Document:

Exhibit 10.1

 

Execution Version

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of December 20, 2016, is by and among OSI SYSTEMS, INC.,  a Delaware corporation (the “Borrower”), the Domestic Subsidiaries of the Borrower identified on the signature pages hereto (collectively, the “Guarantors”), the lenders identified on the signature pages hereto as the Existing Lenders (the “Existing Lenders”), the New Lenders (as defined below; and together with the Existing Lenders, the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders under the Credit Agreement (as hereinafter defined) (in such capacity, the “Administrative Agent”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Guarantors, the Existing Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of October 15, 2010 (as amended by that certain First Amendment to Credit Agreement dated as of November 10, 2011, that certain Second Amendment to Credit Agreement dated as of December 15, 2011, that certain Third Amendment to Credit Agreement dated as of April 10, 2012 and that certain Fourth Amendment to Credit Agreement dated as of May 28, 2014 (collectively, the “Existing Credit Agreement”) and as further amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, the Credit Parties have requested that the Lenders amend certain provisions of the Existing Credit Agreement; and

 

WHEREAS, the Lenders are willing to make such amendments to the Existing Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I
 AMENDMENT TO CREDIT AGREEMENT

 

1.1                               Amendment to Credit Agreement.  From and after the Amendment Effective Date (as hereinafter defined), the Existing Credit Agreement is amended to read in the form of the Credit Agreement attached hereto as Exhibit A to this Amendment (the “Amended Credit Agreement”).

 

 

1.2                               Amendment to Schedules and Exhibits.  Schedule 1.1(c) (Lender Commitments) to the Existing Credit Agreement is hereby replaced in its entirety with the schedule attached hereto as Exhibit B.  The Credit Agreement is hereby amended by adding a new Schedule 1.1(d) (AS&E Cost Savings and Synergies Add-Backs) in the form attached hereto as Exhibit C.  Schedule 6.15 (Permitted Reorganization) to the Existing Credit Agreement is hereby amended by adding the entry set forth on Exhibit D attached hereto to the end of such Schedule.  All other Schedules and Exhibits to the Existing Credit Agreement, shall not be modified or otherwise affected by this Amendment, except as amended, modified or supplemented from time to time in accordance with Section 5.2 of the Credit Agreement.

 

ARTICLE II

ADDITIONAL LENDER; NEW GUARANTOR

 

2.1                               Joinder of New Lenders.   Upon execution of this Amendment, each of the Lenders listed on Exhibit E hereto (each, a “New Lender”) shall be a party to the Credit Agreement and shall have all the rights and obligations of a Revolving Lender thereunder and under the Credit Documents. Each New Lender (a) represents and warrants that it is legally authorized to enter into the Amendment and the Credit Agreement, and the Amendment and the Credit Agreement are legal, valid and binding obligations of such New Lender, enforceable against it in accordance with their respective terms; (b) confirms that it has received a copy of the Credit Agreement and all of the Exhibits and Schedules thereto, together with copies of the financial statements referred to in Section 3.1 of the Credit Agreement, the financial statements delivered pursuant to Section 5.1 thereof, if any, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into the Amendment and the Credit Agreement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; and (d) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Revolving Lender.  The Commitment Percentage of each New Lender after giving effect to the Amendment shall be the percentage identified as its Commitment Percentage on Schedule 1.1(c), which is attached hereto as Exhibit B.

 

2.2                               Credit Party Agreement.   By execution of this Amendment, each of the Credit Parties agrees that, as of the Amendment Effective Date, each New Lender shall (a) be a party to the Credit Agreement and the other Credit Documents, (b) be a “Revolving Lender” for all purposes of the Credit Agreement and the other Credit Documents, and (c) have the rights and obligations of a Revolving Lender under the Credit Agreement and the other Credit Documents.

 

2.3                               Notices.  The applicable address, facsimile number and electronic mail address of each New Lender for purposes of Section 9.2 of the Credit Agreement are as set forth in the administrative questionnaire delivered by such New Lender to the Administrative Agent on or before the Amendment Effective Date or to such other address, facsimile number and electronic mail address as shall be designated by such New Lender in a notice to the Administrative Agent.

 

2

 

2.4  Refinancing of Revolving Loans.  In connection with the increase to the Revolving Committed Amount being provided on the Amendment Effective Date, the Revolving Loans and Participation Interests outstanding on the Amendment Effective Date shall be refinanced with new Revolving Loans made by the Lenders on the Amendment Effective Date based on each such Lender’s Commitment Percentage (after giving effect to this Amendment).  The Borrower shall be responsible for any costs arising under Section 2.15 of the Credit Agreement resulting from such refinancing.

 

ARTICLE III

 

CONDITIONS TO EFFECTIVENESS

 

3.1                               Closing Conditions.  This Amendment shall become effective as of the day and year first set forth in the introductory paragraph (the “Amendment Effective Date”) upon satisfaction of the following conditions (in form and substance reasonably acceptable to the Administrative Agent):

 

(a)                                 Executed Amendment.  The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Borrower, the Guarantors, the Lenders and the Administrative Agent.

 

(b)                                 Fees and Expenses.  The Administrative Agent shall have received from the Borrower such fees and expenses that are payable in connection with the consummation of the transactions contemplated hereby and King & Spalding LLP shall have received from the Borrower payment of all outstanding fees and expenses previously incurred and all fees and expenses incurred in connection with this Amendment.

 

(c)                                  Legal Opinion.  The Administrative Agent shall have received an opinion or opinions of counsel for the Credit Parties, dated the Amendment Effective Date and addressed to the Administrative Agent and the Lenders which shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

(d)                                 Corporate Documents.  The Administrative Agent shall have received, each in form and substance reasonably satisfactory to the Administrative Agent, an officer’s certificate (A) certifying that the articles of incorporation or other organizational documents, as applicable, of each Credit Party that were delivered on the Closing Date or the date on which any Credit Party was joined as a Guarantor pursuant to a Joinder Agreement (the “Joinder Date”) remain true and complete as of the Amendment Effective Date (or, as applicable, certified updates (or uncertified updates in the case of each of OSI Electronics, Inc. and Rapiscan Systems, Inc.)), (B) certifying that the bylaws, operating agreements or partnership agreements of each Credit Party that were delivered on the Closing Date or Joinder Date remain true and correct and in force and effect as of the Amendment Effective Date (or certified updates as applicable), (C) attaching copies of the resolutions of the board of directors of each Credit Party approving and adopting this Amendment, the transactions contemplated herein and authorizing execution and

3

 

delivery hereof, and certifying such resolutions to be true and correct and in force and effect as of the Amendment Effective Date, (D) attaching certificates of good standing, existence or its equivalent with respect to each Credit Party certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation or organization and (E) certifying that each officer listed in the incumbency certification contained in each Credit Party’s officer’s certificate, delivered on the Closing Date or Joinder Date remains a duly elected and qualified officer of such Credit Party and such officer remains duly authorized to execute and deliver on behalf of such Credit Party the Amendment or attaching a new incumbency certificate for each officer signing this Amendment.

 

ARTICLE IV
 MISCELLANEOUS

 

4.1                               Amended Terms.  On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Credit Documents or to any Credit Document shall hereafter mean the Credit Agreement or other applicable Credit Document as amended by this Amendment.  Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

 

4.2                               Representations and Warranties of Credit Parties.  Each of the Credit Parties represents and warrants as follows:

 

(a)                                 It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

 

(b)                                 This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(c)                                  No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

 

(d)                                 The representations and warranties set forth in Article III of the Credit Agreement are true and correct as of the date hereof (except for those which expressly relate to an earlier date).

 

(e)                                  After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

 

(f)                                   The Security Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders, which security interests and Liens are perfected in accordance with the terms of the Security Documents and prior to all Liens other than Permitted Liens.

 

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(g)                                  Except as specifically provided in this Amendment, the Credit Party Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

 

4.3                               Reaffirmation of Credit Party Obligations.  Each Credit Party hereby ratifies the Credit Documents and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement applicable to it and (b) that it is responsible for the observance and full performance of its respective Credit Party Obligations.

 

4.4                               Credit Document.  This Amendment shall constitute a Credit Document under the terms of the Credit Agreement.

 

4.5                               Expenses.  The Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Administrative Agent’s legal counsel.

 

4.6                               Further Assurances; Post-Closing Obligations.  The Credit Parties agree to promptly take such reasonable action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.  Within five (5) Business Days after the Fifth Amendment Effective Date (or such longer period of time as the Administrative Agent shall agree in its sole discretion), the Credit Parties shall deliver copies of the articles of incorporation for each of OSI Electronics, Inc. and Rapiscan Systems, Inc., certified as of a recent date by the Secretary of State for the State of California as full, true and correct.

 

4.7                               Entirety.  This Amendment and the other Credit Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 

4.8                               Counterparts; Telecopy.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart to this Amendment by telecopy or other electronic means shall be effective as an original and shall constitute a representation that an original will be delivered.

 

4.9                               No Actions, Claims, Etc.  As of the date hereof, each of the Credit Parties hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.

 

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4.10                        GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

4.11                        Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

4.12                        Release of Immaterial Subsidiaries.  The Borrower hereby confirms that none of S2Global, Inc., a Delaware corporation (“S2G”), OSI Laser Diode, Inc., a Delaware corporation (“OSILD), nor Rapiscan Government Services, Inc., a Delaware corporation (“RGS” and together with S2G and OSILD, the “Immaterial Subsidiaries”), constitutes a Material Domestic Subsidiary under the Credit Agreement, as amended hereby, and requests that each Immaterial Subsidiary be released from its guarantee of the Credit Party Obligations.  Subject to the satisfaction of the conditions to the effectiveness of this Amendment set forth in Section 3.1 above, the Lenders hereby, effective as of the Amendment Effective Date, (x) release each Immaterial Subsidiary from the Credit Agreement and each other Credit Document, (y) release all Liens on any Collateral of any Immaterial Subsidiary granted under any Credit Document as security for the Credit Party Obligations and (z) authorize and direct the Administrative Agent to execute, deliver and file, at the Borrower’s expense, all documents and terminations (including UCC-3 termination statements) reasonably requested by any Immaterial Subsidiary to evidence of record the foregoing releases.

 

4.13                        General Release.  In consideration of the Administrative Agent’s, on behalf of the Lenders, willingness to enter into this Amendment, each Credit Party hereby releases and forever discharges the Administrative Agent, the Lenders and the Administrative Agent’s and the Lender’s respective predecessors, successors, assigns, officers, managers, directors, employees, agents, attorneys, representatives, and affiliates (hereinafter all of the above collectively referred to as “Bank Group”), from any and all claims, counterclaims, demands, damages, debts, suits, liabilities, actions and causes of action of any nature whatsoever that have arisen prior to, or relate to actions or inactions that took place prior to, the Amendment Effective Date, including, without limitation, all claims, demands, and causes of action for contribution and indemnity, whether arising at law or in equity, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted, which any Credit Party may have or claim to have against any of the Bank Group in any way related to or connected with the Credit Documents and the transactions contemplated thereby.

 

4.14                        Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.  The jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 9.13 and 9.16 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

6

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

 

	
BORROWER:
    	
OSI   SYSTEMS, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Edrick
    
	
 
    	
Name:   Alan Edrick
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
GUARANTORS:
    	
OSI   ELECTRONICS, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Phil Makris
    
	
 
    	
Name:   Phil Makris
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
OSI   OPTOELECTRONICS, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Edrick
    
	
 
    	
Name:   Alan Edrick
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
RAPISCAN   LABORATORIES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eric Luiz
    
	
 
    	
Name:   Eric Luiz
    
	
 
    	
Title:   Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
RAPISCAN   SYSTEMS, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Deepak Chopra
    
	
 
    	
Name:   Deepak Chopra
    
	
 
    	
Title:   Chief Executive Officer
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
 
    	
SPACELABS   HEALTHCARE, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Edrick
    
	
 
    	
Name:   Alan Edrick
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SPACELABS   HEALTHCARE, L.L.C.,
    
	
 
    	
a   Washington limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sujit Kumar
    
	
 
    	
Name:   Sujit Kumar
    
	
 
    	
Title:   President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
RAPISCAN   HOLDINGS, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Edrick
    
	
 
    	
Name:   Alan Edrick
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SPACELABS   HOLDINGS, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Edrick
    
	
 
    	
Name:   Alan Edrick
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AMERICAN   SCIENCE AND ENGINEERING, INC. a Massachusetts corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alan Edrick
    
	
 
    	
Name:   Alan Edrick
    
	
 
    	
Title:   Treasurer
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
ADMINISTRATIVE   AGENT:
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   a Lender and as Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Sigurdson
    
	
 
    	
Name:   Thomas Sigurdson
    
	
 
    	
Title:   Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
EXISTING   LENDER:
    	
Bank   of America, N.A.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christopher D. Pannacciulli
    
	
 
    	
Name:   Christopher D. Pannacciulli
    
	
 
    	
Title:   Senior Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
EXISTING   LENDER:
    	
JPMorgan   Chase Bank, N.A.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Anna C. Araya
    
	
 
    	
Name:   Anna C. Araya
    
	
 
    	
Title:   Executive Director
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
EXISTING   LENDER:
    	
HSBC   Bank USA N.A.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christian Sumulong
    
	
 
    	
Name:   Christian Sumulong
    
	
 
    	
Title:   Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
EXISTING   LENDER:
    	
U.S.   Bank, NA,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Peyman Parhami
    
	
 
    	
Name:   Peyman Parhami
    
	
 
    	
Title:   Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
NEW   LENDER:
    	
Branch   Banking and Trust Company,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Erron Powers
    
	
 
    	
Name:   Erron Powers
    
	
 
    	
Title:   Senior Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
EXISTING   LENDER:
    	
MANUFACTURERS   BANK,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Suzukawa
    
	
 
    	
Name:   David Suzukawa
    
	
 
    	
Title:   Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

	
EXISTING   LENDER:
    	
ZB,   N.A. dba California Bank & Trust,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Elisa Angeles
    
	
 
    	
Name:   Elisa Angeles
    
	
 
    	
Title:   First Vice President
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

EXHIBIT A

Amended Credit Agreement

 

[See attached.]

 

 

Execution Version

 

 

$525,000,000

 

CREDIT AGREEMENT

 

among

 

OSI SYSTEMS, INC.,

as Borrower,

 

CERTAIN DOMESTIC SUBSIDIARIES OF THE BORROWER

FROM TIME TO TIME PARTY HERETO,

as Guarantors,

 

THE LENDERS PARTY HERETO,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

BANK OF AMERICA, N.A.,

as Syndication Agent,

 

U.S. BANK N.A.

and

HSBC BANK USA, N.A.,

as Joint Documentation Agents,

 

Dated as of October 15, 2010

 

WELLS FARGO SECURITIES, LLC

and

MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED,

as Joint Lead Arrangers

 

and

 

WELLS FARGO SECURITIES, LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED

and

JPMORGAN CHASE BANK, N.A.,

as Joint Bookrunners

 

 

 

	
Prepared by:
    	

    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE I   DEFINITIONS
    	
1
    
	
Section 1.1
    	
Defined Terms
    	
1
    
	
Section 1.2
    	
Other Definitional   Provisions
    	
37
    
	
Section 1.3
    	
Accounting Terms
    	
38
    
	
Section 1.4
    	
Time References
    	
39
    
	
Section 1.5
    	
Execution of Documents
    	
39
    
	
ARTICLE II THE   LOANS; AMOUNT AND TERMS
    	
39
    
	
Section 2.1
    	
Revolving Loans and   Incremental Revolving Loans
    	
39
    
	
Section 2.2
    	
Reserved
    	
43
    
	
Section 2.4
    	
Swingline Loan   Subfacility
    	
48
    
	
Section 2.5
    	
Fees
    	
50
    
	
Section 2.6
    	
Commitment Reductions
    	
51
    
	
Section 2.7
    	
Prepayments
    	
52
    
	
Section 2.8
    	
Default Rate and   Payment Dates
    	
52
    
	
Section 2.9
    	
Conversion Options
    	
53
    
	
Section 2.10
    	
Computation of Interest   and Fees; Usury
    	
54
    
	
Section 2.11
    	
Pro Rata Treatment and   Payments
    	
55
    
	
Section 2.12
    	
Non-Receipt of Funds by   the Administrative Agent
    	
57
    
	
Section 2.13
    	
Inability to Determine   Interest Rate
    	
59
    
	
Section 2.14
    	
Yield Protection
    	
59
    
	
Section 2.15
    	
Compensation for   Losses; Eurocurrency Liabilities
    	
61
    
	
Section 2.16
    	
Taxes
    	
62
    
	
Section 2.17
    	
Indemnification; Nature   of Issuing Lender’s Duties
    	
65
    
	
Section 2.18
    	
Illegality
    	
66
    
	
Section 2.19
    	
Replacement of Lenders
    	
67
    
	
Section 2.20
    	
Cash Collateral
    	
68
    
	
Section 2.21
    	
Defaulting Lenders
    	
69
    
	
ARTICLE III   REPRESENTATIONS AND WARRANTIES
    	
71
    
	
Section 3.1
    	
Financial Condition
    	
72
    
	
Section 3.2
    	
No Material Adverse   Effect; Internal Control Event
    	
72
    
	
Section 3.3
    	
Corporate Existence;   Compliance with Law
    	
72
    
	
Section 3.4
    	
Corporate Power;   Authorization; Enforceable Obligations
    	
73
    
	
Section 3.5
    	
No Legal Bar; No   Default
    	
73
    
	
Section 3.6
    	
No Material Litigation
    	
74
    
	
Section 3.7
    	
Investment Company Act;   etc.
    	
