Document:

Exhibit 10.1

 

Execution Version

 

CREDIT AGREEMENT

 

dated as of October 16, 2015

 

among

 

CIMAREX ENERGY CO.,
  as the Borrower,

 

JPMORGAN CHASE BANK, N.A.,
  as the Administrative Agent for the Lenders,

 

WELLS FARGO BANK, N.A.,
  as the Syndication Agent for the Lenders,

 

COMPASS BANK,

DEUTSCHE BANK SECURITIES INC.

 

and

 

MUFG UNION BANK, N.A.,
  as the Documentation Agents for the Lenders,

 

and

 

CERTAIN COMMERCIAL LENDING INSTITUTIONS,
  as the Lenders

 

J.P. MORGAN SECURITIES LLC,

 

and

 

WELLS FARGO SECURITIES, LLC. 
  as Lead Arrangers and Bookrunners

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS AND ACCOUNTING TERMS
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.1
    	
Defined Terms
    	
1
    
	
SECTION 1.2
    	
Use of Defined Terms
    	
17
    
	
SECTION 1.3
    	
Cross-References
    	
17
    
	
SECTION 1.4
    	
Accounting and Financial   Determinations
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE II   THE FACILITY AND BORROWING PROCEDURES
    	
18
    
	
 
    	
 
    	
 
    
	
SECTION 2.1
    	
Facility
    	
18
    
	
SECTION 2.2
    	
Mandatory Reductions of   Commitments
    	
18
    
	
SECTION 2.3
    	
Voluntary Reduction of   Commitments
    	
18
    
	
SECTION 2.4
    	
Base Rate Loans; Eurodollar Loans
    	
19
    
	
SECTION 2.5
    	
Borrowing Procedures for Loans
    	
19
    
	
SECTION 2.6
    	
Continuation and Conversion   Elections
    	
20
    
	
SECTION 2.7
    	
Funding
    	
20
    
	
SECTION 2.8
    	
Repayment of Loans; Evidence of   Debt
    	
20
    
	
SECTION 2.9
    	
Increase in Commitments
    	
21
    
	
SECTION 2.10
    	
Extension of Maturity Date
    	
22
    
	
SECTION 2.11
    	
Letters of Credit
    	
23
    
	
SECTION 2.12
    	
Defaulting Lenders
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE III   REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 3.1
    	
Repayments and Prepayments
    	
29
    
	
SECTION 3.2
    	
Interest Provisions
    	
30
    
	
SECTION 3.3
    	
Fees
    	
31
    
	
SECTION 3.4
    	
Payments to Administrative Agent
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   CERTAIN EURODOLLAR AND OTHER PROVISIONS
    	
32
    
	
 
    	
 
    	
 
    
	
SECTION 4.1
    	
Eurodollar Lending Unlawful
    	
32
    
	
SECTION 4.2
    	
Deposits Unavailable or   Eurodollar Interest Rate Unascertainable
    	
32
    
	
SECTION 4.3
    	
Increased Eurodollar Borrowing   Costs, etc.
    	
32
    
	
SECTION 4.4
    	
Funding Losses
    	
33
    
	
SECTION 4.5
    	
Increased Capital Costs
    	
33
    
	
SECTION 4.6
    	
Taxes
    	
34
    
	
SECTION 4.7
    	
Special Fees in Respect of   Reserve Requirements
    	
37
    
	
SECTION 4.8
    	
Payments, Computations, etc.
    	
37
    
	
SECTION 4.9
    	
Sharing of Payments
    	
37
    
	
SECTION 4.10
    	
Replacement of Lender on Account   of Increased Costs, Eurodollar Lending Unlawful, Reserve Requirements, Taxes,   Certain Dissents, etc.
    	
38
    
	
SECTION 4.11
    	
Maximum Interest
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE V   CONDITIONS
    	
39
    
	
 
    	
 
    	
 
    
	
SECTION 5.1
    	
Effective Date
    	
39
    
	
SECTION 5.2
    	
All Borrowings
    	
42
    

 

i

 

	
ARTICLE VI   REPRESENTATIONS AND WARRANTIES
    	
42
    
	
 
    	
 
    	
 
    
	
SECTION 6.1
    	
Organization, etc.
    	
42
    
	
SECTION 6.2
    	
Due Authorization,   Non-Contravention, etc.
    	
42
    
	
SECTION 6.3
    	
Government Approval, Regulation,   etc.
    	
43
    
	
SECTION 6.4
    	
Validity; Enforceability, etc.
    	
43
    
	
SECTION 6.5
    	
Financial Information
    	
43
    
	
SECTION 6.6
    	
No Material Adverse Change
    	
43
    
	
SECTION 6.7
    	
Litigation, Labor Controversies,   etc.
    	
43
    
	
SECTION 6.8
    	
Subsidiaries
    	
43
    
	
SECTION 6.9
    	
Taxes
    	
43
    
	
SECTION 6.10
    	
Pension and Welfare Plans
    	
44
    
	
SECTION 6.11
    	
Environmental Warranties and Compliance
    	
44
    
	
SECTION 6.12
    	
Regulation U
    	
44
    
	
SECTION 6.13
    	
Accuracy of Information
    	
44
    
	
SECTION 6.14
    	
Use of Proceeds
    	
44
    
	
SECTION 6.15
    	
Sanctions
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   COVENANTS
    	
45
    
	
 
    	
 
    	
 
    
	
SECTION 7.1
    	
Affirmative Covenants
    	
45
    
	
SECTION 7.2
    	
Negative Covenants
    	
48
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   EVENTS OF DEFAULT
    	
52
    
	
 
    	
 
    	
 
    
	
SECTION 8.1
    	
Listing of Events of Default
    	
52
    
	
SECTION 8.2
    	
Action if Bankruptcy
    	
53
    
	
SECTION 8.3
    	
Action if Other Event of Default
    	
54
    
	
 
    	
 
    	
 
    
	
ARTICLE IX   THE AGENTS
    	
54
    
	
 
    	
 
    	
 
    
	
SECTION 9.1
    	
Actions
    	
54
    
	
SECTION 9.2
    	
Funding Reliance, etc.
    	
55
    
	
SECTION 9.3
    	
Exculpation
    	
55
    
	
SECTION 9.4
    	
Successor
    	
55
    
	
SECTION 9.5
    	
Loans by the Agents
    	
56
    
	
SECTION 9.6
    	
Credit Decisions
    	
56
    
	
SECTION 9.7
    	
Copies, etc.
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE X   MISCELLANEOUS PROVISIONS
    	
56
    
	
 
    	
 
    	
 
    
	
SECTION 10.1
    	
Waivers, Amendments, etc.
    	
56
    
	
SECTION 10.2
    	
Notices
    	
57
    
	
SECTION 10.3
    	
Payment of Costs, Expenses and   Taxes
    	
58
    
	
SECTION 10.4
    	
Indemnification; Waiver of   Consequential Damages
    	
59
    
	
SECTION 10.5
    	
Survival
    	
60
    
	
SECTION 10.6
    	
Severability
    	
60
    
	
SECTION 10.7
    	
Headings
    	
60
    
	
SECTION 10.8
    	
Governing Law
    	
60
    
	
SECTION 10.9
    	
Successors and Assigns
    	
60
    
	
SECTION 10.10
    	
Sale and Transfer of Loans and   Commitments; Participations in Loans and Commitments
    	
61
    

 

 

	
SECTION 10.11
    	
Other Transactions
    	
63
    
	
SECTION 10.12
    	
Confidentiality
    	
63
    
	
SECTION 10.13
    	
Forum Selection and Consent to   Jurisdiction
    	
64
    
	
SECTION 10.14
    	
Waiver of Jury Trial
    	
65
    
	
SECTION 10.15
    	
NO ORAL AGREEMENTS
    	
65
    
	
SECTION 10.16
    	
No Adverse Interpretation of   Other Agreements
    	
65
    
	
SECTION 10.17
    	
No Fiduciary Duty
    	
65
    
	
SECTION   10.18
    	
Setoff
    	
66
    
	
 
    	
 
    	
 
    
	
SCHEDULES AND EXHIBITS
    	
 
    
	
 
    	
 
    	
 
    
	
SCHEDULE I
    	
 
    	
-
    	
Schedule of Commitments
    	
 
    
	
SCHEDULE II
    	
 
    	
-
    	
Schedule of LC Commitments
    	
 
    
	
SCHEDULE III
    	
 
    	
-
    	
Issued Letters of Credit
    	
 
    
	
SCHEDULE 6.8
    	
 
    	
-
    	
Subsidiaries
    	
 
    
	
SCHEDULE 7.2.2
    	
 
    	
-
    	
Existing Liens
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EXHIBIT 2.5
    	
 
    	
-
    	
Form of Borrowing Request
    	
 
    
	
EXHIBIT 2.6
    	
 
    	
-
    	
Form of Continuation/Conversion Notice
    	
 
    
	
EXHIBIT 2.8
    	
 
    	
-
    	
Form of Note
    	
 
    
	
EXHIBIT 2.9
    	
 
    	
-
    	
Notice of Commitment Increase
    	
 
    
	
EXHIBIT 5.1.4(a)
    	
 
    	
-
    	
Form of Opinion of General Counsel
    	
 
    
	
EXHIBIT 5.1.4(b)
    	
 
    	
-
    	
Form of Opinion of Akin Gump Strauss Hauer & Feld   LLP
    	
 
    
	
EXHIBIT 10.10
    	
 
    	
-
    	
Form of Lender Assignment Agreement
    	
 
    

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT, dated as of October 16, 2015 (as may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is among CIMAREX ENERGY CO., a Delaware corporation (the “Borrower”), JPMORGAN CHASE BANK, N.A. (“JPMCB”), as administrative agent (JPMCB in such capacity, together with any successor(s) thereto in such capacity, the “Administrative Agent”), WELLS FARGO BANK, N.A. (“Wells Fargo”), as syndication agent (Wells Fargo in such capacity, together with any successor(s) thereto in such capacity, the “Syndication Agent”), Compass Bank, Deutsche Bank Securities Inc. and MUFG Union Bank, N.A., as documentation agents (in such capacity, together with any successor(s) thereto in such capacity, individually, a “Documentation Agent” and, collectively, the “Documentation Agents”), and certain commercial lending institutions as are or may become parties hereto (collectively, the “Lenders”).

 

W I T N E S S E T H:

 

In consideration of the premises and mutual covenants herein contained the parties hereto hereby agree as follows:

 

ARTICLE I
 DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.1                                             Defined Terms.  The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

 

“2012 Indenture” is defined in Section 5.1.8.

 

“2014 Indenture” is defined in Section 5.1.8.

 

“Administrative Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Administrative Agent pursuant to Section 9.4.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agents” means the Administrative Agent, the Syndication Agent, and the Documentation Agents, together with any successors in any such capacities.

 

 

“Agreement” means, on any date, this Credit Agreement as originally in effect on the Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.

 

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

 

“Applicable Commitment Fee Rate” means the number of basis points per annum (based on a year of 360 days) set forth below based on the Applicable Rating Level on such date:

 

	
Applicable Rating Level
    	
 
    	
Applicable Commitment Fee Rate
    	
 
    
	
Level I
    	
 
    	
12.5
    	
 
    
	
Level II
    	
 
    	
15.0
    	
 
    
	
Level III
    	
 
    	
20.0
    	
 
    
	
Level IV
    	
 
    	
27.5
    	
 
    
	
Level V
    	
 
    	
35.0
    	
 
    

 

Changes in the Applicable Commitment Fee Rate will occur automatically without prior notice.  The Administrative Agent will give notice promptly to the Borrower and the Lenders of changes in the Applicable Commitment Fee Rate.

 

“Applicable Margin” means on any date and with respect to each Eurodollar Loan or Base Rate Loan, as applicable, the number of basis points per annum set forth below based on the Applicable Rating Level on such date:

 

	
Applicable Rating
   Level
    	
 
    	
Applicable Eurodollar
   Margin
    	
 
    	
Applicable Base Rate
   Loan Margin
    	
 
    
	
Level I
    	
 
    	
112.5
    	
 
    	
12.5
    	
 
    
	
Level II
    	
 
    	
125.0
    	
 
    	
25.0
    	
 
    
	
Level III
    	
 
    	
150.0
    	
 
    	
50.0
    	
 
    
	
Level IV
    	
 
    	
175.0
    	
 
    	
75.0
    	
 
    
	
Level V
    	
 
    	
200.0
    	
 
    	
100.0
    	
 
    

 

Changes in the Applicable Margin will occur automatically without prior notice.  The Administrative Agent will give notice promptly to the Borrower and the Lenders of changes in the Applicable Margin.

 

“Applicable Rating Level” means (a) at any time that Moody’s and S&P have the equivalent rating or split ratings of not more than one rating differential of the Borrower’s senior unsecured long-term debt, the level set forth in the chart below under the heading “Applicable Rating Level” opposite the rating under the heading “Moody’s” or “S&P” which is the higher of the two if split ratings or opposite the ratings under the headings “Moody’s” and “S&P” if equivalent; and (b) at any time that Moody’s and S&P have split ratings of more than one rating differential of the Borrower’s senior unsecured long-term debt, the level set forth in the chart below under the “Applicable Rating Level” opposite the rating under the heading “Moody’s” or “S&P” which is one rating lower than the higher of the two split ratings.

 

2

 

	
Applicable Rating Level
    	
 
    	
Moody’s
    	
 
    	
S &P
    	
 
    
	
Level I
    	
 
    	
>Baa1
    	
 
    	
>BBB+
    	
 
    
	
Level II
    	
 
    	
Baa2
    	
 
    	
BBB
    	
 
    
	
Level III
    	
 
    	
Baa3
    	
 
    	
BBB-
    	
 
    
	
Level IV
    	
 
    	
Ba1
    	
 
    	
BB+
    	
 
    
	
Level V
    	
 
    	
<Ba2
    	
 
    	
<BB
    	
 
    

 

For example, if the Moody’s rating is Baal and the S&P rating is BBB, then Level I shall apply; if the Moody’s rating is Baa1 and the S&P rating is BBB- or less favorable, then Level II shall apply.

 

For purposes of the foregoing, (i) “>” means a rating equal to or more favorable than; “<” means a rating equal to or less favorable than; “>“ means a rating greater than; “<“ means a rating less than; (ii) if a rating for the Borrower’s senior unsecured long-term debt is not available from one of the Rating Agencies, the Applicable Rating Level will be based on the rating of the other Rating Agency; (iii) if ratings for the Borrower’s senior unsecured long-term debt is available from neither S&P nor Moody’s, Level V shall be deemed applicable; (iv) if determinative ratings shall change (other than as a result of a change in the rating system used by any applicable Rating Agency) such that a change in Applicable Rating Level would result, such change shall effect a change in Applicable Rating Level as of the day on which it is first announced by the applicable Rating Agency, and any change in the Applicable Margin or percentage used in calculating fees due hereunder shall apply commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change; (v) if the rating system of any of the Rating Agencies shall change prior to the date all obligations hereunder have been paid and the Commitments canceled, the Borrower and the Lenders shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system, and pending such amendment, if no Applicable Rating Level is otherwise determinable based upon the foregoing, Level V shall apply; and (vi) in the event that either S&P or Moody’s is no longer in the business of providing ratings, Fitch shall be substituted for such entity for the purposes of this definition.

 

“Approved Fund” is defined in Section 10.10.1.

 

“Arrangers” means J.P. Morgan Securities LLC and Wells Fargo Securities, LLC, each in its capacity as a lead arranger and joint bookrunner of the facility contemplated by this Agreement.

 

“ASC Topic 815” means FASB Accounting Standards Codification Topic 815 (formerly FAS 133) entitled “Derivatives and Hedging” issued by the Financial Accounting Standards Board in March of 2008, as amended from time to time.

 

“Assignee Lender” is defined in Section 10.10.1.

 

“Authorized Officer” means, relative to the Borrower, the Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, any Senior Vice President, the

 

3

 

Treasurer or the Secretary of the Borrower, or any other officer of the Borrower specified as such to the Administrative Agent in writing by any of the aforementioned officers of the Borrower.

 

“Availability Period” means the period from and including the Effective Date to but excluding the Maturity Date.

 

“Base Rate” means, on any date and with respect to all Base Rate Loans, a fluctuating rate of interest per annum equal to the highest of (a) the rate of interest most recently announced by JPMCB at its Domestic Office as its base rate for Dollar loans; (b) the Federal Funds Rate plus 1/2%; and (c) the one-month Eurodollar Rate announced on any date of determination (or if there is no announcement on such day, on the immediately preceding day on which that rate is announced) plus 1.0%.  The Base Rate is not necessarily intended to be the lowest rate of interest determined by JPMCB in connection with extensions of credit.  Changes in the rate of interest on that portion of any Loans maintained as Base Rate Loans will take effect simultaneously with each change in the Base Rate.  The Administrative Agent will give notice promptly to the Borrower and the Lenders of changes in the Base Rate.

 

“Base Rate Loan” means a Loan bearing interest at a fluctuating rate determined by reference to the Base Rate.

 

“Borrower” is defined in the preamble, and includes its permitted successors and assigns.

 

“Borrowing” means any extension of credit (as opposed to any continuation or conversion thereof) made by the Lenders by way of Loans.

 

“Borrowing Date” means a date on which a Borrowing is made hereunder.

 

“Borrowing Request” means a loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit 2.5 hereto.

 

“Business Day” means (a) any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York, New York or Houston, Texas; and (b) relative to the making, continuing, prepaying or repaying of any Eurodollar Borrowing, any day on which dealings in Dollars are carried on in the London and New York Eurodollar interbank market.

 

“Capitalization” means the sum, at any time outstanding and without duplication, of (a) Total Debt plus (b) Stockholders’ Equity.

 

“Capitalized Lease Liabilities” means all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

 

“Cash Collateralize” means to deposit into an account over which the Administrative Agent has exclusive dominion and control and exclusive right of withdrawal, or to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing

 

4

 

Banks or Lenders, as collateral for LC Exposure or obligations of Lenders to fund participations in respect of LC Exposure, cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Bank shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Bank.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

 

“Change in Control” means (i) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 35% or more of the voting power of outstanding shares of voting stock of the Borrower or (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Borrower’s board of directors (together with any new directors whose election or appointment by such board of directors or whose nomination for the election by the shareholders of the Borrower was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period of whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Borrower’s board of directors then in office.

 

“CI Lender” is defined in Section 2.9(a).

 

“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.

 

“Commitment” means, as to any Lender, the obligation, if any, of such Lender to make Loans pursuant to Section 2.1.1 of this Agreement and to acquire participations in Letters of Credit pursuant to Section 2.11 of this Agreement, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder up to but not exceeding the amount, if any, set forth opposite such Lender’s name on Schedule I, as the same may be reduced, increased or adjusted from time to time in accordance with this Agreement, including Sections 2.3 and 2.9.

 

“Commitment Increase” is defined in Section 2.9(a).

 

“Commitment Increase Effective Date” is defined in Section 2.9(b).

 

“Consenting Lenders” is defined in Section 2.10(b).

 

“Consolidated Net Tangible Assets” means at any date of determination, the total amount of assets of the Borrower and its Subsidiaries (less applicable depreciation and valuation reserves and other reserves and items deductible from the gross book value of specific asset accounts under GAAP) after deducting therefrom:

 

(a)                                 all current liabilities (excluding (i) any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than 12 months after

 

5

 

the time as of which the amount thereof is being computed, and (ii) current maturities of Total Debt); and

 

(b)                              the value of all goodwill, trade names, trademarks, patents, and other like intangible assets;

 

all as set forth on the Borrower’s consolidated balance sheet as of a date no earlier than the date of the Borrower’s latest available annual or quarterly consolidated financial statements prepared in accordance with GAAP.

 

“Continuation/Conversion Notice” means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit 2.6 hereto.

 

“Controlled Group” means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

 

“Debt” means the consolidated Indebtedness of the Borrower and its Subsidiaries.

 

“Default” means any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

 

“Defaulting Lender” means, subject to Section 2.12(f), any Lender, as reasonably determined by the Administrative Agent, that has (a) failed to fund any portion of its Loans within three Business Days of the date required to be funded by it hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) notified the Borrower, the Administrative Agent or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement unless such Lender notifies the Administrative Agent and the Borrower in writing that such intent is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (c) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good-faith dispute, (d) failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (d) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (e) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has consented to, approved of or acquiesced in any such proceeding or appointment or has a parent company that has become the subject of a

 

6

 

bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has consented to, approved of or acquiesced in any such proceeding or appointment;  provided, that a Lender shall not be a “Defaulting Lender” (A) solely by reason of events relating to a parent company of such Lender or solely because a governmental authority has been appointed (including pursuant to the Dutch Financial Supervision Act 2007) as receiver, conservator, trustee or custodian for such Lender, in each case as described in clause (e) above, if and for so long as the Administrative Agent and Borrower are satisfied in their respective sole discretion that such Lender will continue to perform its funding obligations hereunder or (B) solely by reason of the ownership or control by a governmental authority of a parent company of such Lender, if and for so long as the Administrative Agent and the Borrower are satisfied in their respective sole discretion that such Lender will continue to perform its funding obligations hereunder.

 

“Default Margin” means two percent (2%) per annum.

 

“Documentation Agent” and “Documentation Agents” are defined in the preamble.

 

“Dollar” and the sign “$” mean lawful money currently issued by the United States.

 

“Domestic Office” means, relative to any Lender, the office of such Lender designated as such in its Administrative Questionnaire or designated in the Lender Assignment Agreement or such other office of a Lender (or any successor or assign of such Lender) within the United States as may be designated from time to time by notice from such Lender, as the case may be, to each other Person party hereto.

 

“Effective Date” means the date on which the conditions specified in Section 5.1 are satisfied (or waived in accordance with Section 10.1).

 

“Environmental Law” means any federal, state, or local statute, or rule or regulation promulgated thereunder, any judicial or administrative order or judgment to which the Borrower or any Subsidiary is party or which are applicable to the Borrower or any Subsidiary (whether or not by consent), and any binding provision or condition of any governmental permit, license or other operating authorization, relating to protection of the environment, persons or the public welfare from actual or potential exposure for the effects of exposure to any actual or potential release, discharge, spill or emission (whether past or present) of, or regarding the manufacture, processing, production, gathering, transportation, importation, use, treatment, storage or disposal of, any chemical, raw material, pollutant, contaminant or toxic, corrosive, hazardous, or non-hazardous substance or waste, including petroleum.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time.  References to sections of ERISA also refer to any successor sections.

 

“Eurodollar Borrowing” means a borrowing hereunder consisting of the aggregate amount of the several Eurodollar Loans made by all or some of the Lenders to the Borrower, at the same time, at the same interest rate and for the same Interest Period.

 

7

 

“Eurodollar Loan” means a Loan bearing interest, at all times during an Interest Period applicable to such Loan, at a fixed rate of interest determined by reference to the Eurodollar Rate.

 

“Eurodollar Office” means, relative to any Lender, the office of such Lender designated as such in its Administrative Questionnaire or designated in the Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining Eurodollar Loans of such Lender hereunder.

 

“Eurodollar Rate” means, with respect to any Eurodollar Borrowing and relative to any Interest Period for Eurodollar Loans, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for U.S. Dollars for a period equal in length to such Interest Period) as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service as selected by the Administrative Agent in its reasonable discretion that publishes such rate from time to time as an authorized information vendor for the purpose of displaying such rates; in each case the “LIBO Screen Rate”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if the LIBO Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”) with respect to U.S. Dollars then the Eurodollar Rate shall be the Interpolated Rate; provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Event of Default” is defined in Section 8.1.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any obligation of the Borrower (each, a “Recipient”) or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits and similar Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document), (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender becomes a party to this Agreement (other than pursuant to an assignment request by the Borrower under Section 4.10) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.6, amounts with respect to such Taxes were payable

 

8

 

either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.6.4 and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Extension Confirmation Date” is defined in Section 2.10(b).

 

“Extension Effective Date” is defined in Section 2.10(b).

 

“Extension Request” is defined in Section 2.10(a).

 

“Facility” is defined in Section 2.1.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreement entered into in connection with the implementation of the foregoing.

 

“Federal Funds Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it; provided, that, if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Fiscal Quarter” means any quarter of a Fiscal Year.

 

“Fiscal Year” means any period of twelve consecutive calendar months ending on December 31.

 

“Fitch” means Fitch, Inc. and any affiliate thereof and any successor thereto that is a nationally-recognized rating agency.

 

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

 

“GAAP” is defined in Section 1.4.

 

“Guaranteed Liability” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or

 

9

 

guarantees the payment of dividends or other distributions upon the shares of any other Person.  The amount of any Person’s Guaranteed Liability shall be the lesser of (a) the limitation on such Person’s liability, if any, set forth in such agreement, undertaking or arrangement or (b) the outstanding principal amount of the Indebtedness guaranteed thereby.

 

“Hazardous Material” means (a) any “hazardous substance”, as defined by CERCLA; (b) any “hazardous waste”, as defined by the Resource Conservation and Recovery Act, as amended; (c) any petroleum, crude oil or any fraction thereof; (d) any hazardous, dangerous or toxic chemical, material, waste or substance within the meaning of any Environmental Law; (e) any radioactive material, including any naturally occurring radioactive material, and any source, special or by-product material as defined in 42 U.S.C. § 2011 et. seq., and any amendments or reauthorizations thereof; (f) asbestos-containing materials in any form or condition; or (g) polychlorinated biphenyls.

 

“Hedging Obligations” means, with respect to any Person, all liabilities (including guarantees and contingent liabilities) of such Person under (or in respect of) derivative contracts, including interest rate or commodity swap agreements, interest rate or commodity cap agreements and interest rate or commodity collar agreements, and all similar agreements or arrangements.

 

“Herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.

 

“Impacted Interest Period” has the meaning assigned to it in the definition of “Eurodollar Rate.”

 

“Impermissible Qualification” means, relative to the opinion or certification of any independent public accountant as to any financial statement of the Borrower, any qualification or exception to such opinion or certification (a) which is of a “going concern” or similar nature; (b) which relates to the limited scope of examination of matters relevant to such financial statement; or (c) which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause the Borrower to be in default of any of its obligations under Section 7.2.3.

 

“Including” means including without limiting the generality of any description preceding such term.

 

“Indebtedness” of any Person means, without duplication: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (b) all obligations relative to banker’s acceptances issued for the account of such Person; (c) all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as Capitalized Lease Liabilities; (d) all obligations of such Person to pay the deferred purchase price of property or services (except accounts payable arising in the ordinary course of business); (e) Indebtedness of others of the

 

10

 

type described in clauses (a), (b), (c) or (d) above secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse (such Indebtedness being the lesser of (i) the value of such property on the books of such Person or (ii) the outstanding principal amount of such Indebtedness); and (f) all Guaranteed Liabilities of such Person in respect of any of the foregoing.  For all purposes of this Agreement, 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 such Indebtedness by its terms is expressly non-recourse to such general partner or joint venturer. For the sake of clarity, Hedging Obligations of a Person shall not constitute Indebtedness of such Person.

 

“Indemnified Liabilities” is defined in Section 10.4.

 

“Indemnified Parties” is defined in Section 10.4.

 

“Indemnified Taxes” means Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document.

 

“Information” is defined in Section 10.12.

 

“Interest Period” means, with respect to Eurodollar Borrowings, the period beginning on (and including) the date on which such Eurodollar Borrowing is made or continued as, or converted into, a Eurodollar Borrowing pursuant to Section 2.5 or 2.6 and shall end on (but exclude) the day which numerically corresponds to such date one, two, three, six or twelve months or one week thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month), or such other time period acceptable to each Lender, in each case, as the Borrower may select in its relevant notice pursuant to Section 2.5, provided, however, that (a) the Borrower shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates occurring on more than ten different dates; (b) if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless, if such Interest Period applies to Eurodollar Loans, such next following Business Day is the first Business Day of a calendar month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and (c) no Interest Period may end later than the Maturity Date.

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between:  (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.

 

11

 

“Issuing Bank” means (a) each of JPMCB and Wells Fargo, in its capacity as the issuer of Letters of Credit hereunder, and their respective successors in such capacity as provided in Section 2.11(i), as well as (b) any other Lender that, at the request of the Borrower and with the consent of the Administrative Agent, agrees, in such Lender’s discretion, to become an Issuing Bank for purposes of issuing Letters of Credit pursuant to Section 2.11; provided that the Issuing Banks shall at no time be requested or otherwise required to issue Letters of Credit with an aggregate LC Exposure in excess of its LC Commitment.  An Issuing Bank may, with the prior written consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed), arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.  Each reference herein to the “Issuing Bank” shall be deemed to be a reference to the relevant Issuing Bank.

 

“JPMCB” is defined in the preamble, and includes its successors and assigns.

 

“Law” means any law (including, without limitation, any zoning law or ordinance or any Environmental Law), statute, rule, regulation, ordinance, order, directive, code, interpretation, judgment, decree, injunction, writ, determination, award, permit, license, authorization, direction, requirement or decision of an agreement with or by any government or governmental department, commission, board, court, authority, agency, official or officer, domestic or foreign.

 

“LC Commitment” means, with respect to each Issuing Bank, the obligation of such Issuing Bank to issue Letters of Credit pursuant to Section 2.11 of this Agreement, initially in the amount set forth opposite such Issuing Bank’s name on Schedule II (as may be amended from time to time by the Administrative Agent, the Borrower and such Issuing Bank).

 

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Percentage of the total LC Exposure at such time.

 

“Lender Affiliate” means (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Lender Assignment Agreement” means a Lender Assignment Agreement substantially in the form of Exhibit 10.10 hereto.

 

“Lenders” means the financial institutions listed on the signature pages hereto and their respective successors and assigns in accordance with Section 10.10 (including any commercial

 

12

 

lending institution becoming a party hereto pursuant to a Lender Assignment Agreement) or otherwise by operation of law.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement or letter of credit listed on Schedule III hereto.

 

“LIBO Screen Rate” has the meaning assigned to it in the definition of “Eurodollar Rate.”

 

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or the performance of an obligation.

 

“Loans” means the Revolving Loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“Loan Advances” means the Loans of the same Type and, in the case of Eurodollar Loans, having the same Interest Period made by all Lenders on the same Business Day and pursuant to the same Borrowing Request in accordance with Section 2.1.

 

“Loan Documents” means this Agreement, each Borrowing Request, any Note, any Letter of Credit or related document, together in each case with all exhibits, schedules and attachments thereto, and all other agreements and instruments from time to time executed and delivered by the Borrower or any of its Subsidiaries pursuant to or in connection with any of the foregoing.

 

“Margin Stock” means “margin stock” within the meaning of Regulation U.

 

“Material Adverse Effect” means a material adverse effect on (i) the financial and operating condition of the Borrower and its consolidated Subsidiaries (taken as a whole) or (ii) the ability of the Borrower to perform its payment obligations under any of the Loan Documents; provided, however, that general market or industry conditions, which do not affect the Borrower in a disproportionately adverse manner, shall not constitute or be taken into account in determining whether there has been a Material Adverse Effect.

 

“Material Subsidiary” means each Subsidiary of the Borrower now existing or hereafter acquired or formed by the Borrower that on a consolidated basis for such Subsidiary and its Subsidiaries, as of the last day of any Fiscal Quarter, was the owner of more than five percent (5%) of the Consolidated Net Tangible Assets of the Borrower and its Subsidiaries.

 

“Maturity Date” means the earlier of:

 

(a)                                 October 16, 2020, and for any Lender agreeing to extend its Maturity Date pursuant to Section 2.10, October 16 in each year thereafter pursuant to which the Maturity Date of such Lender has been extended;

 

(b)                                 the date on which the Commitments are terminated in full or reduced to zero pursuant to the terms of Section 2.3;

 

13

 

(c)                                  the date on which the Commitments are terminated in full and reduced to zero pursuant to the terms of Article VIII; and

 

(d)                                 the date on which the Obligations have become due and payable in full pursuant to the terms of Article VIII.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally-recognized rating agency.

