead Employer's" Adoption Agreement. To the extent that the Adoption Agreement does not permi t modification of an election, any attempt by a Participating Employer to modify th e election shall have no effect on the Plan and the Participating Employer is bound by the Plan terms as selected by the "lead Employer." If a Participating Employer does not ma ke any permissible participation agreement election modifications, then with regard to any election, the Participating Employer is bound by the Adoption Agreement terms as completed by the "lead Employer." Notwithstanding the other provisions of this Section, if a Stan dardized Plan is being used, then the elections available to Participating Employers must be limited to the elections available to the "lead Employer"

that ensure the Plan, by design, satisfies the minimum coverage requirements of Code §410(b) and the nondiscrimination requir ements of
Code §401(a)(4).

14.4  HIGHLY COMPENSATED EMPLOYEE STATUS

Status as a Highly Compensated Employee shall be determined separately with respect to each Participating Employer.

14.5  TESTING

(a)   Separate status. The Administrator shall perform the tests listed below separately for each Participating Employer, with respect to the Employees of that Participating Employer. For this purpose, the Employees of a Participating Employer, and their alloc ations and accounts, shall be treated as though they were in separate plan. Any correction action, such as additional contributions or corrective distributions, shall only affect the Employees of the Participating Employer. The tests subject to this separate t reatment are:

(1)   The ADP test in Section 12.4. (2)   The ACP test in Section 12.6.
(3)   Nondiscrimination testing as described in Code §401(a)(4) and the applicable Regulations. (4)   Coverage testing as described in Code §410(b) and the applicable Regulations.
(b)   Joint status. The Administrator shall perform the following tests for the Plan as whole, without regard to employment by a particular Participating Employer:

(1)   Applying the Code §415 limitation in Section 4.4.

(2)   Applying the Code §402(g) limitation in Section 12.2.

(3)   Applying the limit on Catch-Up Contributions in Section 12.2.

14.6  TOP HEAVY PROVISIONS

The Plan will apply the provisions of Article IX separately to each Participating Employer. The Plan will be considered separate plans for each Participating Employer and its Employees for purposes of determining whether such a separate plan is top -heavy under Section 9.1 or is entitled to the exemption described in Section 12.8(f) or 12.9(i). For purposes of applying this Article to a Participating Employer, the Participating Employer and any business which is related to that Participating Employer shall be the "Employer" for purposes of Section
9.1, and the terms "Key Employee" and "Non-Key Employee" shall refer only to the Employees of that Participating Employer. If such a
Participating Employer's separate plan is top-heavy, then:

(a)   Highest contribution rate. The Administrator shall determine the highest Key Employee contribution rate under Section 4.3(g)
by reference to the Key Employees and their allocations in the separate plan of that Participating Employer;

(b)   Top-heavy minimum allocation. The Administrator shall determine the amount of any required top-heavy minimum allocation separately for that separate plan under Section 4.3(f); and

(c)   Plan Which Will Satisfy. The Participating Employer shall make any additional contributions Section 4.3(k) requires.

14.7  COMPENSATION

(a)   Separate determination. For the following purposes, a Participant's Compensation shall be determined separately for each
Participating Employer:

(1)   Nondiscrimination and coverage. All of the separate tests listed in Section 14.5(a). (2)   Top-heavy. Application of the top-heavy rules in Article IX.
(3)   Allocations. Application of allocations under Article IV.

(4)   HCE determination. The determination of an Employee's status as a Highly Compensated Employee.

(b)   Joint status. For all Plan purposes other than those described in Section 14.7(a), including but not limited to determining the
Code §415 limits in Section 4.4, Compensation includes all Compensation paid by or for any Participating Employer.

14.8  SERVICE

An Employee's service includes all Hours of Service and Years of Service with any and all Participating Employers. An Employe e who terminates employment with one Participating Employer and immediately commences employment with another Participating Employer has not separated from service or had a severance from employment.

14.9  REQUIRED MINIMUM DISTRIBUTIONS

If a Participant is a more than 5% Owner (under Code §416(i) and Section 6.8(e)(6)) of any Participating Employer for which the Participant is an Employee in the Plan Year the Participant attains age 70 1/2, then the Participant's "required beginning date" under Section 6.8(e)(5) shall be the April 1 following the close of the calendar year in which the Participant attains age 70 1/2.

14.10 COOPERATION AND INDEMNIFICATION

(a)   Cooperation. Each Participating Employer agrees to timely provide all information the Administrator deems necessary to insure the Plan is operated in accordance with the requirements of the Code and the Act and will cooperate fully with the "lead Employer," the Plan, the Plan fiduciaries and other proper representatives in maintaining the qualified status of the Plan. Such coopera tion will include payment of such amounts into the Plan, to be allocated to employees of the Participating Employer, which are reasonably required to maintain the tax-qualified status of the Plan.

(b)   Indemnity. Each Participating Employer will indemnify and hold harmless the Administrator, the "lead Employer" and its subsidiaries; officers, directors, shareholders, employees, and agents of the "lead Employer"; the Plan; the Trustees, Fiduci aries, Participants and Beneficiaries of the Plan, as well as their respective successors and assigns, against any cause of action, loss, liability, damage, cost, or expense of any nature whatsoever (including, but not limited to, attorney's fees and costs, whether or not s uit is brought, as well as IRS plan disqualifications, other sanctions or compliance fees or DOL fiduciary breach sanctions and penalties) arising out of or relating to the Participating Employer's noncompliance with any of the Plan's terms or requirements; any in tentional or negligent act or omission the Participating Employer commits with regard to the Plan; and any omission or provision of incorrect information with regard to the Plan which causes the Plan to fail to satisfy the requirements of a tax -qualified plan.