74
    
	
Section 3.8
    	
Margin Regulations
    	
74
    
	
Section 3.9
    	
ERISA
    	
74
    
	
Section 3.10
    	
Environmental Matters
    	
75
    
	
Section 3.11
    	
Use of Proceeds
    	
76
    
	
Section 3.12
    	
Subsidiaries; Joint   Ventures; Partnerships
    	
76
    
	
Section 3.13
    	
Ownership
    	
76
    
	
Section 3.14
    	
Indebtedness
    	
77
    
	
Section 3.15
    	
Taxes
    	
77
    
	
Section 3.16
    	
Intellectual Property   Rights
    	
77
    

 

i

 

	
Section 3.17
    	
Solvency
    	
78
    
	
Section 3.18
    	
Investments
    	
78
    
	
Section 3.19
    	
Location of Collateral
    	
78
    
	
Section 3.20
    	
[Reserved]
    	
78
    
	
Section 3.21
    	
Brokers’ Fees
    	
78
    
	
Section 3.22
    	
Labor Matters
    	
79
    
	
Section 3.23
    	
Accuracy and   Completeness of Information
    	
79
    
	
Section 3.24
    	
Material Contracts
    	
79
    
	
Section 3.25
    	
Insurance
    	
79
    
	
Section 3.26
    	
Security Documents
    	
80
    
	
Section 3.27
    	
Regulation H
    	
80
    
	
Section 3.28
    	
Classification of   Senior Indebtedness
    	
80
    
	
Section 3.29
    	
Anti-Terrorism Laws
    	
80
    
	
Section 3.30
    	
Compliance with OFAC   Rules and Regulations
    	
81
    
	
Section 3.31
    	
Compliance with FCPA
    	
81
    
	
Section 3.32
    	
Consent; Governmental   Authorizations
    	
81
    
	
Section 3.33
    	
Government Contracts
    	
81
    
	
Section 3.34
    	
Assignment of Payments
    	
81
    
	
ARTICLE IV   CONDITIONS PRECEDENT
    	
82
    
	
Section 4.1
    	
Conditions to Closing   Date
    	
82
    
	
Section 4.2
    	
Conditions to All   Extensions of Credit
    	
87
    
	
ARTICLE V   AFFIRMATIVE COVENANTS
    	
88
    
	
Section 5.1
    	
Financial Statements
    	
88
    
	
Section 5.2
    	
Certificates; Other   Information
    	
89
    
	
Section 5.3
    	
Payment of Taxes and   Other Obligations
    	
90
    
	
Section 5.4
    	
Conduct of Business and   Maintenance of Existence
    	
91
    
	
Section 5.5
    	
Maintenance of   Property; Insurance
    	
91
    
	
Section 5.6
    	
Inspection of Property;   Books and Records; Discussions
    	
91
    
	
Section 5.7
    	
Notices
    	
92
    
	
Section 5.8
    	
Environmental Laws
    	
93
    
	
Section 5.9
    	
Financial Covenants
    	
94
    
	
Section 5.10
    	
Additional Guarantors
    	
95
    
	
Section 5.11
    	
Compliance with Law
    	
95
    
	
Section 5.12
    	
Pledged Assets
    	
95
    
	
Section 5.13
    	
Covenants Regarding   Patents, Trademarks and Copyrights
    	
96
    
	
Section 5.14
    	
Landlord Waivers
    	
97
    
	
Section 5.15
    	
Federal Assignment of   Claims Act
    	
97
    
	
Section 5.16
    	
Further Assurances
    	
98
    
	
ARTICLE VI   NEGATIVE COVENANTS
    	
98
    
	
Section 6.1
    	
Indebtedness
    	
99
    
	
Section 6.2
    	
Liens
    	
100
    
	
Section 6.3
    	
Nature of Business
    	
100
    
	
Section 6.4
    	
Consolidation, Merger,   Sale or Purchase of Assets, etc.
    	
101
    
	
Section 6.5
    	
Advances, Investments   and Loans
    	
102
    
	
Section 6.6
    	
Transactions with   Affiliates
    	
102
    
	
Section 6.7
    	
Ownership of   Subsidiaries; Restrictions
    	
102
    

 

ii

 

	
Section 6.8
    	
Corporate Changes;   Material Contracts
    	
103
    
	
Section 6.9
    	
Limitation on   Restricted Actions
    	
103
    
	
Section 6.10
    	
Restricted Payments
    	
103
    
	
Section 6.11
    	
Amendment of   Subordinated Debt
    	
104
    
	
Section 6.12
    	
Sale Leasebacks
    	
104
    
	
Section 6.13
    	
No Further Negative   Pledges
    	
105
    
	
Section 6.14
    	
Bank Accounts
    	
105
    
	
ARTICLE VII EVENTS   OF DEFAULT
    	
106
    
	
Section 7.1
    	
Events of Default
    	
106
    
	
Section 7.2
    	
Acceleration; Remedies
    	
109
    
	
ARTICLE VIII THE   ADMINISTRATIVE AGENT
    	
110
    
	
Section 8.1
    	
Appointment and   Authority
    	
110
    
	
Section 8.2
    	
Nature of Duties
    	
110
    
	
Section 8.3
    	
Exculpatory Provisions
    	
111
    
	
Section 8.4
    	
Reliance by   Administrative Agent
    	
112
    
	
Section 8.5
    	
Notice of Default
    	
112
    
	
Section 8.6
    	
Non-Reliance on   Administrative Agent and Other Lenders
    	
112
    
	
Section 8.7
    	
Indemnification
    	
113
    
	
Section 8.8
    	
Administrative Agent in   Its Individual Capacity
    	
113
    
	
Section 8.9
    	
Successor Administrative   Agent
    	
113
    
	
Section    8.10
    	
Collateral and Guaranty   Matters
    	
114
    
	
ARTICLE IX   MISCELLANEOUS
    	
115
    
	
Section 9.1
    	
Amendments, Waivers and   Release of Collateral
    	
115
    
	
Section 9.2
    	
Notices
    	
118
    
	
Section 9.3
    	
No Waiver; Cumulative   Remedies
    	
120
    
	
Section 9.4
    	
Survival of   Representations and Warranties
    	
120
    
	
Section 9.5
    	
Payment of Expenses and   Taxes; Indemnity
    	
120
    
	
Section 9.6
    	
Successors and Assigns;   Participations
    	
123
    
	
Section 9.7
    	
Right of Set-off;   Sharing of Payments
    	
127
    
	
Section 9.8
    	
Table of Contents and Section Headings
    	
128
    
	
Section 9.9
    	
Counterparts;   Integration; Effectiveness; Electronic Execution
    	
128
    
	
Section 9.10
    	
Severability
    	
128
    
	
Section 9.11
    	
Integration
    	
129
    
	
Section 9.12
    	
Governing Law
    	
129
    
	
Section 9.13
    	
Consent to   Jurisdiction; Service of Process and Venue
    	
129
    
	
Section 9.14
    	
Confidentiality
    	
130
    
	
Section 9.15
    	
Acknowledgments
    	
131
    
	
Section 9.16
    	
Waivers of Jury Trial;   Waiver of Consequential Damages
    	
131
    
	
Section 9.17
    	
Patriot Act Notice
    	
131
    
	
Section 9.18
    	
Resolution of Drafting   Ambiguities
    	
132
    
	
Section 9.19
    	
Continuing Agreement
    	
132
    
	
Section 9.20
    	
Lender Consent
    	
132
    
	
Section 9.22
    	
Press Releases and   Related Matters
    	
133
    
	
Section 9.23
    	
No Advisory or   Fiduciary Responsibility
    	
133
    
	
ARTICLE X GUARANTY
    	
134
    
	
Section 10.1
    	
The Guaranty
    	
134
    

 

iii

 

	
Section 10.2
    	
Bankruptcy
    	
135
    
	
Section 10.3
    	
Nature of Liability
    	
135
    
	
Section 10.4
    	
Independent Obligation
    	
136
    
	
Section 10.5
    	
Authorization
    	
136
    
	
Section 10.6
    	
Reliance
    	
136
    
	
Section 10.7
    	
Waiver
    	
136
    
	
Section 10.8
    	
Limitation on   Enforcement
    	
138
    
	
Section 10.9
    	
Confirmation of Payment
    	
138
    

 

iv

 

	
Schedules
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule 1.1(a)
    	
Investments
    	
 
    
	
Schedule 1.1(b)
    	
Liens
    	
 
    
	
Schedule 1.1(c)
    	
Lender Commitments
    	
 
    
	
Schedule 1.1(d)
    	
AS&E Cost Savings   and Synergies Add-Backs
    	
 
    
	
Schedule 3.3
    	
Jurisdictions of   Organization and Qualification
    	
 
    
	
Schedule 3.12
    	
Subsidiaries
    	
 
    
	
Schedule 3.16
    	
Intellectual Property
    	
 
    
	
Schedule 3.19(a)
    	
Location of Real   Property
    	
 
    
	
Schedule 3.19(b)
    	
Location of Collateral
    	
 
    
	
Schedule 3.19(c)
    	
Chief Executive Offices
    	
 
    
	
Schedule 3.19(d)
    	
Mortgaged Properties
    	
 
    
	
Schedule 3.22
    	
Labor Matters
    	
 
    
	
Schedule 6.15
    	
Permitted   Reorganization
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibits
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit 1.1(a)
    	
Form of Account Designation   Notice
    	
 
    
	
Exhibit 1.1(b)
    	
Form of Assignment   and Assumption
    	
 
    
	
Exhibit 1.1(c)
    	
Form of Joinder   Agreement
    	
 
    
	
Exhibit 1.1(d)
    	
Form of Notice of   Borrowing
    	
 
    
	
Exhibit 1.1(e)
    	
Form of Notice of   Conversion/Extension
    	
 
    
	
Exhibit 1.1(f)
    	
Form of Permitted Acquisition   Certificate
    	
 
    
	
Exhibit 2.1(a)
    	
Form of Funding   Indemnity Letter
    	
 
    
	
Exhibit 2.1(e)
    	
Form of Revolving   Note
    	
 
    
	
Exhibit 2.4(d)
    	
Form of Swingline   Note
    	
 
    
	
Exhibit 4.1(a)
    	
Form of Lender   Consent
    	
 
    
	
Exhibit 4.1(b)
    	
Form of Officer’s   Certificate
    	
 
    
	
Exhibit 4.1(d)
    	
Form of Landlord   Waiver
    	
 
    
	
Exhibit 4.1(g)
    	
Form of Solvency   Certificate
    	
 
    
	
Exhibit 4.1(p)
    	
Form of Financial   Condition Certificate
    	
 
    
	
Exhibit 4.1(q)
    	
Form of Patriot   Act Certificate
    	
 
    
	
Exhibit 5.2(b)
    	
Form of Officer’s   Compliance Certificate
    	
 
    

 

v

 

CREDIT AGREEMENT, dated as of October 15, 2010 among OSI SYSTEMS, INC., a Delaware corporation (the “Borrower”), each of those Domestic Subsidiaries of the Borrower identified as a “Guarantor” on the signature pages hereto and such other Domestic Subsidiaries of the Borrower as may from time to time become a party hereto (such Subsidiaries, each a “Guarantor” and collectively, the “Guarantors”), the several banks and other financial institutions as are, or may from time to time become parties to this Agreement (each a “Lender” and, collectively, the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (successor-by-merger to Wachovia Bank, National Association), a national banking association, as administrative agent for the Lenders hereunder (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Credit Parties (as hereinafter defined) have requested that the Lenders make loans and other financial accommodations to the Credit Parties in an aggregate amount of up to $525,000,000, as more particularly described herein; and

 

WHEREAS, the Lenders have agreed to make such loans and other financial accommodations to the Credit Parties on the terms and conditions contained herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1            Defined Terms.

 

As used in this Agreement, terms defined in the preamble to this Agreement have the meanings therein indicated, and the following terms have the following meanings:

 

“ABR Default Rate” shall have the meaning set forth in Section 2.8.

 

“Account Designation Notice” shall mean the Account Designation Notice dated as of the Closing Date from the Borrower to the Administrative Agent in substantially the form attached hereto as Exhibit 1.1(a).

 

“Additional Credit Party” shall mean each Person that becomes a Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

 

“Additional Revolving Loan” shall have the meaning set forth in Section 2.1(f).

 

“Administrative Agent” or “Agent” shall have the meaning set forth in the first paragraph of this Agreement and shall include any successors in such capacity.

 

 

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

 

“Affiliate” shall mean, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agreement” or “Credit Agreement” shall mean this Agreement, as amended by that certain First Amendment to Credit Agreement dated as of November 10, 2011, that certain Second Amendment to Credit Agreement dated as of December 15, 2011, that certain Third Amendment to Credit Agreement dated as of April 10, 2012, that certain Fourth Amendment to Credit Agreement dated as of May 28, 2014, that certain Fifth Amendment to Credit Agreement dated as of December 20, 2016, and as further amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the sum of (i) LIBOR (as determined pursuant to the definition of LIBOR), for an Interest Period of one (1) month commencing on such day plus (ii) 1.00%.  For purposes hereof: “Prime Rate” shall mean, at any time, the rate of interest per annum publicly announced or otherwise identified from time to time by Wells Fargo at its principal office in Charlotte, North Carolina as its prime rate.  Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs.  The parties hereto acknowledge that the rate announced publicly by Wells Fargo as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks; and “Federal Funds Effective Rate” shall mean, for any day, the weighted average 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 on the next succeeding Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.  If for any reason the Administrative Agent shall have determined (which determination shall be conclusive in the absence of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms above, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist.  Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.  Notwithstanding the foregoing, if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Alternate Base Rate Loans” shall mean Loans that bear interest at an interest rate based on the Alternate Base Rate.

 

2

 

“Applicable Percentage” shall mean, for any day, the rate per annum set forth below opposite the applicable level then in effect (based on the Consolidated Net Leverage Ratio), it being understood that the Applicable Percentage for (a) Revolving Loans that are Alternate Base Rate Loans shall be the percentage set forth under the column “Base Rate Margin”, (b) Revolving Loans that are LIBOR Rate Loans shall be the percentage set forth under the column “LIBOR Margin & Letter of Credit Fee”, (c) the Letter of Credit Fee shall be the percentage set forth under the column “LIBOR Margin & Letter of Credit Fee”, and (d) the Commitment Fee shall be the percentage set forth under the column “Commitment Fee”:

 

	
 
    	
 
    	
Applicable Percentage
    	
 
    
	
Level
    	
 
    	
Consolidated
   Net Leverage
   Ratio
    	
 
    	
LIBOR
   Margin &
   Letter of
   Credit Fee
    	
 
    	
Base Rate
   Margin
    	
 
    	
Commitment
   Fee
    	
 
    
	
I
    	
 
    	
<1.50   to 1.0
    	
 
    	
1.25
    	
%
    	
0.25
    	
%
    	
0.200
    	
%
    
	
II
    	
 
    	
<2.00   to 1.0 but
   >1.50 to 1.0
    	
 
    	
1.50
    	
%
    	
0.50
    	
%
    	
0.200
    	
%
    
	
III
    	
 
    	
<2.75   to 1.0 but
   >2.00 to 1.0
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    	
0.250
    	
%
    
	
IV
    	
 
    	
> 2.75 to 1.0
    	
 
    	
2.00
    	
%
    	
1.00
    	
%
    	
0.300
    	
%
    

 

The Applicable Percentage shall, in each case, be determined and adjusted quarterly on the date five (5) Business Days after the date on which the Administrative Agent has received from the Borrower the quarterly financial information (in the case of the first three fiscal quarters of the Borrower’s fiscal year), the annual financial information (in the case of the fourth fiscal quarter of the Borrower’s fiscal year) and the certifications required to be delivered to the Administrative Agent and the Lenders in accordance with the provisions of Sections 5.1(a), 5.1(b) and 5.2(b) (each an “Interest Determination Date”).  Such Applicable Percentage shall be effective from such Interest Determination Date until the next such Interest Determination Date.  Notwithstanding the foregoing, on and after the Fifth Amendment Effective Date, the Applicable Percentages shall be set at Level II until the applicable financial information and certificates required to be delivered pursuant to Section 5.1(b) and 5.2(b) for the fiscal quarter ending December 31, 2016 have been delivered to the Administrative Agent.  After the Closing Date, if the Credit Parties shall fail to provide the financial information or certifications in accordance with the provisions of Sections 5.1(a), 5.1(b) and 5.2(b), the Applicable Percentage shall, on the date five (5) Business Days after the date by which the Credit Parties were so required to provide such financial information or certifications to the Administrative Agent and the Lenders, be based on Level IV until such time as such information or certifications or corrected information or corrected certificates are provided, whereupon the Level shall be determined by the then current Consolidated Net Leverage Ratio.  In the event that any financial statement or certification delivered pursuant to Section 5.1 is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Percentage for

 

3

 

any period (an “Applicable Period”) than the Applicable Percentage applied for such Applicable Period, then for so long as this Agreement shall be in effect the Borrower shall immediately (i) deliver to the Administrative Agent a corrected compliance certificate for such Applicable Period, (ii) determine the Applicable Percentage for such Applicable Period based upon the corrected compliance certificate, and (iii) pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Percentage for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.11.  It is acknowledged and agreed that nothing contained herein shall limit the rights of the Administrative Agent and the Lenders under the Credit Documents, including their rights under Sections 2.8 and 7.1 and other of their respective rights under this Agreement.

 

“Approved Bank” shall have the meaning set forth in the definition of “Cash Equivalents.”

 

“Approved Fund” shall mean any Fund that is administered, managed or underwritten 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.

 

“Arrangers” shall mean Wells Fargo Securities, LLC, together with its successors and assigns, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, together with its successors and assigns.

 

“AS&E” shall mean American Science and Engineering, Inc., a Massachusetts corporation.

 

“Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by the definition of Eligible Assignee and Section 9.6), and accepted by the Administrative Agent, in substantially the form of Exhibit 1.1(b) or any other form approved by the Administrative Agent.