 

“New Funds Amount” is defined in Section 2.9(d).

 

“Non-Consenting Lender” is defined in Section 2.10(a).

 

“Note” means a promissory note substantially in the form of Exhibit 2.8 or such other form as may be acceptable to the Borrower, the Administrative Agent and the Lender requesting such note pursuant to Section 2.8(e).

 

“Notice of Commitment Increase” is defined in Section 2.9(b).

 

“Obligations” means all obligations (monetary or otherwise) of the Borrower, including any Revolving Credit Exposure, arising under or in connection with this Agreement and each other Loan Document.

 

“Organic Document” means, relative to the Borrower, its certificate of incorporation, its by-laws and all stockholder agreements, voting trusts and similar arrangements applicable to any of its authorized shares of capital stock.

 

“Other Taxes” means all present or future stamp, court, or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are imposed as a result of a present or former connection between the Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced, any Loan Document, or sold or assigned an interest in any Loan or Loan Document) and imposed with respect to an assignment (other than an assignment made pursuant to Section 4.10).

 

“Participant” is defined in Section 10.10.2.

 

“Payment Date” is defined in Section 3.2.3.

 

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

 

“Pension Plan” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrower or any corporation, trade or business

 

14

 

that is, along with the Borrower, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

“Percentage” means, with respect to any Lender, the percentage of the Total Commitment represented by such Lender’s Commitment, as such percentage may be adjusted from time to time pursuant to Lender Assignment Agreements executed by such Lender and its Assignee Lenders and delivered pursuant to Section 10.10, or any decreases in Commitments made in accordance with this Agreement, or as such percentage may be adjusted from time to time pursuant to Section 2.9.  If the Commitments have terminated or expired, the Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments or other adjustments.

 

“Person” means any natural person, corporation, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.

 

“Plan” means any Pension Plan or Welfare Plan.

 

“Quarterly Payment Date” means the last day of each March, June, September, and December or, if any such day is not a Business Day, the next succeeding Business Day.

 

“Rating Agency” means either of S&P or Moody’s.

 

“Recipient” has the meaning given such term in the definition of “Excluded Taxes”.

 

“Reducing Percentage Lender” is defined in Section 2.9(d).

 

“Reduction Amount” is defined in Section 2.9(d).

 

“Regulation U” means any of Regulations T, U or X of the Board of Governors of the Federal Reserve System of the United States of America (the “Board”) from time to time in effect and shall include any successor or other regulations or official interpretations of the Board or any successor Person relating to the extension of credit for the purpose of purchasing or carrying Margin Stock and which is applicable to member banks of the Federal Reserve System or any successor Person.

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“Release” means a “release”, as such term is defined in CERCLA.

 

“Required Lenders” means Lenders in the aggregate holding greater than 50% of the aggregate amount of the Revolving Credit Exposures of all Lenders and, if there is no Revolving Credit Exposure, Lenders having greater than 50% of the then Total Commitment.

 

15

 

“Resource Conservation and Recovery Act” means the Resource Conservation and Recovery Act, 42 U.S.C. Section 690, et q., as in effect from time to time.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure at such time.

 

“Revolving Loans” means the loans provided for in Section 2.1.1 hereof.

 

“S&P” means Standard & Poor’s Ratings Group and any successor thereto that is a nationally-recognized rating agency.

 

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or by the U.S. Department of State, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person that the Borrower knows is owned 50 percent or more by any such Person or Persons described in the foregoing clauses (a) or (b).

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State.

 

“SEC” means the Securities and Exchange Commission of the United States of America.

 

“Section 10.10.1(a) Assignee” is defined in Section 10.10.1(a).

 

“Stockholders’ Equity” means, as of the time for which any determination thereof is to be made, (a) stockholders’ equity of the Borrower and its consolidated Subsidiaries determined in accordance with GAAP plus (b) either plus the amount by which such stockholders’ equity shall have been reduced by reason of any non-cash loss or minus the amount by which such stockholders’ equity shall have been increased by reason of any non-cash gain, in either case from changes in mark-to-market value of hedges, net of tax, resulting from the requirements of ASC Topic 815.

 

“Subsidiary” means any subsidiary of the Borrower.

 

“subsidiary” means, with respect to any Person, (a) any corporation, limited liability company or other business entity of which more than 50% of the outstanding equity interests having ordinary voting power to elect a majority of the board of directors (or persons performing similar functions) of such corporation, limited liability company or other business entity (irrespective of whether at the time equity interests of any other class or classes of such corporation, limited liability company or other business entity shall or might have voting power

 

16

 

upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person and (b) any partnership of which such Person, such Person and one or more other Subsidiaries of such Person, or one or more other Subsidiaries of such Person holds more than 50% of the outstanding general partner interests.

 

“Syndication Agent” is defined in the preamble.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto.

 

“Total Commitment” means the aggregate of all the Lenders’ Commitments.

 

“Total Debt” means, in respect of any Person, all Indebtedness incurred by such Person.

 

“Total LC Commitment” means the aggregate of all the Issuing Banks’ LC Commitments.

 

“Total Debt to Capitalization Ratio” means the ratio of (a) Total Debt to (b) Capitalization.

 

“Type” means, relative to any Loan, the portion thereof, if any, being maintained as a Base Rate Loan or a Eurodollar Loan.

 

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

 

“USA Patriot Act” means Title III of Pub. L. 107-56 (signed into law October 26, 2001), as amended, reformed or otherwise modified from time to time.

 

“Welfare Plan” means a “welfare plan”, as such term is defined in Section 3(1) of ERISA.

 

“Wells Fargo” is defined in the preamble, and includes its successors and assigns.

 

SECTION 1.2                                             Use of Defined Terms.  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in each Borrowing Request, Continuation/Conversion Notice, notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.

 

SECTION 1.3                                             Cross-References.  Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

 

17

 

SECTION 1.4                                             Accounting and Financial Determinations.  Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.3) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with, those generally accepted accounting principles in the United States (“GAAP”) applied in the preparation of the financial statements referred to in Section 6.5.

 

ARTICLE II
 THE FACILITY AND BORROWING PROCEDURES

 

SECTION 2.1                                             Facility.  The Lenders grant to the Borrower a credit facility (the “Facility”) pursuant to which, and upon the terms and subject to the conditions herein set out and provided that no Default or Event of Default has occurred and is continuing from time to time on any Business Day, each Lender severally agrees (a) to make Revolving Loans in U.S. Dollars to the Borrower equal to such Lender’s Percentage of the aggregate amount of Revolving Loans requested by the Borrower to be made on such day and (b) to participate in Letters of Credit in an amount equal to such Lender’s Percentage of the Total LC Commitment.

 

SECTION 2.1.1                                   Revolving Loans.  From time to time during the Availability Period, each Lender shall make Revolving Loans under this Section to the Borrower in an aggregate principal amount at any one time outstanding up to but not exceeding such Lender’s Commitment; provided, however, that at no time shall the aggregate amount of the Revolving Credit Exposure of such Lender exceed the Lender’s Commitment.  Subject to the conditions herein, any such Revolving Loan repaid prior to the Maturity Date may be reborrowed pursuant to the terms of this Agreement.

 

SECTION 2.1.2                                   Availability of Facility.  No Lender shall be permitted or required to make (a) any Loan if, after giving effect thereto, the aggregate amount of the Revolving Credit Exposures of all Lenders would exceed the Total Commitment, or (b) any Loan if, after giving effect thereto, the aggregate amount of the Revolving Credit Exposure of such Lender would exceed the Lender’s Commitment.

 

SECTION 2.2                                             Mandatory Reductions of Commitments.  The Commitment of each Lender shall be reduced automatically to zero ($0) on the Maturity Date applicable to such Lender.

 

SECTION 2.3                                             Voluntary Reduction of Commitments.  The Borrower may, from time to time on any Business Day occurring after the Effective Date, voluntarily reduce the Total Commitment; provided, however, that all such reductions shall require at least three Business Days’ prior notice to the Administrative Agent and be permanent, and any partial reduction of the Total Commitment shall be in a minimum amount of $10,000,000 and in an integral multiple of $1,000,000; and provided further that the Borrower shall not reduce the Total Commitment if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 3.1, the aggregate amount of the Revolving Credit Exposures of all Lenders will exceed the Total Commitment.

 

18

 

SECTION 2.4                                             Base Rate Loans; Eurodollar Loans.  Subject to the terms and conditions set forth in Article V, each Revolving Loan shall be either a Eurodollar Loan or a Base Rate Loan as the Borrower may request, it being understood that Revolving Loans made to the Borrower on any date may be either Eurodollar Loans or Base Rate Loans or a combination thereof.  As to any Eurodollar Loan, each Lender may, if it so elects, fulfill its commitment to make such Eurodollar Loan by causing its Eurodollar Office to make such Eurodollar Loan; provided, however, that in such event the obligation of the Borrower to repay such Eurodollar Loan nevertheless shall be to such Lender and shall be deemed to be held by such Lender for the account of such Eurodollar Office.

 

SECTION 2.5                                             Borrowing Procedures for Loans.  The Borrower shall give the Administrative Agent prior written (including facsimile or portable document format (.pdf)) notice pursuant to a Borrowing Request of each proposed Borrowing or continuation, and as to whether such Borrowing or continuation is to be of Base Rate Loans or Eurodollar Loans, as follows:

 

SECTION 2.5.1                                   Base Rate Loans.  The Administrative Agent shall receive written (including facsimile or portable document format (.pdf)) notice from the Borrower on or before 11:00 a.m. Central time on the date of the proposed Borrowing of a Base Rate Loan (including any such notice of the Borrowing of a Base Rate Loan to finance the reimbursement of an LC Disbursement as contemplated by Section 2.11(e)) and the amount of such Borrowing (which shall be in a minimum amount of $3,000,000 and an integral multiple of $1,000,000 unless such Borrowing is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.11(e)), and the Administrative Agent shall advise each Lender thereof promptly thereafter.  Not later than 2:00 p.m., Central time, on the date specified in such notice for such Borrowing, each Lender shall provide to the Administrative Agent by wire transfer, same day or immediately available funds covering such Lender’s Percentage of the requested Base Rate Loan.  Upon fulfillment of the applicable conditions set forth in Article V with respect to such Base Rate Loan, the Administrative Agent shall make available to the Borrower the proceeds of each Base Rate Loan (to the extent received from the Lenders) by wire transfer of such proceeds to such account(s) as the Borrower shall have specified in the Borrowing Request.

 

SECTION 2.5.2                                   Eurodollar Loans.  The Administrative Agent shall receive written (including facsimile or portable document format (.pdf)) notice pursuant to a Borrowing Request from the Borrower on or before 2:00 p.m. Central time, at least three (3) Business Days prior to the date requested for each proposed Borrowing or continuation of a Eurodollar Loan, of the date of such Borrowing or continuation, as the case may be, the amount of such Borrowing or continuation, as the case may be (which shall be in a minimum amount of $5,000,000 and an integral multiple of $1,000,000), and the duration of the initial Eurodollar Interest Period with respect thereto, and the Administrative Agent shall advise each Lender thereof promptly thereafter.  Not later than 10:00 a.m., Central time, on the date specified in such notice for such Borrowing, each Lender shall provide to the Administrative Agent by wire transfer, same day or immediately available funds covering such Lender’s Percentage of the requested Eurodollar Loan.  Upon fulfillment of the applicable conditions set forth in Article V with respect to such Eurodollar Loan, the Administrative Agent shall make available to the Borrower the proceeds of each Eurodollar Loan (to the extent received from the Lenders) by

 

19

 

wire transfer of such proceeds to such account(s) as the Borrower shall have specified in the Borrowing Request.

 

SECTION 2.6                                             Continuation and Conversion Elections.  By delivering a Continuation/Conversion Notice to the Administrative Agent on or before 2:00 p.m., Central time, on a Business Day, the Borrower may from time to time irrevocably elect, on not less than three (3) nor more than five (5) Business Days’ notice that all, or any portion in an aggregate minimum amount of $5,000,000 and an integral multiple of $1,000,000 of any Borrowings be, (a) in the case of Base Rate Loans, converted into Eurodollar Loans, or (b) in the case of Eurodollar Loans, be converted into a Base Rate Loan or continued as a Eurodollar Loan of such Type (in the absence of delivery of a Continuation/Conversion Notice with respect to any Eurodollar Loan at least three (3) Business Days before the last day of the then current Interest Period with respect thereto, such Eurodollar Loan shall, on such last day, automatically convert to a Base Rate Loan); provided, however, that (i) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders, and (ii) no portion of the outstanding principal amount of any Loans may be continued as, or be converted into, Eurodollar Loans when any Event of Default has occurred and is continuing.

 

SECTION 2.7                                             Funding.  Each Lender may, if it so elects, fulfill its obligation to make, continue or convert Eurodollar Loans hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to make or maintain such Eurodollar Loan; provided, however, that such Eurodollar Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such Eurodollar Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility.  In addition, the Borrower hereby consents and agrees that, for purposes of any determination to be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that each Lender elected to fund all Eurodollar Loans by purchasing Dollar deposits in its Eurodollar Office’s interbank eurodollar market.

 

SECTION 2.8                                             Repayment of Loans; Evidence of Debt.

 

(a)                                 The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date.

 

(b)                                 Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(c)                                  The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder and the Interest Period applicable thereto, if any, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

20

 

(d)                                 The entries made in the accounts maintained pursuant to paragraph (b) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(e)                                  Any Lender may request that Loans made by it be evidenced by a Note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a Note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns).  Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after assignment pursuant to Section 10.10.1) be represented by one or more Notes in such form payable to the payee named therein (or, if such Note is a registered note, to such payee and its registered assigns).

 

SECTION 2.9                                             Increase in Commitments.

 

(a)                                 Subject to the terms and conditions set forth herein, the Borrower shall have the right, with the consent of the Administrative Agent and the Issuing Banks (such consent not to be unreasonably withheld or delayed), to cause from time to time an increase in the total amount of the Commitments (a “Commitment Increase”) by adding to this Agreement one or more additional financial institutions that are not already Lenders hereunder and that are reasonably satisfactory to the Administrative Agent and the Issuing Banks (each a “CI Lender”) or by allowing one or more existing Lenders to increase their respective Commitments; provided, however, that (i) no Event of Default shall have occurred which is continuing, (ii) no such Commitment Increase shall cause the total amount of the Commitments to exceed $1,250,000,000, (iii) no Lender’s Commitment shall be increased without such Lender’s prior written consent (which consent may be given or withheld in such Lender’s sole and absolute discretion) and (iv) if, on the effective date of such increase, any Loans have been funded, then the Borrower shall be obligated to pay any breakage fees or costs in connection with the reallocation of such outstanding Loans in accordance with Section 2.9(c).

 

(b)                                 Any Commitment Increase must be requested by written notice from the Borrower to the Administrative Agent (a “Notice of Commitment Increase”) in the form of Exhibit 2.9 hereto.  The Administrative Agent shall give prompt notice to each Issuing Bank of its receipt of a Notice of Commitment Increase.  Once the Notice of Commitment Increase is fully-executed, such notice and such Commitment Increase shall be effective on the proposed effective date set forth in such notice or on another date agreed to by the Administrative Agent and the Borrower (such date referred to as the “Commitment Increase Effective Date”).

 

(c)                                  On each Commitment Increase Effective Date, to the extent that there are Loans outstanding as of such date, (i) each CI Lender shall, by wire transfer of immediately available funds, deliver to the Administrative Agent such CI Lender’s New Funds Amount, which amount, for each such CI Lender, shall constitute Loans made by such CI Lender to the Borrower pursuant to this Agreement on such Commitment Increase Effective Date, (ii) the Administrative Agent shall, by wire transfer of immediately available funds, pay to each then Reducing Percentage Lender its Reduction Amount, which amount, for each such Reducing Percentage Lender, shall constitute a prepayment by the Borrower pursuant to Section 2.3, ratably in

 

21

 

accordance with the respective principal amounts thereof, of the principal amounts of all then outstanding Loans of such Reducing Percentage Lender, and (iii) the Borrower shall be responsible to pay to each Lender any breakage fees or costs in connection with the reallocation of any outstanding Loans.

 

(d)                                 For purposes of this Section, the following defined terms shall have the following meanings:  (1) “New Funds Amount” means the amount equal to the product of a Lender’s increased Commitment or a CI Lender’s Commitment (as applicable) represented as a percentage of the total amount of the Commitments after giving effect to the Commitment Increase, times the aggregate principal amount of the outstanding Loans immediately prior to giving effect to the Commitment Increase, if any, as of a Commitment Increase Effective Date (without regard to any increase in the aggregate principal amount of Loans as a result of borrowings made after giving effect to the Commitment Increase on such Commitment Increase Effective Date); (2) “Reducing Percentage Lender” means each then existing Lender immediately prior to giving effect to the Commitment Increase that does not increase its respective Commitment as a result of the Commitment Increase and whose relative percentage of the total amount of the Commitments shall be reduced after giving effect to such Commitment Increase; and (3) “Reduction Amount” means the amount by which a Reducing Percentage Lender’s outstanding Loans decrease as of a Commitment Increase Effective Date (without regard to the effect of any borrowings made on such Commitment Increase Effective Date after giving effect to the Commitment Increase).

 

(e)                                  Each Commitment Increase shall become effective on its Commitment Increase Effective Date and upon such effectiveness (i) the Administrative Agent shall record in its records the CI Lender’s information as provided in the Notice of Commitment Increase and pursuant to an Administrative Questionnaire in form satisfactory to the Administrative Agent that shall be executed and delivered by each CI Lender to the Administrative Agent on or before the Commitment Increase Effective Date, (ii) Schedule I hereof shall be amended and restated to set forth all Lenders (including any CI Lenders) that will be Lenders hereunder after giving effect to such Commitment Increase (which shall be set forth in Annex I to the applicable Notice of Commitment Increase) and the Administrative Agent shall distribute to each Lender (including each CI Lender) a copy of such amended and restated Schedule I, and (iii) each CI Lender identified on the Notice of Commitment Increase for such Commitment Increase shall be a “Lender” for all purposes under this Agreement.

 

SECTION 2.10                                      Extension of Maturity Date.

 

(a)                                 Not earlier than 90 days prior to, nor later than 30 days prior to, October 16, 2020 and, if extended as provided in this Section 2.10, October 16, 2021, the Borrower may, upon notice to the Administrative Agent (who shall promptly notify the Lenders), request a one-year extension of the Maturity Date then in effect (“Extension Request”).  Within 15 days of delivery of such Extension Request, each Lender shall notify the Administrative Agent and the Borrower whether or not it consents to such Extension Request (which consent may be given or withheld in such Lender’s sole and absolute discretion).  Any Lender not responding within the above specified time period shall be deemed not to have consented to such Extension Request.  The Administrative Agent shall promptly notify the Borrower and the Lenders of the Lenders’ responses.

 

22

 

(b)                                 The Maturity Date shall be extended only if the Required Lenders (calculated excluding any Defaulting Lender and prior to giving effect to any replacements of Lenders permitted herein) (the “Consenting Lenders”) have consented to the Extension Request.  For each such Extension Request, if so approved, (i) the Maturity Date, as to Consenting Lenders, shall be extended to the same date in the following year after giving effect to any prior extensions (such existing Maturity Date being the “Extension Effective Date”), and (ii) the Maturity Date, as to any Lender which did not consent or which was deemed not to have consented (a “Non-Consenting Lender”), shall remain the Maturity Date in effect for such Non-Consenting Lender prior to the Extension Effective Date.  Non-Consenting Lenders shall remain Lenders until the Maturity Date applicable to such Lender, at which time (and irrespective of the pro rata requirements under Sections 4.8 and 4.9 hereof) the Borrower shall repay all Loans owing to such Lender and such Lender’s Commitment shall be reduced to zero ($0) in accordance with Section 2.2.  The Administrative Agent and the Borrower shall promptly confirm to the Lenders such extension of the Maturity Date, specifying the date of such confirmation (the “Extension Confirmation Date”), the Extension Effective Date, and the extended Maturity Date with respect to the Consenting Lenders.  As a condition precedent to such extension, the Borrower shall deliver to the Administrative Agent a certificate of the Borrower dated as of the Extension Confirmation Date signed by an Authorized Officer of the Borrower certifying that, (i) before and after giving effect to such extension, the representations and warranties contained in Article VI made by it are true and correct on and as of the Extension Confirmation Date, except to the extent that such representations and warranties specifically refer to an earlier date, (ii) before and after giving effect to such extension no Default exists or will exist as of the Extension Confirmation Date, and (iii) no Material Adverse Effect has occurred through the Extension Confirmation Date.

 

SECTION 2.11                                      Letters of Credit.

 

(a)                                 General.  Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account or for the account of any of its Subsidiaries, in a form reasonably acceptable to the applicable Issuing Bank, at any time and from time to time during the Availability Period; provided that no Letter of Credit shall be issued if (i) the aggregate LC Exposure would exceed the Total LC Commitment, (ii) the total Revolving Credit Exposures would exceed the Total Commitment or (iii) the LC Exposure of any Issuing Bank would exceed the LC Commitment of such Issuing Bank.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

 

(b)                                 Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or facsimile or transmit by portable document format (.pdf) (or other electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to such Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance,

 

23

 

amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension the aggregate amount of the Revolving Credit Exposures of all Lenders shall not exceed the Total Commitment.  Each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in Section 5.2.1.

 

(c)                                  Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit, provided that any Letter of Credit may provide for the renewal thereof for additional one year periods (which shall in no event extend beyond the date referred to in clause (ii) hereof) and (ii) the date that is five Business Days prior to the then effective Maturity Date.

 

(d)                                 Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Lender’s Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)                                  Reimbursement.  If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 1:00 pm, Central time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., Central time, on such date, or, not later than 1:00 pm, Central time, on the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of such LC Disbursement; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.5.1 that such payment be financed with a Base Rate Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make

 

24

 

such payment shall be discharged and replaced by the resulting Borrowing.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Percentage of the payment then due from the Borrower, in the same manner as provided with respect to Revolving Loans made by such Lender, and the Administrative Agent shall promptly pay to such Issuing Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to such Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse such Issuing Bank for any LC Disbursement (other than the funding of Base Rate Loans pursuant to Section 2.5.1 as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

 

(f)                                   Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) 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, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, 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 in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential 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 the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for

 

25

 

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.

 

(g)                                  Disbursement Procedures.  The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  Such Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by facsimile or portable document format (.pdf) or other electronic communication) of such demand for payment and whether the Issuing Bank 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 the Issuing Bank and the Lenders with respect to any such LC Disbursement.

 

(h)                                 Interim Interest.  If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to Base Rate Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 3.2.2 shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

 

(i)                                     Removal of an Issuing Bank.  Any Issuing Bank may be removed or replaced at any time by written agreement among the Borrower, the Administrative Agent and the successor Issuing Bank, if any.  The Administrative Agent shall notify the Lenders of any such removal or replacement of an Issuing Bank.  At the time any such removal or replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the removed or replaced Issuing Bank pursuant to Section 3.3.3.  If such Issuing Bank is replaced, from and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of such Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the removal or replacement of an Issuing Bank hereunder, the removed or replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such removal or replacement, but shall not be required to issue additional Letters of Credit.

 

(j)                                    Cash Collateralization.  If the Obligations have become immediately due and payable pursuant to Article VIII, on the Business Day that the Borrower receives notice from the Administrative Agent (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall Cash Collateralize the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to Cash Collateralize such amounts shall become effective immediately, and such Cash Collateral shall

 

26

 

become immediately due and payable, without demand or other notice of any kind, upon the Obligations having become immediately due and payable as a result of an Event of Default with respect to the Borrower described in Section 8.1.9.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account for purposes described in this Section 2.11. Other than any interest earned on the investment of Cash Collateral, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits of Cash Collateral shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Cash Collateral shall be applied by the Administrative Agent to reimburse the Issuing Banks for LC Disbursements for which they have not been reimbursed and, to the extent not 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 Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Obligations of the Borrower.

 

SECTION 2.12                                      Defaulting Lenders.

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

 

(a)                                 Commitment fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 3.3.1 and the Defaulting Lender shall forfeit any right to Letter of Credit Fees pursuant to Section 3.3.2;

 

(b)                                 the Commitment of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.1), provided that any waiver, amendment or modification that (x) reduces the amount of principal of or the rate at which interest is payable on the Loans of such Defaulting Lender, (y) increases the Defaulting Lender’s Commitment or (z) extends the dates fixed for payments of principal or interest on the Loans of such Defaulting Lender shall require the approval or consent of such Defaulting Lender;

 

(c)                                  if any LC Exposure exist at the time a Lender becomes a Defaulting Lender then:

 

(i)                                     all or any part of such LC Exposure shall be reallocated ratably among the non-Defaulting Lenders in accordance with their respective Commitment Percentages (determined without regard to such Defaulting Lender’s Commitment Percentage) and this obligation to reallocate shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to reallocation that any non-Defaulting Lender may have or have had against an Issuing Bank, the Borrower or any other Lender (including the Defaulting Lender); provided that such LC Exposure shall be reallocated among the non-Defaulting Lenders only to the extent that (x) the sum of all non-Defaulting Lenders’ Loans and all non-Defaulting Lenders’ LC Exposure plus such Defaulting Lender’s LC Exposure does not

 

27

 

exceed the total of all non-Defaulting Lenders’ Commitments, (y) the sum of each non-Defaulting Lender’s Loans and such non-Defaulting Lender’s LC Exposure plus its reallocated share of such Defaulting Lender’s LC Exposure does not exceed such non-Defaulting Lender’s Commitment and (z) the conditions set forth in Section 5.2 are satisfied at such time;

 

(ii)                                  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall, within one Business Day following notice by the Administrative Agent, Cash Collateralize such Defaulting Lender’s LC Exposure (determined after giving effect to any partial reallocation pursuant to clause (i) above and any Cash Collateral provided by such Defaulting Lender) in accordance with procedures set forth in Section 2.11(j) for so long as such LC Exposure are outstanding;

 

(iii)                               to the extent that the Borrower Cash Collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to this Section 2.12(c), the Borrower shall not be required to pay any fees pursuant to Section 3.3.2 with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is Cash Collateralized;

 

(iv)                              to the extent that the LC Exposure of the non-Defaulting Lenders are reallocated pursuant to this Section 2.12(c), the fees payable to the Lenders pursuant to Section 3.3.2 shall be adjusted in accordance with such non-Defaulting Lenders’ Commitment Percentages of the reallocated LC Exposure; and

 

(v)                                 to the extent that any Defaulting Lender’s LC Exposure is neither Cash Collateralized nor reallocated pursuant to Section 2.12(c), then, without prejudice to any rights or remedies of an Issuing Bank or any Lender hereunder, the portion of Letter of Credit fees payable under Section 3.3.2 corresponding to such Defaulting Lender’s LC Exposure that are neither so Cash Collateralized nor reallocated shall be payable to the Issuing Banks ratably in accordance with their respective undrawn amounts of Letters of Credit issued and unreimbursed LC Exposure until such LC Exposures are Cash Collateralized and/or reallocated;

 

(d)                                 so long as any Lender is a Defaulting Lender, an Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless that Issuing Bank is satisfied that the related exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or Cash Collateral that will be provided by the Borrower in accordance with Section 2.12(c), or such Defaulting Lender and participating interests in any such newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.12(c)(i) (and Defaulting Lenders shall not participate therein); and

 

(e)                                  any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender) shall, to the extent permitted by applicable law, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated account and, subject to any applicable requirements of law, be applied at such time or times as may be determined by the Administrative Agent (i) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; (ii) second, to the payment of any amounts owing by such Defaulting Lender to any Issuing Bank hereunder, (iii) third, to the funding of any Loan or the funding or Cash Collateralization of any participating interest in any

 

28

 

Letter of Credit in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, (iv) fourth, if so determined by the Administrative Agent and the Borrower, held in such account as Cash Collateral for future funding obligations of the Defaulting Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, (vi) sixth, so long as no Event of Default then exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement and (vii) seventh, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is (x) a prepayment of the principal amount of any Loans or reimbursement obligations in respect of Letter of Credit Disbursements of which a Defaulting Lender has not funded its participation obligations and (y) made at a time when the conditions set forth in Section 5.2.1 are satisfied or waived, such payment shall be applied solely to prepay the Loans of, and reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or reimbursements obligations owed to, any Defaulting Lender.

 

(f)                                   In the event that the Administrative Agent, the Borrower and an Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders as necessary in order for such Lender to hold such Loans in accordance with its Commitment Percentage; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

ARTICLE III
 REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

 

SECTION 3.1                                             Repayments and Prepayments.  The Borrower shall repay in full the unpaid principal amount of each Loan on the Maturity Date.  Prior thereto, the Borrower:

 

(a)                                 may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of any Loans; provided, however, that (i) any such prepayment shall be applied to the Lenders among Loans having the same Type and, if applicable, having the same Interest Period; (ii) all such voluntary prepayments of Eurodollar Loans shall require at least three Business Days’ prior written notice to the Administrative Agent; (iii) all such voluntary prepayments of Base Rate Loans shall be permitted on the same day as written notice is received by the Administrative Agent; and (iv) except in the case of a prepayment pursuant to Section 3.1(c), all such voluntary partial prepayments shall be in an minimum amount of $3,000,000 and an integral multiple of $1,000,000;

 

29

 

(b)                                 shall, immediately upon any acceleration of the Maturity Date pursuant to Section 8.2 or Section 8.3, repay all Loans unless, pursuant to Section 8.3, only a portion of all Loans is so accelerated; and

 

(c)                                  at any time when the aggregate amount of the Revolving Credit Exposures of all Lenders exceeds the Total Commitment then in effect, shall (i) first, immediately prepay outstanding Loans in an amount equal to the lesser of such excess and the outstanding principal balance of Loans and (ii) second, if after giving effect to the prepayment required in clause (i) above, the aggregate amount of the Revolving Credit Exposures of all Lenders still exceeds the Total Commitment then in effect, immediately Cash Collateralize such Revolving Credit Exposure in conformity with Section 2.11(j) in an amount equal to such remaining excess.

 

Each prepayment of any Loans made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4.  No voluntary prepayment of principal of any Loans shall cause a reduction in the Commitments or the Total Commitment.

 

SECTION 3.2                                             Interest Provisions.  Interest on the outstanding principal amount of Loans shall accrue and be payable in accordance with this Section 3.2.

 

SECTION 3.2.1                                   Rates.  Pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice, the Borrower may elect that Loans comprising a Borrowing accrue interest at a rate per annum: (a) on that portion maintained from time to time as a Base Rate Loan, equal to the Base Rate plus the Applicable Margin for Base Rate Loans, if any, from time to time in effect; and (b) on that portion maintained as a Eurodollar Loan, during each Interest Period applicable thereto, equal to the sum of the Eurodollar Rate for such Interest Period plus the Applicable Margin for Eurodollar Loans.  All Eurodollar Borrowings shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to such Eurodollar Borrowing.

 

SECTION 3.2.2                                   Post-Maturity Rates.  While any Event of Default is continuing, at the option of the Required Lenders, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on all outstanding Obligations at a rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate Loans, if any, plus the Default Margin; provided, however, notwithstanding the foregoing, that interest for a Eurodollar Loan shall accrue for the then effective Interest Period at a rate per annum equal to the Eurodollar Rate currently applicable to such Eurodollar Loan plus the Default Margin.

 

SECTION 3.2.3                                   Payment Dates.  Interest accrued on each Borrowing shall be payable, without duplication, on the following dates (each a “Payment Date”): (a) on the Maturity Date; (b)  with respect to Base Rate Loans, on each Quarterly Payment Date occurring after the Effective Date; and (c) with respect to Eurodollar Borrowings, on the last day of the applicable Interest Period (and, if such Interest Period shall exceed three months, every three months from the first day of such Interest Period) and, in the event of any

 

30

 

repayment or prepayment of a Eurodollar Borrowing prior to the last day of the applicable Interest Period, accrued interest on the principal amount repaid or prepaid to but not including the date of such repayment or prepayment, shall be payable on the date thereof.