14.11 INVOLUNTARY TERMINATION

Unless the "lead Employer" provides otherwise in an addendum hereto, the "lead Employer" shall have the power to terminate the participation of any Participating Employer (hereafter "Terminated Employer") in this Plan. If and when the "lead Employer" w ishes to exercise this power, the following shall occur:

(a)   Notice. The "lead Employer" shall give the "Terminated Employer" a notice of the "lead Employer's" intent to terminate the "Terminated Employer's" status as a Participating Employer of the Plan. The "lead Employer" will provide such notice not less than thirty (30) days prior to the date of termination unless the "lead Employer" determines that the interest of Plan Participants requires earlier termination.

(b)   Spin-off. The "lead Employer" shall establish a new defined contribution plan, using the provisions of this Plan with any modifications contained in the "Terminated Employer's" participation agreement, as a guide to establish a new defined contribut ion plan (the "spin-off plan"). The "lead Employer" will direct the Trustee to transfer (in accordance with the rules of Code §414( l) and the provisions of Section 8.3) the Accounts of the Employees of the "Terminated Employer" to the "spin -off plan." The "Terminated Employer" shall be the Employer, Administrator, and sponsor of the "spin-off plan." The Trustee of the "spin-off plan" shall be the person or entity designated by the "Terminated Employer," or, in the absence of any such designation, the chief executive off icer of
the "Terminated Employer." If state law prohibits the "Terminated Employer" from serving as Trustee, the Trustee is the president of a corporate "Terminated Employer," the managing partner of a partnership "Terminated Employer," the managing member of a limite d liability company "Terminated Employer," the sole proprietor of a proprietorship "Terminated Employer," or in the case of any other entity type, such other person with title and responsibilities similar to the foregoing. However, the "lead Employer" shall have the option to designate an appropriate financial institution as Trustee instead if necessary to protect the interest of the Participants. The
"lead Employer" shall have the authority to charge the "Terminated Employer" or the Accounts of the Employees of the "Termina ted
Employer" a reasonable fee to pay the expenses of establishing the "spin-off plan."

(c)   Alternative. The "Terminated Employer," in lieu of creation of the "spin-off plan" under (b) above, has the option to elect a transfer alternative in accordance with this Subsection (c).

(1)   Election. To exercise the option described in this Subsection, the "Terminated Employer" must inform the "lead Employer" of its choice, and must supply any reasonably required documentation as soon as practical. If the "lead Employer" has not received notice of a "Terminated Employer's" exercise of this option within ten (10) days prior to the stated date of termination, the "lead Employer" can choose to disregard the exercise and proceed with the Spin-off.

(2)   Transfer. If the "Terminated Employer" selects this option, the Administrator shall transfer (in accordance with the rules of Code §414(l) and the provisions of Section 8.3) the Accounts of the Employees of the "Terminated Employer" to a qualified pla n the "Terminated Employer" maintains. To exercise this option, the "Terminated Employer" must deliver to the "lead Employer"

or Administrator in writing the name and other relevant information of the transferee plan and must provide such assurances t hat the Administrator shall reasonable require to demonstrate that the transferee plan is a qualified plan.

(d)   Participants. The Employees of the "Terminated Employer" shall cease to be eligible to accrue additional benefits under the Plan with respect to Compensation paid by the "Terminated Employer," effective as of the date of termination. To the extent that these Employees have accrued but unpaid contributions as of the date of termination, the "Terminated Employer" shall pay such amoun ts to the Plan or the "spin-off plan" no later than thirty (30) days after the date of termination, unless the "Terminated Employer" effectively selects the Transfer option under Subsection (c)(2) above.

(e)   Consent. By its signature on the participation agreement, the Terminated Employer specificall y consents to the provisions of this
Article and agrees to perform its responsibilities with regard to the "spin-off plan," if necessary.

14.12 VOLUNTARY TERMINATION

A Participating Employer (hereafter "withdrawing employer") may voluntarily withdraw from participation in this Plan at any t ime. If and when a "withdrawing employer" wishes to withdraw, the following shall occur:

(a)   Notice. The "withdrawing employer" shall inform the "lead Employer" and the Administrator of its intention to withdraw from the Plan. The Withdrawing Employer must give the notice not less than thirty (30) days prior to the e ffective date of its withdrawal.

(b)   Procedure. The "withdrawing employer" and the "lead Employer" shall agree upon procedures for the orderly withdrawal of the "withdrawing employer" from the plan. Such procedures may include any of the optional spin-off or transfer options described in Section 14.11.
(c)   Costs. The "withdrawing employer" shall bear all reasonable costs associated with withdrawal and transfer under this Section. (d)   Participants. The Employees of the "withdrawing employer" shall cease to be eligible to accrue additional benefits under the
Plan as to Compensation paid by the "withdrawing employer," effective as of the effective date of withdrawal. To the extent t hat such Employees have accrued but unpaid contributions as of the effective date of withdrawal, the "withdrawing employer" shall contribute such amounts to the Plan or the "spin-off plan" promptly after the effective date of withdrawal, unless the accounts are transferred to a qualified plan the "withdrawing employer" maintains.

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