 

“Availability” shall mean, as of any date of determination, an amount equal to the sum of (a) the Revolver Availability plus (b) cash and Cash Equivalents on hand.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

“Bankruptcy Event” shall mean any of the events described in Section 7.1(f).

 

4

 

“Bankruptcy Event of Default” shall mean an Event of Default specified in Section 7.1(f).

 

“Bond Hedge Transaction” shall mean any bond hedge, capped call or equity call option or substantively equivalent derivative transaction on Equity Interests.

 

“Borrower” shall have the meaning set forth in the first paragraph of this Agreement.

 

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

 

“Business” shall have the meaning set forth in Section 3.10.

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina, New York, New York or Los Angeles, California are authorized or required by law to close; provided, however, that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks in London, England are not open for dealings in Dollar deposits in the London interbank market.

 

“Canadian Dollars” or “CAD” shall mean dollars in the lawful currency of Canada.

 

“Capital Lease” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

 

“Capital Lease Obligations” shall mean the capitalized lease obligations relating to a Capital Lease determined in accordance with GAAP.

 

“Cash Collateralize” shall mean to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent, the Issuing Lender or Swingline Lender (as applicable) and the Lenders, as collateral for LOC Obligations, obligations in respect of Swingline Loans, or obligations of Lenders to fund participations in respect of either thereof (as the context may require), cash or deposit account balances or, if the Issuing Lender or Swingline Lender benefiting from such collateral shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to (a) the Administrative Agent and (b) the applicable Issuing Lender or the Swingline Lender.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” shall mean (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition (“Government Obligations”), (b) Dollar denominated time deposits, certificates of deposit, Eurodollar time deposits and Eurodollar certificates of deposit of (i) any domestic commercial bank of recognized standing having capital and surplus in excess of $250,000,000 or (ii) any bank whose

 

5

 

short-term commercial paper rating at the time of the acquisition thereof is at least A-1 or the equivalent thereof from S&P or from Moody’s is at least P-1 or the equivalent thereof from Moody’s (any such bank being an “Approved Bank”), in each case with maturities of not more than 364 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements with a bank or trust company (including a Lender) or a recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America, (e) obligations of any state of the United States or any political subdivision thereof for the payment of the principal and redemption price of and interest on which there shall have been irrevocably deposited Government Obligations maturing as to principal and interest at times and in amounts sufficient to provide such payment, (f) auction preferred stock rated in the highest short-term credit rating category by S&P or Moody’s, (g) money market accounts subject to Rule 2a-7 of the Exchange Act (“SEC Rule 2a-7”) which consist primarily of cash and cash equivalents set forth in clauses (a) through (f) above and of which 95% shall at all times be comprised of First Tier Securities (as defined in SEC Rule 2a-7) and any remaining amount shall at all times be comprised of Second Tier Securities (as defined in SEC Rule 2a-7) and (h) shares of any so-called “money market fund,” provided that such fund is registered under the Investment Company Act of 1940, has net assets of at least $100,000,000 and has an investment portfolio with an average maturity of 365 days or less.

 

“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electronic payables), electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person that, (a) at the time it enters into a Cash Management Agreement with a Credit Party or a Subsidiary of a Credit Party, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent, or (b) at the time it (or its Affiliate) becomes a Lender (including on the Fifth Amendment Effective Date), is a party to a Cash Management Agreement with a Credit Party or a Subsidiary of a Credit Party, in each case in its capacity as a party to such Cash Management Agreement.

 

“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, 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 each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

6

 

“Change of Control” shall mean at any time the occurrence of any of the following events:  (a) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have “beneficial ownership” of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of thirty-five percent (35%) or more of the then outstanding Voting Stock of the Borrower; or (b) the replacement of a majority of the Board of Directors of the Borrower over a two-year period from the directors who constituted the Board of Directors at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Borrower then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved.

 

“Closing Date” shall mean the date of this Agreement.

 

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

 

“Collateral” shall mean a collective reference to the collateral which is identified in, and at any time will be covered by, the Security Documents and any other property or assets of a Credit Party, whether tangible or intangible and whether real or personal, that may from time to time secure the Credit Party Obligations; provided that there shall be excluded from the Collateral (a) any account, instrument, chattel paper or other obligation or property of any kind due from, owed by, or belonging to, a Sanctioned Person or Sanctioned Entity or (b) any lease in which the lessee is a Sanctioned Person or Sanctioned Entity.

 

“Committed Funded Exposure” shall mean, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Loans, LOC Obligations and Swingline Obligations at such time.

 

“Commitment” shall mean the Revolving Commitments, the LOC Commitment and the Swingline Commitment, individually or collectively, as appropriate.

 

“Commitment Fee” shall have the meaning set forth in Section 2.5(a).

 

“Commitment Percentage” shall mean, for each Lender, the percentage identified as its Commitment Percentage on Schedule 1.1(c) or in the Assignment and Assumption pursuant to which such Lender became a Lender hereunder, as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6(c).

 

“Commitment Period” shall mean (a) with respect to Revolving Loans and Swingline Loans, the period from and including the Closing Date to but excluding the Maturity Date and (b) with respect to Letters of Credit, the period from and including the Closing Date to but excluding the date that is thirty (30) days prior to the Maturity Date.

 

7

 

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001(b)(1) of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414(b) or 414(c) of the Code or, solely for purposes of Section 412 of the Code to the extent required by such section, Section 414(m) or 414(o) of the Code.

 

“Consolidated” shall mean, when used with reference to financial statements or financial statement items of the Borrower and its Subsidiaries or any other Person, such statements or items on a consolidated basis in accordance with the consolidation principles of GAAP.

 

“Consolidated Capital Expenditures” shall mean, as of any date of determination for the four consecutive fiscal quarter period ending on such date, all expenditures of the Borrower and its Subsidiaries on a Consolidated basis for such period that in accordance with GAAP would be classified as capital expenditures, including, without limitation, Capital Lease Obligations.  The term “Consolidated Capital Expenditures” shall not include (a) any Permitted Acquisition, (b) capital expenditures in respect of the reinvestment of proceeds from Extraordinary Receipts, (c) capital expenditures related to the Borrower’s and its Subsidiaries’ projects with the Servicio de Administración Tributaria (SAT) (Mexico’s tax and customs authority) in an aggregate amount not to exceed $225,000,000, or (d) capital expenditures related to turnkey projects now or hereafter awarded by customers to the Borrower or its Subsidiaries in an aggregate amount not to exceed $300,000,000 during the period beginning on the Fifth Amendment Effective Date and ending on the Maturity Date; the parties acknowledge that the immediately preceding figures are baskets and this Agreement does not obligate the Borrower and its Subsidiaries to make capital expenditures in the specified amount, or in any other amount.

 

“Consolidated EBITDA” shall mean, as of any date of determination for the four consecutive fiscal quarter period ending on such date, without duplication:

 

(a) Consolidated Net Income for such period,

 

plus

 

(b) the sum of the following for such period to the extent deducted in calculating Consolidated Net Income:

 

(i) Consolidated Interest Expense,

 

(ii) tax expense (including, without limitation, any federal, state, local and foreign income and similar taxes) of the Borrower and its Subsidiaries,

 

(iii) non-cash amounts attributed to any third party’s minority interest in any Credit Party or any Subsidiary thereof,

 

(iv) depreciation and amortization expense of the Borrower and its Subsidiaries,

 

8

 

(v) non-cash stock based compensation expense,

 

(vi) non-recurring cash charges in an aggregate amount not to exceed fifteen percent (15%) of Consolidated EBITDA,

 

(vii) other non-cash charges (excluding reserves for future cash charges) of the Borrower and its Subsidiaries,

 

(viii) charges, losses, costs and expenses incurred to the extent actually reimbursed by third parties pursuant to indemnification provisions or insurance,

 

(ix)(A) cost savings and synergies associated with the Borrower’s acquisition of AS&E (the “AS&E Acquisition”) projected by the Borrower in good faith to be realizable within eighteen (18) months after the Fifth Amendment Effective Date (calculated on a pro forma basis as though realized on the first day of the applicable period, net of the amount of actual benefits realized), as long as such cost savings and synergies are reasonably identifiable, reasonably attributable to specified actions to be taken, reasonably anticipated to result from such actions and supportable, and (B) to the extent relating to the realization of any of the cost savings and synergies permitted as an add-back under clause (A) above, charges and expenses resulting from facility closures, severance, relocation, restructuring, integration and other similar adjustments, or any business optimization costs and expenses; provided that (1) concurrently with the delivery of the financial statements referred to in Sections 5.1(a) and 5.1(b), the Administrative Agent shall receive a quarterly certificate, in form and substance reasonably satisfactory to the Administrative Agent, from a Responsible Officer of the Borrower summarizing all such cost savings and synergies and charges and expenses, for the applicable period, and (2) the aggregate amount of all such cost savings and synergies permitted as an add-back under clause (A) above shall not exceed the amounts set forth on Schedule 1.1(d),

 

(x)(A) cost savings and synergies associated with any other consummated Permitted Acquisition projected by the Borrower in good faith to be realizable within eighteen (18) months after the consummation of such Permitted Acquisition (calculated on a pro forma basis as though realized on the first day of the applicable period, net of the amount of actual benefits realized), as long as such cost savings and synergies are reasonably identifiable, reasonably attributable to specified actions to be taken, reasonably anticipated to result from such actions and supportable, and (B) to the extent relating to the realization of any of the cost savings and synergies permitted as an add-back under clause (A) above, charges and expenses for such period resulting from facility closures, severance, relocation, restructuring, integration and other similar adjustments, or any business optimization costs and expenses; provided that (1) concurrently with the delivery of the financial statements referred to in Sections 5.1(a) and 5.1(b), the Administrative Agent shall receive a quarterly certificate, in form and substance reasonably satisfactory to the Administrative Agent, from a Responsible Officer of the Borrower summarizing all such cost savings and synergies and charges and expenses for the applicable period, and (2) the aggregate amount of all such cost savings and synergies and charges and expenses permitted to be added back under clauses (A) and (B) above shall not exceed twenty five percent (25%) of pro forma Consolidated EBITDA (calculated before giving effect to such add-backs) for such period, and

 

(xi) fees and reasonable and documented out-of-pocket expenses incurred in connection with the consummation of any Permitted Acquisition, the incurrence of any Indebtedness permitted under this Agreement or the issuance of any Equity Interests permitted hereunder; provided that the aggregate amount of such fees and expenses permitted as add-backs under this clause (xi) for the AS&E Acquisition shall not exceed $7,000,000 over the term of this Agreement,

 

9

 

minus

 

(c) the sum of the following:

 

(i) non-cash charges previously added back to Consolidated Net Income in determining Consolidated EBITDA to the extent such non-cash charges have become cash charges during such period except to the extent such cash charges are permitted as an add-back under clause (b)(vi) above,

 

(ii) extraordinary losses and gains and all non-cash income, interest income and tax credits, and rebates to the extent otherwise included in Consolidated Net Income, and

 

(iii) non-recurring gains to the extent otherwise included in Consolidated Net Income including, without limitation, gains in connection with material litigation.

 

“Consolidated Funded Debt” shall mean, as of any date of determination, Funded Debt of the Borrower and its Subsidiaries on a Consolidated basis.

 

“Consolidated Interest Expense” shall mean, as of any date of determination for the four consecutive fiscal quarter period ending on such date, all interest expense (excluding amortization of debt discount and premium, but including the interest component under Capital Leases and synthetic leases, tax retention operating leases, off-balance sheet loans and similar off-balance sheet financing products) for such period of the Borrower and its Subsidiaries on a Consolidated basis.

 

“Consolidated Net Income” shall mean, as of any date of determination for the four consecutive fiscal quarter period ending on such date, the net income of the Borrower and its Subsidiaries on a Consolidated basis for such period, all as determined in accordance with GAAP.

 

“Consolidated Net Leverage Ratio” shall mean, as of the last day of any fiscal quarter of the Borrower, for the Borrower and its Subsidiaries on a Consolidated basis, the ratio of (a) Consolidated Funded Debt of the Borrower and its Subsidiaries on such date less  (i) the outstanding amount of all Performance Letters of Credit (including Letters of Credit issued hereunder that are Performance Letters of Credit) to the extent undrawn, (ii) all unrestricted cash and Cash Equivalents of the Borrower and its Domestic Subsidiaries and (iii)  except in connection with the calculation of any financial maintenance covenant required under Section 5.9, 65% of all unrestricted cash and Cash Equivalents of the Borrower’s Foreign Subsidiaries to (b) Consolidated EBITDA.

 

“Consolidated Secured Net Leverage Ratio” shall mean, as of the last day of any fiscal quarter of the Borrower, for the Borrower and its Subsidiaries on a Consolidated basis, the ratio of (a) Consolidated Funded Debt of the Borrower and its Subsidiaries on such date that is secured by a Lien on any asset of the Borrower or any of its Subsidiaries less  (i) the outstanding amount of all Performance Letters of Credit (including Letters of Credit issued hereunder that are Performance Letters of Credit) to the extent undrawn, (ii) all unrestricted cash and Cash Equivalents of the Borrower and its Domestic Subsidiaries and (iii) except in connection with the calculation of any financial maintenance covenant required under Section 5.9, 65% of all unrestricted cash and Cash Equivalents of the Borrower’s Foreign Subsidiaries to (b) Consolidated EBITDA.

 

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“Consolidated Total Tangible Assets” shall mean the consolidated total assets of the Borrower and its Subsidiaries, as determined in accordance with GAAP applied on a consistent basis, minus the aggregate amount of any intangible assets, including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks and brand names.

 

“Contractual Obligation” shall mean, as to any Person, any provision of any security issued by such Person or of any contract, agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

 

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Copyright Licenses” shall mean any agreement, whether written or oral, providing for the grant by or to a Person of any right under any Copyright, including, without limitation, any thereof referred to in Schedule 3.16.

 

“Copyrights” shall mean all copyrights of the Credit Parties and their Subsidiaries in all Works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise, including, without limitation, any thereof referred to in Schedule 3.16 and all renewals thereof.

 

“Credit Documents” shall mean this Agreement, each of the Notes, any Joinder Agreement, the Letters of Credit, LOC Documents, Disclosure Letter and the Security Documents and all other agreements, documents, certificates and instruments delivered to the Administrative Agent or any Lender by any Credit Party in connection therewith (other than any Secured Cash Management Agreement or any agreement, document, certificate or instrument related to a Hedging Agreement).

 

“Credit Exposure” shall mean, as to any Lender at any time (a) if its Commitment is in existence at such time, the amount of its Commitment and (b) if its Commitment is not in existence at such time, the amount of its Committed Funded Exposure.

 

“Credit Party” shall mean any of the Borrower or the Guarantors.

 

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“Credit Party Obligations” shall mean, without duplication, (a) all of the obligations, indebtedness and liabilities of the Credit Parties to the Lenders (including the Issuing Lender) and the Administrative Agent, whenever arising, under this Agreement, the Notes or any of the other Credit Documents, including principal, interest, fees, reimbursements and indemnification obligations and other amounts (including, but not limited to, any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code), (b) all liabilities and obligations, whenever arising, owing from any Credit Party or any of their Subsidiaries to any Hedging Agreement Provider arising under any Secured Hedging Agreement, but in all cases excluding Excluded Swap Obligations, and (c) all existing or future payment and other obligations owing by any Credit Party or any Subsidiary of a Credit Party under any Secured Cash Management Agreement.

 

“Debtor Relief Laws” shall mean the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” shall mean any of the events specified in Section 7.1, whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

 

“Defaulting Lender” shall mean, subject to Section 2.21(b) any Lender that, as determined by the Administrative Agent (with notice to the Borrower of such determination), (a) has failed to perform any of its funding obligations hereunder,  including in respect of its Loans or participations in Letters of Credit or Swingline Loans, within three Business Days of the date required to be funded by it hereunder, unless such obligation is the subject of a good faith dispute, (b) has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or, except in connection with a good faith dispute, under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

 

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“Disclosure Letter” shall mean that certain side letter dated as of the date hereof between the Borrower and the Administrative Agent, for the benefit of the Lenders, pursuant to which the Borrower has attached (a) as Schedule 1 thereto, a complete and accurate list of all Material Contracts of the Credit Parties and their Subsidiaries in effect as of the Closing Date, (b) as Schedule 2 thereto, the federal tax identification number for each Credit Party as of the Closing Date, (c) as Schedule 3 thereto, the Existing Letters of Credit, (d) as Schedule 4 thereto, the insurance coverage of the Credit Parties and their Subsidiaries as of the Closing Date, setting forth the carrier, policy number, expiration date, type and amount, (e) as Schedule 5 thereto, the Indebtedness of the Credit Parties and their Subsidiaries existing as of the Closing Date as referenced in the financial statements referenced in Section 3.1 hereof and (f) as Schedule 6 thereto, a complete and accurate list of all checking, savings or other accounts (including securities accounts) of the Credit Parties at any bank or other financial institution, or any other account where money is or may be deposited or maintained with any Person as of the Closing Date.

 

“Documentation Agents” shall mean U.S. Bank N.A., together with its successors and assigns, and HSBC Bank USA, N.A., together with its successors and assigns, in their capacity as documentation agents hereunder.

 

“Dollar Equivalent” shall mean, at any time, (a) with respect to Dollars or an amount denominated in Dollars, such amount and (b) with respect to an amount in Foreign Currency or an amount denominated in any Foreign Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the applicable Issuing Lender, as the case may be, at such time on the basis of the Spot Rate (determined by the Administrative Agent or such Issuing Lender as of the most recent Revaluation Date) for the purchase of Dollars with such Foreign Currency.

 

“Dollars” and “$” shall mean dollars in lawful currency of the United States of America.

 

“Domestic Lending Office” shall mean, initially, the office of each Lender designated as such Lender’s Domestic Lending Office shown in such Lender’s Administrative Questionnaire; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

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“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person approved by (i) the Administrative Agent, (ii) in the case of any assignment of a Revolving Commitment, the Issuing Lender, and (iii) unless an Event of Default has occurred and is continuing and so long as the primary syndication of the Loans has been completed as determined by Wells Fargo, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries or any natural person.