 

SECTION 3.3                                             Fees.  The Borrower agrees to pay the fees set forth in this Section 3.3.  All such fees shall be non-refundable.

 

SECTION 3.3.1                                   Commitment Fees.  The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee in an amount equal to the product of the Applicable Commitment Fee Rate times the daily average unused amount of such Lender’s Commitment during the period from and including the Effective Date to but excluding the date on which such Lender’s Commitment terminates.  Accrued commitment fees shall be payable in arrears on each Quarterly Payment Date thereafter and on the Maturity Date.

 

SECTION 3.3.2                                   Letter of Credit Fees.  The Borrower agrees to pay, quarterly in arrears (i) to the Administrative Agent for the account of each Lender a participation fee with respect to such Lender’s participations in Letters of Credit, which shall accrue at the same Applicable Margin then in effect used to determine the interest rate applicable to Eurodollar Loans on the average daily amount of such Lender’s LC Exposure attributable to Letters of Credit (excluding any portion thereof attributable to unreimbursed LC Disbursements) for such quarter during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure; and (ii) to each Issuing Bank a fronting fee to be agreed with such Issuing Bank (but in any event not to exceed .20% per annum) which fronting fee shall accrue on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) applicable to such Issuing Bank for such quarter during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third (3) Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

SECTION 3.4                                             Payments to Administrative Agent.  The Borrower shall make all payments to the Administrative Agent by wire transfer of same day or immediately available funds.

 

31

 

ARTICLE IV
 CERTAIN EURODOLLAR AND OTHER PROVISIONS

 

SECTION 4.1                                             Eurodollar Lending Unlawful.  If any Lender shall determine (which determination shall, upon notice thereof to the Borrower and the Lenders, be conclusive and binding on the Borrower) that the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Lender to make, continue or maintain any Borrowing as, or to convert any Borrowing into, a Eurodollar Borrowing, the obligations of such Lender to make, continue, maintain or convert any such Borrowings shall, upon such determination, forthwith be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all Eurodollar Borrowings of such Lender shall automatically convert into Base Rate Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion; provided, however, that the obligation of such Lender to make, continue, maintain or convert any such Eurodollar Borrowings shall remain unaffected if such Lender can designate a different Eurodollar Office for the making, continuance, maintenance or conversion of Eurodollar Borrowings and such designation will not, in the sole discretion of such Lender, be otherwise disadvantageous to such Lender.

 

SECTION 4.2                                             Deposits Unavailable or Eurodollar Interest Rate Unascertainable.  If the Administrative Agent shall have determined that, by reason of circumstances affecting the Administrative Agent’s relevant market, adequate means do not exist for ascertaining the interest rate applicable hereunder to Eurodollar Borrowings, then, upon notice from the Administrative Agent to the Borrower and the Lenders, the obligations of all Lenders under Section 2.5.2 and Section 2.6 to make or continue any Borrowings as, or to convert any Borrowings into, Eurodollar Borrowings shall forthwith be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.

 

SECTION 4.3                                             Increased Eurodollar Borrowing Costs, etc.  The Borrower agrees to reimburse each Lender and Issuing Bank for any increase in the cost to such Lender or Issuing Bank of, or any reduction in the amount of any sum receivable by such Lender or Issuing Bank in respect of, making, continuing or maintaining (or of its obligation to make, continue or maintain) any Borrowings as, or of converting (or of its obligation to convert) any Borrowings into, Eurodollar Borrowings or participating in, issuing or maintaining any Letter of Credit.  Such Lender or Issuing Bank shall promptly notify the Administrative Agent and the Borrower in writing of the occurrence of any such event, such notice to state, in reasonable detail, the reasons therefor and the additional amount required fully to compensate such Lender or Issuing Bank for such increased cost or reduced amount; provided, however, that such Lender or Issuing Bank shall designate a different Eurodollar Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole discretion of such Lender or Issuing Bank, be otherwise disadvantageous to such Lender.  Such additional amounts shall be payable by the Borrower directly to such Lender or Issuing Bank within fifteen days of Borrower’s receipt of such notice, and such notice shall be rebuttable presumptive evidence of the amount payable by the Borrower.

 

32

 

SECTION 4.4                                             Funding Losses.  In the event any Lender shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to make, continue or maintain any portion of the principal amount of any Borrowing as, or to convert any portion of the principal amount of any Borrowing into, a Eurodollar Borrowing) as a result of (a) any conversion or repayment or prepayment of the principal amount of any Eurodollar Borrowings on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to Section 3.1 or otherwise, (b) any Borrowings not being made as Eurodollar Borrowings in accordance with the Borrowing Request therefor, (c) any Borrowings not being continued as, or converted into, Eurodollar Borrowings in accordance with the Continuation/Conversion Notice, or (d) the assignment of any Eurodollar Borrowing other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 4.10, then, upon the written notice of such Lender to the Borrower (with a copy to the Administrative Agent), the Borrower shall, within fifteen days of its receipt thereof, pay directly to such Lender such amount as will (in the reasonable determination of such Lender) reimburse such Lender for such loss or expense.  Such written notice (which shall include calculations in reasonable detail and supporting documentation) shall be rebuttable presumptive evidence of the amount payable by the Borrower.

 

SECTION 4.5                                             Increased Capital Costs.  If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects or would affect the liquidity or the amount of capital required or expected to be maintained by any Lender or any Issuing Bank or any Person controlling such party, and such Lender or Issuing Bank determines (in its sole discretion) that the rate of return on its or such controlling Person’s capital as a consequence of its Commitments or the Borrowings made by such Lender or Issuing Bank is reduced to a level below that which such Lender or Issuing Bank or such controlling Person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by such Lender or Issuing Bank to the Borrower, the Borrower shall pay directly to such Lender or Issuing Bank, within fifteen days, additional amounts sufficient to compensate such Lender or Issuing Bank or such controlling Person for such reduction in rate of return; provided, however, that such Lender or Issuing Bank shall designate a different Domestic or Eurodollar Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole discretion of such Lender or Issuing Bank, be otherwise disadvantageous to such Lender or Issuing Bank.  A statement of such Lender or Issuing Bank as to any such additional amount or amounts (including calculations thereof in reasonable detail and supporting documentation) shall be rebuttable presumptive evidence of the amount payable by the Borrower.  In determining such amount, such Lender or Issuing Bank may use any reasonable method of averaging and attribution that it (in its sole discretion) shall deem applicable.  For the purposes of this Section 4.5, the Dodd Frank Wall Street Reform and Consumer Protection Act, Basel III and all rules, regulations, orders, requests, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities in connection therewith are deemed to have been adopted and gone into effect after the date of this Agreement.  Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section 4.5 shall not constitute a waiver of such Lender’s or Issuing Bank’s right

 

33

 

to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section 4.5 for any increased costs incurred or reductions suffered more than 90 days prior to the date that such Lender or Issuing Bank, as the case may be, notifies the Borrower of the change in law giving rise to such increased costs or reductions, and of such Lender’s or Issuing Bank’s intention to claim compensation therefor (except that, if the change in law giving rise to such increased costs or reductions is retroactive, then the 90 day period referred to above shall be extended to include the period of retroactive effect thereof).

 

SECTION 4.6                                             Taxes.

 

SECTION 4.6.1                                   All payments by the Borrower of principal of, and interest on, the Borrowings and all other amounts payable hereunder shall be made free and clear of and without deduction for any Taxes.  In the event that any withholding or deduction from any payment to be made by or on account of any obligation of the Borrower under any Loan Document is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Borrower will, within fifteen days (a) pay directly to the relevant authority the full amount required to be so withheld or deducted; (b) forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and (c) to the extent that the withholding or deduction is made on account of Indemnified Taxes, pay to the Administrative Agent for the account of each applicable Lender or Issuing Bank such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender and Issuing Bank will equal the full amount such Lender or Issuing Bank would have received had no such withholding or deduction been required.  A statement of such Lender or Issuing Bank as to any such amount or amounts (including calculations, in reasonable detail, showing how such Lender or Issuing Bank computed such amount or amounts) shall be promptly furnished by such Lender or Issuing Bank to the Borrower and shall be rebuttable presumptive evidence of such amount or amounts.

 

SECTION 4.6.2                                   If any Indemnified Taxes are directly asserted against the Administrative Agent, any Lender or any Issuing Bank with respect to any payment received by the Administrative Agent, such Lender or such Issuing Bank hereunder, the Administrative Agent, such Lender or such Issuing Bank may pay such Indemnified Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Indemnified Taxes (including any Taxes on such additional amount) shall equal the amount such person would have received had not such Taxes been asserted; provided that the Borrower will not be obligated to pay such additional amounts to the Administrative Agent, such Lender or such Issuing Bank to the extent that such additional amounts shall have been incurred as a consequence of the Administrative Agent’s, such Lender’s, or such Issuing Bank’s gross negligence or willful misconduct, as the case may be.

 

SECTION 4.6.3                                   If the Borrower fails to pay any Indemnified Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent, for the account of the respective Lenders or Issuing Banks, the required receipts or other required documentary evidence, the Borrower shall indemnify such Lenders and Issuing Banks for any incremental Indemnified Taxes, interest or penalties that may become payable by any Lender or

 

34

 

Issuing Bank as a result of any such failure.  For purposes of this Section, a distribution hereunder by the Administrative Agent, any Lender or any Issuing Bank to or for the account of any Lender or Issuing Bank shall be deemed a payment by the Borrower.

 

SECTION 4.6.4                                   (a) Each Lender that is organized under the laws of a jurisdiction other than the United States shall, prior to the due date of any payments of the Loans under this Agreement, execute and deliver to the Borrower and the Administrative Agent, on or about the first scheduled Payment Date in each Fiscal Year and as otherwise reasonably requested by the Borrower or the Administrative Agent, one or more (as the Borrower or the Administrative Agent may reasonably request) executed originals of United States Internal Revenue Service Form W-8BEN, Form W-8BEN-E, Form W-8IMY (with documentation of the direct and indirect beneficial owners of such entity attached thereto) or Form W-8 ECI or such other forms or documents (or successor forms or documents), appropriately completed, as may be applicable to establish the extent, if any, to which a payment to such Lender is exempt from withholding or deduction of Taxes, and shall (but only so long as such Lender remains lawfully able to do so) deliver to the Borrower and the Administrative Agent additional copies of such forms on or before the date that such forms expire or become obsolete or after the occurrence of an event requiring a change in the most recent form so delivered by it and such amendments thereto as may be reasonably requested by the Borrower or the Administrative Agent, in each case certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or fees or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States.  If the form provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States withholding tax rate in excess of zero, withholding tax at such rate shall be considered an “Excluded Tax”.  For any period with respect to which a Lender has failed to provide the Borrower and the Administrative Agent with the forms required pursuant to this paragraph, if any (other than if such failure is due to a change in treaty, law or regulation occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under this Section with respect to Indemnified Taxes imposed by the United States which Indemnified Taxes would not have been imposed but for such failure to provide such form.

 

(b)                                 If any Lender or the Administrative Agent is a U.S. Person, such Lender or Administrative Agent shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of United States Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

SECTION 4.6.5                                   If the Borrower is required to pay additional amounts to or for the account of any Lender or Issuing Bank pursuant to this Section 4.6, then such Lender or Issuing Bank will change the jurisdiction of its applicable Eurodollar or Domestic Office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the sole discretion of such Lender or Issuing Bank, is not otherwise disadvantageous to such Lender or Issuing Bank.  No Lender or Issuing Bank shall be entitled to receive any greater payment under this Section as a result of the designation by such Lender or

 

35

 

Issuing Bank of a different applicable Eurodollar or Domestic Office after the date hereof, unless such designation is made with the Borrower’s prior written consent or by reason of the provisions of Sections 4.1, 4.3 or 4.5 requiring such Lender or Issuing Bank to designate a different applicable Eurodollar or Domestic Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist.

 

SECTION 4.6.6                                   If a payment made to a Lender or Issuing Bank under this Agreement or any other Loan Document would be subject to U.S. federal withholding of Taxes imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender or Issuing Bank shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by either the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by either the Borrower or the Administrative Agent, as applicable, as may be necessary for either the Borrower or the Administrative Agent, as applicable, to comply with its obligations under FATCA, to determine that such Lender or Issuing Bank has complied with such Lender’s or Issuing Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 4.6.6, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

SECTION 4.6.7                                   Each Lender and the Administrative Agent agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

SECTION 4.6.8                                   If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.6, it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 4.6 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant governmental authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 4.6.8 (plus any penalties, interest or other charges imposed by the relevant governmental authority) in the event that such indemnified party is required to repay such refund to such governmental authority.  This Section 4.6.8 shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

SECTION 4.6.9           To the extent not indemnified pursuant to Section 4.6.1 or Section 4.6.2, the Borrower shall timely pay to the relevant authority, in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

 

36

 

SECTION 4.7                     Special Fees in Respect of Reserve Requirements.  With respect to Eurodollar Borrowings, the Borrower agrees to pay to each Lender on appropriate Payment Dates, as additional interest, such amounts as will compensate such Lender for any cost to such Lender, from time to time, of any reserve, special deposit, special assessment or similar capital requirements against assets of, deposits with or for the account of, or credit extended by, such Lender which are imposed on, or deemed applicable by, such Lender, from time to time, under or pursuant to (a) any Law, treaty, regulation or directive now or hereafter in effect (including, without limitation, Regulation D of the Board of Governors of the Federal Reserve System but excluding any reserve requirement included in the definition of Eurodollar Rate in Section 1.1), (b) any interpretation or application thereof by any governmental authority, agency or instrumentality charged with the administration thereof or by any court, central bank or other fiscal, monetary or other authority having jurisdiction over the Eurodollar Borrowings or the office of such Lender where its Eurodollar Borrowings are lodged, or (c) any requirement imposed or requested by any court, governmental authority, agency or instrumentality or central bank, fiscal, monetary or other authority, whether or not having the force of law.  A written notice as to the amount of any such cost or any change therein (including calculations, in reasonable detail, showing how such Lender computed such cost or change) shall be promptly furnished by such Lender to the Borrower and shall be rebuttable presumptive evidence of such cost or change.  The Borrower will not be responsible for paying any amounts pursuant to this Section accruing prior to 90 days prior to the receipt by the Borrower of the written notice referred to in the preceding sentence.  Within fifteen (15) days after such certificate is furnished to the Borrower, the Borrower will pay directly to such Lender such additional amount or amounts as will compensate such Lender for such cost or change.

 

SECTION 4.8                     Payments, Computations, etc. Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Administrative Agent for the pro rata account of the Lenders entitled to receive such payment.  All such payments required to be made to the Administrative Agent shall be made, without setoff, deduction or counterclaim, not later than 1:00 p.m., Central time, on the date due, in same day or immediately available funds, to such account as the Administrative Agent shall specify from time to time by notice to the Borrower.  Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day.  The Administrative Agent shall promptly remit in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender.  All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days (or, in the case of interest on a Base Rate Loan, 365 days or, if appropriate, 366 days).  Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (b) of the definition of the term “Interest Period” with respect to Eurodollar Loans) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

 

SECTION 4.9                     Sharing of Payments.  If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan (other than pursuant to the terms of Sections 2.9(c), 2.10(b), 4.1, 4.3, 4.4, 4.5 and 10.4) or participation in LC Disbursements in excess of its pro rata share of payments

 

37

 

then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in Revolving Loans and participations in LC Disbursements made by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender’s ratable share (according to the proportion of (a) the amount of such selling Lender’s required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set off to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

 

SECTION 4.10              Replacement of Lender on Account of Increased Costs, Eurodollar Lending Unlawful, Reserve Requirements, Taxes, Certain Dissents, etc..  If (a) any Lender shall claim the inability to make or maintain Eurodollar Borrowings pursuant to Section 4.1, (b) any Lender is owed increased costs under Section 4.3 or Section 4.5, (c) any payment to any Lender by the Borrower is subject to any withholding tax pursuant to Section 4.6, (d) any Lender is owed any cost or expense pursuant to Section 4.7, (e) any Lender fails to agree to extend the Maturity Date if the Required Lenders have agreed to do so, (f) any Lender is a Defaulting Lender, or (g) in connection with any proposed amendment, modification, waiver or consent with respect to the interest or fees charged under the Agreement requiring consent of each Lender, the consent of the Required Lenders shall have been obtained, but the consent of one or more of the other Lenders whose consent is required shall not have been obtained, then the Borrower shall have the right, if no Event of Default or Default then exists, to replace such Lender with another bank or financial institution provided that (i) if it is not a Lender or an Affiliate thereof, such bank or financial institution shall be reasonably acceptable to the Administrative Agent and the Issuing Banks and (ii) such bank or financial institution shall unconditionally purchase, in accordance with Section 10.10 hereof, all of such Lender’s rights and obligations under this Agreement and the other Loan Documents and the appropriate pro rata share of such Lender’s Loans, LC Exposure, without recourse or expense to, or warranty by, such Lender being replaced for a purchase price equal to the aggregate outstanding principal amount of the Loans payable to such Lender, plus any accrued but unpaid interest on such Loans, plus accrued but unpaid fees in respect of such Lender’s Borrowings and such Lender’s Commitment hereunder to the date of such purchase on a date therein specified.  The Borrower shall be obligated to pay, simultaneously with such purchase and sale, the increased costs, amounts, expenses and taxes under Sections 4.1, 4.2, 4.3, 4.5, 4.6, and 4.7, any amounts payable under Section 4.4 and all other costs, fees and expenses payable to such Lender hereunder and under the Loan Documents, to the date of such purchase as well as all other Obligations due and payable to or for the benefit of such Lender; provided, that if such bank or financial institution

 

38

 

fails to purchase such rights and obligations, the Borrower shall continue to be obligated to pay the increased costs, amounts, expenses and taxes under Sections 4.3, 4.5, 4.6, and 4.7 to such Lender.

 

SECTION 4.11              Maximum Interest.  It is the intention of the parties hereto to conform strictly to applicable usury laws and, anything herein to the contrary notwithstanding, the obligations of the Borrower to the Administrative Agent and each Lender under this Agreement shall be subject to the limitation that payments of interest shall not be required to the extent that receipt thereof would be contrary to provisions of law applicable to the Administrative Agent or such Lender limiting rates of interest which may be charged or collected by the Administrative Agent or such Lender.  Accordingly, if the transactions contemplated hereby would be usurious under applicable law (including the Federal and state laws of the United States of America, or of any other jurisdiction whose laws may be mandatorily applicable) with respect to the Administrative Agent or a Lender then, in that event, notwithstanding anything to the contrary in this Agreement, it is agreed as follows:  (a) the provisions of this Section shall govern and control; (b) the aggregate of all consideration which constitutes interest under applicable law that is contracted for, charged or received under this Agreement, or under any of the other aforesaid agreements or otherwise in connection with this Agreement by the Administrative Agent or such Lender shall under no circumstances exceed the maximum amount of interest allowed by applicable law (such maximum lawful interest rate, if any, with respect to such Lender herein called the “Highest Lawful Rate”), and any excess shall be credited to the Borrower by the Administrative Agent or such Lender (or, if such consideration shall have been paid in full, such excess refunded to the Borrower); (c) all sums paid, or agreed to be paid, to the Administrative Agent or such Lender for the use, forbearance and detention of the Indebtedness of the Borrower to the Administrative Agent or such Lender hereunder shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Indebtedness until payment in full so that the actual rate of interest is uniform throughout the full term thereof; and (d) if at any time the interest provided pursuant to Section 4.1 together with any other fees payable pursuant to this Agreement and the other Loan Documents and deemed interest under applicable law, exceeds that amount which would have accrued at the Highest Lawful Rate, the amount of interest and any such fees to accrue to the Administrative Agent or such Lender pursuant to this Agreement shall be limited, notwithstanding anything to the contrary in this Agreement to that amount which would have accrued at the Highest Lawful Rate, but any subsequent reductions, as applicable, shall not reduce the interest to accrue to the Administrative Agent or such Lender pursuant to this Agreement below the Highest Lawful Rate until the total amount of interest accrued pursuant to this Agreement and such fees deemed to be interest equals the amount of interest which would have accrued to the Administrative Agent or such Lender if a varying rate per annum equal to the interest provided pursuant to Section 3.2 had at all times been in effect, plus the amount of fees which would have been received but for the effect of this Section.

 

ARTICLE V
 CONDITIONS

 

SECTION 5.1                     Effective Date.  This Agreement and the obligations of the Lenders to fund the initial Borrowing and of any Issuing Bank to issue Letters of Credit hereunder shall become effective on the date on which each of the conditions precedent set forth

 

39

 

in this Section 5.1 are satisfied or waived in writing by the Administrative Agent (with the consent of Required Lenders).

 

SECTION 5.1.1                                   Loan Documents.  The Administrative Agent shall have received from each party hereto either (a) a counterpart of this Agreement and each other required Loan Document signed on behalf of such party or (b) written evidence satisfactory to the Administrative Agent (which may include facsimile or portable document format (.pdf) or other electronic communication transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and each required Loan Document.  In addition, the Administrative Agent shall have received a Note for each Lender requesting its Loans and Commitments be evidenced by a Note.

 

SECTION 5.1.2                                   Resolutions, etc.  The Administrative Agent shall have received from the Borrower a certificate, dated the Effective Date, of its Secretary or Assistant Secretary as to (a) resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and each other Loan Document to be executed by it; and (b) the incumbency and signatures of its Authorized Officers, upon which certificate each Lender may conclusively rely until it shall have received a further certificate of the Secretary of the Borrower canceling or amending such prior certificate.

 

SECTION 5.1.3                                   Organic Documents, etc.  The Administrative Agent shall have received from the Borrower a certificate, dated the Effective Date, of an Authorized Officer certifying that attached thereto are true, correct and complete copies of the Organic Documents of the Borrower, together with all amendments thereto, and a certificate of good standing or equivalent document as to the Borrower, certified by the appropriate governmental officer in its jurisdiction of incorporation or formation, as well as any other information required by Section 326 of the USA Patriot Act or necessary for the Administrative Agent or any Lender to verify the identity of the Borrower as required by Section 326 of the USA Patriot Act.

 

SECTION 5.1.4                                   Opinion of Counsel.  The Administrative Agent shall have received favorable opinions, dated the Effective Date and addressed to the Administrative Agent and all Lenders, from (a) the general counsel to the Borrower, substantially in the form of Exhibit 5.1.4(a) hereto, and (b) the Akin Gump Strauss Hauer & Feld LLP, counsel to the Borrower, substantially in the form of Exhibit 5.1.4(b) hereto.

 

SECTION 5.1.5                                   Closing Fees, Expenses, etc.  The Administrative Agent shall also have received for its own account, or for the account of the Arrangers and each Lender, as the case may be, all fees, costs and expenses due and payable pursuant to Section 10.3, if then invoiced, together with all upfront fees due and payable pursuant to any fee letter or other agreement between the Borrower and the Administrative Agent or any Lender.

 

SECTION 5.1.6                                   No Material Adverse Change; No Default.  There shall have been no change constituting a Material Adverse Effect in the consolidated financial or operating condition of the Borrower and its consolidated Subsidiaries taken as a whole since June 30, 2015.  As of the Effective Date, no Default or Event of Default shall have then occurred and be continuing.

 

40

 

SECTION 5.1.7                                   Termination of 2011 Credit Agreement.  The Administrative Agent shall also have received (a) a written payoff letter from the administrative agent thereunder in form and substance satisfactory to the Administrative Agent providing for the termination of all commitments and guarantees and payment of all amounts due under that certain Credit Agreement, dated as of July 14, 2011 among the Borrower, the Administrative Agent and others (including, for the avoidance of doubt, each appendix thereto together with all loan documentation relating thereto) upon payment thereof and (b) if applicable, a Borrowing Request providing for Loans in the amount thereof to be paid to the account of such administrative agent.

 

SECTION 5.1.8                                   Release of Indenture Guarantors.  The Administrative Agent shall have received a copy of the certificate from the Borrower delivered to U.S. Bank National Association evidencing that contemporaneously with the Closing Date, any guarantor, if any, of the senior notes issued (x) under the Indenture dated as of April 5, 2012 by and among the Borrower and U.S. Bank National Association (as amended, supplemented or otherwise modified from time to time, the “2012 Indenture”) and (y) under the Indenture dated as of June 4, 2014 (as amended, supplemented or otherwise modified from time to time, the “2014 Indenture”) shall, in each case, have been released and discharged in full from all of its obligations under its Guarantees (as defined in, as applicable, the 2012 Indenture or the 2014 Indenture).

 

SECTION 5.1.9                                   Lien Searches.  The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties of the Borrower for each of the following jurisdictions:  Delaware and Colorado and any other jurisdiction requested by the Administrative Agent; other than those being assigned or released on or prior to the Closing Date or Liens permitted by Section 7.2.2.

 

SECTION 5.1.10                            Financial Statements.  The Lenders shall have received audited financial statements of the Borrower for the Fiscal Year ended December 31, 2014 and unaudited financial statements of the Borrower for the Fiscal Quarters ended March 31, 2015 and June 30, 2015.

 

SECTION 5.1.11                            Consents and Approvals.  All governmental and third party approvals necessary or, in the reasonable opinion of the Administrative Agent, advisable in connection with the financing and transactions contemplated hereby, and the continuing operations of the Borrower and its Subsidiaries shall have been obtained and be in full force and effect.

 

SECTION 5.1.12                            Notes.  The Administrative Agent shall have received a duly executed Note, payable to each Lender that has requested a Note, in the principal amount of its Commitment and dated as of the date hereof.

 

SECTION 5.1.13                            KYC.  The Lenders shall have received at least three (3) business days prior to the Closing Date, to the extent requested at least seven (7) days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.

 

41

 

SECTION 5.1.14                            Other Documents.  Such other documents as the Administrative Agent may have reasonably requested.

 

SECTION 5.2                     All Borrowings.  The obligation of each Lender to fund any Borrowing (including the initial Borrowing) and of any Issuing Bank to issue, amend, renew or extend any Letters of Credit hereunder (including any initial Letter of Credit) shall be subject to the satisfaction of each of the conditions precedent set forth in this Section.

 

SECTION 5.2.1                                   Compliance with Warranties, No Default, etc.  Both before and after giving effect to any Borrowing, the following statements shall be true and correct (a) the representations and warranties set forth in Article VI (other than the representations contained in Sections 6.6 and 6.7) shall be true and correct with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and (b) no Default or Event of Default shall have then occurred and be continuing.

 

SECTION 5.2.2                                   Borrowing Request.  Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall constitute a representation and warranty by the Borrower that on the date of such Borrowing (both immediately before and after giving effect to such Borrowing and the application of the proceeds thereof) the statements made in Section 5.2.1 are true and correct.

 

ARTICLE VI
 REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders and the Administrative Agent to enter into this Agreement and to make Loans hereunder and to participate in Letters of Credit and to induce each Issuing Bank to issue Letters of Credit, the Borrower represents and warrants unto the Administrative Agent and each Lender as set forth in this Article VI.

 

SECTION 6.1                     Organization, etc. The Borrower and each of its Subsidiaries is a corporation, partnership, limited partnership or limited liability company validly organized and existing and in good standing under the laws of the State of its incorporation, is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction where the nature of its business requires such qualification, and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its Obligations under this Agreement and each other Loan Document to which it is a party and to conduct its business substantially as currently conducted by it (except where the failure to be so qualified to do business or be in good standing or to hold any such licenses, permits and other approvals would not reasonably be expected to cause a Material Adverse Effect).

 

SECTION 6.2                     Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document executed or to be executed by it, and the Borrower’s participation in any transaction contemplated herein are within the Borrower’s powers, have been duly authorized by all necessary corporate action, and do not (a) contravene the Borrower’s Organic Documents; (b) contravene any material contractual restriction, law, governmental regulation or court decree

 

42

 

or order, in each case binding on or affecting the Borrower; or (c) result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties.

 

SECTION 6.3                     Government Approval, Regulation, etc.  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document to which it is a party, or for the Borrower’s participation in any transaction contemplated herein, except as have been obtained and remain in full force and effect.  Neither the Borrower nor any of its Subsidiaries is or is “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

SECTION 6.4                     Validity; Enforceability, etc.  This Agreement constitutes, and each other Loan Document executed by the Borrower will, on the due execution and delivery thereof, constitute, the legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms except as (i) enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditor’s rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

 

SECTION 6.5                     Financial Information.  The balance sheets of the Borrower and each of its consolidated Subsidiaries as at June 30, 2015 and the related statements of earnings and cash flow, copies of which have been furnished to the Administrative Agent and each Lender, have been prepared in accordance with GAAP consistently applied, and present fairly the consolidated financial condition of the corporations covered thereby as at the date thereof and the results of their operations for the period then ended.

 

SECTION 6.6                     No Material Adverse Change.  As of the Effective Date, since the date of the financial statements described in Section 6.5, there has been no Material Adverse Effect.

 

SECTION 6.7                     Litigation, Labor Controversies, etc.  As of the Effective Date, there is no pending or, to the knowledge of the Borrower, threatened litigation, action, proceeding, or labor controversy affecting the Borrower or any of its Subsidiaries, or any of their respective properties, businesses, assets or revenues, which would reasonably be expected to cause a Material Adverse Effect or which purports to affect the legality, validity or enforceability of, and the rights and remedies of the Administrative Agent and the Lenders under, this Agreement or any other Loan Document.

 

SECTION 6.8                     Subsidiaries.  Schedule 6.8 sets forth the name, the identity or corporate structure and the ownership interest of each direct or indirect Subsidiary as of the Effective Date.  As of the Effective Date, the Borrower does not have any Subsidiaries other than the Subsidiaries identified in Schedule 6.8.

 

SECTION 6.9                     Taxes.  The Borrower and each of its Subsidiaries which is a member of the Borrower’s consolidated U.S. federal income tax group has filed all federal tax returns and reports and all material state tax returns and reports required by law to have been

 

43

 

filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books except such returns and taxes for jurisdictions other than the United States with respect to which the failure to file and pay such taxes would not reasonably be expected to cause a Material Adverse Effect.

 

SECTION 6.10              Pension and Welfare Plans.  During the twelve-consecutive-month period prior to the date of the execution and delivery of this Agreement and prior to the date of any Borrowing hereunder, no steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA, in either case which would reasonably be expected to cause a Material Adverse Effect.  No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by the Borrower or any member of the Controlled Group of any liability, fine or penalty which would reasonably be expected to cause a Material Adverse Effect.  As of the Effective Date, neither the Borrower nor any member of the Controlled Group has any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA.

 

SECTION 6.11              Environmental Warranties and Compliance.  The liabilities and costs of the Borrower and its Subsidiaries related to compliance with applicable Environmental Laws (as in effect on the date on which this representation is made or deemed made) would not reasonably be expected to cause a Material Adverse Effect.

 

SECTION 6.12              Regulation U.  None of the Borrower and its Subsidiaries are engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loans will be used for any purpose which would cause the Loans to be a “purpose credit” within the meaning of Regulation U.

 

SECTION 6.13              Accuracy of Information.  No certificate, statement or other information delivered herewith or hereto by or on behalf of the Borrower in writing to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or in connection with any transaction contemplated hereby contains any untrue statement of a fact or omits to state any fact known to the Borrower or its Subsidiaries necessary to make the statements contained herein or therein not misleading as of the date made or deemed made, except to the extent that any untrue statement or omission would not reasonably be expected to cause a Material Adverse Effect; provided that, with respect to projected information, the Borrower only represents that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

 

SECTION 6.14              Use of Proceeds.  The proceeds of each Borrowing shall be used for the general corporate purposes of the Borrower and its Subsidiaries, including corporate and asset acquisitions and repurchases of, and distributions in respect of, capital stock of the Borrower.