 

“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

 

“Environmental Laws” shall mean any and all applicable foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirement of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time be in effect during the term of this Agreement.

 

“Equity Interest” shall mean (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests and (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“Euro” and “EUR” mean the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

“Event of Default” shall mean any of the events specified in Section 7.1; provided, however, that any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

 

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

 

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (determined after giving effect to Section 10.11 and any and all

 

14

 

guarantees of such Guarantor’s Swap Obligations by other Credit Parties) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

 

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender, the Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.16, except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16 and (d) any United States federal withholding Taxes imposed under FATCA.

 

“Existing Credit Facility” shall mean the credit facility of the Borrower existing immediately prior to the closing date as evidenced by that certain Credit Agreement dated as of July 27, 2007 by and among the Borrower, the Administrative Agent and the lenders from time to time party thereto.

 

“Existing Letter of Credit” shall mean each of the letters of credit described by applicant, date of issuance, letter of credit number, amount, beneficiary and date of expiry on Schedule 3 to the Disclosure Letter.

 

“Exposed LOC Obligations” shall have the meaning set forth in Section 2.21(a)(iii)(B).

 

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such Lender, any conversion of a Loan from one Type to another Type, any extension of any Loan or the issuance of, or participation in, a Letter of Credit or Swingline Loan by such Lender.

 

“Extraordinary Receipt” shall mean any cash received by or paid to or for the account of any Person not in the ordinary course of business, including proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustments.

 

15

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the Fifth Amendment Effective Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any intergovernmental agreements entered into in connection with the foregoing, and any rules or guidance implementing such intergovernmental agreements.

 

“Federal Funds Effective Rate” shall have the meaning set forth in the definition of “Alternate Base Rate”.

 

“Fee Letter” shall mean the letter agreement dated September 1, 2010, addressed to the Borrower from Wells Fargo and WFS, as amended, modified, extended, restated, replaced, or supplemented from time to time.

 

“Fifth Amendment Effective Date” shall mean December 20, 2016.

 

“Financial Letter of Credit” shall mean any Letter of Credit that is not a Performance Letter of Credit.

 

“Fixed Charge Coverage Ratio” shall mean, as of the last day of any fiscal quarter of the Borrower, for the Borrower and its Subsidiaries on a Consolidated basis, the ratio of (a)  Consolidated EBITDA minus Consolidated Capital Expenditures to (b) the sum of (i) Consolidated Interest Expense to the extent paid or payable in cash during such period, (ii) all cash income taxes paid during such period and (iii) Scheduled Funded Debt Payments for such period.

 

“Flood Hazard Property” shall mean any Mortgaged Property that is in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

 

“Foreign Currency” shall mean any of the following:  (a) Euro, Sterling and Canadian Dollars and (b) any other currency that is freely tradable and convertible into Dollars that is approved by the applicable Issuing Lender and the Administrative Agent.

 

“Foreign Currency Letter of Credit” shall have the meaning set forth in Section 2.3(j).

 

“Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Mortgage Indebtedness” shall mean all Indebtedness incurred by (a) any Foreign Subsidiary (including Capital Lease Obligations) to finance the purchase of real estate to the extent such Indebtedness is secured only by such real estate so purchased and (b) all Guaranty Obligations of the Borrower with respect to Indebtedness of the type described in clause (a) hereof to the extent such guaranty is permitted hereunder.

 

16

 

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“Foreign Subsidiary Indebtedness” shall mean, as of any date of determination, the sum of the outstanding amount of all Indebtedness of Foreign Subsidiaries (other than Foreign Mortgage Indebtedness).

 

“Fronting Exposure” shall mean, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Commitment Percentage of the outstanding LOC Obligations with respect to Letters of Credit issued by such Issuing Lender other than LOC Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swingline Lender, such Defaulting Lender’s Commitment Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“Fund” shall mean any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“Funded Debt” shall mean, with respect to any Person, without duplication with respect to any items which might be categorized as more than one of the following, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations (including, without limitation, earnout obligations) of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within nine (9) months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person prepared in accordance with GAAP, (e) the principal portion of all obligations of such Person under Capital Leases, (f) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (g) all preferred Equity Interest or other equity interests issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (h) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product (other than the principal balance outstanding under non-recourse, off-balance sheet debt not guaranteed by the Borrower or any of its Subsidiaries), (i) obligations of such Person under non-compete agreements to the extent such obligations are quantified contingent obligations of such Person, (j) all obligations of such Person under Hedging Agreements, excluding any portion thereof which would be accounted for as interest expense under GAAP, (k) all Indebtedness of others of the type described in clauses (a) through (j) hereof secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (l) all Guaranty Obligations of such Person with respect to Indebtedness of another Person of the type described in clauses (a) through (j) hereof, only to the extent of the amount of the underlying obligation and (m) all Indebtedness of the type described in clauses (a) through (j) hereof of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer to the extent such Indebtedness is recourse to such Person.

 

17

 

“GAAP” shall mean generally accepted accounting principles in effect in the United States of America applied on a consistent basis, subject, however, to the provisions of Section 1.3.

 

“Government Acts” shall have the meaning set forth in Section 2.17.

 

“Government Contract” shall mean any contract entered into between the Borrower or any of its Subsidiaries and the government of the United States of America, or any department, agency, public corporation, or other instrumentality or any state government or any department, agency or instrumentality providing for the sale of products or services to a Governmental Authority.

 

“Government Obligations” shall have the meaning set forth in the definition of “Cash Equivalents.”

 

“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“GSA Matter” shall mean the investigation conducted by the U.S. General Services Administration (“GSA”) in connection with that certain subpoena received by AS&E  on April 17, 2015 from the Office of the Inspector General of the GSA with respect to AS&E’s compliance with AS&E’s GSA schedule contract.

 

“Guarantor” shall mean (a) each Material Domestic Subsidiary of the Borrower from time to time party hereto and (b) with respect to the Swap Obligations of any other Credit Party, the Borrower.

 

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.

 

“Guaranty Obligations” shall mean, with respect to any Person, without duplication with respect to any items which might be categorized as more than one of the following, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting security therefor, (b) to advance or provide funds or other support for the payment or

 

18

 

purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (c) to lease or purchase property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (d) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof.  The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

 

“Hawthorne Property” shall mean the real property owned by the Borrower which is located in Hawthorne, California.

 

“Hedging Agreement Provider” shall mean any Person that enters into a Secured Hedging Agreement with a Credit Party or any of its Subsidiaries that is permitted by Section 6.1(e) to the extent such Person is a Lender, an Affiliate of a Lender or any other Person that was a Lender (or an Affiliate of a Lender) at any time (or whose Affiliate has ceased to be a Lender) under the Credit Agreement; provided, in the case of a Secured Hedging Agreement with a Person who is no longer a Lender, such Person shall be considered a Hedging Agreement Provider only through the stated maturity date (without extension or renewal) of such Secured Hedging Agreement.

 

“Hedging Agreements” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements or other interest or exchange rate hedging agreements.

 

“Incremental Revolving Facility” shall have the meaning set forth in Section 2.1(f).

 

“Indebtedness” shall mean, with respect to any Person, without duplication with respect to any items which might be categorized as more than one of the following, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within nine (9) months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) the principal portion of all Capital Lease Obligations plus any accrued interest thereon, (h) all obligations of such Person under

 

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Hedging Agreements, excluding any portion thereof which would be accounted for as interest expense under GAAP, (i) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (j) all preferred Equity Interest issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (k) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, (l) obligations of such Person under non-compete agreements to the extent such obligations are quantified contingent obligations of such Person, (m) all Guaranty Obligations of such Person with respect to Indebtedness of another Person of the type described in clauses (a) through (l) hereof, only to the extent of the amount of the underlying obligation, and (n) all indebtedness of the type described in clauses (a) through (l) of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer to the extent such Indebtedness is recourse to such Person.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Indemnitee” shall have the meaning set forth in Section 9.5(b).

 

“Insolvency” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.

 

“Intellectual Property” shall mean, collectively, all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses of the Credit Parties and their Subsidiaries, all goodwill associated therewith and all rights to sue for infringement thereof.

 

“Interest Determination Date” shall have the meaning specified in the definition of “Applicable Percentage”.

 

“Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan, the last Business Day of each March, June, September and December and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any LIBOR Rate Loan having an Interest Period longer than three months, (i) each three (3) month anniversary following the first day of such Interest Period and (ii) the last day of such Interest Period and (d) as to any Loan which is the subject of a mandatory prepayment required pursuant to Section 2.7(b), the date on which such mandatory prepayment is due.

 

“Interest Period” shall mean, with respect to any LIBOR Rate Loan,

 

(a)                                 initially, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months thereafter, subject to availability to all applicable Lenders, as selected by the Borrower in the Notice of Borrowing or Notice of Conversion given with respect thereto; and

 

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(b)                                 thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months thereafter, subject to availability to all applicable Lenders, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that the foregoing provisions are subject to the following:

 

(i)                                     if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)                                  any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month;

 

(iii)                               if the Borrower shall fail to give notice as provided above, the Borrower shall be deemed to have selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan;

 

(iv)                              no Interest Period in respect of any Loan shall extend beyond the Maturity Date; and

 

(v)                                 no more than six (6) LIBOR Rate Loans may be in effect at any time.  For purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBOR Rate Loan with a single Interest Period.

 

“Internal Control Event” shall mean a material weakness in, or fraud that involves management or other employees who have a significant role in, any Credit Party’s internal controls over financial reporting, in each case as described in the Securities Laws.

 

“Investment” shall mean (a) the acquisition (whether for cash, property, services, assumption of Indebtedness, securities or otherwise) of shares of Equity Interest, other ownership interests or other securities of any Person or bonds, notes, debentures or all or substantially all of the assets of any Person, (b) any deposit with, or advance, loan or other extension of credit to, any Person (other than deposits made in the ordinary course of business) or (c) any other capital contribution to or investment in any Person, including, without limitation, any Guaranty Obligation, only to the extent of the amount of the underlying obligation (including any support for a letter of credit issued on behalf of such Person, but excluding Guaranty Obligations relating

 

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to the guaranty of Subsidiaries’ performance under real property leases or product sales or service agreements) incurred for the benefit of such Person.

 

“Issuing Lender” shall mean Wells Fargo, Bank of America, N.A., JPMorgan Chase Bank, N.A. or any other Lender agreed to by the Borrower and the Administrative Agent, together with any successor to any such issuing lender hereunder.

 

“Issuing Lender Fees” shall have the meaning set forth in Section 2.5(c).

 

“Joinder Agreement” shall mean a Joinder Agreement in substantially the form of Exhibit 1.1(c), executed and delivered by an Additional Credit Party in accordance with the provisions of Section 5.10.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

 

“Lender” shall have the meaning set forth in the first paragraph of this Agreement and shall include the Revolving Lenders, the Issuing Lender and the Swingline Lender.

 

“Lender Consent” shall mean any lender consent delivered by a Lender on the Closing Date in the form of Exhibit 4.1(a).

 

“Letter of Credit” shall mean any letter of credit issued by the Issuing Lender pursuant to the terms hereof, as such letter of credit may be amended, modified, restated, extended, renewed, increased, replaced or supplemented from time to time.  A Letter of Credit may be issued in Dollars or in a Foreign Currency, in accordance with Section 2.3.

 

“Letter of Credit Facing Fee” shall have the meaning set forth in Section 2.5(c).

 

“Letter of Credit Fee” shall have the meaning set forth in Section 2.5(b).

 

“LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.  If for any reason such rate is not available, then “LIBOR” shall mean the rate per annum at which, as determined by the Administrative Agent in accordance with its customary practices, Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 A.M. London time, two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.  Notwithstanding the foregoing, if LIBOR shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

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“LIBOR Lending Office” shall mean, initially, the office(s) of each Lender designated as such Lender’s LIBOR Lending Office in such Lender’s Administrative Questionnaire; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

“LIBOR Rate” shall mean a LIBOR rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent in accordance with the definition of “LIBOR”.

 

“LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate.

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing).

 

“Loan” shall mean a Revolving Loan and/or a Swingline Loan, as appropriate.

 

“LOC Commitment” shall mean the commitment of the Issuing Lender to issue Letters of Credit and with respect to each Revolving Lender, the commitment of such Revolving Lender to purchase Participation Interests in the Letters of Credit up to such Lender’s Commitment Percentage as specified on Schedule 1.1(c) or in the Register, or in the applicable Assignment and Assumption, as such amount may be reduced from time to time in accordance with the provisions hereof.

 

“LOC Committed Amount” shall have the meaning set forth in Section 2.3(a).

 

“LOC Documents” shall mean, with respect to each Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or (b) any Collateral for such obligations.

 

“LOC Obligations” shall mean, at any date of determination, the sum of (a) with respect to all Letters of Credit issued in Dollars, the Dollar Equivalent of the maximum amount which is, or at any time thereafter may become, available to be drawn under such Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit, (b) with respect to all Letters of Credit issued in a Foreign Currency, the Dollar Equivalent of the maximum amount which is, or at any time thereafter may become, available to be drawn under such Letter of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit and (c) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

 

“Mandatory LOC Borrowing” shall have the meaning set forth in Section 2.3(e).

 

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“Mandatory Swingline Borrowing” shall have the meaning set forth in Section 2.4(b)(ii).

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property, assets, condition (financial or otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower or any Guarantor to perform its obligations, when such obligations are required to be performed, under this Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Credit Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

 

“Material Contract” shall mean (a) any contract or other agreement listed on Schedule 1 of the Disclosure Letter, (b) any contract or other agreement, written or oral, of the Borrower or any of its Subsidiaries with reported revenues representing at least 10.0% of the total Consolidated revenues of the Borrower and its Subsidiaries for the most recently ended fiscal year and (c) any other contract, agreement, permit or license, written or oral, of the Borrower or any of its Subsidiaries as to which the breach, nonperformance or cancellation by any party thereto, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.  For the avoidance of doubt, each Material Government Contract shall constitute a Material Contract.

 

“Material Domestic Subsidiary” shall mean any Domestic Subsidiary of the Borrower that, together with its Subsidiaries, (a) generates more than 10% of the revenue of the Borrower and its Subsidiaries on a Consolidated basis for the four (4) fiscal quarter period most recently ended or (b) owns more than 10% of the assets of the Borrower and its Subsidiaries on a Consolidated basis determined as of the last day of the most recently ended fiscal quarter of the Borrower; provided, however, that if at any time there are Domestic Subsidiaries which are not classified as “Material Domestic Subsidiaries” but which collectively (i) generate more than 10% of the revenue of the Borrower and its Subsidiaries on a Consolidated basis for the four (4) fiscal quarter period most recently ended or (ii) own more than 10% of the assets of the Borrower and its Subsidiaries on a Consolidated basis determined as of the last day of the most recently ended fiscal quarter of the Borrower, then the Borrower shall promptly designate one or more of such Domestic Subsidiaries as Material Domestic Subsidiaries until such excess is eliminated and cause any such Domestic Subsidiaries to comply with the provisions of Section 5.10.

 

“Material Government Contract” shall mean a Government Contract with a Governmental Authority with reported revenues representing at least 10.0% of the total Consolidated revenues of the Borrower and its Subsidiaries for the most recently completed fiscal year.

 

“Material Permitted Acquisition” shall mean any single Permitted Acquisition for which the aggregate consideration paid by the Borrower and its Subsidiaries in connection therewith is greater than or equal to $150,000,000.

 

“Materials of Environmental Concern” shall mean any gasoline or petroleum (including crude oil or any extraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, perchlorate, polychlorinated biphenyls and urea-formaldehyde insulation.

 

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“Maturity Date” shall mean December 20, 2021; provided, that the Maturity Date shall spring forward to the date (the “Early Maturity Date”) that is 90 days prior to the earliest maturity of any subordinated or unsecured high yield or convertible debt of the Borrower in excess of $75,000,000, in the aggregate, incurred pursuant to Section 6.1(h), if such Early Maturity Date is before December 20, 2021.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgage Instrument” shall mean any mortgage, deed of trust or deed to secure debt executed by a Credit Party in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to the terms of Section 5.10 or 5.12, as the same may be amended, modified, extended, restated, replaced, or supplemented from time to time.

 

“Mortgage Policy” shall mean, with respect to any Mortgage Instrument, an ALTA mortgagee title insurance policy issued by a title insurance company (the “Title Insurance Company”) selected by the Administrative Agent in an amount satisfactory to the Administrative Agent, in form and substance satisfactory to the Administrative Agent.

 

“Mortgaged Property” shall mean any owned real property of a Credit Party listed on Schedule 3.19(d).

 

“Multiemployer Plan” shall mean a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Non-Defaulting Lender” shall mean, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Note” or “Notes” shall mean the Revolving Notes and/or the Swingline Note, collectively, separately or individually, as appropriate.

 

“Notice of Borrowing” shall mean a request for a Revolving Loan borrowing pursuant to Section 2.1(b)(i) or a request for a Swingline Loan borrowing pursuant to Section 2.4(b)(i), as appropriate.  A Form of Notice of Borrowing is attached as Exhibit 1.1(d).

 

“Notice of Conversion/Extension” shall mean the written notice of conversion of a LIBOR Rate Loan to an Alternate Base Rate Loan or an Alternate Base Rate Loan to a LIBOR Rate Loan, or extension of a LIBOR Rate Loan, in each case substantially in the form of Exhibit 1.1(e).

 

“Obligations” shall mean, collectively, Loans, LOC Obligations, and all other obligations of the Credit Parties to the Administrative Agent and the Lenders under the Credit Documents, but in all cases excluding Excluded Swap Obligations.

 

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“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“Operating Lease” shall mean, as applied to any Person, any lease (including, without limitation, leases which may be terminated by the lessee at any time) of any property (whether real, personal or mixed) which is not a Capital Lease other than any such lease in which that Person is the lessor.

 

“Other Taxes” shall mean all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Credit Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Credit Document.

 

“Participant” has the meaning assigned to such term in clause (d) of Section 9.6.

 

“Participating Member State” means each state so described in any EMU Legislation.

 

“Participation Interest” shall mean a participation interest purchased by a Revolving Lender in LOC Obligations as provided in Section 2.3(c) and in Swingline Loans as provided in Section 2.4.

 

“Patent Licenses” shall mean all agreements, whether written or oral, providing for the grant by or to a Person of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in Schedule 3.16.

 

“Patents” shall mean (a) all letters patent of the United States or any other country, now existing or hereafter arising, and all improvement patents, reissues, reexaminations, patents of additions, renewals and extensions thereof, including, without limitation, any thereof referred to in Schedule 3.16, and (b) all applications for letters patent of the United States or any other country, now existing or hereafter arising, and all provisionals, divisions, continuations and continuations-in-part and substitutes thereof, including, without limitation, any thereof referred to in Schedule 3.16.

 

“Patriot Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)), as amended or modified from time to time.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

 

“Performance Letter of Credit” means a standby letter of credit issued to ensure or otherwise support the performance of services and/or delivery of goods (including, without limitation, standby letters of credit issued (a) in connection with bids for the performance of services and/or delivery of goods or (b) in connection with advance payments for the performance of services and/or delivery of goods) by or on behalf of the Borrower or any of its Subsidiaries.

 

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“Permitted Acquisition” shall mean an acquisition or any series of related acquisitions by the Borrower or its Subsidiaries of (a) all or substantially all of the assets or a majority of the outstanding Voting Stock or economic interests of a Person or (b) any division, line of business or other business unit of a Person (such Person or such division, line of business or other business unit of such Person shall be referred to herein as the “Target”), in each case that is a type of business (or assets used in a type of business) permitted to be engaged in by the Credit Parties and their Subsidiaries pursuant to Section 6.3, in each case so long as:

 

(i) no Default or Event of Default shall then exist or would exist after giving effect thereto;

 

(ii) the Credit Parties shall demonstrate to the reasonable satisfaction of the Administrative Agent that, after giving effect to the acquisition on a Pro Forma Basis, the Consolidated Net Leverage Ratio shall be 0.25 less than the then applicable level set forth in Section 5.9(a) (after giving effect to any step-up applicable to such level arising from any Material Permitted Acquisition);

 

(iii) the Administrative Agent, on behalf of the Secured Parties, shall have received (or shall receive within thirty (30) days of the closing of such acquisition) a first priority perfected security interest in all property (including, without limitation, Equity Interest) acquired with respect to the Target to the extent required pursuant to the terms of Sections 5.10 and 5.12 and the Target, if a Person, shall have executed a Joinder Agreement to the extent required pursuant to the terms of Section 5.10;

 

(iv) for any Material Permitted Acquisition, the Administrative Agent and the Lenders shall have received (A) a description of the material terms of such acquisition (B) audited financial statements (or, if unavailable, management-prepared financial statements) of the Target for its two most recent fiscal years and for any fiscal quarters ended within the fiscal year to date, (C) Consolidated projected income statements of the Borrower and its Consolidated Subsidiaries (giving effect to such acquisition), and (D) not less than five (5) Business Days prior to the consummation of any such acquisition, a certificate substantially in the form of Exhibit 1.1(f), executed by a Responsible Officer of the Borrower certifying that such Permitted Acquisition complies with the requirements of this Agreement; and

 

(v) after giving effect to such acquisition, there shall be at least $35,000,000 of Revolver Availability.

 

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“Permitted Bond Hedge Transaction” shall mean any Bond Hedge Transaction purchased by the Borrower in connection with the issuance of any convertible Indebtedness issued pursuant to Section 6.1(h); provided that the purchase of any such Permitted Bond Hedge Transaction is made with, and the purchase price thereof does not exceed, the net proceeds received by the Borrower from the issuance of such convertible Indebtedness.

 

“Permitted Investments” shall mean:

 

(a)                                 cash and Cash Equivalents;

 

(b)                                 Investments existing as of the Closing Date as set forth on Schedule 1.1(a);

 

(c)                                  receivables owing to the Credit Parties or any of their Subsidiaries or any receivables and advances to suppliers and advances to vendors, in each case if created, acquired or made in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

 

(d)                                 Investments in and loans to any Credit Party;

 

(e)                                  loans and advances to officers, directors and employees in an aggregate amount not to exceed $500,000 at any time outstanding; provided that such loans and advances shall comply with all applicable Requirements of Law (including Sarbanes-Oxley);

 

(f)                                   Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

 

(g)                                  Investments, acquisitions or transactions permitted under Section 6.4(b);

 

(h)                                 Permitted Acquisitions and Investments set forth on Schedule 6.15 in connection with the Permitted Reorganization;

 

(i)                                     Hedging Agreements to the extent permitted hereunder;

 

(j)                                    Investments in and loans to Foreign Subsidiaries including those created or acquired after the Closing Date in an aggregate amount for all such investments and loans not to exceed $50,000,000 in any fiscal year of the Borrower;

 

(k)                                 additional loan advances and/or Investments of a nature not contemplated by the foregoing clauses hereof; provided that such loans, advances and/or Investments made after the Fifth Amendment Effective Date pursuant to this clause shall not exceed an aggregate amount of the sum of (i) such unlimited amount as would not cause the Consolidated Net Leverage Ratio, on a Pro Forma Basis, to exceed 3.00 to 1.00 plus (ii)(A) $50,000,000 minus (B) the aggregate amount of Restricted Payments made in reliance on subsection 6.10(d)(C)(ii), at any one time outstanding; 

 

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(l)                                     Investments made in the ordinary course of business in any deferred compensation plans maintained by the Borrower or its Subsidiaries; and

 

(m)                             Permitted Bond Hedge Transactions.

 

“Permitted Liens” shall mean:

 

(a)                                 Liens created by or otherwise existing under or in connection with this Agreement or the other Credit Documents in favor of the Administrative Agent on behalf of the Secured Parties or in favor of the Issuing Lender with respect to Letters of Credit;

 

(b)                                 Liens in favor of a Hedging Agreement Provider in connection with a Secured Hedging Agreement; provided that such Liens shall secure the Credit Party Obligations and the obligations under such Secured Hedging Agreement on a pari passu basis;

 

(c)                                  Liens securing purchase money Indebtedness and Capital Lease Obligations to the extent permitted under Section 6.1(c); provided, that (i) any such Lien attaches to such property concurrently with or within thirty (30) days after the acquisition thereof and (ii) such Lien attaches solely to the property so acquired in such transaction;

 

(d)                                 Liens for taxes, assessments, charges or other governmental levies not yet due or as to which the period of grace (not to exceed sixty (60) days), if any, related thereto has not expired or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of any Credit Party or its Subsidiaries, as the case may be, in conformity with GAAP;

 

(e)                                  statutory Liens such as carriers’, warehousemen’s, mechanics’, materialmen’s, landlords’, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith by appropriate proceedings; provided that a reserve or other appropriate provision shall have been made therefor;

 

(f)                                   pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements;

 

(g)                                  deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

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(h)                                 easements, rights of way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

(i)                                     Liens existing on the Closing Date and set forth on Schedule 1.1(b); provided that (i) no such Lien shall at any time be extended to cover property or assets other than the property or assets subject thereto on the Closing Date and improvements thereon and (ii) the principal amount of the Indebtedness secured by such Lien shall not be extended, renewed, refunded or refinanced;

 

(j)                                    any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in this definition (other than Liens set forth on Schedule 1.1(b)); provided that such extension, renewal or replacement Lien shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property);

 

(k)                                 Liens arising in the ordinary course of business by virtue of any contractual, statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies covering deposit or securities accounts (including funds or other assets credited thereto) or other funds maintained with a depository institution or securities intermediary;

 

(l)                                     any zoning, building or similar laws or rights reserved to or vested in any Governmental Authority;

 

(m)                             restrictions on transfers of securities imposed by applicable Securities Laws;

 

(n)                                 Liens arising out of judgments or awards not resulting in an Event of Default; provided that the applicable Credit Party or Subsidiary shall in good faith be prosecuting an appeal or proceedings for review;

 

(o)                                 Liens on the property of a Person existing at the time such Person becomes a Subsidiary of a Credit Party in a transaction permitted hereunder securing Indebtedness permitted under Section 6.1(f) consisting of letters of credit (which must be either terminated or replaced with Letters of Credit within ninety (90) days after such acquisition), Indebtedness incurred to provide all or a portion of the purchase price or cost of construction of an asset, Capital Leases and mortgages, in each case only to the extent existing at the time of such acquisition and not incurred in contemplation thereof; provided, however, that any such Lien may not extend to any other property of any Credit Party or any other Subsidiary that is not a Subsidiary of such Person;

 

(p)                                 any interest or title of a lessor, licensor or sublessor under any lease, license or sublease entered into by any Credit Party or any Subsidiary thereof in the ordinary course of its business and covering only the assets so leased, licensed or subleased;

 

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(q)                                 assignments of insurance or condemnation proceeds provided to landlords (or their mortgagees) pursuant to the terms of any lease and Liens or rights reserved in any lease for rent or for compliance with the terms of such lease;

 

(r)                                    cash collateral securing letters of credit permitted to the extent permitted under Section 6.1(j) in an aggregate amount not to exceed $50,000,000 at any time outstanding;

 

(s)                                   Liens securing obligations in respect of export/import bank financing arrangements of the Borrower, so long as the principal amount of Indebtedness and other obligations secured thereby does not exceed $10,000,000 in the aggregate; and

 

(t)                                    additional Liens so long as the principal amount of Indebtedness and other obligations secured thereby does not exceed the greater of (i) $50,000,000 and (ii) 7.5% of Consolidated Total Tangible Assets, in the aggregate and in no event shall such Liens extend to the Hawthorne Property.

 

“Permitted Reorganization” shall mean the transactions set forth on Schedule 6.15.

 

“Person” shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” shall mean, as of any date of determination, any employee benefit plan which is covered by Title IV of ERISA and in respect of which any Credit Party or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledge Agreement” shall mean that certain Pledge Agreement dated as of the Closing Date executed by the Credit Parties in favor of the Administrative Agent, for the benefit of the Secured Parties, as the same may from time to time be amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with the terms hereof and thereof.

 

“Prime Rate” shall have the meaning set forth in the definition of Alternate Base Rate.

 

“Pro Forma Basis” shall mean, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the year-to-date period ending as of the most recent quarter end preceding the date of such transaction.

 

“Properties” shall have the meaning set forth in Section 3.10(a).

 

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“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each Credit Party that has total assets exceeding $10,000,000 (or such other dollar threshold as, at the time of determination, may be required to be an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder) at the time the relevant Guaranty or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Register” shall have the meaning set forth in Section 9.6(c).

 

“Reimbursement Obligation” shall mean the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 2.3(d) for amounts drawn under Letters of Credit.

 

“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“Reorganization” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of such term as used in Section 4241 of ERISA.

 

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under PBGC Reg. §4043.

 

“Required Lenders” shall mean, as of any date of determination, Lenders having Credit Exposures representing more than 50% of the Credit Exposures of all Lenders. The Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

 

“Requirement of Law” shall mean, as to any Person, (a) the articles or certificate of incorporation, by-laws or other organizational or governing documents of such Person, and (b) all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive orders, and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority (in each case whether or not having the force of law); in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” shall mean, for any Credit Party, any duly authorized officer thereof and in which the Administrative Agent has an incumbency certificate indicating such officer is a duly authorized officer thereof.

 

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“Restricted Payment” shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares (or equivalent) of any class of Equity Interest of any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares (or equivalent) of any class of Equity Interest of any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interest of any Credit Party or any of its Subsidiaries, now or hereafter outstanding, including, in any event, any cash settlement in respect of any convertible Indebtedness permitted pursuant to Section 6.1(h), (d) any payment with respect to any earnout obligation (excluding any earnout obligations associated with Permitted Acquisitions), (e) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Subordinated Debt of any Credit Party or any of its Subsidiaries and (f) the payment by any Credit Party or any of its Subsidiaries of any extraordinary salary, bonus or other form of compensation to any Person who is directly or indirectly a significant partner, shareholder, owner or executive officer of any such Person, to the extent such extraordinary salary, bonus or other form of compensation is not included in the corporate overhead of such Credit Party or such Subsidiary.

 

“Revaluation Date” shall mean each of the following:  (a) each date a Loan is borrowed or a Letter of Credit is issued; (b) each date there is a drawing under any Foreign Currency Letter of Credit; (c) the last Business Day of each calendar month; and (d) such additional dates as the Administrative Agent, the Issuing Lender, the Required Lenders or the Borrower shall specify.

 

“Revolver Availability” shall mean, as of any date of determination, the amount that the Borrower is able to borrow on such date under the Revolving Committed Amount without a Default or Event of Default occurring or existing after giving pro forma effect to such borrowing.

 

“Revolving Commitment” shall mean, with respect to each Revolving Lender, the commitment of such Revolving Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to an amount equal to such Revolving Lender’s Commitment Percentage of the Revolving Committed Amount as specified on Schedule 1.1(c).

 

“Revolving Committed Amount” shall have the meaning set forth in Section 2.1(a).

 

“Revolving Lender” shall mean, as of any date of determination, a Lender holding a Revolving Commitment, a Revolving Loan or a Participation Interest on such date.

 

“Revolving Loan” shall have the meaning set forth in Section 2.1.

 

“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the Borrower provided pursuant to Section 2.1(e) in favor of any of the Revolving Lenders evidencing the Revolving Loan provided by any such Revolving Lender pursuant to Section 2.1(a), individually or collectively, as appropriate, as such promissory notes may be amended, modified, extended, restated, replaced, or supplemented from time to time.

 

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.

 

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“Sanctioned Entity” shall mean (a) a country, region, territory or a government of a country, region or territory, (b) an agency of the government of a country, region or territory, (c) an organization directly or indirectly controlled by a country, region or territory, or its government, or (d) a person or entity resident in or determined to be resident in a country, region or territory that is subject to a sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” shall mean a person named on the list of Specially Designated Nationals maintained by OFAC.

 

“Sarbanes-Oxley” shall mean the Sarbanes-Oxley Act of 2002.

 

“Scheduled Funded Debt Payments” shall mean, as of any date of determination for the Borrower and its Subsidiaries, the sum of all scheduled payments of principal on Funded Debt for the applicable period ending on the date of determination (including payments due on Capital Leases and mortgaged real properties (including any Mortgaged Properties) during the applicable period ending on the date of determination).

 

“SEC” shall mean the Securities and Exchange Commission or any successor Governmental Authority.

 

“Secured Cash Management Agreement” means any Cash Management Agreement between or among any Credit Party or any Subsidiary of a Credit Party and any Cash Management Bank.

 

“Secured Hedging Agreement” shall mean any Hedging Agreement between a Credit Party or any Subsidiary of a Credit Party and a Hedging Agreement Provider, as amended, modified, extended, restated, replaced, or supplemented from time to time.

 

“Secured Parties” shall mean the Administrative Agent, the Lenders, the Hedging Agreement Providers and the Cash Management Banks.

 

“Securities Act” shall mean the Securities Act of 1933, together with any amendment thereto or replacement thereof and any rules or regulations promulgated thereunder.

 

“Securities Laws” shall mean the Securities Act, the Exchange Act, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

 

“Security Agreement” shall mean that certain Security Agreement dated as of the Closing Date executed by the Credit Parties in favor of the Administrative Agent, for the benefit of the Secured Parties, as amended, modified, extended, restated, replaced, or supplemented from time to time in accordance with its terms.

 

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“Security Documents” shall mean the Security Agreement, the Pledge Agreement, the Mortgage Instruments and all other agreements, documents and instruments relating to, arising out of, or in any way connected with any of the foregoing documents or granting to the Administrative Agent, Liens or security interests to secure, inter alia, the Credit Party Obligations whether now or hereafter executed and/or filed, each as may be amended from time to time in accordance with the terms hereof, executed and delivered in connection with the granting, attachment and perfection of the Administrative Agent’s security interests and liens arising thereunder, including, without limitation, UCC financing statements.

 

“Single Employer Plan” shall mean any Plan that is not a Multiemployer Plan.

 

“Spot Rate” for any Foreign Currency on any date means the rate determined by the Administrative Agent or the applicable Issuing Lender, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two (2) Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the applicable Issuing Lender may obtain such spot rate from another financial institution designated by the Administrative Agent or the applicable Issuing Lender if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the Issuing Lender may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in a Foreign Currency.

 

“Sterling” and “£” mean the lawful currency of the United Kingdom.

 

“Subordinated Debt” shall mean any Indebtedness incurred by any Credit Party which by its terms is specifically subordinated in right of payment to the prior payment of the Credit Party Obligations and contains subordination and other terms acceptable to the Administrative Agent.

 

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

 

“Swap Obligations” shall mean, with respect to any Guarantor, an obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of § 1a(47) of the Commodity Exchange Act.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline Committed Amount, and the commitment of the Revolving Lenders to purchase participation interests in the Swingline Loans as provided in Section 2.4(b)(ii), as such amounts may be reduced from time to time in accordance with the provisions hereof.

 

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“Swingline Committed Amount” shall mean the amount of the Swingline Lender’s Swingline Commitment as specified in Section 2.4(a).

 

“Swingline Lender” shall mean Wells Fargo and any successor swingline lender.

 

“Swingline Loan” shall have the meaning set forth in Section 2.4(a).

 

“Swingline Note” shall mean the promissory note of the Borrower in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.4(d), as such promissory note may be amended, modified, extended, restated, replaced, or supplemented from time to time.