 

44

 

SECTION 6.15              Sanctions.  The Borrower has implemented and maintains in effect policies and procedures designed to achieve compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents (acting in their capacity as such) with applicable Anti-Corruption Laws and Sanctions.  The Borrower and each of its Subsidiaries is in compliance with all applicable Anti-Corruption Laws and Sanctions.  None of (a) the Borrower, any Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective directors or officers, or (b) to the knowledge of the Borrower, any employee or agent of the Borrower or any Subsidiary (in each case, acting in their capacity as such), is a Sanctioned Person.  No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will violate any Anti-Corruption Law or applicable Sanctions.  Neither the making of the Loans nor the use of proceeds thereof will violate the USA Patriot Act, the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or successor statute thereto.  The Borrower and its Subsidiaries are in compliance in all material respects with the USA Patriot Act.

 

ARTICLE VII
 COVENANTS

 

SECTION 7.1                     Affirmative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, until all Commitments have terminated and all Obligations have been paid and performed in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower will perform the obligations set forth in this Section 7.1.

 

SECTION 7.1.1                                   Financial Information, Reports, Notices, etc.  The Borrower will furnish, or will cause to be furnished, to each Lender and the Administrative Agent copies of the following financial statements, reports, notices and information:

 

(a)                                 as soon as available and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of earnings and cash flow of the Borrower and its Subsidiaries for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, certified by the chief financial Authorized Officer of the Borrower as having been prepared in accordance with GAAP;

 

(b)                                 as soon as available and in any event within 75 days after the end of each Fiscal Year of the Borrower, a copy of the annual audit report for such Fiscal Year for the Borrower and its Subsidiaries, including therein consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such Fiscal Year and consolidated statements of earnings and cash flow of the Borrower and its Subsidiaries for such Fiscal Year, in each case certified (without any Impermissible Qualification) as having been prepared in accordance with GAAP by independent public accountants of recognized national standing;

 

(c)                                  as soon as available and in any event at the time of each delivery of financial reports under subsections (a) and (b) of this Section 7.1.1, a certificate, executed by the chief financial Authorized Officer of the Borrower, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Administrative Agent) compliance with the financial covenants set forth in Section 7.2.3;

 

45

 

(d)                                 promptly, and in any event within three Business Days after an Authorized Officer of the Borrower or any of its Subsidiaries becomes aware of the existence of the occurrence of each Default, a statement of an Authorized Officer of the Borrower setting forth details of such Default and the action which the Borrower has taken and proposes to take with respect thereto;

 

(e)                                  promptly, and in any event within three Business Days after an Authorized Officer of the Borrower or any of its Subsidiaries becomes aware of (x) the occurrence of any adverse development with respect to any litigation, action, proceeding, or labor controversy described in Section 6.7 which would reasonably be expected to cause a Material Adverse Effect, or (y) the commencement of any material labor controversy, litigation, action, proceeding of the type described in Section 6.7 which would reasonably be expected to cause a Material Adverse Effect, notice thereof and copies of all documentation relating thereto requested by the Administrative Agent or any Lender;

 

(f)                                   promptly after the sending or filing thereof, copies of all reports and registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange;

 

(g)                                  immediately upon becoming aware of the institution of any steps by the Borrower or any other Person to terminate any Pension Plan, or the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA, or the taking of any action with respect to a Pension Plan which could result in the requirement that the Borrower furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan which could result in the incurrence by the Borrower of any liability, fine or penalty, or any increase in the contingent liability of the Borrower with respect to any post-retirement Welfare Plan benefit which would reasonably be expected to cause a Material Adverse Effect, notice thereof and copies of all documentation relating thereto; and

 

(h)                                 such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request.

 

To the extent any documents which are required to be delivered pursuant to Section 7.1.1 are included in materials otherwise filed with the SEC, such documents may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the following website address: www.cimarex.com; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender.  Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide portable document format (.pdf) or other electronic communication copies of the compliance certificates required by

 

46

 

Section 7.1.1 to the Administrative Agent.  Except for such compliance certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

SECTION 7.1.2                                   Compliance with Laws, etc.  The Borrower will, and will cause each of its Subsidiaries to, comply with all Laws, such compliance to include, without limitation: (a) the maintenance and preservation of its corporate existence and qualification as a foreign corporation, (b) the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books and (c) all Environmental Laws; except; in each case, where the failure to so comply would not reasonably be expected to cause a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower shall, and shall cause each Subsidiary to, provide such information and take such actions as are reasonably requested by the Administrative Agent or any Lender to assist the Administrative Agent and the Lenders in maintaining compliance with the USA Patriot Act.

 

SECTION 7.1.3                                   Maintenance of Properties.  The Borrower will, and will cause each of its Material Subsidiaries to, maintain, preserve, protect and keep its properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times unless the Borrower determines in good faith that the continued maintenance of any of its properties is no longer economically desirable or unless failure to so preserve, maintain, protect or keep its properties would not reasonably be expected to cause a Material Adverse Effect.

 

SECTION 7.1.4                                   Insurance.  The Borrower will, and will cause each of its Material Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to its properties and business against such casualties and contingencies and of such types and in such amounts as is customary in the case of similar businesses in similar locations, subject to self insurance and deductibles as the Borrower deems appropriate and subject in any event to such insurance being available on commercially reasonably terms.

 

SECTION 7.1.5                                   Books and Records.  The Borrower will, and will cause each of its Subsidiaries to, keep books and records which accurately reflect, in accordance with GAAP, all of its business affairs and transactions and permit the Administrative Agent or its representatives, at reasonable times and intervals and upon reasonable prior notice to the Borrower, to visit all of its offices, to discuss its financial matters with its officers and employees and to examine any of its books or other corporate records; provided, however, that prior notice to the Borrower shall not be required if an Event of Default has occurred or is continuing.

 

SECTION 7.1.6                                   Conduct of Business.  The Borrower will, and will cause each Material Subsidiary to, cause all material properties and businesses to be regularly conducted, operated, maintained and developed in a good and workmanlike manner, as would a

 

47

 

prudent operator and in accordance with all applicable federal, state and local laws, rules and regulations, except for any failure to so operate, maintain and develop that would not reasonably be expected to cause a Material Adverse Effect.

 

SECTION 7.2                     Negative Covenants.  The Borrower agrees with the Administrative Agent and each Lender that, until all Commitments have terminated and all Obligations have been paid and performed in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower will perform the obligations set forth in this Section 7.2.

 

SECTION 7.2.1                                   Business Activities.  The Borrower will not, and will not permit any of its Subsidiaries to, engage in any business activity if, as a result thereof, the Borrower and its Subsidiaries taken as a whole would no longer be principally engaged in the business of oil, gas and energy exploration, development, production, processing and marketing and such activities as may be incidental or related thereto.

 

SECTION 7.2.2                                   Liens.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

 

(a)                                 Liens securing payment of the Obligations granted pursuant to any Loan Document;

 

(b)                                 Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

 

(c)                                  Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue more than 30 days or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

 

(d)                                 Liens incurred in the ordinary course of business in connection with workmen’s compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders or bids, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds;

 

(e)                                  judgment Liens in existence less than 30 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to applicable self insurance and deductibles) by insurance maintained with responsible insurance companies;

 

(f)                                   Liens in favor of the United States of America or any state thereof or any department, agency, instrumentality or political subdivision of any such jurisdiction to secure partial, progress, advance or other payments pursuant to any contract or statute;

 

48

 

(g)                                  Liens required by any contract or statute in order to permit the Borrower or a Subsidiary to perform any contract or subcontract made by it with or at the request of the United States of America, any state or any department, agency or instrumentality or political subdivision of either;

 

(h)                                 Liens which exist prior to the time of acquisition upon any assets acquired by the Borrower or any Subsidiary (including Liens on assets of any Person at the time of the acquisition of the capital stock or assets of such Person or a merger with or consolidation with such Person by the Borrower or a Subsidiary); provided that (i) the Lien shall attach solely to the assets so acquired (or of the Person so acquired, merged or consolidated), and (ii) in the case of Liens securing Indebtedness, the aggregate principal amount of all Indebtedness of Subsidiaries secured by such Liens shall be permitted by the limitations set forth in Section 7.2.4;

 

(i)                                     Liens securing Indebtedness owing by any Subsidiary to another Subsidiary or to the Borrower;

 

(j)                                    Liens pursuant to partnership agreements, oil, gas and/or mineral leases, farm-out agreements, division orders, contracts for the processing of oil, gas and/or other hydrocarbons, unitization and pooling declarations and agreements, operating agreements, development agreements, area of mutual interest agreements and other agreements which are customary in the oil, gas and other mineral exploration, development and production business and in the business of processing of gas and gas condensate production for the extraction of products therefrom;

 

(k)                                 Liens set forth on Schedule 7.2.2 which are existing on the Effective Date;

 

(l)                                     Liens on debt of or equity interests in a Person that is not a Subsidiary;

 

(m)                             Liens on cash and cash equivalents to secure payment or performance under futures, forwards or Hedging Obligations, and other obligations of a like nature, in each case in the ordinary course of business;

 

(n)                                 Liens securing Indebtedness of the Borrower or its Subsidiaries incurred to finance the acquisition, construction, or improvement, or capital lease of assets (including equipment); provided that such Indebtedness when incurred shall not exceed the purchase price and costs, as applicable, of acquisition, construction or improvement of the asset(s) financed and all fees, costs and expenses relating thereto, including attorney and legal, accounting, expert, and professional advisor fees and expenses;

 

(o)                                 any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses of this Section or of any Indebtedness secured thereby; provided that in the case of Liens securing Indebtedness, the principal amount of Indebtedness secured thereby shall not exceed the principal amount of Indebtedness so secured at the time of such extension, renewal or replacement and that such extension, renewal or replacement Lien shall be limited to all or part of substantially the same property or revenue subject of the Lien extended, renewed or replaced (plus improvements on such property);

 

49

 

(p)                                 Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution; provided that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Borrower in excess of those set forth by regulations promulgated by the Federal Reserve Board or any other governmental authority performing a substantially equivalent role; and (ii) such deposit account is not intended by the Borrower or any Subsidiary to provide collateral to the depository institution; and

 

(q)                                 Liens upon assets of the Borrower and its Subsidiaries created after the date hereof not otherwise permitted by this Section 7.2.2, provided that (i) the aggregate Indebtedness secured thereby and incurred on or after the date hereof shall not exceed fifteen percent (15%) of Consolidated Net Tangible Assets in the aggregate at any one time outstanding and (ii) that such Liens do not encumber or attach to any equity interest in a Subsidiary.

 

SECTION 7.2.3                                   Financial Covenant - Total Debt to Capitalization.  The Borrower will not permit the Total Debt to Capitalization Ratio, expressed as a percentage, to exceed 65% at any time.

 

SECTION 7.2.4                                   Subsidiary Indebtedness.  The Borrower will not permit any of its Subsidiaries to contract, create, incur or assume any Indebtedness for borrowed money, other than:

 

(a)                                 Indebtedness owing by a Subsidiary of the Borrower to the Borrower or any Subsidiary of the Borrower;

 

(b)                                 purchase money Indebtedness to finance the acquisition, construction, or improvement, or capital lease of assets (including equipment); provided that such Indebtedness when incurred shall not exceed the purchase price and costs, as applicable, of acquisition, construction or improvement of the asset(s) financed and all fees, costs and expenses relating thereto;

 

(c)                                  Indebtedness of a Subsidiary which exists prior to the time of acquisition of such Subsidiary (including Indebtedness at the time of the acquisition of the capital stock or assets of such Person or a merger with or consolidation with such Person by the Borrower or a Subsidiary) as long as such Indebtedness was not created in anticipation thereof;

 

(d)                                 Indebtedness (i) under unsecured overdraft lines of credit or for working capital purposes in foreign countries with financial institutions and (ii) arising from the honoring by a bank or other person of a check, draft or similar instrument inadvertently drawing against insufficient funds;

 

(e)                                  extensions, refinancing, renewals or replacements (or successive extensions, refinancing, renewals, or replacements), in whole or in part, of the Indebtedness permitted above which, in the case of any such extension, refinancing, renewal or replacement, does not increase the amount of the Indebtedness being extended, refinanced, renewed or replaced, other than amounts incurred to pay the costs of such extension, refinancing, renewal or replacement; and

 

50

 

(f)                                   any other Indebtedness not otherwise permitted by this Section 7.2.4 in a principal amount not to exceed fifteen percent (15%) of Consolidated Net Tangible Assets in the aggregate at any one time outstanding.

 

SECTION 7.2.5                                   Consolidation, Merger, etc.

 

(a)                                 The Borrower will not liquidate or dissolve, nor consolidate with, or merge into or with, any other Person except (i) any Subsidiary and (ii) so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, any other Person, in either case so long as the Borrower is the surviving entity.

 

(b)                                 The Borrower will not sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of the assets of the Borrower and its Subsidiaries taken as a whole to any “person” (as such term is used in Section 13(d) and 14(d) under the Securities Exchange Act of 1934).

 

(c)                                  The Borrower will not change its jurisdiction of organization to a jurisdiction outside the United States of America.

 

SECTION 7.2.6                                   Restrictive Agreements.  The Borrower will not and will not permit any of its Material Subsidiaries to enter into any agreement prohibiting the ability of any Material Subsidiary to make any payments, directly or indirectly, to the Borrower by way of dividends, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Material Subsidiary to make any payment, directly or indirectly, to the Borrower, other than agreements or arrangements in respect of Indebtedness of a Person which exist at the time such Person is merged or amalgamated with a Subsidiary or existing at the time such Person becomes a Subsidiary, so long as such Indebtedness was not created in anticipation thereof, and in respect of Indebtedness secured by a Lien encumbering any assets acquired by a Subsidiary, so long as such Indebtedness was not created in anticipation thereof, and extensions, refinancings, renewals or replacements that would be permitted under Section 7.2.4.

 

SECTION 7.2.7                                   Anti-Corruption Laws and Sanctions.  The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Person known by the Borrower or such Subsidiary, director, officer employee or agent to be a Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

51

 

ARTICLE VIII
 EVENTS OF DEFAULT

 

SECTION 8.1                     Listing of Events of Default.  Each of the following events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.

 

SECTION 8.1.1                                   Non-Payment of Obligations.  The Borrower shall default in the payment or prepayment when due of any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement, or the Borrower shall default (and such default shall continue unremedied for a period of five days) in the payment when due of any interest on any Loan, of any fee hereunder or of any other Obligation.

 

SECTION 8.1.2                                   Breach of Warranty.  Any representation or warranty of the Borrower made or deemed to be made hereunder or in any other Loan Document executed by it or any certificates delivered pursuant to Article V is or shall be incorrect in any material respect when made or deemed made, in a manner that would have a Material Adverse Effect.

 

SECTION 8.1.3                                   Non-Performance of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance of any of its obligations under Sections 7.1.1(d), 7.2.2, 7.2.3, 7.2.4, 7.2.5, 7.2.6 or 7.2.7; provided that the imposition of any non-consensual Lien that is not permitted to exist pursuant to Section 7.2.2 shall not be deemed to constitute an Event of Default hereunder until thirty (30) days after the date of such imposition.

 

SECTION 8.1.4                                   Non-Performance of Other Covenants and Obligations.  The Borrower shall default in the due performance and observance of any other provision contained herein (not constituting an Event of Default under the preceding provisions of this Section 8.1) or any other Loan Document executed by it, and such default shall continue unremedied for a period of 30 days after notice thereof shall have been given to the Borrower by the Administrative Agent.

 

SECTION 8.1.5                                   Default on Other Indebtedness.  A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness (other than Indebtedness described in Section 8.1.1) of the Borrower or any of its Material Subsidiaries, or of any reimbursement obligation in respect of letters of credit for which the Borrower or any of its Material Subsidiaries is an account party, in any case having a principal amount, individually or in the aggregate, in excess of $50,000,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness or reimbursement obligation if the effect of such default is to accelerate the maturity of any such Indebtedness or reimbursement obligation or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness or reimbursement obligation, or any trustee or agent for such holders, to cause such Indebtedness to become due and payable prior to its expressed maturity.

 

SECTION 8.1.6                                   Judgments.  Any judgment or order for the payment of money in excess of $50,000,000 shall be rendered against the Borrower or any of its Material

 

52

 

Subsidiaries if such excess is not fully covered (except to the extent of any self insurance and deductibles permitted under Section 7.1.4) by valid and collectible insurance in respect thereof, the payment of which is not being disputed or contested by the insurer or the insurers, and either (i) proper or valid enforcement or levying proceedings shall have been commenced by any creditor upon such judgment or order or (ii) such judgment or order shall continue unsatisfied and unstayed for a period of thirty (30) consecutive days.

 

SECTION 8.1.7                                   Pension Plans.  Any of the following events shall occur with respect to any Pension Plan (a) the institution of any steps by the Borrower, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination, the Borrower or any such member could be required to make a contribution to such Pension Plan in excess of $50,000,000; or (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA to the extent such action would reasonably be expected to cause a Material Adverse Effect.

 

SECTION 8.1.8                                   Change in Control.  Any Change in Control shall occur.

 

SECTION 8.1.9                                   Bankruptcy, Insolvency, etc.  The Borrower or any Material Subsidiary shall (a) become insolvent or generally fail to pay, or admit in writing its inability or unwillingness to pay, debts as they become due; (b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Borrower or Material Subsidiaries or any substantial portion of the property of any thereof, or make a general assignment for the benefit of creditors; (c) in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Borrower or any Material Subsidiary or for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days; provided that the Borrower and each Material Subsidiary hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; (d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any Material Subsidiary, and, if any such case or proceeding is not commenced by the Borrower or such Material Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Material Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed; provided that the Borrower and each Material Subsidiary hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; or (e) take any corporate action authorizing, or in furtherance of, any of the foregoing.

 

SECTION 8.2                     Action if Bankruptcy.  If any Event of Default described in Section 8.1.9 shall occur with respect to the Borrower or any Material Subsidiary, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Borrowings and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.

 

53

 

SECTION 8.3                     Action if Other Event of Default.  If any Event of Default (other than any Event of Default described in Section 8.1.9 with respect to the Borrower or any Material Subsidiary) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare all or any portion of the outstanding principal amount of the Borrowings and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, as the case may be, and/or the Commitments shall terminate.

 

ARTICLE IX
 THE AGENTS

 

SECTION 9.1                     Actions.  Each Lender and each Issuing Bank hereby appoints (i) JPMorgan Chase Bank, N.A., as the Administrative Agent under this Agreement and each other Loan Document, (ii) Wells Fargo Bank, N.A., as Syndication Agent under this Agreement and each other Loan Document, and (iii) Compass Bank, Deutsche Bank Securities Inc. and MUFG Union Bank, N.A., as Documentation Agents under this Agreement and each other Loan Document.  Each Lender authorizes the Administrative Agent to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Administrative Agent (with respect to which the Administrative Agent agrees that it will comply, except as otherwise provided in this Section or as otherwise advised by counsel), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto.  Each Lender acknowledges that neither the Syndication Agent nor any of the Documentation Agents have any duties or obligations under this Agreement or any other Loan Document in connection with their capacity as either a Syndication Agent or Documentation Agent, respectively.  Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each of the Agents, pro rata according to such Lender’s Percentage, WHETHER OR NOT RELATED TO ANY SINGULAR, JOINT OR CONCURRENT NEGLIGENCE OF THE AGENTS, from and against any and all liabilities, obligations, losses, damages, claims, costs or expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against, any Agent in any way relating to or arising out of this Agreement and any other Loan Document, including reasonable attorneys’ fees, and as to which such Agent is not reimbursed by the Borrower; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, claims, costs or expenses which are determined by a court of competent jurisdiction in a final proceeding to have resulted solely from such Agent’s gross negligence or willful misconduct.  None of the Agents shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is indemnified hereunder to its satisfaction.  If any indemnity in favor of any Agent shall be or become inadequate, in such Agent’s determination, as the case may be, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.  Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, none of the

 

54

 

Agents shall have any duties or responsibilities, except as expressly set forth herein, nor shall any of the Agents have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any of the Agents.

 

SECTION 9.2                     Funding Reliance, etc. Unless the Administrative Agent shall have been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., Central time, on the day prior to a Borrowing (except with respect to a Borrowing comprised of Base Rate Loans, in which case notice shall be given no later than 12:00 noon, Central time, on the date of the proposed Borrowing) that such Lender will not make available the amount which would constitute its Percentage of such Borrowing on the date specified therefor, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent and, in reliance upon such assumption, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to the Borrower to the date such amount is repaid to the Administrative Agent, at the Federal Funds Rate.

 

SECTION 9.3                     Exculpation.  None of the Agents and their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of this Agreement or any other Loan Document, nor to make any inquiry respecting the performance by the Borrower of its obligations hereunder or under any other Loan Document.  Any such inquiry which may be made by any Agent shall not obligate it to make any further inquiry or to take any action.  Each of the Agents shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement or writing which such Agent believes to be genuine and to have been presented by a proper Person.

 

SECTION 9.4                     Successor.  Any of the Agents may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders.  If the Administrative Agent at any time shall resign, the Required Lenders may, with the consent of the Borrower, appoint another Lender as the successor Administrative Agent which shall thereupon become the Administrative Agent hereunder; provided that the consent of the Borrower shall not be required if an Event of Default has occurred and is continuing.  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be one of the Lenders and a commercial banking institution organized under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a commercial banking institution, in each case having an office or place of business in the State of New York and having a combined capital and surplus of at least $500,000,000.  Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the retiring Administrative Agent such documents of transfer and assignment as

 

55

 

such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement.  After a retiring Administrative Agent’s resignation hereunder as an Administrative Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement, and Section 10.4 (and, with respect to the Administrative Agent, Section 10.3) shall continue to inure to its benefit.

 

SECTION 9.5                     Loans by the Agents.  Each of the Agents shall have the same rights and powers with respect to the Loans made by it or any of its Affiliates and may exercise the same as if it were not an Agent.  Each of the Agents and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the Borrower as if it were not an Agent hereunder.

 

SECTION 9.6                     Credit Decisions.  Each Lender and Issuing Bank acknowledges that it has made its own credit decision to extend its Commitments hereunder (i) independently of each of the Agents, each other Lender and each other Issuing Bank, and (ii) based on such Lender’s or Issuing Bank’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate.  Each Lender and Issuing Bank also acknowledges that it will continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document (i) independently of each of the Agents, each other Lender and each other Issuing Bank, and (ii) based on such other documents, information and investigations as it shall deem appropriate at any time.

 

SECTION 9.7                     Copies, etc. The Administrative Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to the Administrative Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower).  The Administrative Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by the Administrative Agent from the Borrower for distribution to the Lenders by the Administrative Agent in accordance with the terms of this Agreement.

 

ARTICLE X
 MISCELLANEOUS PROVISIONS

 

SECTION 10.1              Waivers, Amendments, etc.  The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided, however, that no such amendment, modification or waiver which would: (a) modify any requirement hereunder that any particular action be taken by all the Lenders or by each Lender shall be effective unless consented to by each Lender; (b) modify the first sentence of Section 4.8, modify Section 4.9 or this Section 10.1, change the definition of “Required Lenders”, reduce any fees described in Article III or elsewhere in any other Loan Document, or, except in the manner set forth in

 

56

 

Section 2.10, extend the Maturity Date, shall be made without the consent of each Lender adversely affected thereby; (c) except in the manner set forth in Section 2.10, extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on any Loan or LC Disbursement (or reduce the principal amount of or rate of interest on any Loan or LC Disbursement) shall be made without the consent of the Lender which made such Loan or is otherwise adversely affected thereby; (d) affect adversely the interests, rights or obligations of any Agent as an Agent shall be made without the consent of such Agent or (e) amend Section 2.11(c) to permit any Letter of Credit to expire after the Maturity Date without the consent of the applicable Issuing Bank; provided, further, that no such amendment, modification or waiver which would either increase any Commitment, the Total Commitment or the Percentage of any Lender, or modify the rights, duties or obligations of any Agent or Issuing Bank, shall be effective without the consent of such Lender, such Agent or such Issuing Bank, as applicable.  No failure or delay on the part of the Administrative Agent, any Lender or any Issuing Bank in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right.  No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances.  No waiver or approval by the Administrative Agent, any Lender or any Issuing Bank under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions.  No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.

 

SECTION 10.2              Notices.

 

(a)                                 Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or portable document format (.pdf), as follows:

 

(i)                                     if to the Borrower, to:

 

Cimarex Energy Co.

1700 Lincoln Street, Suite 3700

Denver, Colorado 80203

Attention:                           Sherri Nitta

Telephone No.: (303) 285-4915

Facsimile No.: (303) 285-0229

email: snitta@cimarex.com

 

(ii)                                if to the Administrative Agent, to:

 

JPMorgan Chase Bank

Wholesale Loan Operations,

10 S. Dearborn Avenue, Floor L2

Chicago, IL. 60616

Attention: LaDesiree Williams

 

57

 

Telephone No.:  (312)-732-2007

Email: jpm.agency.cri@jpmorgan.com

 

With a copy to:

 

JPMorgan Chase Bank, N.A.

Global Oil & Gas Group

1125 17th Street, Floor 3

Denver, CO 80202

Attention:  Ryan Fuessel

Telephone No.:  (303) 244-3224

Facsimile No.:  (832) 487-1765

Email: ryan.fuessel@jpmorgan.com

 

(iii)                             if to the Syndication Agent, any Documentation Agent, any Issuing Bank or any other Lender, to it at its address (or facsimile number or email) provided to the Administrative Agent and the Borrower or as set forth in its Administrative Questionnaire.

 

(b)                                 Notices and other communications to the Lenders or any Issuing Bank hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender or Issuing Bank.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

(c)                                  Any party hereto may change its address, facsimile number or email for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

SECTION 10.3              Payment of Costs, Expenses and Taxes.  The Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of (i) the Administrative Agent, the Syndication Agent and the Arrangers in connection with the preparation, negotiation, execution, delivery, syndication and administration of this Agreement and of each other Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modification to this Agreement or any other Loan Document, (ii) any Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) the Administrative Agent, any Issuing Bank and the Lenders in connection with the enforcement by the Lenders, any Issuing Bank or the Administrative Agent of, or the protection of rights under, this Agreement and each other Loan Document.  The Administrative Agent, the other Agents, the Arrangers, each Issuing Bank and each Lender agree to the extent feasible, and to the extent a conflict of interest does not exist in the reasonable opinion of the Administrative Agent, the other Agents, the Arrangers, any Issuing Bank or any Lender, to use one law firm in each jurisdiction in connection with the foregoing, to the extent they seek reimbursement for the expenses thereof from the Borrower.

 

58

 

Each Lender agrees to reimburse the Administrative Agent and each Issuing Bank on demand for such Lender’s pro rata share (based upon its respective Percentage) of any such costs or expenses not paid by the Borrower.  In addition, the Borrower agrees to pay, and to save the Administrative Agent, the other Agents, the Arrangers, any Issuing Bank and the Lenders harmless from all liability for, any stamp or other taxes (other than Excluded Taxes) which may be payable in connection with the execution or delivery of this Agreement, the Borrowings hereunder, or of any other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith.

 

SECTION 10.4              Indemnification; Waiver of Consequential Damages.  In consideration of the execution and delivery of this Agreement by each Lender and Issuing Bank and the extension of the Commitments, the Borrower hereby indemnifies, exonerates and holds each Agent, the Arrangers, each Issuing Bank and each Lender and each of their respective officers, directors, employees and agents (collectively, the “Indemnified Parties”), WHETHER OR NOT RELATED TO ANY NEGLIGENCE OF THE INDEMNIFIED PARTIES, free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), whether brought by a third party or by the Borrower, including reasonable attorneys’ fees and disbursements (collectively, the “Indemnified Liabilities”), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loan or Letter of Credit; the entering into and performance of this Agreement and any other Loan Document by any of the Indemnified Parties; any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank 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), any investigation, litigation or proceeding related to any acquisition or proposed acquisition by the Borrower or any of its Subsidiaries of all or any portion of the stock or assets of any Person, whether or not such Agent, such Arranger, such Issuing Bank or such Lender is party thereto; any investigation, litigation or proceeding related to any environmental cleanup, audit, compliance or other matter relating to the protection of the environment arising out of the ownership or operation of property by the Borrower or any of its Subsidiaries or the Release by the Borrower or any of its Subsidiaries of any Hazardous Material; or the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any real property owned or operated by the Borrower or any Subsidiary thereof of any Hazardous Material (including any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental Law), regardless of whether caused by, or within the control of, the Borrower or such Subsidiary; provided that such indemnity shall not, as to any Indemnified Party, 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 Indemnified Party or (y) result from a claim brought by the Borrower or any Subsidiary against an Indemnified Party for breach in bad faith of such Indemnified Party’s obligations hereunder or under any other Loan Document, if the Borrower or such Subsidiary has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the

 

59

 

maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.  This Section 10.4 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NO PARTY SHALL ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNIFIED PARTY, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR LETTER OF CREDIT, OR THE USE OF THE PROCEEDS THEREOF.  NO INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY; PROVIDED SUCH INDEMNIFIED PARTY HAS TAKEN AND MAINTAINS COMMERCIALLY REASONABLE EFFORTS AND CONTROLS TO SAFEGUARD THE USE AND ACCESS OF SUCH MATERIAL AND INFORMATION.

 

SECTION 10.5              Survival.  The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under Section 9.1, shall in each case survive any termination of this Agreement, the payment in full of all Obligations and the termination of all Commitments.

 

SECTION 10.6              Severability.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

 

SECTION 10.7              Headings.  The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

 

SECTION 10.8              Governing Law.  THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

SECTION 10.9              Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns (including any Affiliate of an Issuing Bank that issues any Letter of Credit); provided, however, that: (a) the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Administrative Agent and all Lenders; and (b) the rights of sale, assignment and transfer of the Lenders are subject to Section 10.10.

 

60

 

SECTION 10.10       Sale and Transfer of Loans and Commitments; Participations in Loans and Commitments.  Each Lender may assign, or sell participations in, its Loans and Commitments to one or more other Persons in accordance with this Section.

 

SECTION 10.10.1                     Assignments.  Any Lender at any time may assign and delegate:

 

(a)                                 with notice to (but without the consent of) the Administrative Agent, any Issuing Banks and the Borrower, to any of its Affiliates or to any other Lender, Lender Affiliate or Approved Fund (other than (i) any Lender that is, at such time, a Defaulting Lender, (ii) any natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person), and (iii) for the avoidance of doubt, the Borrower or any Affiliate of the Borrower; any such permitted assignee and delegate, a “Section 10.10.1(a) Assignee”), and

 

(b)                                 with the written consent (which consent shall not be unreasonably delayed or withheld) of the Administrative Agent, each Issuing Bank and, if no Event of Default has occurred and is continuing, the Borrower (such consent of the Borrower being deemed given if the Borrower does not respond within five (5) Business Days of the Borrower’s receipt of written notice of such assignment), to one or more commercial banks or other financial institutions other than a Section 10.10.1(a) Assignee (each Section 10.10.1(a) Assignee and each Person described in this clause (b) as being the Person to whom such assignment and delegation is to be made, being hereinafter referred to as an “Assignee Lender”),

 

all or any fraction of such Lender’s total Loans and Commitments pursuant to a Lender Assignment Agreement executed by such Assignee Lender and such assigning Lender (and, in the case of an Assignee Lender described in clause (b) of this Section, the Borrower (if applicable), the Administrative Agent and each Issuing Bank); provided that (i) such assignment and delegation shall be in a minimum aggregate amount of $5,000,000 (or in a minimum amount of $1,000,000 in the case of an assignment to an Approved Fund with respect to which such Approved Fund plus the Lender or an Affiliate of such Lender who administers or manages such Approved Fund plus other Approved Funds administered or managed by the such Lender or an Affiliate of such Lender will then hold an amount of $5,000,000 or more), (ii) any such Assignee Lender will comply, if applicable, with the provisions of Section 4.6.5, and (iii) the Borrower and the Administrative Agent shall be entitled to continue to deal solely and directly with such assigning Lender in connection with the interests so assigned and delegated to an Assignee Lender until (A) written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Administrative Agent by such Lender and such Assignee Lender, (B) such Assignee Lender shall have executed and delivered to the Borrower and the Administrative Agent a Lender Assignment Agreement, accepted by the Administrative Agent, (C) such Assignee Lender shall have delivered to the Administrative Agent an Administrative Questionnaire, and (D) the processing fees described below shall have been paid.  For the purposes of this Section 10.10.1, the term “Approved Fund” has the following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in

 

61

 

the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

From and after the date that the Administrative Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned and delegated by it in connection with such Lender Assignment Agreement, shall be released from its obligations hereunder and under the other Loan Documents; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Accrued interest on that part of the predecessor Loans and Commitments, and accrued fees, shall be paid as provided in the Lender Assignment Agreement.  Accrued interest on that part of the predecessor Loans and Commitments shall be paid to the assignor Lender.  Accrued interest and accrued fees shall be paid at the same time or times provided in this Agreement.  Such assignor Lender or such Assignee Lender must also pay a processing fee to the Administrative Agent upon delivery of any Lender Assignment Agreement in the amount of $3,500.  Any attempted assignment and delegation not made in accordance with this Section 10.10.1 shall be null and void.