 

“Syndication Agent” shall mean Bank of America, N.A., together with its successors and assigns, in its capacity as syndication agent hereunder.

 

“Target” shall have the meaning set forth in the definition of “Permitted Acquisition”.

 

“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Title Insurance Company” shall have the meaning set forth in the definition of “Mortgage Policy”.

 

“Trademark License” shall mean any agreement, whether written or oral, providing for the grant by or to a Person of any right to use any Trademark, including, without limitation, any thereof referred to in Schedule 3.16.

 

“Trademarks” shall mean (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, service marks, elements of package or trade dress of goods or services, logos and other source or business identifiers, together with the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, including, without limitation, any thereof referred to in Schedule 3.16 and (b) all renewals thereof including, without limitation, any thereof referred to in Schedule 3.16.

 

“Tranche” shall mean the collective reference to (a) LIBOR Rate Loans whose Interest Periods begin and end on the same day and (b) Alternate Base Rate Loans made on the same day.

 

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“Transactions” shall mean the closing of this Agreement, the other Credit Documents and the other transactions contemplated hereby to occur in connection with such closing (including, without limitation, the initial borrowings under the Credit Documents and the payment of fees and expenses in connection with all of the foregoing).

 

“Transfer Effective Date” shall have the meaning set forth in each Assignment and Assumption.

 

“Type” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan or LIBOR Rate Loan, as the case may be.

 

“UCC” shall mean the Uniform Commercial Code from time to time in effect in any applicable jurisdiction.

 

“Voting Stock” shall mean, with respect to any Person, Equity Interest issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote may be or have been suspended by the happening of such a contingency.

 

“Wells Fargo” shall mean Wells Fargo Bank, National Association, a national banking association, together with its successors and/or assigns.

 

“WFS” shall mean Wells Fargo Securities, LLC, together with its successors and assigns.

 

“Withholding Agent” shall mean a Credit Party, the Administrative Agent, or, in the case of any Lender that is treated as a partnership for U.S. federal income tax purposes, such Lender or any partnership for U.S. federal income tax purposes that is a direct or indirect (through a chain of entities treated as flow-through entities for U.S. federal income tax purposes) beneficial owner of such Lender, or any of their respective agents, that is required under applicable law to deduct or withhold any Tax from a payment by or on account of any obligation of any Credit Party under any Credit Document.

 

“Works” shall mean all works which are subject to copyright protection pursuant to Title 17 of the United States Code.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

Section 1.2                                   Other Definitional Provisions.

 

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be

 

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deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 1.3                                   Accounting Terms.

 

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited Consolidated financial statements of the Borrower delivered to the Lenders.  It is acknowledged and agreed that if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in the Credit Agreement, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders, which approval shall not be unreasonably withheld); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under the Credit Agreement or as reasonably requested thereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

Notwithstanding the foregoing, (a) all references to leases of any kind in this Agreement or the other Credit Documents, including without limitation the determination of Capital Leases, Operating Leases and Capital Lease Obligations, shall be determined in accordance with GAAP as in effect as of the Closing Date for all purposes, including without limitation the calculation of any covenant in this Agreement or the calculation of the Consolidated Net Leverage Ratio, Consolidated Funded Debt or Indebtedness; irrespective of whether there occurs after the Closing Date any change in GAAP that would otherwise affect any such calculation or covenant and (b) the Borrower shall not be required to provide a reconciliation between calculations concerning the changes in GAAP referenced in the above clause (a), but will be required to provide any additional financial information reasonably requested by the Administrative Agent in connection with such calculations.

 

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For purposes of computing the financial covenants set forth in Section 5.9 for any applicable test period, any Permitted Acquisition or permitted sale of assets (including a stock sale) shall be given pro forma effect as if such transaction had taken place as of the first day of such applicable test period.

 

Section 1.4                                   Time References.

 

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

Section 1.5                                   Execution of Documents.

 

Unless otherwise specified, all Credit Documents and all other certificates executed in connection therewith must be signed by a Responsible Officer.

 

Section 1.6                                   Foreign Currency.

 

(a)                                 The Administrative Agent shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of L/C Credit Extensions and outstanding LOC Obligations denominated in Foreign Currencies.  Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur.  Except for purposes of financial statements delivered by the Credit Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Credit Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent.

 

(b)                                 Any request for a Letter of Credit in a currency other than Dollars shall be made to the Administrative Agent and the applicable Issuing Lender, not later than 11:00 A.M., five (5) Business Days prior to the date of the desired L/C Credit Extension (or such other time or date as may be agreed by the Administrative Agent and the applicable Issuing Lender, in their sole discretion). The Administrative Agent and the applicable Issuing Lender shall promptly notify the Borrower of the response to any request pursuant to this Section.

 

(c)                                  At the Borrower’s request, the Administrative Agent shall advise the Borrower of the outstanding LOC Obligations as of the last Revaluation Date.

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1                                   Revolving Loans and Incremental Revolving Loans.

 

(a)                                 Revolving Commitment.  During the Commitment Period, subject to the terms and conditions hereof, each Revolving Lender severally, but not jointly, agrees to

 

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make revolving credit loans in Dollars (“Revolving Loans”) to the Borrower from time to time in an aggregate principal amount of up to FIVE HUNDRED TWENTY-FIVE MILLION DOLLARS ($525,000,000) (as increased from time to time as provided in Section 2.1(f) and as such aggregate maximum amount may be reduced from time to time as provided in Section 2.6, the “Revolving Committed Amount”) for the purposes hereinafter set forth; provided, however, that (i) with regard to each Revolving Lender individually, the sum of such Revolving Lender’s Commitment Percentage of the aggregate principal amount of outstanding Revolving Loans plus such Revolving Lender’s Commitment Percentage of outstanding Swingline Loans plus such Revolving Lender’s Commitment Percentage of outstanding LOC Obligations shall not exceed such Revolving Lender’s Revolving Commitment and (ii) with regard to the Revolving Lenders collectively, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving Committed Amount then in effect.  Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof; provided, however, the Revolving Loans made on the Closing Date or any of the three (3) Business Days following the Closing Date, may only consist of Alternate Base Rate Loans unless the Borrower delivers a funding indemnity letter, substantially in the form of Exhibit 2.1(a), reasonably acceptable to the Administrative Agent not less than three (3) Business Days prior to the Closing Date.  LIBOR Rate Loans shall be made by each Revolving Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b)                                 Revolving Loan Borrowings.

 

(i)                                     Notice of Borrowing.  The Borrower shall request a Revolving Loan borrowing by delivering a written Notice of Borrowing (or telephone notice promptly confirmed in writing by delivery of a written Notice of Borrowing, which delivery may be by fax) to the Administrative Agent not later than 1:00 P.M. on the Business Day of the requested borrowing in the case of Alternate Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans.  Each such Notice of Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed and (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor.  If the Borrower shall fail to specify in any such Notice of Borrowing (1) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (2) the Type of Revolving Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder.  The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Revolving Lender’s share thereof.

 

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(ii)                                  Minimum Amounts.  Each Revolving Loan that is made as an Alternate Base Rate Loan shall be in a minimum aggregate amount of $500,000 and in integral multiples of $100,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).  Each Revolving Loan that is made as a LIBOR Rate Loan shall be in a minimum aggregate amount of $500,000 and in integral multiples of $100,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).

 

(iii)                               Advances.  Each Revolving Lender will make its Commitment Percentage of each Revolving Loan borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in Section 9.2, or at such other office as the Administrative Agent may designate in writing, by 3:00 P.M. on the date specified in the applicable Notice of Borrowing, in Dollars and in funds immediately available to the Administrative Agent.  Such borrowing will then be made available to the Borrower by the Administrative Agent by crediting the account of the Borrower on the books of such office (or such other account that the Borrower may designate in writing to the Administrative Agent) with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

(c)                                  Repayment.  Subject to the terms of this Agreement, Revolving Loans may be borrowed, repaid and reborrowed during the Commitment Period.  The principal amount of all Revolving Loans shall be due and payable in full on the Maturity Date, unless accelerated sooner pursuant to Section 7.2.  The Borrower shall have the right to repay Revolving Loans in whole or in part from time to time; provided, however; that each partial repayment of a Revolving Loan shall be in a minimum principal amount of $500,000 and integral multiples of $100,000 in excess thereof (or the remaining outstanding principal amount).

 

(d)                                 Interest.  Subject to the provisions of Section 2.8, Revolving Loans shall bear interest as follows:

 

(i)                                     Alternate Base Rate Loans.  During such periods as any Revolving Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii)                                  LIBOR Rate Loans.  During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

 

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(e)                                  Revolving Notes; Covenant to Pay.  The Borrower’s obligation to pay each Revolving Lender shall be evidenced by this Agreement and, upon such Revolving Lender’s request, by a duly executed promissory note of the Borrower to such Revolving Lender in substantially the form of Exhibit 2.1(e).  The Borrower covenants and agrees to pay the Revolving Loans in accordance with the terms of this Agreement.

 

(f)                                   Incremental Revolving Loans.  Subject to the terms and conditions set forth herein, the Borrower shall have the right, at any time and from time to time after the Closing Date and prior to the Maturity Date, to incur additional Indebtedness under this Credit Agreement in the form of an increase to the Revolving Committed Amount (each an “Incremental Revolving Facility”) by an aggregate amount of up to the sum of (i) such unlimited amount as would not cause the Consolidated Secured Net Leverage Ratio, on a Pro Forma Basis and assuming all incremental revolving commitments are fully funded, to exceed 2.00 to 1.00 plus (ii) $250,000,000.  The following terms and conditions shall apply to each Incremental Revolving Facility:  (i) the loans made under any such Incremental Revolving Facility (each an “Additional Revolving Loan”) shall constitute Credit Party Obligations and will be secured and guaranteed with the other Credit Party Obligations on a pari passu basis, (ii) any such Incremental Revolving Facility shall be entitled to the same voting rights as the existing Revolving Loans and shall be entitled to receive proceeds of prepayments on the same basis as the existing Revolving Loans, (iii) any such Incremental Revolving Facility shall be obtained from existing Lenders or from other banks, financial institutions or investment funds; provided that no existing Lender shall be required to participate in or fund any Incremental Revolving Facility, (iv) any such Incremental Revolving Facility shall be in a minimum principal amount of $10,000,000 and integral multiples of $1,000,000 in excess thereof, (v) the proceeds of any Additional Revolving Loan will be used for the purposes set forth in Section 3.11, (vi) the Borrower shall execute a Revolving Note in favor of any new Lender or any existing Lender requesting a Revolving Note whose Revolving Committed Amount is increased, (vii) the conditions to Extensions of Credit in Section 4.2 shall have been satisfied, (viii) the Administrative Agent shall have received an opinion or opinions (including, if reasonably requested by the Administrative Agent, local counsel opinions) of counsel for the Credit Parties, addressed to the Administrative Agent and the Lenders, and such other documentation as the Administrative Agent deems reasonably necessary to effectuate such increase, with all of the foregoing to be in form and substance acceptable to the Administrative Agent, (ix) the Administrative Agent shall have received from the Borrower updated financial projections and an officer’s certificate, in each case in form and substance reasonably satisfactory to the Administrative Agent, demonstrating that, after giving effect to any such Incremental Revolving Facility on a Pro Forma Basis, the Borrower will be in compliance with the financial covenants set forth in Section 5.9, (x) the outstanding Revolving Loans and Participation Interests shall be reallocated by causing such fundings and repayments (which shall not be subject to any processing and/or recordation fees) among the Revolving Lenders (which the Borrower shall be responsible for any costs arising under Section 2.15 resulting from such reallocation and repayments) of Revolving Loans as necessary such that, after giving effect to such Incremental Revolving Facility, each Revolving Lender will hold Revolving Loans and

 

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Participation Interests based on its Commitment Percentage (after giving effect to such Incremental Revolving Facility) and (xi) any Incremental Revolving Facility shall also include a proportional increase in the LOC Committed Amount.  The Borrower may invite other banks, financial institutions and investment funds reasonably acceptable to the Administrative Agent to join this Credit Agreement as Lenders hereunder for the portion of such Incremental Revolving Facility not taken by existing Lenders, provided that such other banks, financial institutions and investment funds shall enter into such joinder agreements to give effect thereto as the Administrative Agent may reasonably request.  The Administrative Agent is authorized to enter into, on behalf of the Lenders, any amendment to this Credit Agreement or any other Credit Document as may be necessary to incorporate the terms of any new Incremental Revolving Facility therein.

 

Section 2.2                                   Reserved.

 

Section 2.3                                   Letter of Credit Subfacility.

 

(a)                                 Issuance.  Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require, during the Commitment Period the Issuing Lender shall issue, and the Revolving Lenders shall participate in, standby Letters of Credit for the account of the Borrower from time to time upon request in a form acceptable to the Issuing Lender; provided, however, that (i) (A) the aggregate amount of all LOC Obligations with respect to Financial Letters of Credit shall not at any time exceed ONE HUNDRED MILLION DOLLARS ($100,000,000) and (B)  the aggregate amount of all LOC Obligations (including Performance Letters of Credit and all other Letters of Credit) shall not at any time exceed THREE HUNDRED MILLION DOLLARS ($300,000,000) (as increased from time to time as provided in Section 2.1(f) and as such aggregate maximum amount may be reduced from time to time as provided in Section 2.6, the “LOC Committed Amount”), (ii) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not at any time exceed the Revolving Committed Amount then in effect, (iii) all Letters of Credit shall be denominated in Dollars or, subject to Section 2.3(j), in a Foreign Currency and (iv) Letters of Credit shall be issued for any lawful corporate purposes and shall be issued as standby letters of credit, including in connection with workers’ compensation and other insurance programs.  If requested by the Issuing Lender, the Borrower shall submit a letter of credit application on such Issuing Lender’s standard form in connection with any request for a Letter of Credit.  Except as otherwise expressly agreed upon by all the Revolving Lenders, no Letter of Credit shall have an original expiry date more than eighteen (18) months from the date of issuance; provided, however, so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than eighteen (18) months from the date of extension; provided, further, that for any Letter of Credit with an expiry date extending beyond the Maturity Date, the Borrower shall provide cash collateral for the benefit of the applicable Issuing Lender on or prior to

 

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the date of issuance or renewal in an amount as shall be agreed to by the Borrower and the Issuing Lender and pursuant to documentation satisfactory to such Issuing Lender.  Each Letter of Credit shall comply with the related LOC Documents.  The issuance and expiry date of each Letter of Credit shall be a Business Day.  Each Letter of Credit issued hereunder shall be in a minimum original face amount of $50,000 or such lesser amount as approved by the Issuing Lender.   The Issuing Lender shall be under no obligation to issue any Letter of Credit if (i) any Lender is at such time a Defaulting Lender and the reallocation described in Section 2.21(a)(iv) cannot be completely effected, unless the Issuing Lender has entered into arrangements satisfactory to the Issuing Lender with the Borrower or such Lender to eliminate the Issuing Lender’s risk with respect to such Lender’s LOC Obligations, or (ii) in the case of each of Wells Fargo, Bank of America, N.A. and JPMorgan Chase Bank, N.A., after giving effect to such Letter of Credit, the aggregate LOC Obligations in respect of all Letters of Credit issued by such Issuing Lender shall exceed $100,000,000. The Borrower’s Reimbursement Obligations in respect of each Existing Letter of Credit, and each Revolving Lender’s participation obligations in connection therewith, shall be governed by the terms of this Credit Agreement.  The Existing Letters of Credit shall, as of the Closing Date, be deemed to have been issued as Letters of Credit hereunder and subject to and governed by the terms of this Agreement.

 

(b)                                 Notice and Reports.  The request for the issuance of a Letter of Credit shall be submitted to the Issuing Lender at least five (5) Business Days prior to the requested date of issuance.  The Issuing Lender will promptly upon request provide to the Administrative Agent for dissemination to the Revolving Lenders a detailed report specifying the Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred.  The Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit.  The Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding.

 

(c)                                  Participations.  Each Revolving Lender, upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such Letter of Credit and the obligations arising thereunder and any Collateral relating thereto, in each case in an amount equal to its Commitment Percentage of the obligations under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its Commitment Percentage of the obligations arising under such Letter of Credit; provided that any Person that becomes a Revolving Lender after the Closing Date shall be deemed to have purchased a Participation Interest in all outstanding Letters of Credit on the date it becomes a Lender hereunder and any Letter of Credit issued on or after such date, in each case in accordance with the foregoing terms.  Without limiting the scope and nature of each Revolving Lender’s participation in any Letter of Credit, to the extent that the Issuing

 

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Lender has not been reimbursed as required hereunder or under any LOC Document, each such Revolving Lender shall pay to the Issuing Lender its Commitment Percentage of such unreimbursed drawing in same day funds pursuant to and in accordance with the provisions of subsection (d) hereof.  The obligation of each Revolving Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Issuing Lender under any Letter of Credit, together with interest as hereinafter provided.