 

The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

SECTION 10.10.2                     Participations.  Any Lender may at any time sell to one or more commercial banks or other Persons (each of such commercial banks and other Persons being herein called a “Participant”) participating interests in any of the Loans, Commitments or other interests of such Lender hereunder; provided, however, that (a) no participation contemplated in this Section 10.10 shall relieve such Lender from its Commitments or its other obligations hereunder or under any other Loan Document, (b) such Lender shall remain solely responsible for the performance of its Commitments and such other obligations, (c) the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents, (d) no Participant, unless such Participant is an Affiliate of such Lender, or is itself a Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any

 

62

 

actions of the type described in clause (b) or (c) of Section 10.1, and (e) the Borrower shall not be required to pay any amount under Section 4.6 that is greater than the amount which it would have been required to pay had no participating interest been sold.  The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 10.4 and 10.18, shall be considered a Lender; provided that this sentence shall not obligate the Borrower to pay more under such Sections than it would be obligated to pay had no such participation been granted. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 4.10 with respect to any Participant.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

SECTION 10.10.3                     Pledge by Lender.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central bank; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 10.11       Other Transactions.  Nothing contained herein shall preclude the Administrative Agent or any other Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

 

SECTION 10.12       Confidentiality.  Each of the Agents, any Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the

 

63

 

exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 10.12, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii)  any actual or prospective counterparty (or its advisors) to any swap or derivative transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 10.12 or (ii) becomes available to the Administrative Agent, any Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrower.  In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and other information pertaining to this Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry.  For the purposes of this Section, “Information” means all information received from the Borrower or any of its Affiliates relating to the Borrower and its Subsidiaries or their business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrower or any of its Affiliates; provided that, in the case of information received from the Borrower or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section 10.12 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

SECTION 10.13       Forum Selection and Consent to Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.  THE BORROWER, THE ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY AND OF THE UNITED STATES DISTRICT COURT FOR SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  THE BORROWER, THE ADMINISTRATIVE AGENT, AND EACH LENDER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.  THE BORROWER, THE ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT

 

64

 

THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

SECTION 10.14       Waiver of Jury Trial.  THE ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR THE BORROWER.  THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

 

SECTION 10.15       NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

SECTION 10.16       No Adverse Interpretation of Other Agreements.  This Credit Agreement may not be used to interpret another indenture, loan, security or debt agreement of the Borrower or any Subsidiary thereof.  No such indenture, loan, security or debt agreement may be used to interpret this Credit Agreement.

 

SECTION 10.17       No Fiduciary Duty.  Each of the Administrative Agent, the Syndication Agent, the Documentation Agents, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests that conflict with those of the Borrower.  The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other similar duty between the Lenders and the Borrower, its stockholders or its Affiliates.  The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, (ii) in connection therewith and with the process leading to such transaction each of the Lenders is acting solely as a principal and not the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other person, (iii) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether any

 

65

 

Lender or any of its Affiliates has advised or is currently advising the Borrower on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (iv) the Borrower has consulted its own legal and financial advisors to the extent it deemed appropriate.  The Borrower further acknowledges and agrees that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto.  The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Borrower, in connection with such transaction or the process leading thereto.

 

SECTION 10.18  Setoff.  If (a) an Event of Default shall have occurred and be continuing and (b) the principal of the Loans has been accelerated, each 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 obligations at any time owing by such Lender to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured; provided, that any Lender exercising any right of set off shall provide promptly to the Borrower a statement describing in reasonable detail the source and amount of any deposits or other obligations owing by such Lender and the Obligations owing to such Lender as to which it exercised such right of setoff; and provided, further, that  in the event that any Defaulting Lender shall exercise such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.12 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

 

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

66

 

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

 

	
 
    	
CIMAREX ENERGY CO., as the Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ G.   Mark Burford
    
	
 
    	
G. Mark   Burford
    
	
 
    	
Vice   President and Chief Financial Officer
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
JPMORGAN CHASE   BANK, N.A.,   individually as a Lender, as the Administrative Agent and as an Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David   Morris
    
	
 
    	
Name:   David Morris
    
	
 
    	
Title:   Authorized Officer
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
WELLS FARGO BANK,   N.A., individually as a Lender, as   the Syndication Agent and as an Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sarah   Thomas
    
	
 
    	
Name: Sarah   Thomas
    
	
 
    	
Title: Vice   President
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
COMPASS BANK, individually as a Lender and as a Documentation Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Rhianna   Disch
    
	
 
    	
Name: Rhianna   Disch
    
	
 
    	
Title:   Vice President
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
DEUTSCHE BANK AG   NEW YORK BRANCH, individually   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Virginia   Cosenza
    
	
 
    	
Name: Virginia   Cosenza
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John   S. McGill
    
	
 
    	
Name: John   S. McGill
    
	
 
    	
Title: Director
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
MUFG UNION BANK,   N.A., individually as a Lender and as   a Documentation Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew   Oram
    
	
 
    	
Name: Andrew   Oram
    
	
 
    	
Title: Managing   Director
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
BRANCH BANKING AND   TRUST COMPANY, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ryan   Michael
    
	
 
    	
Name: Ryan   Michael
    
	
 
    	
Title: Senior   Vice President
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
CANADIAN IMPERIAL   BANK OF COMMERCE, NEW YORK BRANCH,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daria   Mahoney
    
	
 
    	
Name:   Daria Mahoney
    
	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Trudy   Nelson
    
	
 
    	
Name: Trudy   Nelson
    
	
 
    	
Title:   Authorized Signatory
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
ING CAPITAL LLC, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott   Lamoreaux
    
	
 
    	
Name: Scott   Lamoreaux
    
	
 
    	
Title: Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Josh   Strong
    
	
 
    	
Name:   Josh Strong
    
	
 
    	
Title:   Director
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
U.S. BANK NATIONAL   ASSOCIATION, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nicholas T. Hanford
    
	
 
    	
Name:   Nicholas T. Hanford
    
	
 
    	
Title: Vice   President
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
BOKF, NA DBA BANK   OF OKLAHOMA, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sonja   Borodko
    
	
 
    	
Name: Sonja   Borodko
    
	
 
    	
Title: Vice   President
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
PNC BANK, NATIONAL   ASSOCIATION, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sandra Aultman
    
	
 
    	
Name:   Sandra Aultman
    
	
 
    	
Title:   Managing Director
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
SANTANDER BANK,   N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Aidan   Lanigan
    
	
 
    	
Name: Aidan   Lanigan
    
	
 
    	
Title: Senior   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Puiki   Lok
    
	
 
    	
Name:   Puiki Lok
    
	
 
    	
Title:   Vice President
    

 

Signature Page

to Credit Agreement

 

 

	
 
    	
THE BANK OF NOVA   SCOTIA, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Alan   Dawson
    
	
 
    	
Name: Alan   Dawson
    
	
 
    	
Title: Director
    

 

Signature Page

to Credit Agreement

 

 

SCHEDULE I

 

SCHEDULE OF COMMITMENTS

 

	
NAME OF LENDER
    	
 
    	
COMMITMENTS
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
$
    	
100,000,000
    	
 
    
	
Wells Fargo Bank, N.A.
    	
 
    	
$
    	
100,000,000
    	
 
    
	
Compass Bank
    	
 
    	
$
    	
100,000,000
    	
 
    
	
Deutsche Bank AG New York Branch
    	
 
    	
$
    	
100,000,000
    	
 
    
	
MUFG Union Bank, N.A.
    	
 
    	
$
    	
100,000,000
    	
 
    
	
Branch Banking and Trust Company
    	
 
    	
$
    	
75,000,000
    	
 
    
	
Canadian Imperial Bank of   Commerce, New York Branch
    	
 
    	
$
    	
75,000,000
    	
 
    
	
ING Capital LLC
    	
 
    	
$
    	
75,000,000
    	
 
    
	
U.S. Bank National Association
    	
 
    	
$
    	
75,000,000
    	
 
    
	
BOKF, NA dba Bank of Oklahoma
    	
 
    	
$
    	
50,000,000
    	
 
    
	
PNC Bank, National Association
    	
 
    	
$
    	
50,000,000
    	
 
    
	
Santander Bank, N.A.
    	
 
    	
$
    	
50,000,000
    	
 
    
	
The Bank of Nova Scotia
    	
 
    	
$
    	
50,000,000
    	
 
    
	
TOTAL
    	
 
    	
$
    	
1,000,000,000EXHIBIT 10.1

 

 

EXECUTION COPY

 

SHARE PURCHASE AGREEMENT AMONG

GREAT LAKES COPPER INC.

- and -

MUELLER COPPER TUBE PRODUCTS, INC.

July 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
TABLE OF CONTENTS

	 		 	 	 	 
	
ARTICLE 1

		 	 	 	 
	 		
INTERPRETATION

	 	 	
1

	 		 	 	 	 
	
1.1

		
Definitions

	 	 	
1

	
1.2

		
Currency

	 	 	
9

	
1.3

		
Sections and Headings

	 	 	
9

	
1.4

		
Number and Gender

	 	 	
9

	
1.5

		
Accounting Terms

	 	 	
10

	
1.6

		
Knowledge

	 	 	
10

	
1.7

		
Entire Agreement

	 	 	
10

	
1.8

		
Time of Essence

	 	 	
10

	
1.9

		
Applicable Law

	 	 	
10

	
1.10

		
Severability

	 	 	
10

	
1.11

		
Successors and Assigns: Assignment

	 	
10

	
1.12

		
Amendment and Waivers

	 	
11

	
1.13

		
Including

	 	 	
11

	
1.14

		
Schedules

	 	 	
11

	 		 	 	 	 
	
ARTICLE 2

		 	 	 	 
	 		
PURCHASE AND SALE

	
12

	 		 	 	 	 
	
2.1

		
Agreement to Sell and to Purchase

	 	 	
12

	
2.2

		
Share Purchase Price: LuxCo Loan

	 	 	
12

	
2.3

		
Allocation under the Assignment and Assumption Agreement

	
12

	
2.4

		
Transfer Taxes

	 	 	
13

	 		 	 	 	 
	
ARTICLE 3

		 	 	 	 
	 		
REPRESENTATIONS AND WARRANTIES OF THE VENDOR

	
13

	 		 	 	 	 
	
3.1

		
Representations and Warranties of the Vendor Relating to the Business

	
13

	
3.2

		
Survival of Representations, Warranties and Covenants of the Vendor

	
33

	 		 	 	 	 
	
ARTICLE 4

		 	 	 	 
	 		
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

	
33

	 		 	 	 	 
	
4.1

		
Representations and Warranties of the Purchaser

	 	 	
33

	
4.2

		
Survival of Representations, Warranties and Covenants of the Purchaser

	
35

	 		 	 	 	 
	
ARTICLE 5

		 	 	 	 
	 		
CLOSING COVENTANTS

	
35

	 		 	 	 	 
	
5.1

		
Consent and Approvals

	 	 	
35

	
5.2

		
Closing Documents

	 	 	
36

 

2

	 		 	 	 	 
	
ARTICLE 6

		 	 	 	 
	 		
CONDITIONS OF CLOSING

	
37

	 		 	 	 	 
	
6.1

		
Conditions of Closing in Favour of the Purchaser

	 	 	
37

	
6.2

		
Conditions of Closing in Favour of the Vendor

	 	 	
37

	 		 	 	 	 
	
ARTICLE 7

		 	 	 	 
	 		
POST-CLOSING CONVENANTS

	
38

	 		 	 	 	 
	
7.1

		
Pre-Closing Cheques

	 	 	
38

	
7.2

		
Investment Canada Act

	 	 	
38

	
7.3

		
Preservation of Records

	 	 	
38

	
7.4

		
[Reserved]

	 	 	
39

	
7.5

		
Litigation and Audit Support

	 	 	
39

	
7.6

		
Commercially Reasonable Efforts: Certain Governmental Matters

	
39

	
7.7

		
[Reserved]

	 	 	
40

	
7.8

		
Intercompany Obligations and Agreements

	 	 	
40

	
7.9

		
Trademarks

	 	 	
40

	
7.10

		
GLC Newco Tax Returns

	 	 	
40

	 		 	 	 	 
	
ARTICLE 8

		 	 	 	 
	 		
EMPLOYEE MATTERS

	
41

	 		 	 	 	 
	
8.1

		
Employees

	 	 	
41

	
8.2

		
Employee Plans

	 	 	
41

	
8.3

		
Notice of Change in Employment

	 	 	
42

	
8.4

		
Post Closing Changes

	 	 	
42

 

3

	 		 	 	 	 
	
ARTICLE 9

		 	 	 	 
	 		
CLOSING ARRANGEMENTS

	
42

	 		 	 	 	 
	
9.1

		
Place of Closing

	 	 	
42

	
9.2

		
[Reserved]

	 	 	
42

	
9.3

		
Further Assurances

	 	 	
42

	 		 	 	 	 
	
ARTICLE 10

		 	 	 	 
	 		
INDEMNIFICATION

	 	 	
42

	 		 	 	 	 
	
10.1

		
Indemnification by the Vendor

	 	 	
42

	
10.2

		
Indemnification by the Purchaser

	 	 	
44

	
10.3

		
Procedure re:Claims

	 	 	
45

	
10.4

		
Monetary Limit on Indemnification

	 	 	
46

	
10.5

		
Escrow Funds

	 	 	
47

	
10.6

		
Exclusivity

	 	 	
48

	
10.7

		
Adjustment to Purchase Price

	 	 	
48

	
10.8

		
Maintenance of Existence

	 	 	
48

	 		 	 	 	 
	
ARTICLE 11

		 	 	 	 
	 		
GENERAL

	 	 	
48

	 		 	 	 	 
	
11.1

		
Confidentiality of Information

	 	 	
48

	
11.2

		
Expenses

	 	 	
49

	
11.3

		
Notices

	 	 	
49

	
11.4

		
Commissions, etc.

	 	 	
49

	
11.5

		
Consultation and Public Announcements

	 	 	
50

	
11.6

		
Disclosure

	 	 	
50

	
11.7

		
Counterparts

	 	 	
50

	 		 	 	 	 
	 		 	 	 	 
	 		 	 	 	 

4

SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT made the 31st day of July, 2015, AMONG GREAT LAKES COPPER INC., a corporation existing under the laws of the Province of Ontario  (hereinafter referred  to  as the "Vendor"), and  MUELLER COPPER TUBE PRODUCTS, INC. a corporation existing under the laws of the State of Delaware, U.S.A. ("Purchaser").

WHEREAS the Vendor carries on the Business (as hereinafter defined);

WHEREAS immediately after giving effect to the transactions contemplated by the Assignment and Assumption Agreement between the Vendor and Great Lakes Copper Ltd., a corporation existing under the laws of the Province of Nova Scotia, ("GLC NewCo") attached as Schedule 5.2(b) hereto (the "Assignment and Assumption Agreement") Vendor desires to sell, and the Purchaser desires to acquire, all of the capital stock of GLC NewCo (the "Shares"), upon and subject to the terms and conditions hereinafter set forth (the "Acquisition");

WHEREAS, immediately after giving effect to the transactions contemplated by the Assignment and Assumption Agreement, GLC NewCo is indebted to the Vendor in the amount of US$45,000,000, as evidenced by the GLC Note; and

WHEREAS, immediately upon the Closing, the LuxCo Entities desire to loan to GLC NewCo the GLC NewCo Indebtedness Amount pursuant to the LuxCo Loan Agreements in order to allow GLC NewCo to satisfy and discharge its debt obligation to Vendor pursuant to the GLC Note.

NOW THEREFORE in consideration of the respective covenants, agreements, representations, warranties and indemnities herein contained and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties covenant and agree as follows:

ARTICLE 1

INTERPRETATION

1.1            Definitions.

For the purpose of this Agreement (as hereinafter defined), unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

"Accounts Receivable" has the meaning set forth in the Assignment and Assumption Agreement;

"Acquisition" has the meaning set out in the recitals;

"Actions" has the meaning set out in Section 3.1(v);

1

"Affiliate" has the meaning which would be given to that term in the OBCA, if subsection 1(4) of the OBCA read "For the purposes of this Act, a body corporate shall be deemed to be affiliated with a person or persons  if the body corporate is controlled by that person or persons or another affiliate of that person or persons";

                "Agreement" means this agreement, including its Schedules, as amended from time to time;

 

"Arm's Length" has the same meaning as the term "arm's length" has for the purposes of the ITA;

"Assessments" has the meaning set out in Section 3.1(z)(vii);

"Assets" has the meaning set out in the Assignment and Assumption Agreement;

"Assigned Contracts" has the meaning set out in the Assignment and Assumption Agreement;

                "Assignment and Assumption Agreement" has the meaning set out in the recitals;

                "Assumed Liabilities" has the meaning set out in the Assignment and Assumption Agreement;

"Audited Financial Statements" means the audited financial statements of the Vendor as at and for the fiscal year ended June 30, 2014, consisting of a balance sheet, a statement of income and retained earnings, a statement of cash flows, together with the notes thereto and the report of the Vendor's auditors thereon, a copy of which is attached hereto as Schedule 1.1(a);

"Business" means the business carried on by the Vendor in Canada and the U.S. consisting of manufacturing, distributing and selling copper tube products for the industrial, wholesale and refrigeration markets;

"Business Day" means any day, other than a Saturday or a Sunday, on which banks are open for ordinary banking business in Toronto, Ontario and New York, New York;

 

                "CDC" means CDC Warehouse Inc., a corporation organized under the laws of the Province of Ontario;

                "CDC Property" has the meaning set out in the Assignment and Assumption Agreement.

"Claim" has the meaning set out in Section 10.3(a);

"Clarke Road Property" has the meaning set out in the Assignment and Assumption Agreement.

2

"Closing" means the closing of the transaction provided for herein;

"Closing Date" means the date hereof;

"Competition Act" has the meaning set out in Section 3.1(hh);

"Consents" has the meaning set out in Section 5.1;

 

                "Contract" has the meaning set forth in the Assignment and Assumption Agreement;

"Current Liabilities" has the meaning set forth in the Assignment and Assumption Agreement;

"Customer and Supplier List" has the meaning set forth in Section 3.1(ee);

"Data Room" means the data room established by the Vendor and titled "Fogler Rubinoff Deal Room - GLC - Project Saturn" and accessible at https://dealroom.foglers.com/foglers/dashboard.action?metaData.channelId=9, all the content of which as at the time of execution and delivery of this Agreement (or such other date as may be agreed by the parties) has been transferred to a DVD or hard drive provided to the Purchaser concurrently with such execution and delivery;

"Direct Claim" has the meaning set out in Section 10.3(a);

"Domain Names" means Wlvtc.ca, Wlvtc.com, Kamcoproducts.ca, Kamcoproducts.com, glcopper.ca and glcopper.com;

"Employee Future Benefit Obligation" has the meaning set forth in the Assignment and Assumption Agreement;

 

                "Employee Plans" has the meaning set out in Section 3.1(y)(i); 

 

                "Employee Representations" has the meaning set out in Section 3.2(a);

 

                "Employees" has the meaning set out in Section 3.1(aa) and Employee means any one of them;

"Employers" has the meaning set out in Section 8.1;

"Employment Legislation" means, collectively, the Labour Relations Act, 1995 (Ontario), the Human Rights Code (Ontario), the Pay Equity Act (Ontario), the Occupational Health and Safety Act (Ontario), the Employment Standards Act, 2000 (Ontario), the Workplace Safety and Insurance Act, 1997 (Ontario) and the Employment Insurance Act (Canada) and all regulations and rules thereunder, and similar legislation, and regulations and rules thereunder, in the other jurisdictions where the Vendor has Employees and that are applicable to the Business;

"Encumbrance" means any encumbrance, lien, charge, hypothec, pledge, mortgage, security interest, or, in the event same affect the continued used and occupation of the

3

Owned Real Property and Buildings as currently used in the Business, easement, deemed trust, restrictive covenant, right of way, encroachment, title reservation, adverse claim, occupancy right or any other like-right of a third party, or any binding agreement, indenture, contract or other commitment, whether written or oral, to create any of the foregoing;

"Environmental Law" means any statute or regulation of a Governmental Entity as in effect on the Closing Date relating in full or in part to the protection of the environment, and includes those Laws relating to the storage, generation, use, handling, manufacture, processing, labelling, advertising, sale, display, transportation, treatment, release and disposal of Hazardous Substances;

"Environmental Permit" means any Licence required under Environmental Laws in connection with the operation of the Business;

"Environmental Representations" has the meaning set out in Section 3.2(a);

                "Equipment" has the meaning  set forth in the Assignment and Assumption Agreement;

"Escrow Agent" has the meaning set out in Section 5.2(d);

"Escrow Agreement" has the meaning set out in Section 5.2(d);

"Escrow Amount" means Five Million Dollars ($5,000,000) subject to reduction as set out in Section 10.5;

"Estimated Net Working Capital" has the meaning set out in the Assignment

and Assumption Agreement;

"Estimated Net Working Capital Statement" has the meaning set out in the

Assignment and Assumption Agreement;

"Estimated Shortfall Amount" has the meaning set forth in the Assignment and

Assumption Agreement;

"ETA" means the Excise Tax Act (Canada), as amended from time to time;

                  "Excluded Assets" has the meaning set out in the Assignment and Assumption Agreement;

                "Excluded Liabilities" has the meaning set out in the Assignment and Assumption Agreement;

"Final Closing Date Statement" has the meaning set out in the Assignment and Assumption Agreement;

"Final Closing Net Working Capital" has the meaning set out in the Assignment and Assumption Agreement;

4

                "Financial Statements" means, collectively, the Audited Financial Statements and the Interim Financial Statements;

"GAAP" means generally accepted accounting principles for private enterprise as set out in  the Chartered Professional Accountants of Canada Handbook-Accounting  at the relevant time applied on a basis consistent with prior periods applying, for the avoidance of doubt, the same principles and methodologies used in preparing the Audited Financial Statements;

"GLC NewCo" has the meaning set out in the recitals.

"GLC NewCo Indebtedness Amount" has the meaning set out in Section 2.2.

 

                "GLC Note" has the meaning set out in the Assignment and Assumption Agreement.

"Governmental Entity" means any federal, state, provincial, local, municipal, foreign or other government, and anybody  lawfully  exercising or entitled or purporting to exercise any administrative, executive, judicial, legislative or regulatory or taxing authority or power;

"Hazardous Substance" means any substance, material, chemical, pollutant, contaminant or waste that is defined or regulated under Environmental Laws;

 

                "Indemnified Party" means the party to this Agreement that is entitled to be indemnified under Article 10;

"Indemnifying Party" means, in relation to an Indemnified Party, the party to this Agreement that has agreed to indemnify that Indemnified Party under Article 10;

"Indemnity Cap" means the sum of the Share Purchase Price plus the GLC NewCo Indebtedness Amount;

                

                "Intellectual Property" has the meaning set forth in the Assignment and Assumption Agreement;

 

                "Intercompany Obligations and Agreements" has the meaning set out in Section 7.8;

"Interim Financial Statements" means the internally prepared unaudited financial statements of the Vendor as at and for the 12-month period ended June 30, 2015, consisting of a balance sheet and an income statement, a copy of which is attached hereto as Schedule 1.1(b);

                "Inventories" has the meaning  set forth in the Assignment and Assumption Agreement;

5

"ITA" means the Income Tax Act (Canada), as amended from time to time, and the rules and regulations promulgated thereunder;

"Law or Laws" has the meaning set forth in Section 3.1(q);

"Liability" shall mean, with respect to any person, all debts, liabilities, actions, claims, expenses, costs and other obligations of any kind, character or description, whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such person.

"Licences" has the meaning set out in Section 3.1(q);

"Licensed Intellectual Property" has the meaning set out in Section 3.1(l)(vi);

"Losses" in respect of any matter, means all losses, damages, Liabilities, costs, penalties and expenses (including reasonable legal fees and out-of-pocket disbursements) arising as a result of such matter but for greater certainty does not include any incidental, indirect, special, aggravated or punitive damages, provided that the foregoing limitation shall not restrict the ability of an Indemnified Party to seek and recover such Losses to the extent that (a) such Indemnified Party is held liable pursuant to a Third Party Claim for any such Losses and (b) the Purchaser has complied in all material respects with its obligations pursuant to Section 10.3;

"LuxCo Entities" means LuxCo 1 and LuxCo 2, collectively.

"LuxCo 1" means Muellux Holding Company I, a corporation existing under the laws of Luxembourg;

"LuxCo 2" means Muellux Holding Company II, a corporation existing under the laws of Luxembourg;

"LuxCo Loan Agreements" means (i) the loan agreements, dated as of the date hereof, by and between GLC NewCo and LuxCo 1 and (ii) the loan agreement, dated as of the date hereof by and between GLC NewCo and LuxCo 2;

"Material Adverse Effect" means any change in the business, results of operations, assets, liabilities or financial condition of the Vendor or the Business (other than the Acquisition) that, individually or when taken together with all other changes that have occurred during any relevant period of time before Closing that is or is reasonably likely to be materially adverse to the condition of the Business, as determined from the perspective of a reasonable person, provided that any fact, change, development, event, occurrence, action, omission or effect relating directly or indirectly to, arising in connection with or otherwise attributable to any of the following shall not be deemed to constitute, and shall not be taken into account in determining whether there has been, a Material Adverse Effect: (i) changes, developments, conditions or events affecting the industry in general in which the Business operates, including fluctuations in the price of copper; (ii) changes, developments or conditions in or relating to the economy in general, or international, financial or capital markets in general, including changes in foreign exchange rates, or economic or financial or capital market 

6

 conditions;(iii) any changes in any applicable Law to the Business, the interpretation, application or non-application of any applicable Law by any Governmental Entity generally and not specific to the Vendor or the Business, in GAAP or in applicable accounting standards; or (iv) any change in global, national or regional political conditions or any act of war (whether declared or undeclared), sabotage or terrorism,  any outbreak of hostilities  or any escalation  or worsening  of any an  act  of war (whether declared or undeclared).

"Material Contract" means a Contract to which the Vendor is a party or by which it is bound and which (i) involves expenditures by the Vendor or the Business in excess of

$100,000 per fiscal year of the Vendor, or revenues to be received by the Vendor or the Business in excess of $100,000 per fiscal year of the Vendor; (ii) has a term, including any automatic renewal or renewal at the option of the other party thereto, of more than one year if same is not terminable on 90 days' notice or less without penalty or payment; (iii) is with a non-Arm's Length person; (iv) is not in the ordinary course of the Business and such Contract does not relate solely to an Excluded Asset or an Excluded Liability, (v) is a license of Licensed Intellectual Property; or (vi) is referred to in any of clauses (i) through  (viii) of Section 3.1(p).

"No Consent Contract" has the meaning set out in Section 5.1;

 

                "OBCA" means the Business Corporations Act (Ontario), as amended from time to time;

"Obsolete Inventory" has the meaning set out in Section 3.1(ff);

"Occurrence" has the meaning set out in Section 3.1(gg)(ii);

"Owned Real Property and Buildings" has the meaning set out in the Assignment and Assumption Agreement;

"Payoff Letters" shall have the meaning set out in the Assignment and Assumption Agreement;

"Permitted Encumbrances" means any (i) statutory Encumbrance in respect of Taxes and other government charges and assessments not yet due and payable; (ii) landlords', lessors', warehousemen's', employees', materialmen's, mechanics', carriers', workmen's, repairmen's, statutorily imposed or other like Encumbrances arising or incurred in the ordinary course of Business for amounts not yet due and payable and for which adequate reserves have been established in accordance with GAAP in the Interim Financial Statements; (iii) Encumbrances arising under original purchase price conditional sales contracts and equipment leases with third parties that are contracts entered into in connection with the Vendor; (iv) Encumbrances, survey exceptions, imperfections of title, liens or other title matters affecting any Owned Real Property and Buildings that would not, individually or in the aggregate, impair the occupancy or current use of the Owned Real Property and Buildings they encumber; (v) with respect to the Owned Real Property and Buildings, zoning, building codes and other land use Laws regulating the use or occupancy of such Owned Real Property and Buildings or the activities conducted thereon that are imposed by any Governmental Entity having jurisdiction over such Owned Real Property and Buildings and do not materially interfere with the present use of the 

7

Owned Real Property and Buildings; (vi) liens securing indebtedness to be repaid and released  in  connection  with  the  transactions  contemplated  by   this  Agreement;  (vii) Encumbrances listed as Schedule 3.1(d) and (viii) Encumbrances related solely to Excluded Assets;

"person" includes any individual, corporation, partnership, firm, joint venture, syndicate, association, trust, government, governmental agency and any other form of entity or organization;

"Pre-Closing Employee Liabilities" has the meaning set out in the Assignment and Assumption Agreement;

"Product Liability Lawsuits" has the meaning set out in Section 3.1(gg)(i);

"Products" has the meaning set out in Section 3.1(gg)(i);

"Purchaser" has the meaning set out in the preamble;

"Purchaser Basket Amount" has the meaning set out in Section 10.4(a);

 

                "Purchaser Fundamental Representations" has the meaning set out in Section 4.2(a);

"Purchaser Indemnified Parties" has the meaning set out in Section 10.1(a);

"Purchaser's Plans" has the meaning set out in Section 8.1;

 

                "Records" has the meaning set out in the Assignment and Assumption Agreement;;

"Retrofits" has the meaning set out in Section 3.1(gg)(i);

"R&W Policy" means that certain representation and warranty insurance policy obtained or to be obtained by the Vendor to insure against Vendor's liability for any Losses incurred by any Purchaser Indemnified Party as a result of any breach of any representation or warranty made by the Vendor in Article 3 or in any instrument delivered pursuant to this Agreement;

"Settled Closing Date Statement" has the meaning set out in the Assignment and

Assumption Agreement;

"Share Purchase Price" has the meaning set out in Section 2.2;

"Shares" has the meaning set out in the recitals;

"Software" has the meaning set in Section 3.1(m);

 

                "Standards" has the meaning set out in the Assignment and Assumption Agreement;

8

                "Surplus Inventory" has the meaning set out in Section 3.1(ff);

                

                "Taxes" or "Tax" means all taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Entity, together with all interest, penalties, fines, additions to tax or other additional amounts imposed in respect thereof, including those levied on, or measured by, or referred to as income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, use, value-added, excise, stamp, withholding, business, franchising, property, payroll, employment, health, social services, education and social insurance taxes, all surtaxes, all customs duties and import and export taxes, all licence, franchise and registration fees and all employment insurance, health insurance and government pension plan premiums;

"Tax Representations" has the meaning set out in Section 3.2(a); "Third Party Claim" has the meaning set out in Section 10.3(a); "Time of Closing" means the close of business on the Closing Date;

 

"Transferred Employees" means all Employees who have accepted GLC NewCo's offer of employment made in accordance with Section 8.1;

 

                "Transferred Plans" has the meaning set out in the Assignment and Assumption Agreement;

"Vendor" has the meaning set out in the preamble;

"Vendor Basket Amount" has the meaning set out in Section 10.4(a);

 

                "Vendor Fundamental Representations" has the meaning set out in Section 3.2(a); and

"Vendor Indemnified Parties" has the meaning set out in Section 10.2(a);

1.2            Currency.

The parties acknowledge and agree that the purchase price set forth in Section 2.2 is expressed in U.S. dollars. Subject to the foregoing, unless otherwise indicated, all dollar amounts referred to in this Agreement are expressed in Canadian dollars.

1.3            Sections and Headings.

The division of this Agreement into sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a section or a schedule refers to the specified section or schedule to this Agreement.

1.4            Number and Gender.

9

In this Agreement, words importing the singular number only shall include the plural and vice versa, and words importing gender shall include all genders.

1.5            Accounting Terms.

All accounting terms not specifically defined in this Agreement are to be interpreted in accordance with GAAP.

1.6            Knowledge.

For the purposes of this Agreement, "to the Vendor's knowledge" or "to the knowledge of the Vendor", with respect to any matter, shall mean the actual knowledge of Jean Noelting, Don Wellington and Julie Smith with respect to such matter after due inquiry.

1.7            Entire Agreement.

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and, except as expressly provided herein, supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral, including the Term Sheet dated March 13, 2015 between the Vendor and Mueller Industries, Inc. There are no conditions, covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof except as herein provided.

1.8            Time of Essence.

Time shall be of the essence of this Agreement.

1.9            Applicable Law.

This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Ontario and the federal laws of Canada applicable therein, and each party hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of the Province of Ontario and all courts competent to hear appeals therefrom.

1.10            Severability.

If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct.

1.11            Successors and Assigns; Assignment.

This Agreement shall enure to the benefit of and shall be binding on and enforceable by the parties and, where the context so permits, their respective successors, permitted assigns, heirs, executors, administrators and legal representatives. No party may assign

10

any of its rights or obligations hereunder, without the prior written consent of the other parties, provided that the Purchaser may assign its rights under this Agreement to any of its respective Affiliates.

1.12     Amendment and Waivers.

No amendment or waiver of any provision of this Agreement shall be binding on any party unless consented to in writing by such party. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver constitute a continuing waiver unless otherwise expressly provided.

1.13            Including.

Where the word "including" or "includes" is used in this Agreement, it means

"including (or includes) without limitation".

1.14            Schedules.

The following Schedules are attached to and form part of this Agreement:

Schedule 1.1(a)         Audited Financial Statements Schedule 1.1(b)         Interim Financial Statements Schedule 3.1(a)         Business Registrations

Schedule 3.1(d)                                      Leases, Licences and Permitted Encumbrances

Schedule 3.1(j)                                        Buildings

Schedule 3.1(l)                                        Intellectual Property

Schedule 3.1(m)                                     Software

Schedule 3.1(n)                                      Insurance

Schedule 3.1(p)                                      Material Contracts

Schedule 3.1(q)                                      Compliance with Laws and Licences

Schedule 3.1(r)                                       Consents and Approvals

Schedule 3.1(u)                                     Absence of Changes

Schedule 3.1(v)                                      Litigation and Other Proceedings Schedule 3.1(w)  Restrictions on Business Schedule 3.1(x)  Environmental

Schedule 3.1(y)                                     Employee Plans

Schedule 3.1(z)                                      Labour & Employment Matters

Schedule 3.1(aa)                                   Employees

Schedule 3.1(bb)                                  Non-Arm's Length Transactions

Schedule 3.1(cc)                                   Tax Matters

Schedule 3.1(ee)                                   Customer and Suppliers

Schedule 3.1(gg)                                  Products

Schedule 3.1(jj)                                      Draft R+W Policy

Schedule 4.1(d)                                      Consents

Schedule 5.2(b)                                     Form of Consulting Agreement

Schedule 5.2(c)                                      Assignment and Assumption Agreement

Schedule 5.2(d)                                      Form of Escrow Agreement

11

Schedule 5.2(e)                                      Form of Lease Agreements

Schedule 5.2(f)                                       Form of Transition Services Agreement

Schedule 5.2(j)                                        Form of Individual Restrictive Covenant Agreement

Schedule 5.2(k)                                      Form of Vendor Restrictive Covenant Agreement

ARTICLE 2

PURCHASE AND SALE

2.1            Agreement to Sell and to Purchase.

At the Closing, upon the terms and subject to the conditions set forth in this Agreement, (i) the Vendor shall sell, assign, transfer, convey and deliver the Shares, free and clear of any Encumbrance, limitations or restrictions (other than restrictions under applicable securities laws), to the Purchaser, and the Purchaser shall purchase and accept the Shares from the Vendor and (ii) the Purchaser shall cause the LuxCo Entities to loan to GLC NewCo the GLC NewCo Indebtedness Amount pursuant to the LuxCo Loan Agreements.

2.2            Share Purchase Price; LuxCo Loan.

(a)     Subject to adjustments in accordance with Section 2.7 of the Assignment and Assumption Agreement, the purchase price payable by the Purchaser to the Vendor in respect of the Shares means an amount equal to Thirty Million U.S. Dollars (US$30,000,000) less the Estimated Shortfall Amount (the "Share Purchase Price").

(b)      At the Time of Closing, the Vendor hereby directs that the Purchaser pay the Share Purchase Price and cause the LuxCo Entitites to pay Forty-Five Million U.S. Dollars (US$45,000,000) (the "GLC NewCo Indebtedness Amount") to GLC NewCo pursuant to the LuxCo Loan Agreements for the purposes of repaying the GLC Note in full, to the following accounts:

(i)            with respect to the Share Purchase Price:

(A)     the aggregate payoff amount set forth in the Payoff Letters, by wire transfer of immediately available funds directly to the account(s) designated by the applicable secured party;

(B)     the balance shall be paid by wire transfer of immediately available funds to the account designated by the Vendor.

		(ii)	with respect to the GLC Note, the Purchaser shall cause the LuxCo Entities to loan the GLC NewCo Indebtedness Amount and, immediately upon the Closing, cause GLC NewCo to repay the GLC Note in full, by wire transfer of immediately available funds directly to the account designated by the Vendor in full satisfaction of the GLC Note.

2.3            Allocation under the Assignment and Assumption Agreement.

12

The Vendor and the Purchaser shall consult together with respect to allocation of the purchase price under the Assignment and Assumption Agreement, but if within 120 days after the Closing Date, Vendor and Purchaser fail to agree on a mutually acceptable allocation of such purchase price, each of the Vendor, the Purchaser and GLC NewCo, as the case may be, shall be entitled to allocate such purchase price in its sole discretion. Each of the Vendor and the Purchaser shall use commercially  reasonable efforts to deliver a draft of their respective proposed allocation to the other party within 90 days after the Closing Date (provided that the parties acknowledge and agree that any such draft allocation may be subject to further revisions by the providing party).

2.4            Transfer Taxes.

The Vendor shall be liable for and shall pay all Taxes, fees or other like charges of the Province of Ontario payable by the Purchaser or the Vendor or required to be collected by the Purchaser or the Vendor in connection with the transactions contemplated in the Assignment and Assumption Agreement or the purchase of the Shares.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE VENDOR

3.1            Representations and Warranties of the Vendor Relating to the Business.

As of the execution of this Agreement and as of the Closing (provided that any representations and warranties made as of the Closing shall be deemed to be modified, to the extent  necessary   (mutatis  mutandis),  to  reflect  the  consummation  of  the  transactions contemplated by the Assignment and Assumption Agreement), the Vendor represents, warrants and covenants to and with the Purchaser as follows, and acknowledges that the Purchaser is relying on such representations, warranties and covenants in connection with entering into the transaction contemplated hereby:

(a)      Existence; Corporate Power and Capacity of the Vendor and GLC NewCo. The Vendor and GLC NewCo are validly existing under the laws of their jurisdiction of incorporation and have all corporate power, authority and capacity to own or lease their property and assets and to carry on the Business as now being conducted by it. Except as set out on Schedule 3.1(a), GLC NewCo is not required to be registered or qualified as a corporation to do business in any jurisdiction in which the nature of the Business or the property and assets owned or leased by it makes such registration or qualification necessary. All of the issued and outstanding capital stock of GLC NewCo is owned directly by Vendor. GLC NewCo has not conducted any business prior to the date of this Agreement and has no, and prior to and at the Closing will have no, assets, liabilities or obligations of any nature other than those (i) as set forth in the Assignment and Assumption Agreement and (ii) incident to its formation and pursuant to this Agreement and the other transactions contemplated by this Agreement.

(b)            Authorization; Execution; Enforceability.

		(i)	This Agreement has been duly authorized by all necessary corporate action on the part of the Vendor, including the approval of the

13

	 	 	
shareholders of the Vendor, and has been duly executed and delivered by the Vendor and is a legal, valid and binding obligation of the Vendor enforceable against it by  the Purchaser in accordance with its terms, except  as  enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of rights of creditors generally and except that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

	
(ii)

	
 

The Assignment and Assumption Agreement has been duly authorized by all necessary corporate action on the part of the Vendor and GLC NewCo, including  the approval of the shareholders of the Vendor and GLC NewCo, as applicable, and has been duly executed and delivered by the Vendor and GLC NewCo and is a legal, valid and binding obligation of each of the Vendor and GLC NewCo enforceable against one another in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of rights of creditors generally and except that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

	
 

       (c)

	
 

 

	
 

Capitalization; Title to Shares; No Liabilities.                                                                                                  The authorized capital of GLC NewCo consists of an unlimited number of common shares, 1000 of which are issued and outstanding on the date hereof. All of the Shares are validly issued and outstanding, fully paid and nonassessable. There are no outstanding or authorized options, warrants, derivatives, convertible securities, conversion rights, exchange rights or other rights to subscribe for or purchase any securities of GLC NewCo. There are no outstanding stock appreciation, phantom stock, profit participation or other similar rights with respect to GLC NewCo. There are no proxies, voting rights or other agreements or understandings with respect to the voting or transfer of the equity securities of GLC NewCo (including contracts relating to preemptive rights, rights of first refusal, co-sale rights or "drag-along" rights). No holder of indebtedness of GLC NewCo has any right to convert or exchange such indebtedness for any equity securities of GLC NewCo. None of the outstanding equity securities of GLC NewCo was issued in violation of any Law. GLC NewCo has no Liabilities other than Liabilities incurred in connection with the Assignment and Assumption Agreement or those contemplated pursuant to this Agreement.

 

         (d)                             Ownership of Assets.   Except with respect to any  Assets that are  leased or licensed by or for the benefit of GLC NewCo or the Vendor that are designated as such on  Schedule 

                                                   3.1(d) (the "Leased Assets"), the Vendor is the sole registered and beneficial owner of all of the Assets and the Clarke Road Property, GLC NewCo, after giving effect to the 

                                                   transactions contemplated by the Assignment and Assumption Agreement and subject to the reservations set out therein, will, at the Time of Closing, be the sole registered and 

                                                   beneficial owner of all of the Assets (other than the Leased Assets), and CDC is the sole registered and beneficial owner of the CDC Property, in each case with good and 

                                                   marketable title thereto, free and clear of all Encumbrances, other than the Permitted Encumbrances and the obligation to transfer Accounts Receivable pursuant to section 2.7(b) 

                                                   of the Assignment and Assumption Agreement. Neither Wolverine Tube Inc. nor any other Affiliate of the Vendor (other than GLC NewCo after giving effect to the transactions 

                                                   contemplated by the Assignment and Assumption Agreement) owns, or has the right to use, any of the Assets (other than the Leased Assets) related to the Business except for 

                                                   the spare parts arrangement noted on Schedule 3.1(p). Subject to the provisions of Section 3.1(q), the Vendor has the exclusive right and full power (i) to sell, transfer and assign

                                                   good and marketable title to the Assets (other than the Leased Assets) to GLC NewCo under the Assignment and Assumption Agreement, and good and marketable title to the 

                                                   Shares to the Purchaser and (ii) to lease the Clarke Road Property to GLC NewCo, and CDC has the exclusive right and full power to lease the CDC Property to GLC NewCo,

14

                      in each case free and clear of any Encumbrances, other than the Permitted Encumbrances. Without limiting the generality of the foregoing, there has been no assignment,                           subletting or granting of any license by the Vendor or GLC NewCo of or in respect of any of the Assets.

(e)                           No Other Agreement or Restriction. No person, other than GLC NewCo under the Assignment and Assumption Agreement, has any  agreement or option or any right or            privilege (whether by Law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase or acquisition from the Vendor or use of any of the 

              Assets  or  the Owned Real Property and Buildings (except for the arrangement between GLC NewCo and the Vendor to permit the Vendor to utilise a portion of the Clarke Road             Property).   There is not pending any suit, action or other legal proceeding of any sort which would in any manner restrain or prevent the Vendor from effectually and legally 

              transferring the Assets to GLC NewCo or the Shares to the Purchaser, in accordance with the Assignment and Assumption Agreement or this Agreement, as applicable, free 

              and clear of any  Encumbrances, other than Permitted Encumbrances.

(f)                             No Violation.    Neither the execution  and  delivery of this  Agreement  by the Vendor or the Assignment and Assumption Agreement by the Vendor and GLC NewCo, nor the 

                                 consummation of the transactions herein or therein, will result in (i) the violation of, or constitute a default under, or conflict with, or cause the acceleration of, any obligations 

              of  the Vendor or GLC NewCo under: (A) any Contract or Licence (including the termination thereof or any material adverse change to the Vendor's or GLC NewCo's rights or 

              benefits thereunder, as applicable) (subject to obtaining the consents and approvals set out in Schedule 3.1(r)); (B) any provision of the constating documents or by-laws or             resolutions of the board of directors (or any committee thereof) or shareholders of the Vendor or GLC NewCo, as applicable; (C) any judgment,  decree,  order or award of any             Governmental Entity having  jurisdiction  over the Vendor or GLC NewCo, as applicable; or (D) any applicable Law; or (ii) the creation of an Encumbrance upon the Assets or 

              the Owned Real  Property and Buildings.

(g)         Bankruptcy.   The Vendor is not  insolvent, nor has it committed an act of bankruptcy, proposed a compromise or arrangement to its creditors generally, taken any proceeding 

              with respect to a compromise or arrangement, taken any proceeding to have itself declared bankrupt or wound up, as the case may be, taken any proceeding to have a receiver 

                                 appointed over any part of its assets, had any encumbrance or receiver take possession of any of its property, had any execution or distress become enforceable or levied upon 

                                 any of its property or had any petition for a receiving order in bankruptcy filed against it.

(h)        Sufficiency of Assets. Except for a quantity of spare parts for the pilger mill and the spare  parts arrangement with Wolverine Tube Inc. noted in Schedule 3.1(p), and the             Excluded Assets, the Assets constitute all of the property used or held for use by the Vendor, and after giving effect to the transactions contemplated by the Assignment and             Assumption Agreement, GLC NewCo, in carrying on the Business, or necessary for the Vendor or GLC NewCo to carry on the Business, in the manner presently conducted by  

15

                      the vendor.  With the exception of Inventories in transit, all of the Assets are located on the Owned Real Property and Buildings. Without limiting the generality of the                             foregoing, the Vendor and, after giving effect to the transactions contemplated by the Assignment and Assumption Agreement, GLC NewCo, owns, leases or licenses all                           Intellectual Property which is necessary to conduct the Business as it is currently conducted. Except with respect to Assigned Contracts that require a Consent to be obtained                       subsequent to the Closing, upon the consummation of the transactions contemplated by the Assignment and Assumption Agreement, no person other than GLC NewCo will                         own or otherwise have rights to the Vendor's interest in any Assigned Contracts, assets, properties or rights that are used in the operation of the Business (including any of the                       Assets) or that are necessary or required for the conduct of such Business as currently conducted by the Vendor.

(i)                            Owned Real Property and Buildings.

		(i)	Neither the Vendor nor GLC NewCo (as landlords) leases or subleases nor has agreed to lease any real property, except for the Owned Real Property and Buildings.

		(ii)	The uses of Owned Real Property and Buildings in carrying on the Business comply in all material respects with all applicable by-laws, regulations and ordinances of the local municipality and of any other Governmental Entity having jurisdiction.

		(iii)	All Taxes and other assessments in respect of the Owned Real Property and Buildings are in good standing.

(j)                       Buildings.

		(i)	Except  as  set  out  on  Schedule  3.1(j),  the  buildings,  structures, improvements and appurtenances situate on the Owned Real Property and Buildings and all mechanical, fixtures, plumbing and heating, electrical, drainage, air-conditioning and cooling systems therein are in good working order having regard to the age thereof.

		(ii)	Except as set out on Schedule 3.1(j), the Vendor has not received any notice advising of any material defects in the construction, state of repair or state of completion of any of the buildings located on any Owned Real Property and Buildings or ordering or directing that any material alteration, repair, improvement or other work be done.

		(iii)	Except as set out on Schedule 3.1(j), there are no outstanding, and to the knowledge of the Vendor there are no threatened, work orders against any of the Owned Real Property and Buildings or any part thereof or any matters under discussion with any municipality or other Governmental Entity which could give rise to any work order.

16

		(iv)	There are no construction liens registered against the Owned Real Property and Buildings nor any claims for which such liens could be registered.

(k)         Equipment. All of the Equipment that is material to the operation of the Business is in good working order and good state of repair and maintenance having regard to its age,            except for regular wear and tear on such Equipment, and to the knowledge of the Vendor, all of the other Equipment is in good working order and good state of repair and            maintenance having regard to its age except for regular wear and tear on such Equipment. All Equipment currently used in the Business has the capability  to manufacture             Products at commercial rates of production that comply with applicable Law and meet ASTM specification within +/- 8% for 3⁄4" L type copper tube and for any other Products             within +/- 10%.

(l)                        Intellectual Property.

		(i)	Schedule 3.1(l) sets forth sets forth a complete and correct list and brief description  of  all  Intellectual  Property,  including   details  of  any registrations or applications for registration in respect thereof in any jurisdiction and the Vendor's Interest in such Intellectual Property, other than Intellectual Property noted on Schedule 3.1(l) forming part of the Excluded Assets. Following the completion of the Acquisition, GLC NewCo will be required to effect a change in registration of the Intellectual Property where required to reflect the change in ownership. .

		(ii)	Subject to the Assignment and Assumption Agreement, the Vendor is the sole and exclusive owner of, or has the right to use, all right, title and interest in and to the Intellectual Property, in each case as disclosed in Schedule 3.1(1). Following the completion of the Acquisition, GLC NewCo will be required to effect a change in any rights to use Intellectual Property where required to reflect the change in ownership of Intellectual Property not owned by the Vendor.

		(iii)	Except as disclosed in Schedule 3.1(l), the Intellectual Property owned by the Vendor is in full force and effect and has not been used or enforced or failed to be used or enforced in a manner that would result in the abandonment, cancellation or unenforceability of any of such Intellectual Property.

		(iv)	Except as disclosed in Schedule 3.1(l), the Vendor has no knowledge of any claim of adverse ownership, invalidity  or other opposition to or conflict with any Intellectual Property nor of any pending or threatened suit, proceeding, claim, demand, action or investigation of any nature or kind against the Vendor relating to the Intellectual Property.

		(v)	The Vendor is the current registrant of the Domain Names and is the exclusive owner of all rights in such Domain Names and, subject to the transfer of same to GLC NewCo pursuant to the Assignment and Assumption Agreement, has the exclusive right to use same.

17

		(vi)	Except for Intellectual Property that is described on Schedule 3.1(l) as being licensed to the Vendor (the "Licensed Intellectual Property"), the Vendor is not a party to any Contract (other than the Assignment and Assumption Agreement and subject to the Consents set forth on Schedule

3.1(r) that limits or impairs the Vendor's ability to use, sell, transfer or assign the Intellectual Property. The Vendor has not granted any licence or other rights to any other person in respect of all or any portion of the Intellectual Property (other than the Assignment and Assumption Agreement) .

		(vii)	(a) Except for any Consents set forth on Schedule 3.1(r),  all licences granted to the Vendor in respect of the Licensed Intellectual Property are in full force and effect unamended, (b) the Vendor has duly observed and performed all of its covenants and obligations under each of such licences and, (c) to the Vendor's knowledge, there has not been any default under or breach of any such licences by the other parties thereto. Except as disclosed on Schedule 3.1(l), no royalty or other fee is required to be paid by the Vendor to any other person in respect of the use of any of the Licensed Intellectual Property or Intellectual Property.

		(viii)	To the Vendor's knowledge, no third party has made or is making any unauthorized use of any Intellectual Property owned by the Vendor or GLC NewCo or has infringed or misappropriated or is infringing or misappropriating any such Intellectual Property.

(ix)           To the Vendor's knowledge, the conduct of the Business does not breach, violate, infringe or constitute misappropriation of any intellectual property right of any third party.

(x)          To the Vendor's knowledge, all personal information (within the meaning of applicable privacy laws) collected by the Vendor has been collected, used and disclosed in accordance with applicable privacy Laws.

(m)         Software. Schedule 3.1(m) lists all software used by the Vendor or in connection with the operation of the Business (the "Software") exclusive of off-the-shelf, shrink wrapped software. The Software operates properly and is fit for use by the Vendor in the Business as currently being conducted.

(n)          Insurance. Schedule 3.1(n) sets out all insurance policies, including, for greater certainty, the insurance policies maintained with respect to the Accounts Receivable (which, for greater certainty, is not being transferred to GLC NewCo) under which the Vendor maintained insurance on the Assets. All of the property and assets of the Vendor are presently insured to the amounts referred to in the said policies. All premiums in connection with such policies are fully paid to the extent due. There are no outstanding insurance claims under the policies described on Schedule 3.1(n)

18

 

 except as disclosed thereon.

(o)         No Expropriation.  No property or asset of the Business (including any Owned Real Property and Buildings) has been taken or expropriated by any Governmental Entity, nor has any notice or proceeding in respect thereof or in respect of any rezoning of any Owned Real Property and Buildings been given or commenced.

(p)         Contracts. Schedule 3.1(p) is a true and complete list of all Material Contracts relating to the Business, the Owned Real Property and Buildings or to the Assets. The Vendor has performed all of the obligations required to be performed by it and is entitled to all benefits under, and is not in material default or alleged to be in material default in respect of, any Contracts. All Contracts are in good standing and in full force and effect, unamended, except for the Consents in respect of Material Contracts as set forth on Schedule 3.1(r) and other Consents which may be required in respect of non-Material Contracts, and there are no current facts or circumstances which could, or to the Vendor's knowledge with the lapse of time and/or the giving of any notice would, constitute a default under or a breach of any such obligation or of a term of any such Contract, other than required Consents. To the Vendor's knowledge, no other party to a Contract is in default under or in breach of any covenants, conditions or obligations contained therein and, except for Consents set forth on Schedule 3.1(p), there are no facts or circumstances which could, or with the lapse of time and/or the giving of any notice would, constitute a default under or a breach of any such obligation or of a term of any Contract by the other party thereto. Except as described in Schedule 3.1(p) or in any other Schedule hereto, the Vendor is not a party to or bound by any:

(i)                   collective bargaining agreement or other Contract with any labour union; (ii)  trust indenture, mortgage, promissory note, loan agreement, security agreement, guarnatee for borrowed money or other Contract for the borrowing of money or a leasing transaction of the tupe required to be capitalized in accordance with GAAP;

 

(iii)                commitment for charitable contributions;

(iv)               contract for the sale of any assets, other than in the ordinary course of the Business;

		(v)	Contract which contains any confidentiality, secrecy or non-disclosure covenant by or in favour of the Vendor relating to any proprietary or confidential information (other than confidentiality provisions in Contracts relating solely to the fact that a Contract exists and contracts entered into for the purposes of obtaining or providing insurance, recruiting, consulting or advisory services, or assessing the creditworthiness of the Vendor or its affiliates and third  parties in contemplation of  transactions with the Vendor) or any non-competition or similar covenant by or in favour of the Vendor;

19

(vi)          licence, franchise or other agreement that relates in whole or in part to any Intellectual Property;

		(vii)	agreement  of  guarantee,  support,  indemnification  (other  than  the indemnification provisions set out in the Vendor's by-laws), assumption or endorsement of, or any other similar commitment with respect to, the Liabilities of any other person; or

		(viii)	Contract that would require the Vendor to pay a material termination fee, or which cannot be performed by the Vendor or cannot be performed without incurring a loss, or is for goods or services in excess of the normal requirements of the Business;

              The Data Room includes a true and complete copy of each Material Contract which is in writing and a true and complete description of the terms of each Material Contract    

            which is not in writing.

(q)        Compliance with Laws; Licences.  Except as set forth on Schedule 3.1(q), the Vendor has complied in all material respects with all laws, statutes, ordinances, regulations, rules, judgments, decrees or orders of any Governmental Entity ("Law" or "Laws") applicable to the Business and there are no facts or circumstances which could, or with the lapse of time and/or the giving of any notice would, result in any default of any Law. The Vendor has not received any notice claiming that the Vendor is in default under, or that the Business is not being conducted or that any of the property and assets of the Vendor or the Business are not being used in compliance with, any applicable Law. Without limiting the generality of the foregoing, to the knowledge of the Vendor no customer or supplier of the Vendor has been or is currently subject to any economic or trade sanctions authorized, administered or enforced by the Department of Foreign Affairs and International Trade Canada in respect of Products sold by or to the Vendor. Except as set out on Schedule 3.1(q), the Vendor holds all licences, permits, approvals, consents, certificates, registrations and authorizations from any Governmental Entity (the "Licences"), including without limitation any permits or approvals issued under employment standards legislation, necessary for the carrying on of the Business as currently being conducted by the Vendor. GLC NewCo will be required to obtain all such Licences in its own name subsequent to Closing. Schedule 3.1(q) sets out a complete and accurate list of all Licences, true and complete copies of which are included in the Data Room. All Licences are in good standing. Except for any transfer pursuant to the Assignment and Assumption Agreement, the Vendor is not in default or breach of any Licence and there are no facts or circumstances which could, or with the lapse of time and/or the giving of any notice would, result in any material default or breach of any License. Notwithstanding anything herein contained, nothing herein shall be a representation or warranty in respect of the matters set forth in Section 4.1(d).

(r)         Consents and Approvals. There is no requirement for the Vendor or GLC NewCo to make any filing with, give any notice to or to obtain any licence, permit, certificate, registration, authorization, consent or approval of, any Governmental Entity or other person in connection with the transactions contemplated by this Agreement or the Assignment and Assumption Agreement, except for the filings, notifications, licences, permits, certificates, registrations,   authorizations,   consents   and   approvals   described   in   Schedule   3.1(r).

20

Notwithstanding anything herein contained, nothing herein shall be a representation or warranty in respect of the matters set forth in Section 4.1(d).

(s)                           Financial Statements.

		(i)	The Audited Financial Statements and the Interim Financial Statements have been prepared in accordance with GAAP on a basis generally consistent with that of prior fiscal periods.

		(ii)	The Audited Financial Statements and Interim Financial Statements are complete and accurate; and

		(iii)	The Audited Financial Statements and, in all material respects,   the Interim Financial Statements present fairly, consistent with prior fiscal periods, the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial position of the Vendor as at their respective dates, and the results of the operations of the Vendor and the changes in its financial position for the periods then ended.

		(iv)	The representations and warranties contained herein with respect to the Interim Financial Statements are qualified as a result of the fact that the Interim Financial Statements have been internally  prepared by management and are subject to period end adjustments consistent with past practices and do not contain notes.

(t)         Records. The Records have been duly maintained in accordance with all material applicable legal requirements and contain full and accurate records of all material financial transactions and other matters relating to the Business.    All vacation pay, performance incentives, bonuses, commissions and other payments relating to each of the Employees are reflected in the Records, and all vacation pay, performance incentives, bonuses and commissions are accrued in a manner consistent with past practice and none of such payables is in arrears. Except as disclosed in Schedule 3.1(t) and except for Software subject to a Licence, all information systems relating to the Records are owned, operated and maintained exclusively by the Vendor.

(u)        Absence of Changes.      Except   for the transactions   contemplated   by the Assignment and Assumption Agreement or as disclosed in Schedule 3.1(u) or in the Audited Financial Statements, unless as otherwise specified below, since the date  of the Audited Financial Statements until the date of execution of this Agreement, the Vendor has carried on the Business and conducted its operations and affairs only in the ordinary and normal course consistent with past practice and there has not been:

		(i)	any change in the condition (financial or otherwise), assets, liabilities, operations, earnings, or business of the Vendor which has had or to the Vendor's knowledge, would be reasonably likely to have a Material Adverse Effect;

21

		(ii)	any material  loss  (whether or not  covered  by insurance) affecting the property or assets of the Vendor;

		(iii)	any Liability (whether absolute, accrued,  contingent  or otherwise,  and whether due or to become due) incurred by the Vendor, other than those incurred in the ordinary and normal course of the Business and consistent with past practice;

		(iv)	other than Permitted Encumbrances, any pledge, mortgage or granting of a security interest or other Encumbrance on or over any of the property or assets of the Vendor;

		(v)	any write-off of any Accounts Receivable over $10,000 as uncollectible, or any portion thereof;

		(vi)	any write-down of capital assets other than by way of depreciation in accordance with past practice;

		(vii)	except as required by GAAP or by Law, any change in the accounting or tax practices followed by the Vendor;

		(viii)	any cancellation of any debts or claims or any amendment, termination or waiver of any rights of value to the Vendor;

         (ix)               any labour condition or dispute which is likely to have a Material Adverse Effect on the Business;

         (x)          any licence, sale, assignment, transfer or disposition of any property or assets of the Vendor for amounts in excess of $25,000, other than the sale of Inventories in the ordinary course of the Business;

         (xi)          since January 1, 2015, any increase in any compensation, bonus or benefit (including any increase pursuant to any Employee Plan) payable to any Employee or the execution of any employment contract with any Employee, or the making of any loan to, or engagement in any transaction with, any Employee, officer, director or shareholder of the Vendor or any other person not acting at Arm's Length with the Vendor;

         (xii)         any forward purchase commitments in excess of requirements of the Vendor for normal operating inventories or at a prices higher than the current market prices;

         (xiii)            any forward sales commitments, other than in the ordinary course of the

Business, or any failure to satisfy any accepted order for goods;

         (xiv)       since March 1, 2015, any material change in the credit or payment terms offered to customers of, or by suppliers to, the Vendor;

22

		(xv)	any capital expenditure or commitment of the Vendor, in excess of the amount set forth on Schedule 3.1(u);

(xvi)            since March 1, 2015, any change in the terms of any Material Contract, or in the Vendor's pricing practices or terms of sale;

(xvii)       any change in the material terms of any material License; or

(xviii)      any commitment or agreement to do any of the foregoing.

(v)        Litigation.      Except   as  described   in   Schedule 3.1(v),  there is   no  court, administrative, regulatory or similar proceeding (whether civil, quasi-criminal or criminal), arbitration or other dispute resolution procedure, claim, investigation or inquiry (collectively, "Actions") by or before any Governmental Entity or arbitration tribunal, or any similar matter or proceeding against or involving the Vendor, GLC NewCo, the Assets, the Owned Real Property and Buildings or the Business (whether in progress or, to the Vendor's knowledge, threatened); and no event has occurred which might give rise to any such proceeding that has a reasonable possibility of prevailing. There is no judgment, decree, injunction, rule, award or order of any Governmental Entity or arbitration tribunal outstanding against the Vendor, GLC NewCo, the Business or the Assets.

(w)      Restriction on Business. Except as disclosed in Schedule 3.1(w), there is no agreement, non-competition covenant, exclusivity covenant, right of first refusal, judgment, injunction, order or decree binding upon the Vendor, GLC NewCo, the Business, the Owned Real Property and Buildings or the Assets that has, or could reasonably be expected to have, the effect of prohibiting, restricting or impairing any business practice of the Vendor, GLC NewCo; or the conduct of the Business, any acquisition, use or disposition of any of the Shares, the Assets, the Owned Real Property and Buildings or the Business, or the conduct of the Business as currently conducted.

(x)                      Environmental.

(i)                 All Environmental Permits are listed in Schedule 3.1(x).