 

(d)                                 Reimbursement.  In the event of any drawing under any Letter of Credit, the Issuing Lender will promptly notify the Borrower and the Administrative Agent.  The Borrower shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit if notified prior to 11:00 A.M. on a Business Day or, if after 11:00 A.M., on the following Business Day (either with the proceeds of a Revolving Loan obtained hereunder or otherwise) in same day funds as provided herein or in the LOC Documents.  If the Borrower shall fail to reimburse the Issuing Lender as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the ABR Default Rate.  Unless the Borrower shall immediately notify the Issuing Lender and the Administrative Agent of its intent to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have requested a Mandatory LOC Borrowing in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the Reimbursement Obligations.  The Borrower’s Reimbursement Obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrower may claim or have against the Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including without limitation any defense based on any failure of the Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit.  The Issuing Lender will promptly notify the other Revolving Lenders of the amount of any unreimbursed drawing and each Revolving Lender shall promptly pay to the Administrative Agent for the account of the Issuing Lender, in Dollars and in immediately available funds, the amount of such Revolving Lender’s Commitment Percentage of such unreimbursed drawing.  Such payment shall be made on the day such notice is received by such Revolving Lender from the Issuing Lender if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 P.M. on the Business Day next succeeding the day such notice is received.  If such Revolving Lender does not pay such amount to the Issuing Lender in full upon such request, such Revolving Lender shall, on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Revolving Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate.  Each Revolving Lender’s obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the

 

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Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Credit Party Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)                                  Repayment with Revolving Loans.  On any day on which the Borrower shall have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Revolving Lenders that a Revolving Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each such borrowing, a “Mandatory LOC Borrowing”) shall be made (without giving effect to any termination of the Commitments pursuant to Section 7.2) pro rata based on each Revolving Lender’s respective Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2) and the proceeds thereof shall be paid directly to the Issuing Lender for application to the respective LOC Obligations.  Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans on the day such notice is received by the Revolving Lenders from the Administrative Agent if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 P.M. on the Business Day next succeeding the day such notice is received, in each case notwithstanding (i) the amount of Mandatory LOC Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure for any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v) the date of such Mandatory LOC Borrowing, or (vi) any reduction in the Revolving Committed Amount after any such Letter of Credit may have been drawn upon.  In the event that any Mandatory LOC Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the occurrence of a Bankruptcy Event), then each such Revolving Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory LOC Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Participation Interests in the outstanding LOC Obligations; provided, further, that in the event any Revolving Lender shall fail to fund its Participation Interest on the day the Mandatory LOC Borrowing would otherwise have occurred, then the amount of such Revolving Lender’s unfunded Participation Interest therein shall bear interest payable by such Revolving Lender to the Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(f)                                   Modification, Extension.  The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

 

(g)                                  ISP98.  Unless otherwise expressly agreed by the Issuing Lender and the Borrower, when a Letter of Credit is issued, the rules of the “International Standby Practices 1998,” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit.

 

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(h)                                 Conflict with LOC Documents.  In the event of any conflict between this Agreement and any LOC Document, this Agreement shall control.

 

(i)                                     Designation of Subsidiaries as Account Parties.  Notwithstanding anything to the contrary set forth in this Agreement, including without limitation Section 2.3(a), a Letter of Credit issued hereunder may contain a statement to the effect that such Letter of Credit is issued for the account of a Subsidiary of the Borrower; provided that, notwithstanding such statement, the Borrower shall be the actual account party for all purposes of this Agreement for such Letter of Credit and such statement shall not affect the Borrower’s Reimbursement Obligations hereunder with respect to such Letter of Credit.

 

(j)                                    The Borrower may request, and any Issuing Lender may issue, Letters of Credit denominated in any Foreign Currency (any such Letter of Credit, a “Foreign Currency Letter of Credit”), subject to the following provisions:

 

(i)                                     all provisions of Section 2.3 shall be satisfied with respect to such Foreign Currency Letter of Credit;

 

(ii)                                  any drawing under any Foreign Currency Letter of Credit shall be deemed to be a drawing under a Letter of Credit hereunder in Dollars in an amount equal to the Dollar Equivalent of such drawing, and such drawing shall be reimbursed or repaid with Revolving Loans as provided in Sections 2.3(d) and (e) hereof as if such drawing had been made in Dollars in an amount equal to the Dollar Equivalent of such drawing;

 

(iii)                               [Reserved].

 

(iv)                              the obligation of the Borrower to reimburse the Issuing Lender for each drawing under such Foreign Currency Letter of Credit shall be absolute, unconditional and irrevocable under all circumstances, including, without limitation, any adverse change in the relevant exchange rates or in the availability of any such Foreign Currency to the Borrower or any Subsidiary or in the relevant currency markets generally; and

 

(v)                                 within five days of demand therefor by the applicable Issuing Lender, the Borrower shall reimburse such Issuing Lender for any Foreign Currency Letter of Credit, for any costs, expenses, losses or liabilities (including foreign currency exchange costs and losses) incurred by such Issuing Lender in connection with any drawing under such Foreign Currency Letter of Credit and the reimbursement of such drawing in Dollars rather than the applicable Foreign Currency, including, without limitation, any costs, expenses, losses or liabilities resulting from the determination of the Spot Rate two Business Days prior to the date a drawing under such Foreign Currency Letter of Credit is reimbursed.

 

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(k)                                 Issuing Lenders. Each Issuing Lender shall (i) prior to the issuance, renewal or extension of any Letter of Credit, receive written confirmation from the Administrative Agent that such issuance, renewal or extension meets the requirements set forth in Section 2.3, (ii) provide to the Administrative Agent, upon the issuance, renewal or extension of any Letter of Credit and on a monthly basis, a report that details the activity with respect to each Letter of Credit issued by such Issuing Lender (including an indication of the maximum amount then in effect with respect to each such Letter of Credit) and (iii) upon the Administrative Agent’s request, any other documentation relating to any such Letter of Credit (including, without limitation, copies of such Letters of Credit).

 

(l)                                     Cash Collateral.  At any point in time in which there is a Defaulting Lender, the Issuing Lender may require the Borrower to Cash Collateralize the LOC Obligations pursuant to Section 2.20.

 

Section 2.4                                   Swingline Loan Subfacility.

 

(a)                                 Swingline Commitment.  During the Commitment Period, subject to the terms and conditions hereof (including those set forth in Section 4.2), the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrower (each a “Swingline Loan” and, collectively, the “Swingline Loans”) for the purposes hereinafter set forth; provided, however, (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the “Swingline Committed Amount”), and (ii) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving Committed Amount then in effect.  Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof.

 

(b)                                 Swingline Loan Borrowings.

 

(i)                                     Notice of Borrowing and Disbursement.  Upon receiving a Notice of Borrowing from the Borrower not later than 1:00 P.M. on any Business Day requesting that a Swingline Loan be made, the Swingline Lender will make Swingline Loans available to the Borrower on the same Business Day such request is received by the Administrative Agent.  Swingline Loan borrowings hereunder shall be made in minimum amounts of $100,000 (or the remaining available amount of the Swingline Committed Amount if less) and in integral amounts of $100,000 in excess thereof.  Notwithstanding anything to the contrary contained herein, the Swingline Lender shall not at any time be obligated to make any Swingline Loan hereunder if any Lender is at such time a Defaulting Lender, unless the Swingline Lender has entered into arrangements satisfactory to the Swingline Lender with the Borrower or such Lender to eliminate the Swingline Lender’s risk with respect to such Lender’s obligations in respect of its Swingline Commitment.

 

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(ii)                                  Repayment of Swingline Loans.  Each Swingline Loan borrowing shall be due and payable on the Maturity Date.  The Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Borrower shall be deemed to have requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans in the amount of such Swingline Loans; provided, however, that, in the following circumstances, any such demand shall also be deemed to have been given one Business Day prior to each of (A) the Maturity Date, (B) the occurrence of any Bankruptcy Event, (C) upon acceleration of the Credit Party Obligations hereunder, whether on account of a Bankruptcy Event or any other Event of Default, and (D) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as “Mandatory Swingline Borrowing”).  Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any such request or deemed request on account of each Mandatory Swingline Borrowing in the amount and in the manner specified in the preceding sentence on the date such notice is received by the Revolving Lenders from the Administrative Agent if such notice is received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00 P.M. on the Business Day next succeeding the date such notice is received notwithstanding (1) the amount of Mandatory Swingline Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (2) whether any conditions specified in Section 4.2 are then satisfied, (3) whether a Default or an Event of Default then exists, (4) failure of any such request or deemed request for Revolving Loans to be made by the time otherwise required in Section 2.1(b)(i), (5) the date of such Mandatory Swingline Borrowing, or (6) any reduction in the Revolving Committed Amount or termination of the Revolving Commitments immediately prior to such Mandatory Swingline Borrowing or contemporaneously therewith.  In the event that any Mandatory Swingline Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code), then each Revolving Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Swingline Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such Participation Interest in the outstanding Swingline Loans as shall be necessary to cause each such Revolving Lender to share in such Swingline Loans ratably based upon its respective Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2); provided that (x) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the

 

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date as of which the respective Participation Interest is purchased, and (y) at the time any purchase of a Participation Interest pursuant to this sentence is actually made, the purchasing Revolving Lender shall be required to pay to the Swingline Lender interest on the principal amount of such Participation Interest purchased for each day from and including the day upon which the Mandatory Swingline Borrowing would otherwise have occurred to but excluding the date of payment for such Participation Interest, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Swingline Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.  The Borrower shall have the right to repay the Swingline Loan in whole or in part from time to time; provided, however; that each partial repayment of a Swingline Loan shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof (or the remaining outstanding principal amount).

 

(c)                                  Interest on Swingline Loans.  Subject to the provisions of Section 2.8, Swingline Loans shall bear interest at a per annum rate equal to the Alternate Base Rate plus the Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans.  Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date.

 

(d)                                 Swingline Note; Covenant to Pay.  The Swingline Loans shall be evidenced by this Agreement and, upon request of the Swingline Lender, by a duly executed promissory note of the Borrower in favor of the Swingline Lender in the original amount of the Swingline Committed Amount and substantially in the form of Exhibit 2.4(d).  The Borrower covenants and agrees to pay the Swingline Loans in accordance with the terms of this Agreement.

 

(e)                                  Cash Collateral.  At any point in time in which there is a Defaulting Lender, the Swingline Lender may require the Borrower to Cash Collateralize the outstanding Swingline Loans pursuant to Section 2.20.

 

Section 2.5                                   Fees.

 

(a)                                 Commitment Fee.  In consideration of the Revolving Commitments, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Revolving Lenders, a commitment fee (the “Commitment Fee”) in an amount equal to the Applicable Percentage per annum on the average daily unused amount of the Revolving Committed Amount.  For purposes of computation of the Commitment Fee, LOC Obligations shall be considered usage of the Revolving Committed Amount but Swingline Loans shall not be considered usage of the Revolving Committed Amount.  The Commitment Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

(b)                                 Letter of Credit Fees.  In consideration of the LOC Commitments, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Revolving Lenders, a fee (the “Letter of Credit Fee”) equal to the Applicable Percentage for Revolving Loans that are LIBOR Rate Loans per annum on the average daily maximum amount available to be drawn under each Letter of Credit from the date of issuance to the date of expiration.  The Letter of Credit Fee shall each be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

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(c)                                  Issuing Lender Fees.  In addition to the Letter of Credit Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender for its own account without sharing by the other Lenders the reasonable and customary charges from time to time of the Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “Issuing Lender Fees”).  The Issuing Lender may charge, and retain for its own account without sharing by the other Lenders, an additional facing fee (the “Letter of Credit Facing Fee”) of 0.125% per annum on the average daily maximum amount available to be drawn under each such Letter of Credit issued by it.  The Issuing Lender Fees and the Letter of Credit Facing Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

(d)                                 Administrative Fee.  The Borrower agrees to pay to the Administrative Agent the annual administrative fee as described in the Fee Letter.

 

Section 2.6                                   Commitment Reductions.

 

(a)                                 Voluntary Reductions.  The Borrower shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount at any time or from time to time upon not less than five (5) Business Days’ prior written notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Revolving Loans made on the effective date thereof, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations would exceed  the Revolving Committed Amount then in effect.

 

(b)                                 Swingline Committed Amount.  If the Revolving Committed Amount is reduced below the then current Swingline Committed Amount, the Swingline Committed Amount shall automatically be reduced by an amount such that the Swingline Committed Amount equals the Revolving Committed Amount.

 

(c)                                  Maturity Date.  The Revolving Commitments, the Swingline Commitment and the LOC Commitment shall automatically terminate on the Maturity Date.

 

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Section 2.7                                   Prepayments.

 

(a)                                 Optional Repayments.  The Borrower shall have the right to repay Loans in whole or in part from time to time. The Borrower shall give three Business Days’ irrevocable notice of repayment in the case of LIBOR Rate Loans and same-day irrevocable notice on any Business Day in the case of Alternate Base Rate Loans, to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable).  Within the foregoing parameters, repayments under this Section shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities.  All repayments under this Section shall be subject to Section 2.15, but otherwise without premium or penalty.  Interest on the principal amount prepaid shall be payable on the next occurring Interest Payment Date that would have occurred had such loan not been prepaid or, at the request of the Administrative Agent, interest on the principal amount prepaid shall be payable on any date that a repayment is made hereunder through the date of repayment.

 

(b)                                 Mandatory Prepayments.  If at any time after the Closing Date, (y) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall exceed the Revolving Committed Amount, the Borrower shall immediately prepay the Revolving Loans and Swingline Loans (first to outstanding Swingline Loans and second to outstanding Revolving Loans) and (after all Revolving Loans and Swingline Loans have been repaid) cash collateralize the LOC Obligations in an amount sufficient to eliminate such excess.

 

(c)                                  Hedging Obligations and Cash Management Obligations Unaffected.  Any repayment or prepayment made pursuant to this Section shall not affect the Borrower’s obligation to continue to make payments under any Secured Hedging Agreement or Secured Cash Management Agreement, which shall remain in full force and effect notwithstanding such repayment or prepayment, subject to the terms of such Secured Hedging Agreement or Secured Cash Management Agreement, as applicable.

 

Section 2.8                                   Default Rate and Payment Dates.

 

(a)                                 If all or a portion of the principal amount of any Loan which is a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate Loan in accordance with the provisions of Section 2.9 (whether at the stated maturity, by acceleration or otherwise), such overdue principal amount of such Loan shall be converted to an Alternate Base Rate Loan at the end of the Interest Period applicable thereto.

 

(b)                                 (i) If all or a portion of the principal amount of any LIBOR Rate Loan shall not be paid when due, such overdue amount shall bear interest at a rate per annum which is equal to the rate that would otherwise be applicable thereto plus 2%, until the end of the Interest Period applicable thereto, and thereafter at a rate per annum which is equal to the Alternate Base Rate plus the sum of the Applicable Percentage then in effect for Alternate Base Rate Loans and 2% (the “ABR Default Rate”) or (ii) if any interest payable on the principal amount of any Loan or any fee or other amount, including the

 

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principal amount of any Alternate Base Rate Loan, payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is equal to the ABR Default Rate, in each case from the date of such non-payment until such amount is paid in full (after as well as before judgment).  Upon the occurrence, and during the continuance, of any other Event of Default hereunder, at the option of the Required Lenders, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate which is (A) in the case of principal, the rate that would otherwise be applicable thereto plus 2% or (B) in the case of interest, fees or other amounts, the ABR Default Rate (after as well as before judgment).

 

(c)                                  Interest on each Loan shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (b) of this Section shall be payable from time to time on demand.

 

Section 2.9                                   Conversion Options.

 

(a)                                 The Borrower may, in the case of Revolving Loans, elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by delivering a Notice of Conversion/Extension to the Administrative Agent at least three Business Days prior to the proposed date of conversion.  In addition, the Borrower may elect from time to time to convert all or any portion of a LIBOR Rate Loan to an Alternate Base Rate Loan by giving the Administrative Agent irrevocable written notice thereof by 1:00 P.M. one (1) Business Day prior to the proposed date of conversion.  If the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan.  LIBOR Rate Loans may only be converted to Alternate Base Rate Loans on the last day of the applicable Interest Period.  If the date upon which a LIBOR Rate Loan is to be converted to an Alternate Base Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan.  All or any part of outstanding Alternate Base Rate Loans may be converted as provided herein; provided that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) partial conversions shall be in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.  All or any part of outstanding LIBOR Rate Loans may be converted as provided herein; provided that partial conversions shall be in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.

 

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(b)                                 Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in Section 2.9(a); provided, that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, in which case such Loan shall be automatically converted to an Alternate Base Rate Loan at the end of the applicable Interest Period with respect thereto.  If the Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto.

 

Section 2.10                            Computation of Interest and Fees; Usury.

 

(a)                                 Interest payable hereunder with respect to any Alternate Base Rate Loan based on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed.  All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360-day year for the actual days elapsed.  The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof.  Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate shall become effective.  The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change.

 

(b)                                 Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error.  The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the computations used by the Administrative Agent in determining any interest rate.

 

(c)                                  It is the intent of the Lenders and the Credit Parties to conform to and contract in strict compliance with applicable usury law from time to time in effect.  All agreements between the Lenders and the Credit Parties are hereby limited by the provisions of this subsection which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity of any Credit Party Obligation), shall the interest taken, reserved, contracted for, charged, or received under this Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible under applicable law.  If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this paragraph and such interest shall be automatically reduced to the maximum nonusurious amount permitted under applicable law, without the necessity of execution of any amendment or new document.  If any Lender shall ever receive anything of value which is characterized as interest on the Loans under applicable law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal

 

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amount owing on the Loans and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans.  The right to demand payment of the Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand.  All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of such Indebtedness does not exceed the maximum nonusurious amount permitted by applicable law.

 

Section 2.11                            Pro Rata Treatment and Payments.

 

(a)                                 Allocation of Payments Prior to Exercise of Remedies.  Each borrowing of Revolving Loans and any reduction of the Revolving Commitments shall be made pro rata according to the respective Commitment Percentages of the Revolving Lenders.  Unless otherwise required by the terms of this Agreement, each payment under this Agreement or any Note shall be applied, first, to any fees then due and owing by the Borrower pursuant to Section 2.5, second, to interest then due and owing hereunder and under the Notes of the Borrower and, third, to principal then due and owing hereunder and under the Notes of the Borrower.  Each payment on account of any fees pursuant to Section 2.5 shall be made pro rata in accordance with the respective amounts due and owing (except as to the Letter of Credit Facing Fees and the Issuing Lender Fees).  Each optional repayment by the Borrower on account of principal of and interest on the Revolving Loans shall be applied to such Loans on a pro rata basis and to the extent applicable in accordance with the terms of Section 2.7(a) hereof.  Each mandatory prepayment on account of principal of the Loans shall be applied to such Loans on a pro rata basis and to the extent applicable in accordance with Section 2.7(b).  All payments (including prepayments) to be made by the Borrower on account of principal, interest and fees shall be made without defense, set-off or counterclaim and shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s office specified on Section 9.2 in Dollars and in immediately available funds not later than 3:00 P.M. on the date when due.  The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received.  If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.  If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, such payment date shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.