		(ii)	Except for changes required as a result of the completion of the Acquisition and as disclosed in Schedule 3.1(x), all Environmental Permits required to be held by the Vendor have been obtained, are valid and in full force and effect, have been and are being complied with, and there have been and are no proceedings commenced or, to the Vendor's knowledge, threatened to revoke or amend any Environmental Permits.

		(iii)	Since July 8, 2008, except as disclosed in Schedule 3.1(x), the operations of the Business and the Owned Real Property and Buildings have been and are in compliance with Environmental Laws in all material respects..

		(iv)	Neither the Vendor, the Owned Real Property and Buildings nor the Business is the subject of any administrative complaint, direction, order or sanction filed or imposed by any Governmental Entity pursuant to any Environmental Law or with respect to environmental matters, and except as disclosed in Schedule 3.1(x), to the knowledge of the Vendor, there are no facts or circumstances which could, or with the lapse of time and/or the giving of any notice would, result in any of the foregoing.

23

 

		(v)	Except as disclosed in Schedule 3.1(x), the Vendor has not received any written notice from any Governmental Entity or other person alleging that the Vendor, the Business or the Owned Real Property and Buildings is not in compliance with Environmental Laws.

		(vi)	Except as disclosed in Schedule 3.1(x), (A) there is no claim, action, audit, investigation, or other proceeding pending or, to the Vendor's knowledge, threatened against the Vendor, the Business or the Owned Real Property and Buildings alleging, or arising out of or in connection with, any non- compliance with Environmental Laws or environmental matters, and (B) to the Vendor's knowledge, there are no facts or circumstances currently existing which could, or with the lapse of time and/or the giving of any notice would, result in any such claim, action, audit, investigation, or other proceeding.

		(vii)	Except for raw materials and work-in-process inventories of copper held for use in the Business and finished product inventories held for sale in the Business or as disclosed in Schedule 3.1(x), there are no Hazardous Substances present at, on, in, under or over the Owned Real Property and Buildings which constitute a breach or violation of Environmental Laws and, to the knowledge of the Vendor ,such Hazardous substances represent the only Hazardous Substances present at, on, in, under or over the Owned Real Property and Buildings and to the knowledge of the Vendor, there are no underground storage tanks present at the Owned Real Property and Buildings.

(y)                            Employee Plans.

		(i)	Schedule 3.1(y) identifies each retirement, pension, savings, bonus, stock purchase, profit sharing, stock option, stock appreciation, phantom stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive, or other compensation or benefit plan or arrangement, whether written or oral, which is maintained, or otherwise contributed to or required to be contributed to, by the Vendor, GLC NewCo  or CDC or in respect of which the Vendor, GLC NewCo or CDC has or may have any Liability, whether absolute or contingent, for the benefit of any Employee, director or officer or former employee, director or officer (collectively, the "Employee Plans"). The Employee Plans are the only benefit plans existing in respect of the Employees. Current and complete copies of the Employee Plans, and in the case of an unwritten plan, a true and complete written summary thereof, and all relevant documents related thereto, are included in the Data Room including the documents establishing the current terms of the Employee Plan, all descriptions of the Employee Plan provided to Employees and former employees and all other communications relating to the Employee Plan, a copy of the current trust or funding arrangement and all other contracts relating to the Employee Plan and all internal and third party administration reports and reports of investment counsel within the past two years.

24

		(ii)	Except as disclosed on Schedule 3.1(y), all contributions or premiums required to be paid by the Vendor, GLC NewCo or CDC, as the case may be, under the terms of each Employee Plan or by applicable Law have been made in a timely fashion in accordance with such applicable Law and the terms of the Employee Plans or will be set forth as Current Liabilities on the Settled Closing Date Statement. Except as set out in the Estimated Net Working Capital Statement, none of the Employee Plans provides for any adjustment after the Closing Date in respect of costs incurred or the experience of the Employee Plan prior to the Closing Date.

		(iii)	There have been no improper withdrawals, applications or transfers of assets of any Employee Plan and none of the Vendor, GLC NewCo CDC, nor, to the Vendor's knowledge, any of the Vendor's agents or delegates, has breached any fiduciary obligation with respect to any Employee Plan.

		(iv)	All employee data necessary to administer each Employee Plan is in the possession of  the Vendor  or  GLC NewCo or its agents and, to the Vendor's knowledge, is true and correct as of the date of this Agreement.

		(v)	No insurance policy or any other agreement to which the Vendor or CDC is a party affecting any Employee Plan requires or permits any other party tosuch  policy  or  agreement  to  impose  retroactive  increase  in contributions, premiums or other payments due thereunder.

		(vi)	Except as disclosed on Schedule 3.1(y), no Employee is on long-term disability leave, secondment, statutory leave of absence or receiving benefits pursuant to any workers' compensation legislation or is on any other leave of absence.

		(vii)	Except as disclosed on Schedule 3.1(y), neither the Vendor, GLC NewCo nor CDC has any formal plan or has made any promise to improve or change any Employee Plan since the date of the Audited Financial Statements.

		(viii)	No claim, action, proceeding, audit, investigation, or litigation of any kind in or before any court, tribunal or governmental agency, has been made, commenced or, to the Vendor's knowledge, threatened with respect to any Employee Plan (other than routine claims for benefits payable in the ordinary course, and appeals of any denied claims), nor to the Vendor's knowledge, is there any basis for one.

25

              (ix)       Except as disclosed on Schedule 3.1(y), no Employee Plan provides for any bonus, retirement, severance, job security or similar benefit or any accelerated or enhanced                                payment or benefit as a result of the transactions contemplated herein, nor do such transactions or this Agreement or the Assignment and Assumption Agreement create any                          Liabilities or trigger any expenses under an Employee Plan.

                           (x)            There are no participating employers with respect to any Employee Plan other than the Vendor, GLC NewCo  and CDC.

       (xi)           None of Vendor, GLC NewCo or CDC has any obligation under any Benefit Plan to provide benefits to any person who is not an Employee or former employee of the Vendor               or      CDC except for spouses and dependants of employees and former employees.

 

(xii)        Except for any registrations necessitated by the completion of the Acquisition, each Employee Plan is, and has since its establishment been, duly registered when             required by    applicable Law (including registration with relevant tax authorities where such registration is required to qualify for tax exemption or other tax beneficial status). Each Employee Plan has been administered in compliance in all material respects with, and is in good standing under applicable Law and the terms of the Employee Plan and any associated funding arrangement. All assets associated with an Employee Plan have been held, invested and otherwise dealt with in compliance with applicable Laws and the terms of the Employee Plan and the associated funding arrangement.

       (xiii)         With respect to the Employee Future Benefit Obligation, included in the Data Room are true and complete copies of the two most recently completed actuarial valuation reports.

(xiv)       With respect to the Employee Plan that is a deferred profit sharing plan, such plan and all amendments are registered for purpose of the Income Tax Act (Canada), evidence    of  which is included in the Data Room.

(xv)            The financial information and financial statements related to each Employee Plan that have been provided to the Purchaser in the Data Room are complete and accurate in all    material respects for the periods indicated therein. There have been no material changes in any Employee Plan that are not reflected for the full period reported on in the Financial Statements and in the financial statements or financial reports and actuarial reports related to the Employee Plan that have been provided to the Purchaser in the Data Room.  No taxes, fees, expenses or penalties related to any Employee Plan are exigible against assets held under the associated funding arrangement.

26

(z)                        Labour and Employment Matters.

		(i)	There is no pending or to the Vendor's knowledge threatened strike, work stoppage or other material labour dispute against the Vendor. To the Vendor's knowledge, there is no, nor in the past two years has there been any, organizing activity involving the Vendor or CDC or threatened by any labour union or group of employees with respect to the Vendor or CDC.  No trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to any of the Employees by way of certification, interim certification, voluntary recognition, related employer or successor rights, nor has, since July 7, 2008, sought voluntary recognition or applied or, to the Vendor's knowledge, threatened to apply to be certified as the bargaining agent of any of the Employees.

		(ii)	Except for bonus and incentive payments for 2015, and transaction bonuses to be paid in accordance with the Transition Services Agreement, all amounts due or accrued for all salary, bonuses, commissions, vacation with pay, and benefits under the Employee Plans have either been paid or will be accrued in the Settled Closing Date Statement, consistent with past practice.

		(iii)	Except as disclosed on Schedule 3.1(aa), there are no written Contracts with Employees. No Employee  is employed under  a  Contract which cannot be terminated by the Vendor upon statutory notice or upon reasonable notice at common law, or payment in lieu of such notice, together with any required statutory severance and continuation of benefits, including the Employee Future Benefit Obligation. The Vendor is in compliance with the terms and conditions of all of its Contracts with Employees. To Vendor's knowledge, no Employee intends to resign his or her employment or has demanded or intends to demand any increase in the remuneration or benefits to be paid or provided to such Employee.

		(iv)	The Vendor and CDC are each in compliance, in all material respects, with Employment Legislation, has not engaged in any unfair labour practice, and there are no outstanding or to the Vendor's knowledge threatened charges, claims, complaints, investigations or orders under Employment Legislation, except as described in Schedule 3.1(z). Except as described in Schedule 3.1(z), there have been no fatal or critical accidents   in   the  Business   during the past  five  years. All   levies, assessments and penalties made against the Vendor and CDC pursuant to any Employment Legislation have been paid.

27

                          (v)          Except as disclosed on Schedule 3.1(y), there is no commitment to increase any remuneration or benefits to be paid or provided to, or to otherwise modify any terms and conditions of                     employment of, any Employee.

		(vi)	Except as disclosed in Schedule 3.1(z), there are no complaints or charges, investigations, grievances or arbitrations against the Vendor pending or, to the Vendor's knowledge, threatened to be filed with any Governmental Entity or arbitrator based on or arising out of the employment or termination of employment of any individual by the Vendor and CDC.

		(vii)	There are no outstanding notices of assessment, provisional assessment, reassessment, supplementary assessment, penalty assessment or increased assessment (collectively, "Assessments") or any other written communications related thereto that the Vendor has received from any workers' compensation or workplace safety and insurance board or similar authorities in any jurisdictions where the Business is carried on and there are no Assessments that are unpaid on the date hereof and there are, to the knowledge of the Vendor, no facts or circumstances currently existing that could result in an increase in Liability to the Vendor or CDC under any applicable workers' compensation or workplace safety and insurance legislation, regulations or rules after the date of this Agreement. The Vendor's and CDC's accident cost experience relating to the Business is set out in Schedule 3.1(z), and there are no pending assessments and, to the knowledge of the Vendor, except as set out in Schedule 3.1(z), no potential claims which may adversely affect the Vendor's current accident cost experience.

(aa)      Employees.  Schedule 3.1(aa) contains (i) a complete and accurate list of the names of all individuals who are full-time, part-time or casual employees of the Vendor and CDC or individuals engaged by the Vendor on contract to provide employment or consulting services or sales as of the date of this Agreement other than Jean Noelting, Don Wellington, Julie Smith and Dushyant Patel (collectively, the "Employees") specifying for each such employee his or her employment location, the length of hire, title or classification and rate of salary or hourly pay and commission, bonus and incentive entitlements, vacation entitlement and accrued vacation, and other benefit, including post-retirement benefit, entitlements and other terms and conditions of employment or engagement, and (ii) the names of all inactive Employees, the reason for their absence from work, whether they are expected to return to work, and if so, when and the benefits to which they are entitled from the Vendor.

(bb)      Non-Arm's Length Transactions. Except as set forth on Schedule 3.1(bb), neither the Vendor nor GLC NewCo is indebted to, nor has it made any loan to, any present or former, director, officer, Employee, shareholder or any other person not dealing at Arm's Length with the Vendor. Except as disclosed on Schedule 3.1(bb), neither the Vendor nor GLC NewCo is a party to any contract, agreement or other commitment, whether written or oral, with any present or former, director, officer, Employee or any other person not dealing at Arm's Length with the Vendor or any shareholder, officer or director of the Vendor. No present or former officer, entity that is an Affiliate of one or more of such individuals or the Vendor:

28

		(i)	owns, directly or indirectly, in whole or in part, any property that is used in the operation of the Business, other than the Owned Real Property and Buildings;

		(ii)	has any cause of action or other claim whatsoever against, or owes any amount to, the Vendor, except for Excluded Liabilities and any Liabilities reflected in the Audited Financial Statements and claims in the ordinary and normal course of business after July 1, 2014, such as for accrued vacation pay and accrued benefits under the Employee Plans; or

		(iii)	except as set forth on Schedule 3.1(bb) has supplied or purchased any goods or services to or from the Vendor since June 30, 2014, other than interest and management fees reflected in the Financial Statements.

(cc)                      Tax Matters.

		(i)	The Vendor has duly and timely withheld or collected from any amount paid or credited by it to or for the account or benefit of any person, including any  of its Employees, officers and directors and any  non- resident person, the amount of all Taxes and other deductions required by any applicable Law to be withheld from any such amount and has duly and timely remitted the same, and all employer contributions relating thereto, to the appropriate Governmental Entity.

		(ii)	The Vendor is in material compliance with all registration, reporting and remittance obligations in respect of all provincial (and federal) sales Tax legislation and all excise tax, customs duties, import and export legislation (including the Canada Customs Act).

		(iii)	The Vendor is a registrant for the purposes of the ETA and its registration number is 10573 0964 RT0001.

		(iv)	GLC NewCo is a registrant for the purposes of the ETA and its registration number is 81291 7565 RT0001.

(v)               The Vendor is not a non-resident person of Canada for the purposes of the ITA.

		(vi)	Except as disclosed in Schedule 3.1(cc), there are no inquiries, audits, investigations, assessments or reassessments pending, or to Vendor's knowledge  threatened,  in  connection  with  any   Taxes  payable  in connection with the Business, the Owned Real Property and Buildings or the Assets.

29

                                  (vii)         The only jurisdictions in which the Vendor is required to pay Tax or to file Tax returns or make other Tax filings are listed in Schedule 3.1(cc).

		(viii)	The Vendor shall execute or participate in the execution of, on a timely basis, all necessary elections prepared by the GLC Newco in accordance with and subject to Section 2.8 of the Assignment and Assumption Agreement.

(ix)    No election under Section 85 of the ITA has been or will be made in connection with the transactions contemplated by the Assignment and Assumption Agreement.

(dd)     Accounts Receivable. All of the Accounts Receivable reflected on the Settled Closing Date Statement will have arisen from bona fide transactions in the ordinary course of the Business and are valid and, except to the extent reserved against in the Settled Closing Date Statement, collectible within 90 days following the Closing (and to the extent not so collected as of the 90th  day  following the Closing shall be fully reserved in the Settled Closing Date Statement and as a result thereof there shall  be no general reserve for bad debts for such Accounts Receivable in the calculation of Estimated Net Working Capital or Final Closing Net Working Capital) and will not be subject to any discounts, rebates, counterclaim or set-off in excess of the amounts accrued as liabilities in connection therewith reflected on the Settled Closing Date Statement and to the Vendor's knowledge will not be in dispute.

(ee)      Customers and Suppliers. The Vendor has provided to the Purchaser in the Data Room a comprehensive listing of each supplier of goods and services paid in excess of $100,000 in the aggregate during the 11 month period ending May 31, 2015 and each customer of, the Business to whom the Vendor billed in such period, together with, in each case, the amount so billed or paid (the "Customer and Supplier List"). No material supplier or customer has terminated or to the knowledge of the Vendor intends to terminate any Contract or has failed to renew or to the knowledge of the Vendor has any intention (i) not to renew any renewable Contract, or (ii) to change its relationship or its dealings with the Business as a result of the transactions contemplated in this Agreement or the Assignment and Assumption Agreement. The Vendor has not terminated and has no intention to terminate any Contract with any material supplier or customer and has not failed to renew nor has any intention not to renew any renewable Contract with any material supplier or customer. Except as disclosed in Schedule 3.1(ee), no customer of the Vendor is entitled to or receives discounts, allowances, volume rebates or similar reductions in price or other concessions pursuant to any agreement or understanding with such customer which is not generally available to all customers of like quantities.

(ff)       Inventories.  The inventory levels of the Vendor have been maintained at such amounts as are required for the operation of the Business as previously conducted. The inventories of the Vendor (including tooling, spare parts and supplies) reflected on the balance sheet contained in the Interim Financial Statements, or acquired by the Vendor after the date thereof and prior to the Closing Date, are valued in accordance with the Standards set out in Section 2.5 of the Assignment and Assumption Agreement, including the methodologies set out in Section 2.4 thereof, and such inventories do not include any material amount of  Obsolete Inventory or Surplus Inventory for which adequate reserves have not been established on the Financial Statements. As used herein, "Obsolete Inventory" is inventory which, at June 30, 2015, was not usable or salable in the ordinary course of business of the Vendor as now conducted because of legal restrictions, loss of market damage or physical  deterioration, in each case net of reserves provided therefor on the balance sheet contained in the Interim Financial Statements; and "Surplus Inventory" is inventory that, at June 30, 2015,

30

 exceeded known or anticipated requirements in the reasonable business judgment of the Vendor.

(gg)                      Product Liability.

		(i)	Except as set forth on Schedule 3.1(gg), (A) there is no Action before any Governmental Entity pending, or to the Knowledge of the Vendor, threatened against the Vendor, or pending or threatened by the Vendor against any supplier to the Vendor, involving any products manufactured, produced, distributed or sold by or on behalf of the Vendor and/or in connection with the Business (including any parts or components) (collectively, "Products"), or class of claims or lawsuits involving the same or similar Product which is pending or, to the Vendor's knowledge, threatened, resulting from an alleged defect in design, manufacture, materials or workmanship of any Product, or any alleged failure to warn, or from any breach of implied warranties or representations (collectively, "Product Liability Lawsuits"); (B) there has not been, within the past 12 months, any Occurrence (as hereinafter defined) except for customer complaints which are in the ordinary course of business and which are not in the aggregate material and have not resulted in Product Liability Lawsuits ; and (C) there has not been, within the past 12 months, any Product rework or retrofit (collectively, "Retrofits") conducted by or on behalf of the Vendor.

		(ii)	For purposes of this Section 3.1(gg), the term "Occurrence" shall mean any accident, happening or event which takes place which is caused or allegedly caused by any alleged hazard or alleged defect in manufacture, design, materials or workmanship including, without limitation, any alleged failure to warn or any breach of express or implied warranties or representations with respect to, or any such accident, happening or event otherwise involving any Product that can reasonably be expected to result in a claim or loss.

		(iii)	Except as set forth on Schedule 3.1(gg), each Product sold to GLC NewCo under the Assignment and Assumption Agreement is in conformity with all applicable contractual commitments and all express and implied warranties applicable to the sale to GLC NewCo or sale to customers of the Business. Schedule 3.1(gg) includes copies of the standard terms and conditions of sale or lease of products or services by the Vendor and the Business (containing applicable guaranty, warranty, and indemnity provisions). Except as set forth on Schedule 3.1(gg), the Vendor and the Business have no obligation to any person to maintain, modify, improve or upgrade any of the Products.

31

		(iv)	Except as set forth on Schedule 3.1(gg), to the Vendor's Knowledge, the Vendor and the Business have no material Liability (and there is no basis for any present or future proceeding against any the Vendor and the Business giving rise to any material Liability) arising out of any injury to individuals or property as a result of the ownership, possession, or use of any Product manufactured, sold, leased, or delivered by the Vendor and the Business.

		(v)	The Vendor has made adequate provision (in accordance with GAAP) in the Records, the Audited Financial Statements and in the Interim Financial Statements, for product warranties and pending or, to the Vendor's knowledge, threatened product warranty claims.

(hh)                     Competition Act.

The aggregate value, for the purposes of determining whether Part IX of the Competition Act (Canada) (the "Competition Act") applies in respect of the transaction contemplated by this Agreement:

		(i)	of the assets in Canada of GLC NewCo, together with its affiliates (within the meaning of the Competition Act), determined pursuant to paragraph

109(1)(a) of the Competition Act, is $171,894,000; and

		(ii)	of the gross revenues from sales in, from or into Canada of GLC NewCo, together with its affiliates (within the meaning of the Competition Act), determined pursuant to paragraph 109(1)(b) of the Competition Act, is

$324,892,000.

(ii)                         Untrue Statements

No representation or warranty of the Vendor contained in this Agreement or any document, instrument or agreement delivered hereunder contains any untrue statement of a material fact or omits to state any material fact necessary to make such representation or warranty not misleading.

(jj)                    R&W Policy

Set forth on Schedule 3.1(jj) hereto is a draft version of the R&W Policy which the Vendor is using its best efforts to obtain. The Vendor will use reasonable commercial efforts to obtain on substantially similar terms and keep the R&W Policy in full force and effect through its stated termination date and will not in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement. The Vendor is not in default with respect to its obligations under the R&W Policy nor has Vendor received any notification of cancellation of the R&W Policy.

32

3.2                            Survival of Representations, Warranties and Covenants of the Vendor.

(a)      Except in the case of fraud or intentional misrepresentation, the representations and warranties made by the Vendor contained in this Agreement and in any agreement, instrument, certificate or other document to be executed and delivered pursuant to this Agreement shall survive the Closing and, notwithstanding such Closing and notwithstanding any investigations made by or on behalf of the Purchaser, but subject to the provisions in Section 10.1, shall continue in full force and effect from and after the Closing Date for a period of fifteen (15) months, except that the (i) representations  and warranties  contained in Section 3.1(a), Section 3.1(b), Section 3.1(c), Section 3.1(d), Section 3.1(e), Section 3.1(r), Section 3.1(gg) and Section 3.1(cc)(vii)-(viii) (collectively, the "Vendor Fundamental Representations") shall survive the Closing Date indefinitely, (ii) the representations and warranties contained in Section 3.1(x) (the "Environmental Representations") shall survive until the eighth (8th) anniversary of the Closing Date, (iii) each of the representations and warranties contained in Section 3.1(y)-(z) (the "Employee Representations") shall survive for a period of eighteen (18) months following the Closing Date and (iv) each of the representations and warranties contained in Section 3.1(cc) (the "Tax Representations") shall survive until the expiration of the applicable limitations period, if any, during which an assessment, reassessment or other form of recognized document assessing liability for Tax under applicable Tax legislation (without extension of such period) arising out of or in respect of any matter referred to in such representation and warranty could be issued under such Tax legislation.

(b)      Except in the case of fraud or intentional misrepresentation, all covenants (which are not also representation and warranties) and obligations of the Vendor contained in this Agreement, the Assignment and Assumption Agreement and in any other agreement, instrument, certificate or other document to be executed and delivered pursuant to this Agreement shall survive the Closing and shall continue in full force and effect from and after the Closing Date for a period of fifteen (15) months or such other term as is specified in such document in accordance with their respective terms, but subject to the provisions of Section 10.1.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

4.1                                          Representations and Warranties of the Purchaser.

The   Purchaser   represents  and  warrants  to  the   Vendor   as  follows  and acknowledges and confirms that the Vendor is relying on such representations and warranties in connection with the completion of the transaction contemplated hereunder:

(a)        Existence; Corporate Power of the Purchaser.  The Purchaser is a corporation validly existing under the laws of the State of Delaware, U.S.A. and it has the corporate power to enter into this Agreement and perform its obligations hereunder.

(b)        Authorization; Execution; Enforceability.    This Agreement has been duly authorized, executed and delivered by the Purchaser and is a legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of rights of creditors generally and except that equitable remedies may only be granted in the discretion of a court of competent jurisdiction.

33

(c)       No Violation.  Neither the execution and delivery of this Agreement by the Purchaser, nor  the consummation of  the  transaction provided for  herein will result in the violation of, or constitute a default under or conflict with: (i) any provision of the constating documents or by-laws or resolutions of the board of directors (or any committee thereof) or shareholders of the Purchaser; (ii) any judgment, decree, order or award of any Governmental Entity having jurisdiction over the Purchaser; or (iii) any applicable, law, statute, ordinance, regulation or rule.

(d)        Consents and Approvals. There is no requirement for the Purchaser, including as set forth on Schedule 4.1(d), to make any filing with, give any notice to or obtain any licence, permit, certificate, registration, authorization, consent or approval of, any Governmental Entity as a condition to the lawful consummation of the transaction contemplated by this Agreement.

(e)                    Competition Act.  The aggregate value, for the purposes of determining whether Part IX of the Competition Act applies in respect of the transaction contemplated by this

 Agreement:

		(i)	of the assets   in Canada of the Purchaser, together with its affiliates (within the meaning of the Competition Act), determined pursuant to paragraph 109(1)(a) of the Competition Act, is $1,545,434; and

		(ii)	of the gross revenues from sales in, from or into Canada of the Purchaser, together with its affiliates (within the meaning of the Competition Act), determined pursuant to paragraph 109(1)(b) of the Competition Act, is $11,947,406.

(f)          Acknowledgment by the Purchaser. The Purchaser acknowledges and agrees that it has conducted its own independent review and analysis of, and, based thereon, has formed an independent judgment concerning, the Business and the Vendor and the assets, condition, operations and prospects of the Business and the Vendor. In entering into this Agreement, the Purchaser: (a) acknowledges that, other than as expressly set forth in this Agreement, neither the Vendor, nor any of its Affiliates, agents or representatives makes or has made any representation or warranty, either express or implied, (i) as to the accuracy or completeness of any of the information provided or made available to the Purchaser or its agents or representatives prior to the execution of this Agreement, including any presentation to the Purchaser or its agents or representatives by management of the Vendor or materials furnished in the on-line data site prepared by the Vendor or other due diligence information provided to the Purchaser or its agents or representatives, or (ii) with respect to any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Vendor; and (b) except as specifically provided in this Agreement, agrees, to the fullest extent permitted by Law, that none of the Vendor, nor any of its Affiliates, directors, officers, employees, agents or representatives shall have  any direct

34

personal Liability or responsibility whatsoever to the Purchaser or its Affiliates on any basis (including contract, tort, or otherwise) based upon any  information provided  or made available, or statements made, to the Purchaser prior to the execution of this Agreement, including any presentation to the Purchaser or its agents or representatives by management of the Vendor or materials furnished in the on-line data site prepared by the Vendor or other due diligence information provided to the Purchaser or its agents or representatives.

4.2                        Survival of Representations, Warranties and Covenants of the Purchaser.

(a)     The representations and warranties made by the Purchaser contained in this Agreement and in any agreement, instrument, certificate or other document to be executed and delivered pursuant to this Agreement shall survive the Closing  and, notwithstanding such Closing and notwithstanding any investigations made by or on behalf of the Vendor, shall continue in full force and effect from and after the Closing Date for a period of fifteen (15) months, except that the representations and warranties contained in Section 4.1(a), Section 4.1(b) and  Section  4.1(d)  or  any   schedule  in  respect  thereof  (collectively,  the  "Purchaser Fundamental Representations") shall survive the Closing Date indefinitely; and

(b)       All covenants and obligations of the Purchaser contained in this Agreement, the Assignment and Assumption Agreement and in any other agreement, instrument, certificate or other document to be executed and delivered  pursuant to this Agreement shall survive the Closing and shall continue in full force and effect from and after the Closing Date for a period of fifteen (15) months or such other term as is specified in such document in accordance with their respective terms, but subject to the provisions of Section 10.2.

ARTICLE 5

CLOSING COVENANTS

5.1                            Consent and Approvals.

The Vendor shall give all notices to, and make all declarations, filings and registrations with any person set forth on Schedule 3.1(q) and shall use commercially reasonable efforts to obtain, with all reasonable dispatch following Closing, all consents, approvals and waivers required for the transactions contemplated by the Assignment and Assumption Agreement or this Agreement (the "Consents"), including without limitation Consents from any persons set forth on Schedule 3.1(r) and any Consent from any person necessary to assign any Contracts or  Scheduled Employee  Plans included  within the Assets.   With respect to any Assigned Contract included within the Assets that is not assigned to GLC NewCo as of the Closing due to the failure to obtain any necessary Consent as of the Closing (a "No Consent Contract"), after the Closing and until any requisite Consent is obtained therefor and the same is sold and assigned to GLC NewCo under the Assignment and Assumption Agreement, the parties shall cooperate with each other, in good faith, in endeavoring to obtain for GLC NewCo an arrangement to provide for GLC NewCo substantially comparable benefits, obligations and Liabilities therein.  With respect to any No Consent Contracts, the performance obligations of the Vendor thereunder shall, unless not permitted by such Contracts, be deemed to be subleased or

35

subcontracted to GLC NewCo until such No Consent Contracts, as applicable,  have  been assigned and GLC NewCo shall assume all such performance obligations thereunder pursuant to the Assignment and Assumption Agreement.

5.2                       Closing Documents.

The parties agree to execute and deliver to each other on Closing, all in form and substance satisfactory to the parties and their respective solicitors acting reasonably:

(a)      Vendor shall assign, convey, transfer and deliver to the Purchaser or its designee, and the Purchaser or its designee shall acquire, accept and receive from the Vendor, stock certificates representing the Shares, either duly endorsed in blank for transfer or accompanied by appropriate stock powers duly executed in blank in exchange for the payment of the Share Purchase Price as provided in Section 2.2 hereof;

(b)       the Consulting Agreement, executed and delivered by and among GLC NewCo, Wellington Materials Consulting Inc. in the form attached as Schedule 5.2(b) and all related documents;

(c)            The Assignment and Assumption Agreement executed and delivered by the

Vendor and GLC NewCo in the form attached as Schedule 5.2(c);

(d)      an escrow agreement (the "Escrow Agreement")  between the  Vendor, the Purchaser and Computershare Trust Company of  Canada, as escrow agent (the "Escrow Agent"), in the form attached as Schedule 5.2(d);

(e)      lease agreements between the Vendor, as landlord, and GLC NewCo, as tenant, in respect of the Clarke Road Property and a lease from CDC Warehouse Inc. of the CDC Property, each in the form attached as Schedule 5.2(e);

(f)        a transition services agreement between the Vendor and GLC NewCo in the form attached as Schedule 5.2(f);

(g)            the Payoff Letters executed by the holders of the applicable Encumbrances;

 

        (h)            a customary receipt executed by the Vendor evidencing repayment of the GLC Note;

(i)      Restrictive Covenant Agreements, executed and delivered by and between the Purchaser, GLC NewCo and each of Jean Noelting, Don Wellington and Julie Smith, in the form attached as Schedule 5.2(i); and

(j)            a Restrictive Covenant Agreement, executed and delivered by and between the Purchaser and the Vendor, in the form attached as Schedule 5.2(j).

36

ARTICLE 6

CONDITIONS OF CLOSING

6.1                            Conditions of Closing in Favour of the Purchaser.

  The closing of the transaction contemplated hereby is subject to the following terms and conditions for the exclusive benefit of the Purchaser, to be fulfilled or performed at or prior to the Closing:

(a)        Closing Deliveries. The Vendor and CDC shall have executed and delivered all closing deliveries to be delivered by them pursuant to Article 5.

(b)        Covenants. All of the terms, covenants and conditions of this Agreement and the Assignment and Assumption Agreement to be complied with or performed by the Vendor or GLC NewCo at or before the Closing shall have been complied with or performed.

(c)        Assignment and Assumption. The transactions contemplated by the Assignment and Assumption Agreement shall have been consummated.

(d)        Necessary Approvals. All necessary corporate action, including the approval of the shareholders of the Vendor and GLC NewCo, shall have been taken by the Vendor and GLC NewCo to authorize the execution and delivery of this Agreement and the Assignment and Assumption Agreement, as applicable, all documents to be delivered hereunder or thereunder and the consummation of the transactions contemplated hereunder or thereunder.

(e)        Payoff Letters. The Vendor shall have delivered to the Purchaser duly executed copies of the Payoff Letters.

(f)         No Action or Proceeding. No action or proceeding at law or in equity shall be pending or threatened by any person to enjoin, restrict or prohibit the closing of the transactions contemplated herein or in the Assignment and Assumption Agreement or GLC NewCo's right to conduct the Business as it is presently conducted.

                If any of the conditions contained in this Section 6.1 shall not be performed or fulfilled at or prior to the Closing to the satisfaction of the Purchaser, acting reasonably, the Purchaser may, by notice to the Vendor, and without prejudice to any Claims for any breach by the Vendor of the provisions of Section 7.6, terminate this Agreement and the obligations of the parties to this Agreement, other than the obligations contained in Section 11.1, shall be terminated. However, the Purchaser may waive compliance with any condition in whole or in part if it sees fit to do so, without prejudice to its rights of termination in the event of non- fulfilment of any other condition.

6.2                                 Conditions of Closing in Favour of the Vendor.

The closing of the transaction contemplated hereby is subject to the following terms and conditions for the exclusive benefit of the Vendor, to be fulfilled or performed at or prior to the Closing:

37

(a)        Payment of the Share Purchase Price. The Purchaser shall have paid and satisfied the Share Purchase Price, in accordance with the provisions of this Agreement.

(b)        GLC NewCo Indebtedness Amount.  The LuxCo Entities shall have loaned the GLC NewCo Indebtedness Amount pursuant to the LuxCo Loan Agreements, in accordance with the provisions of this Agreement and the GLC Note shall have been repaid in full.

(c)        Closing Deliveries. The Purchaser shall have executed and delivered all closing deliveries to be delivered by it pursuant to Article 5.

(d)        Covenants. All of the terms, covenants and conditions of this Agreement to be complied with or performed by the Purchaser at or before the Closing shall have been complied with or performed in all material respects.

(e)        No Action or Proceeding. No action or proceeding at law or in equity shall be pending or threatened by any person to enjoin, restrict or prohibit the closing of the transactions contemplated herein or in the Assignment and Assumption Agreement.

                If any of the conditions contained in this Section 6.2 shall not be performed or fulfilled at or prior to the Closing, the Vendor may, by notice to the Purchaser, terminate this Agreement and the obligations of the parties to this Agreement, other than the obligations contained in Section 11.1, shall be terminated. However, the Vendor may waive compliance with any condition in whole or in part if it sees fit to do so, without prejudice to its rights of termination in the event of non-fulfilment of any other condition.

ARTICLE 7

POST-CLOSING COVENANTS

7.1                            Pre-Closing Cheques.

The Vendor shall cause all cheques that have been issued by the Vendor in connection with the Business and sent or otherwise delivered to third parties prior to the Closing Date to be honoured, notwithstanding that such cheques may be cashed by such third parties on or after the Closing Date.

7.2                             Investment Canada Act.

The Purchaser shall file a notification pursuant the Investment Canada Act (Canada) with Industry Canada within 30 days following the Closing Date.

7.3                             Preservation of Records.

The Purchaser shall take all reasonable steps to preserve and keep the Records delivered to the Purchaser for a period of seven years from the Closing Date, or for any longer period as may be required by any applicable laws or Governmental Entity. The Purchaser shall make such Records available to the Vendor, during normal business hours, for review or copying (at the expense of the Vendor) as may be reasonably required by the Vendor. The Purchaser shall also make available employees of the Business, during normal business hours, as reasonable required by the Vendor, 

38

 at no cost to the Vendor, to assist the Vendor in respect of the preparation of financial statements and tax returns for any period during which the Business has been carried on by the Vendor, and all assessments and reassessments (including appeals) of tax returns for such period and all prior periods. The Purchaser shall provide the Vendor with no less than 90 days advance notice in the event it intends to move the Records from their current location. The Vendor acknowledges that the Purchaser shall not be liable to the Vendor in the event of any accidental destruction of such Records.

7.4                        [Reserved].

7.5                        Litigation and Audit Support.

The Purchaser and its Affiliates will cooperate with the Vendor and its Affiliates, and the Vendor and its Affiliates will cooperate with the Purchaser and its Affiliates, in the defense or settlement of any Liabilities or lawsuits or audits involving the Business, the Assets or the Assumed Liabilities for which any of them has or may have responsibility under this Agreement (other than lawsuits between the parties and/or their respective Affiliates) by providing the other party and such other party's legal counsel and other designated persons access to employees, records, documents, data, equipment and facilities, and other information regarding the Business as such party may reasonably request, to the extent maintained or under the possession or control of the requested party. The reasonable expenses incurred by a party pursuant to this Section 7.5 shall be borne by the contesting or defending party (unless and to the extent that the contesting or defending party is entitled to indemnification pursuant to this Agreement). To the extent that this Section 7.5 requires one party to make available to the other party records, documents, data or other information that is subject to a claim of attorney-client privilege or attorney work product, the parties shall enter into an appropriate and customary joint defense agreement to protect the privileged nature and confidentiality of such records, documents, data or other information.

7.6                             Commercially Reasonable Efforts; Certain Governmental Matters.

Upon the terms and subject to the conditions herein provided, each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary for it to do under applicable Laws to consummate and make effective the transactions contemplated by this Agreement and the Assignment and Assumption Agreement, including: (i) to comply promptly with all legal requirements which may be imposed on it with respect to this Agreement and the Assignment and Assumption Agreement and the transactions contemplated hereby and thereby  (which actions shall include furnishing all information required by applicable Law in connection with approvals of or filings with any Governmental Entity); (ii) to satisfy the conditions precedent to the obligations of such party hereto and thereto; (iii) to obtain any and all Consents; (iv) without limiting the generality of clause (iii) of this Section 7.6, to effect all registrations, filings and transfers of Licences (to the extent transferable) necessary for the operation of the Business and required under applicable Laws; (v) to obtain any other consents, authorizations or approvals, and to make any other notices, required to be obtained or made by the Purchaser, GLC NewCo or the Vendor in connection with the acquisition of Assets or the taking of any action

39

contemplated by this Agreement or the Assignment and Assumption Agreement; and (vi) to take any action reasonably necessary to vigorously defend, lift, mitigate, or rescind the effect of any litigation or administrative proceeding adversely affecting the acquisition of the Assets, the assumption of the Assumed Liabilities or this Agreement or the Assignment and Assumption Agreement.

7.7                        [Reserved].

7.8                             Intercompany Obligations and Agreements.

Except for accounts receivable and accounts payable incurred in the ordinary course of the Business, Excluded Assets and Excluded Liabilities, and except for the transactions between the Vendor and GLC NewCo under the Assignment and Assumption Agreement (the "Exceptions"), all intercompany contracts, leases, licenses, accounts, loans, advances, payables (including any payable accounts with negative balance and receivables, whether or not currently due and payable and relating to the Business and involving GLC NewCo as a party and the Vendor and one or more of its Affiliates as a counterparty (collectively, the "Intercompany Obligations and Agreements"), shall be settled in full at or prior to the Closing Date and all commitments with respect thereto shall be deemed to have been terminated at or prior to the Closing Date and in each case, GLC NewCo and the Purchaser shall be fully released from all Liability with respect to such Intercompany Obligations and Agreements other than the Exceptions. Except as otherwise contemplated in this Agreement, including all Exceptions set out in the previous sentence, the Vendor and the Purchaser shall, and shall cause their respective Affiliates to, cause any Intercompany  Obligations and Agreements to be terminated and cancelled as of the Closing, and the Vendor and the Purchaser and their respective Affiliates shall be fully released from all Liability with respect to any such Intercompany Obligations and Agreements.

7.9                           Trademarks.

      

Within ninety (90) days of the Closing Date, the Vendor shall discontinue all use of the trademarks, service marks and similar indicia of origin included in the Assets, including, without limitation, any such use in or on any product or service offerings, websites, advertising materials, stationery, business cards, checks, purchase orders and acknowledgments, customer agreements and other contracts and business documents. In furtherance of the foregoing, within ninety (90) days of the Closing Date, Vendor shall change its name from Great Lakes Copper Inc. to another name not containing "Copper" via the filing of a articles of amendment to its articles of incorporation with the Province of Ontario.

7.10                          GLC Newco Tax Returns

The Purchaser and GLC NewCo will have sole authority and responsibility to prepare the financial statements and tax returns for GLC NewCo for the taxation year commencing on its date of incorporation and each subsequent taxation year of GLC NewCo. The Tax return for the taxation year ending immediately prior to the Closing Date shall include the election specified in subsection 256(9) of the ITA. The Purchaser shall provide draft financial statements and tax returns for the taxation year ending immediately prior to the Closing Date to the Vendor and shall consider any comments 

40

made by the Vendor within 15 days of receipt of such statements prior to filing same with Canada Revenue Agency. Purchaser and Vendor will be given access by each other to any backup information necessary for GLC NewCo to prepare such financial statements and tax returns.

ARTICLE 8

EMPLOYEE MATTERS

8.1                        Employees.

Upon the Closing, the Purchaser shall cause GLC NewCo to offer to employ, effective at the Time of Closing, all of the Employees (excluding Jean Noelting, Don Wellington, Julie Smith, and Dushyant Patel) of the Vendor and CDC (the "Employers") on terms and conditions which are  no less beneficial as those upon which each Employee is currently employed by such Employee's current Employer at the Time of Closing, including the establishment of employee benefit plan(s) (collectively, the "Purchaser's Plans") which initially following the Time of Closing (and with respect to the Employee Future Benefit Obligations not less than two years after the Time of Closing) are no less favourable than the Employee Plans. The Purchaser acknowledges and agrees that GLC NewCo shall be responsible for the payment of vacation, severance or termination pay and other like benefits payable under common law or under Employment Legislation in connection with the termination of any Transferred Employee by GLC NewCo after the Time of Closing. The Purchaser hereby acknowledges that all Liabilities under the Purchaser's Plans to or for the benefit of the Transferred Employees for any health or accident claims, workers' compensation benefits, occupational diseases claims and employer liability claims relating or payable to the Transferred Employees for matters that occur after the Time of Closing while employed by GLC NewCo, shall be the responsibility of GLC NewCo. The Purchaser acknowledges and agrees that GLC NewCo, in accordance with Section 6.4 of the Assignment and Assumption Agreement, shall be responsible for the Employee Future Benefit Obligation and the Transferred Plans notwithstanding  that such obligations are in respect of former or retired employees of the Vendor, including Don Wellington, who is retiring as of the Closing Date. Except to the extent provided for in the Settled Closing Date Statement, the Vendor shall be solely responsible for all wages, commissions, bonuses, and salary accrued and owing to the Employees up to the Closing Date. The Vendor shall also be responsible for the payment of severance or termination pay and any other benefits payable under common law or under Employment Legislation: (i) to Don Wellington (other than with respect to Employee Future Benefit Obligations) and each of Jean Noelting, Julie Smith and Dushyanat Patel and (ii) in connection with the termination or resignation of employment of any Employee in contemplation of, in conjunction with or a result of, or following completion of, the transactions contemplated by this Agreement and the Assignment and Assumption Agreement (except for any termination of any Transferred Employee by the Purchaser after the Closing as contemplated by this Section 8.1).

8.2                         Employee Plans.

The Vendor shall be responsible for any and all Pre-Closing Employee Liabilities and GLC NewCo shall be responsible under the Purchaser's Plans for any and all claims made or

41

filed by the Transferred Employees on and after the Time of Closing (excluding, for the avoidance of doubt, any Pre-Closing Employee Liabilities).

8.3                             Notice of Change of Employment.

Any notice that is sent to the Employees concerning the change of their employer from the Vendor to GLC Newco with respect to the Business shall be subject to the Vendor's prior approval, acting reasonably, and shall be subject to any applicable law or governmental regulation or policy.

8.4                             Post Closing Changes.

Nothing in this Agreement or the Assignment and Assumption Agreement shall, as between the Vendor and the Purchaser prevent GLC NewCo from amending or terminating any or all Transferred Plans other than any Employee Future Benefit Obligation or Purchaser's Plans at any time after the Closing or the Employee Future Benefit Obligations at any time after the second (2nd) anniversary of the Closing.

ARTICLE 9

CLOSING ARRANGEMENTS

9.1                             Place of Closing.

The Closing shall take place at the offices of Fogler, Rubinoff LLP, 77 King Street West, Suite 3000, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8.

9.2                             [Reserved].

9.3                             Further Assurances.

Each party to this Agreement covenants and agrees that, from time to time subsequent to the Closing, it will, at the request and expense of the requesting party, execute and deliver all such documents, including all such additional conveyances, transfers, consents and other assurances and do all such other acts and things as the other party  hereto, acting reasonably, may from time to time request be executed or done in order to better evidence or perfect or effectuate any provision of this Agreement or the Assignment and Assumption Agreement or of any agreement or other document executed pursuant to this Agreement or the Assignment and Assumption Agreement or any of the respective obligations intended to be created hereby or thereby.

ARTICLE 10

INDEMNIFICATION

10.1                          Indemnification by the Vendor.

42

(a)      The Vendor agrees to indemnify and save harmless GLC NewCo, the Purchaser, its Affiliates and each of their respective directors, officers, employees, agents, successors and permitted assigns (collectively, the "Purchaser Indemnified Parties") from and against all Losses suffered or incurred by such Purchaser Indemnified Party as a result of or relating to:

		(i)	any breach by the Vendor of any representation or warranty of the Vendor contained in Section 3.1 of this Agreement, or in any agreement, certificate or other document delivered by the Vendor pursuant hereto;

		(ii)	any breach or non-performance by the Vendor of any covenant or agreement to be performed by it which is contained in this Agreement, the Assignment and Assumption Agreement or in any agreement, certificate or other document delivered by the Vendor pursuant hereto or thereto;

(iii)                any Excluded Liability or Excluded Asset;

		(iv)	all warranty or guaranty obligations with respect to Products manufactured by the Vendor or the Business prior to the Closing Date;

		(v)	any product liability claim related to or resulting from the Products manufactured by the Vendor or the Business prior to the Closing Date;

		(vi)	Vendor's failure to comply with any fraudulent transfer laws that may be applicable to the transactions contemplated by this Agreement or the Assignment and Assumption Agreement;

(vii)              the ownership, operation or use of any of the Excluded Assets;

		(viii)	Liabilities of the Vendor that become Liabilities of GLC NewCo by reason of successor liability, de facto merger or similar principles or operation of law that impose Liability in the absence of the assumption of such Liability under this Agreement or the Assignment and Assumption Agreement; or

(ix)           any Liabilities of GLC NewCo for or relating to Taxes incurred prior to the Time of Closing.

(b)      No claim for indemnification may be made by the Purchaser Indemnified Parties under Section 10.1(a)(i) unless notice of such claim is delivered by a Purchaser Indemnified Party to the Vendor prior to the date that is 15 months following the Closing Date; provided, however, that: (i) if such claim for indemnification relates to a matter in the Tax Representations, notice of such claim may be delivered by a Purchaser Indemnified Party to the Vendor at any time prior to 90 days following the expiration of the applicable limitations period, if any, during which an assessment, reassessment or other form of recognized document assessing liability for Tax under applicable Tax legislation (without extension of such period) arising out of or in respect of such matter could be issued under such Tax legislation; (ii) if such claim for indemnification relates to a matter in the Employee Representations, notice of such claim may be delivered by a Purchaser Indemnified Party to the Vendor at any time prior to prior to the date that is 18 months following the Closing Date; (iii) (if such claim for indemnification relates to a matter in the Environmental Representations, notice of such claim may be delivered   

43

by a Purchaser Indemnified Party to the Vendor at any time prior to eighth (8th) anniversary of the Closing Date or (iv) if such claim for indemnification relates to a matter in the Vendor Fundamental Representations, Section 10.1(a)(ii), Section 10.1(a)(iii), Section 10.1(a)(iv), Section 10.1(a)(v), Section 10.1(a)(vi), Section 10.1(a)(vii), Section 10.1(a)(viii) or Section 10.1(a)(ix), notice of such claim may be delivered by a Purchaser Indemnified Party to the Vendor any time after the Closing Date. If notice of a claim for indemnification is not delivered within the time periods set forth in this Section 10.1(b), the Purchaser acknowledges and agrees that the Vendor shall not have any responsibility or obligation whatsoever in respect of the facts or circumstances which have, or may have, given rise to such claim for indemnification.

(c)      The Vendor acknowledges and agrees that the provisions of Sections 10.1(a) and (b) above are for the express benefit of GLC NewCo, as well as the Purchaser, and may be enforced by GLC NewCo as if GLC NewCo was a party to this Agreement.

10.2                     Indemnification by the Purchaser.

(a)      The Purchaser agrees to indemnify and save harmless the Vendor, its Affiliates and each of their respective directors, officers, employees, agents, successors and permitted assigns (collectively, the "Vendor Indemnified Parties") from and against all Losses suffered or incurred by the Vendor as a result of:

		(i)	any breach by the Purchaser of any representation or warranty of the Purchaser contained in Section 4.1 of this Agreement or in any agreement, certificate or other document delivered by the Purchaser to the Vendor pursuant hereto;

		(ii)	any breach or non-performance by the Purchaser of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other document delivered by the Purchaser to the Vendor pursuant hereto;

		(iii)	the Purchaser's failure to comply with any fraudulent transfer laws that may be applicable to the transactions contemplated by this Agreement; and

(iv)            any obligations for which GLC NewCo is responsible pursuant to Sections 6.4 and 6.5 of the Assignment and Assumption Agreement.

(b)      No claim for indemnification may be made by a Vendor Indemnified Party under Section 10.2(a)(i) (other than a claim in respect of a breach of section 4.1(d) or any certificate of other document delivered pursuant thereto) unless notice of such claim is delivered by a Vendor Indemnified Party to the Purchaser prior to the date that is 15 months following the Closing Date; provided, however, that if a claim for indemnification relates to a matter in the Purchaser Fundamental Representations or Section 10.2(a)(ii), notice of such claim may be delivered by a Vendor Indemnified Party to the Purchaser any time after the Closing Date. If notice of a claim for indemnification is not delivered by the a Vendor Indemnified Party to the Purchaser with in the time periods set forth in this Section  

44

10.2(b), the Vendor acknowledges and agrees that the Purchaser shall not have any responsibility or obligation whatsoever in respect of the facts or circumstances which have, or may have, given rise to such claim for indemnification.

10.3                     Procedure re: Claims.

(a)      In the event that an Indemnified Party shall become aware of any claim, proceeding or other matter (a "Claim") in respect of which any Indemnifying Party has agreed to indemnify the Indemnified Party pursuant to this Agreement, the Indemnified Party shall promptly give written notice thereof to the Indemnifying Party. Such notice shall specify whether the Claim arises as a result of a claim by a person against the Indemnified Party (a "Third Party Claim") or whether the Claim does not so arise (a "Direct Claim"), and shall also specify with reasonable particularity (to the extent that the information is available) the factual basis for the Claim, the amount of the Claim, if known, and, with respect to a Third Party Claim, the other information provided for in Section 10.3(d).

(b)            [Intentionally omitted].

(c)      With respect to any Direct Claim, following receipt of notice from the Indemnified Party of the Claim, the Indemnifying Party shall have 60 days to make such investigation of the Claim as is considered necessary or desirable. For the purpose of such investigation, the Indemnified Party shall make available to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate the Claim, together with all such other information as the Indemnifying Party may reasonably request. If all parties agree at or prior to the expiration of such 60-day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim, the Indemnifying Party shall immediately pay to the Indemnified Party the full agreed upon amount of the Claim, failing which the matter shall be referred to binding arbitration in such manner as the parties may agree or shall be determined by a court of competent jurisdiction.

(d)      With respect to any Third Party Claim, the Indemnified Party shall promptly notify in writing the Indemnifying Party of such Third Party Claim and such notice shall include a description of such claim, the basis for indemnification hereunder and a copy of any documentation (e.g., complaint, petition, etc.) from the third party or its representative relating to such claim. The Indemnifying Party shall have fifteen (15) days after receipt of such notice to notify in writing the Indemnified Party if the Indemnifying Party has elected, at its expense, to participate in or assume control of the negotiation, settlement or defence of the Claim and, in such event, the Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified Party's reasonable out of pocket expenses as a result of such participation or assumption. If the Indemnifying Party elects to assume such control, then the Indemnifying Party shall be entitled at its own expense to conduct and control the defense and settlement of such Third Party Claim through counsel of its own choosing, provided, however, that (i) the Indemnified Party shall have the right to participate in the negotiation, settlement or defence of such Third Party Claim and to retain counsel at its own expense to act on its behalf; ((ii) assuming  such defense will conclusively establish for purposes of this Agreement that the claims made in that proceeding are within the scope of and subject of indemnification (subject to the limits hereof); and (iii) no compromise or settlement of such claims may be effected by the Indemnifying Party without the Indemnified 

45

Party's consent (which shall not be unreasonably withheld, conditioned or delayed) unless (A) there is no finding or admission of any violation of law or any violation of the rights of any person on the part of the Indemnified Party, (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party and (C) the Indemnified Party could not reasonably be expected to have any liability with respect to any compromise or settlement of such claims. Notwithstanding the foregoing, in no event shall the Indemnifying Party be entitled to assume the defense of any such Third Party Claim if (x) the Indemnified Party shall have given the Indemnifying Party written notice that it has determined in good faith, after consultation with its own counsel, that a bona fide conflict of interest makes separate representation by the Indemnified Party's own counsel advisable; (y) such Third Party Claim seeks an injunction or other equitable relief; or (z) such Third Party Claim is made by a customer or supplier or by a governmental or regulatory authority (it being understood and agreed that in any such case the Indemnifying Party may participate in the defense of such Third Party Claim with its own counsel at its own expense). If the Indemnifying Party fails to notify  the Indemnified Party of its assumption of the defense of such Third Party Claim within fifteen (15) days after receipt of the Indemnified Party's notice of a Third Party Claim, the Indemnified Party shall assume the defense of such Third Party Claim at the expense of the Indemnifying Party if it is determined that the Indemnified Party is entitled to indemnification from the Indemnifying Party pursuant to this Section 10, provided, however, that the Indemnified Party may not settle any Third Party Claim without the consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).  The party assuming the defense of a Third Party Claim shall keep the other party reasonably informed of the status and events occurring in such Third Party Claim.  The Indemnified Party and the Indemnifying Party shall co-operate fully with each other with respect to Third Party Claims, and shall keep each other fully advised with respect thereto. In addition, the party defending any Third Party Claim shall use commercially reasonable efforts to make available to the other party and its counsel all books, records, documents and other information relating to any Third Party Claim for which indemnification is sought hereunder, and the parties to this Agreement shall render to each other reasonable assistance in the defense of any such Third Party Claim, subject to the execution and delivery of a customary common interest or joint defense agreement addressing privilege, work product and other similar concepts.

10.4                        Monetary Limit on Indemnification.

(a)      Except in the case of fraud or intentional misrepresentation, or a Claim in respect of a Vendor Fundamental Representation, no Claim may be made against the Vendor under Section10.1(a)(i)  until the aggregate of all Losses suffered or incurred by the Purchaser Indemnified Parties in respect of all matters which are subject to indemnification thereunder exceed $400,000 (the "Vendor Basket Amount"), in which case the Purchaser Indemnified Parties shall be entitled to receive all Losses incurred from "dollar one". Notwithstanding the foregoing, except in the case of fraud or intentional misrepresentation, the Vendor shall have no liability to indemnify the Purchaser Indemnified Parties for any Losses incurred after the aggregate successful Claims made by the Purchaser Indemnified Parties suffered or incurred by  it hereunder exceed $7,500,000, except that (i) the Vendor shall indemnify the Purchaser Indemnified Parties for all Losses incurred related to or arising directly or indirectly out of any breach of or any inaccuracy in any Vendor Fundamental Representation in an amount not to exceed the Indemnity Cap and (ii) the Vendor shall indemnify the Purchaser

46

Indemnified Parties for all Losses incurred, in its entire amount and without limitation, related to or arising directly or indirectly out of any (A) fraudulent or intentional misrepresentation by Vendor, (B) any claim pursuant to Section 10.1(a)(ii), Section 10.1(a)(iii), Section 10.1(a)(iv), Section 10.1(a)(v), Section 10.1(a)(vi), Section 10.1(a)(vii), Section 10.1(a)(viii) or Section 10.1(a)(ix).

(b)       No Claim may be made against the Purchaser under Section 10.2(a)(i) until the aggregate of all Losses suffered or incurred by the Vendor in respect of all matters which are subject to indemnification thereunder exceed $400,000 (the "Purchaser Basket Amount"), in which case the Vendor Indemnified Parties shall be entitled to receive all Losses incurred from "dollar one"; provided, however, that the Purchaser Basket Amount limitation shall not apply to any Losses suffered by the Vendor Indemnified Parties with respect to misrepresentations in or breaches of the Purchaser Fundamental Representations or for fraud or intentional misrepresentation. Notwithstanding the foregoing, the Purchaser shall have no liability to indemnify the Vendor for any Losses after the aggregate successful Claims made by the Vendor for Losses suffered or incurred by it hereunder exceed $7,500,000, except that (i) the Purchaser shall indemnify the Vendor Indemnified Parties for all Losses incurred, in its entire amount and without limitation, related to or arising directly or indirectly out of any fraudulent or intentional misrepresentation by the Purchaser and (ii) the Purchaser shall indemnify the Vendor Indemnified Parties for all Losses incurred related to or arising directly or indirectly out of any breach of or any inaccuracy in any Purchaser Fundamental Representation in an amount not to exceed the Indemnity Cap.

(c)      In calculating the amount of Losses that have been sustained or incurred due to any inaccuracy or breach of any representation or warranty of the Vendor set forth in this Agreement or the Assignment and Assumption Agreement and in determining whether a breach of any such representation or warranty has occurred the terms "Material Adverse Effect," "material," "in all material respects" and words of similar import are to be disregarded and given no effect.

10.5                     Escrow Funds.

The Escrow Agreement will provide for the reduction of the Escrow Amount (and delivery to the Vendor of such reduction) by the amount of $2,000,000 less the amount of any Claim made on or before the 90th  day following the Closing. The Escrow Amount less any the amount of any Claims made at or prior to that time shall be released to the Vendor on the date that is the last day of the fifteenth month following Closing. In the event of Vendor is required to indemnify any Purchaser Indemnified Party for Losses under this Article 10 (subject to the limitations thereunder), such Purchaser Indemnified Party shall be paid (a) first, to the extent there are sufficient funds in the escrow account established pursuant to the Escrow Agreement, by release of funds to Purchaser Indemnified Parties by the Escrow Agent, in accordance with the terms of the Escrow Agreement and (b) in the event that there are no remaining funds in the escrow account established pursuant to the Escrow Agreement, by the Vendor, by wire transfer of immediately available funds within five Business Days of such obligation becoming due; provided that, notwithstanding the foregoing, in the event an indemnification payment is due and owing with respect to the Mitchell/Jones Liabilities, the Vendor shall pay such amount by wire transfer of immediately available funds within five Business Days of such obligation becoming due (and, unless otherwise elected by the Purchaser, such amount shall not be deducted from the escrow account established pursuant to the Escrow Agreement). Any payment the Purchaser is obligated to make to any Vendor Indemnified Party shall be paid to the applicable Vendor Indemnified Party by wire transfer of immediately available funds within five Business Days of such obligation becoming due.

47

10.6                        Exclusivity.

The provisions of this Article 10 shall apply to any Claim for breach of any covenant, representation, warranty or other provision of this Agreement, the Assignment and Assumption  Agreement or any agreement,  certificate or other document  delivered pursuant hereto or thereto (other than a claim for specific performance or injunctive relief) with the intent that all such Claims shall be subject to the limitations and other provisions contained in this Article 10.

10.7                             Adjustment to Purchase Price.

Any payment made by the Vendor under this Article 10 to any Purchaser Indemnified Party, shall, to the extent permitted by Law:

(a)                result in a downward adjustment to the Share Purchase Price; and

(b)         to the extent traceable to a particular Asset, as reasonably determined by the Purchaser, be allocated to and thereby decrease the portion of the purchase price allocated to such Asset pursuant to the Assignment and Assumption Agreement and, to the extent that any such payment cannot be traced to a particular Asset, such payment shall be apportioned to goodwill.

10.8                             Maintenance of Existence.

For a period of ten years following the Time of Closing, the Vendor shall continue to directly own the Clarke Road Property (other than the excess property located outside the fenced area of the Clarke Road Property which the Vendor shall not  sell within nine months following the Time of Closing) and will not mortgage, pledge, hypothecate, or otherwise burden all or any part of the Clarke Road Property in respect of debt obligations which exceed seventy-five (75%) of the fair market value of the Clarke Road Property at the time such debt obligation is incurred.

ARTICLE 11

GENERAL

11.1                             Confidentiality of Information.

In the event that the transaction contemplated herein is not consummated for any reason, the Purchaser covenants and agrees that, except as otherwise authorized by the Vendor, neither the Purchaser nor any of their representatives, agents, directors, officers, employees or shareholders will disclose to third parties, directly or indirectly, any confidential information or confidential data relating to the Vendor or the Business discovered by the Purchaser or its representatives as a result of the Vendor making available to the Purchaser and its representatives the information requested by it in connection with the transaction contemplated herein. If this Agreement is, for any reason, terminated prior to the Closing Date, such confidentiality agreement shall nonetheless continue in full force and effect.

48

 

11.2                        Expenses.

Each party shall be responsible for the expenses (including fees and expenses of legal advisors, accountants and other professional advisors) incurred by it and its Affiliates (if applicable) in connection with the negotiation and settlement of this Agreement and any other agreements contemplated hereby and the completion of the transaction contemplated hereby.

11.3                             Notices.

(a)      Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given upon receipt if (i) delivered in person, (ii) transmitted by fax or similar means of recorded electronic communication with receipt confirmed (if a fax number is provided below), or (iii) sent by registered mail or courier, charges prepaid, addressed as follows:

if to the Vendor:

c/o Great Lakes Copper Inc.

1010 Clarke Road, Box 7515

London, Ontario  N5Y 5S6

Attention: Julie Smith

Email:   julie.smith@glcopper.com

if to the Purchaser:

Office of the General Counsel c/o Mueller Industries, Inc.

8285 Tournament Drive, Suite 150

Memphis, TN 38125

Attention: Gary C. Wilkerson, Esq. Facsimile: (901) 753-3254

Email:   gwilkerson@muellerindustries.com

(b)            Any party may at any time change its address for service from time to time by giving notice in accordance with this Section 11.3.

11.4                          Commissions, etc.

The Vendor agrees to indemnify  and save harmless the Purchaser from and against all Losses suffered or incurred by the Purchaser in respect of any commission or other remuneration payable to any broker, agent or other intermediary who is acknowledged by the Vendor to act or has acted for or on behalf of the Vendor in connection with the transaction contemplated hereby, and the Purchaser agrees to indemnify and save harmless the Vendor from and against all Losses suffered or incurred by the Vendor in respect of any commission or other remuneration payable to any broker, agent or other intermediary who is acknowledged by the Purchaser to act or has acted for the Purchaser in connection with the transaction contemplated hereby. 

49

11.5                     Consultation and Public Announcements.

The Purchaser and the Vendor shall consult with one another before issuing any press release or making any other public announcement with respect to this Agreement or the transaction contemplated hereby and, except as required by any applicable law or regulatory requirement, neither the Vendor Nor the Purchaser shall issue any such press release or make any such public announcement without the prior written consent of the Purchaser and the Vendor.

11.6                          Disclosure.

Prior to any public announcement of the transaction contemplated hereby pursuant to Section 11.5, neither Party shall disclose this Agreement or any aspect of such transaction without consent of the other Party, except to its board of directors, or any committee thereof, and on a "need to know" basis to (a) its senior management and staff, and (ii) its legal, accounting, financial or other professional advisors who are assisting it in connection with the transaction.

11.7                            Counterparts.

This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument.

[SIGNATURE PAGE TO FOLLOW]

50

IN WITNESS WHEREOF this Agreement has been executed by the parties.

GREAT LAKES COPPER INC.

Per:              /s/ Jean Noelting

Name: Jean Noelting

Title: Chief Executive Officer & Secretary

MUELLER COPPER TUBE PRODUCTS, INC.

Per:              /s/ Gary C. Wilkerson

Name: Gary C. Wilkerson

Title: Vice President - Legal and Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00250-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00250-of-00352.parquet"}]]