 

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(b)                                 Allocation of Payments After Exercise of Remedies.  Notwithstanding any other provisions of this Agreement to the contrary, after the exercise of remedies (other than the invocation of default interest pursuant to Section 2.8) by the Administrative Agent or the Lenders pursuant to Section 7.2 (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Credit Documents (including without limitation the maximum amount of all contingent liabilities under Letters of Credit) shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Administrative Agent or any Lender on account of the Credit Party Obligations or any other amounts outstanding under any of the Credit Documents or in respect of the Collateral shall be paid over or delivered as follows (irrespective of whether the following costs, expenses, fees, interest, premiums, scheduled periodic payments or Credit Party Obligations are allowed, permitted or recognized as a claim in any proceeding resulting from the occurrence of a Bankruptcy Event):

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation reasonable attorneys’ fees) of the Administrative Agent in connection with enforcing the rights of the Lenders under the Credit Documents and any protective advances made by the Administrative Agent with respect to the Collateral under or pursuant to the terms of the Security Documents;

 

SECOND, to the payment of any fees owed to the Administrative Agent and the Issuing Lender;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation, reasonable attorneys’ fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents; provided all Lenders shall be represented by a single counsel (unless any such Lender, in good faith, shall reasonably determine that there is a conflict of interest that causes it to be necessary for such Lender to be represented by separate counsel), or otherwise with respect to the Credit Party Obligations owing to such Lender;

 

FOURTH, to the payment of all of the Credit Party Obligations consisting of accrued fees and interest, and including, with respect to any Secured Hedging Agreement, any fees, premiums and scheduled periodic payments due under such Secured Hedging Agreement and any interest accrued thereon;

 

FIFTH, to the payment of the outstanding principal amount of the Credit Party Obligations and the payment or cash collateralization of the outstanding LOC Obligations, and including, with respect to any Secured Hedging Agreement, any breakage, termination or other payments due under such Secured Hedging Agreement and any interest accrued thereon, and, with respect to any Secured Cash Management Agreements, any payment obligations then owing thereunder;

 

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SIXTH, to all other Credit Party Obligations and other obligations which shall have become due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

 

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (b) each of the Lenders, any Hedging Agreement Provider and any Cash Management Bank shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans and LOC Obligations held by such Lender or the outstanding obligations payable to such Hedging Agreement Provider or Cash Management Bank bears to the aggregate then outstanding Loans and LOC Obligations and obligations payable under all Secured Hedging Agreements and all Secured Cash Management Agreements) of amounts available to be applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (c) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Administrative Agent in a cash collateral account and applied (i) first, to reimburse the Issuing Lender from time to time for any drawings under such Letters of Credit and (ii) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section.  Notwithstanding the foregoing terms of this Section, only Collateral proceeds and payments under the Guaranty (as opposed to ordinary course principal, interest and fee payments hereunder) shall be applied to obligations under any Secured Hedging Agreement.  Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or such Guarantor’s assets, but appropriate adjustments shall be made with respect to payments from other Credit Parties to preserve the allocation to Obligations otherwise set forth above in this Section

 

Notwithstanding anything to the contrary contained in this Agreement, Credit Party Obligations arising under Secured Cash Management Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank.  Each Cash Management Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article VIII for itself and its Affiliates as if a “Lender” party hereto.

 

Section 2.12                            Non-Receipt of Funds by the Administrative Agent.

 

(a)                                 Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received written notice from a Lender prior to the proposed date of any Extension of Credit that such Lender will not make available to the

 

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Administrative Agent such Lender’s share of such Extension of Credit, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Agreement and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Extension of Credit available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Alternate Base Rate Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Extension of Credit to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Extension of Credit.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(b)                                 Payments by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under subsections (a) and (b) of this Section shall be conclusive, absent manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Extension of Credit set forth in Article IV are not satisfied or waived in accordance with the terms thereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

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(d)                                 Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Revolving Loans, to fund participations in Letters of Credit and Swingline Loans and to make payments pursuant to Section 9.5(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any such payment under Section 9.5(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.5(c).

 

(e)                                  Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

Section 2.13                            Inability to Determine Interest Rate.

 

Notwithstanding any other provision of this Agreement, if (a) the Administrative Agent shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that, by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining the LIBOR Rate for such Interest Period, or (b) the Required Lenders shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested be outstanding as a LIBOR Tranche during such Interest Period, the Administrative Agent shall forthwith give telephone notice of such determination, confirmed in writing, to the Borrower, and the Lenders at least two (2) Business Days prior to the first day of such Interest Period.  Unless the Borrower shall have notified the Administrative Agent upon receipt of such telephone notice that it wishes to rescind or modify its request regarding such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans shall be made as Alternate Base Rate Loans and any Loans that were requested to be converted into or continued as LIBOR Rate Loans shall remain as or be converted into Alternate Base Rate Loans.  Until any such notice has been withdrawn by the Administrative Agent, no further Loans shall be made as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods so affected.

 

Section 2.14                            Yield Protection.

 

(a)                                 Increased Costs Generally.  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate) or the Issuing Lender;

 

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(ii)                                  subject any Lender or the Issuing Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Rate Loan made by it, or change the basis of taxation of payments to such Lender or the Issuing Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.16 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Lender); or

 

(iii)                               impose on any Lender or the Issuing Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBOR Rate Loan (or, in the case of clause (ii), any Loan or any participation in any Loan) or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Administrative Agent, Lender, the Issuing Lender or other recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Administrative Agent, Lender, the Issuing Lender, or other recipient, the Borrower will pay to such Administrative Agent, Lender, the Issuing Lender or other recipient, as the case may be, such additional amount or amounts as will compensate such Administrative Agent, Lender, Issuing Lender or other recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender or the Issuing Lender determines that any Change in Law affecting such Lender or the Issuing Lender or any lending office of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such reduction suffered.

 

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(c)                                  Certificates for Reimbursement.  A certificate of a Lender or the Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or the Issuing Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the part of any Lender or the Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered, as the case may be, to the extent that such Lender or the Issuing Lender fails to make a demand for such compensation more than six (6) months after becoming aware of such Change in Law giving rise to such increased costs or reductions.

 

Section 2.15                            Compensation for Losses; Eurocurrency Liabilities.

 

(a) Compensation for Losses.  Upon demand of any Lender (with a copy to the Administrative Agent), which demand must made within 60 days from the date upon which the Lender becomes aware of the event that is the basis for the demand, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(i)                                     any continuation, conversion, payment or prepayment of any Loan other than an Alternate Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(ii)                                  any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than an Alternate Base Rate Loan on the date or in the amount notified by the Borrower; or

 

(iii)                               any assignment of a LIBOR Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 2.19;

 

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section, each Lender shall be deemed to have funded each LIBOR Rate Loan made by it

 

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at the LIBOR Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Rate Loan was in fact so funded.

 

(b)                                 The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves under Regulation D with respect to “Eurocurrency liabilities” within the meaning of Regulation D, or under any similar or successor regulation with respect to Eurocurrency liabilities or Eurocurrency funding, additional interest on the unpaid principal amount of each LIBOR Loan equal to the actual costs of such reserves allocated to such LIBOR Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such LIBOR Loan, provided the Borrower shall have received at least fifteen (15) days prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice fifteen (15) days prior to the relevant interest payment date, such additional interest shall be due and payable fifteen (15) days from receipt of such notice.

 

Section 2.16                            Taxes.

 

(a)                                 Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Credit Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, any Lender or Issuing Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)                                 Payment of Other Taxes by the Borrower.  Without limiting the provisions of paragraph (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                                  Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Lender, within ten (10) days after demand therefor, which demand must be made within 60 days from the date upon which the Lender becomes aware of the event that is the basis for the demand, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or the Issuing Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.

 

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(d)                                 [Reserved.]

 

(e)                                  Status of Lenders.  Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Credit Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

 

(f)                                   Foreign Lenders.       Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States of America, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(i)                                     duly completed copies of Internal Revenue Service Form W-8BEN  or W-8BEN-E (as applicable) claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,

 

(ii)                                  duly completed copies of Internal Revenue Service Form W-8ECI,

 

(iii)                               in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (i) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (ii) duly completed copies of  Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable), or

 

(iii)                               any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

 

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(g)                                  Treatment of Certain Refunds.  If the Administrative Agent, a Lender or the Issuing Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent directly incurred in connection with payment of the refund to the Borrower, such Lender or the Issuing Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the Issuing Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Lender in the event the Administrative Agent, such Lender or the Issuing Lender is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to require the Administrative Agent, any Lender or the Issuing Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

(h)                                 FATCA.  If a payment made to a Lender under any Credit Document would be subject to U.S. federal income withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender granting the participation only) at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent (or, in the case of a Participant, the Lender granting the participation) such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent (or, in the case of a Participant, the Lender granting the participation) as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.16(h), “FATCA” shall include any amendments made to FATCA after the Fifth Amendment Effective Date.

 

(i)                                     Grandfathered Obligation under FATCA.  For purposes of determining withholding Taxes imposed under FATCA, from and after the Fifth Amendment Effective Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loans as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

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Section 2.17                            Indemnification; Nature of Issuing Lender’s Duties.

 

(a)                                 In addition to its other obligations under Section 2.3, the Credit Parties hereby agree to protect, indemnify, pay and save the Issuing Lender and each Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) that the Issuing Lender or such Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such acts or omissions, herein called “Government Acts”).

 

(b)                                 As between the Credit Parties, the Issuing Lender and each Lender, the Credit Parties shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.  Neither the Issuing Lender nor any Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any consequences arising from causes beyond the control of the Issuing Lender or any Lender, including, without limitation, any Government Acts.  None of the above shall affect, impair, or prevent the vesting of the Issuing Lender’s rights or powers hereunder.

 

(c)                                  In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender or any Lender, under or in connection with any Letter of Credit or the related certificates, if taken or omitted in the absence of gross negligence or willful misconduct, shall not put such Issuing Lender or such Lender under any resulting liability to the Credit Parties.  It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify the Issuing Lender and each Lender against any and all risks involved in the issuance of the Letters of Credit, all of which risks are hereby assumed by the Credit Parties, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any Government Authority.  The Issuing Lender  and the Lenders shall not, in any way, be liable for any failure by the Issuing Lender or anyone else to pay any drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of the Issuing Lender and the Lenders.

 

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(d)                                 Nothing in this Section is intended to limit the Reimbursement Obligation of the Borrower contained in Section 2.3(d) hereof.  The obligations of the Credit Parties under this Section shall survive the termination of this Agreement.  No act or omissions of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the Issuing Lender and the Lenders to enforce any right, power or benefit under this Agreement.

 

(e)                                  Notwithstanding anything to the contrary contained in this Section, the Credit Parties shall have no obligation to indemnify the Issuing Lender or any Lender in respect of any liability incurred by the Issuing Lender or such Lender arising out of the gross negligence or willful misconduct of the Issuing Lender (including action not taken by the Issuing Lender or such Lender), as determined by a court of competent jurisdiction or pursuant to arbitration.

 

Section 2.18                            Illegality.

 

Notwithstanding any other provision of this Credit Agreement, if any Change in Law shall make it unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated by this Credit Agreement or to obtain in the interbank eurodollar market through its LIBOR Lending Office the funds with which to make such Loans, (a) such Lender shall promptly notify the Administrative Agent and the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until the Administrative Agent shall give notice that the condition or situation which gave rise to the suspension shall no longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest Period for such Loans or within such earlier period as required by law as Alternate Base Rate Loans.  The Borrower hereby agrees to promptly pay any Lender, upon its demand, any additional amounts necessary to compensate such Lender for actual and direct costs (but not including anticipated profits) reasonably incurred by such Lender in making any repayment in accordance with this Section including, but not limited to, any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.  A certificate (which certificate shall include a description of the basis for the computation) as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error.  Each Lender agrees to use reasonable efforts (including reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its sole discretion to be material.

 

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Section 2.19                            Replacement of Lenders.

 

(a)                                 Designation of a Different Lending Office.  If any Lender requests compensation under Section 2.14, or requires the Borrower to pay any Indemnified Taxes or additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or Section 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders.  If (i) any Lender requests compensation under Section 2.14, (ii) the Borrower is required to pay any Indemnified Taxes or additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, (iii) any Lender becomes a Defaulting Lender or (iv) any Lender (other than Wells Fargo) fails to consent to any proposed amendment, modification, termination, waiver or consent with respect to any provision hereof or of any other Credit Document that requires the unanimous approval of all of the Lenders, the approval of all of the Lenders affected thereby or the approval of a class of Lenders, in each case in accordance with the terms of Section 9.1, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign (at par) and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.6), all of its interests, rights and obligations under this Agreement and the related Credit Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(A)                               the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.6;

 

(B)                               such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and shall have been relieved of its obligations under its participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Credit Documents (including any amounts under Section 2.15) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(C)                               in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments thereafter;

 

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(D)                               in the case of any such assignment resulting from a Lender’s failure to consent as described in clause (iv), the consent of the Required Lenders shall have been obtained with respect to such amendment, modification, termination, waiver or consent; and

 

(E)                                such assignment does not conflict with applicable law.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

Section 2.20                            Cash Collateral.

 

(a)                                 Cash Collateral.  At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent, any Issuing Lender or the Swingline Lender, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.21 and any Cash Collateral provided by the Defaulting Lender).

 

(b)                                 Grant of Security Interest.  All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked deposit accounts with the Administrative Agent, which accounts shall, if reasonably available, be interest-bearing accounts.  The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the Issuing Lenders and the Lenders (including the Swingline Lender), and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein as security for the obligations to which such Cash Collateral may be applied pursuant to clause (c) below.  If at any time the Administrative Agent, any Issuing Lender or the Swingline Lender reasonably determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, any Issuing Lender or the Swingline Lender, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.

 

(c)                                  Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section or Section 2.21  in respect of Letters of Credit or Swingline Loans, shall be held and applied to the satisfaction of the specific LOC Obligations, Swingline Loans, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

 

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(d)                                 Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure, together with accrued interest thereon (if any), shall be released promptly following (i) the elimination of the applicable Fronting Exposure giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee)), or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral (which determination shall be confirmed by any Issuing Lender or Swingline Lender affected by such release of Cash Collateral); provided, however, (A) that Cash Collateral furnished by or on behalf of a Credit Party shall not be released during the continuance of a Default (and following application as provided in this Section may be otherwise applied in accordance with Section 2.13), and (B) the Person providing Cash Collateral and each applicable Issuing Lender or Swingline Lender may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure.

 

Section 2.21                            Defaulting Lenders.

 

(a)                                 Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)                                     Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 9.1.

 

(ii)                                  Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or Swingline Lender hereunder; third, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fourth, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Loans under this Agreement; fifth, to the payment of any amounts owing to the Lenders, the Issuing Lenders or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuing Lenders or the Swingline Lender against that Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; sixth, so long as no Default exists, to the payment of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by any Borrower

 

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against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and seventh, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a payment of the principal amount of any Loans or LOC Obligations in respect of which such Defaulting Lender has not fully funded its appropriate share, and such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LOC Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LOC Obligations owed to, such Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                               Certain Fees.

 

(A)                               Commitment Fees. (1) No Commitment Fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender and (2) any Commitment Fee accrued with respect to the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a Defaulting Lender.

 

(B)                               Letter of Credit Fees.  A Defaulting Lender shall not be entitled to receive any Letter of Credit Fee for any period during which it is a Defaulting Lender, except that a Defaulting Lender shall be entitled to receive a Letter of Credit Fee with respect to each Letter of Credit or portion thereof for which it has provided Cash Collateral pursuant to Section 2.20.  With respect to any Letter of Credit Fee that a Defaulting Lender is not entitled to receive in accordance with the terms of this Section, such Letter of Credit Fee shall be paid to the non-Defaulting Lenders to the extent such Defaulting Lender’s LOC Obligations have been reallocated to the Non-Defaulting Lenders in accordance with clause (iv) below; provided that if any portion of such Defaulting Lender’s LOC Obligations have not been reallocated to the Non-Defaulting Lenders and have not been Cash Collateralized by the Defaulting Lender (the “Exposed LOC Obligations”), the Letter of Credit Fees corresponding to the Exposed LOC Obligations (1) shall not be payable by the Borrower to the extent the Borrower has Cash Collateralized such Exposed LOC Obligations and (2) shall be payable to the Issuing Lender to the extent the Borrower has not Cash Collateralized such Exposed LOC Obligations.

 

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(iv)                              Reallocation of Participations to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s LOC Obligations and its Swingline Exposure shall automatically (effective on the day such Lender becomes a Defaulting Lender) be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Committed Funded Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.

 

(v)                                 Cash Collateral.  If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to them hereunder or under law, immediately following notice by the Administrative Agent, any Issuing Lender or the Swingline Lender, Cash Collateralize such Defaulting Lender’s LOC Obligations and its Swingline Exposure (after giving effect to any partial reallocation pursuant to clause (iv) above) in accordance with the procedures set forth in Section 2.20 for so long as such LOC Obligations or Swingline Loans are outstanding.

 

(b)                                 Defaulting Lender Cure.  If the Borrower, the Administrative Agent, the Swingline Lender and all Issuing Lenders agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Committed Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.21(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such 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 such Lender’s having been a Defaulting Lender.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders to enter into this Agreement and to make the Extensions of Credit herein provided for, the Credit Parties hereby represent and warrant to the Administrative Agent and to each Lender that:

 

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Section 3.1                                   Financial Condition.

 

(a)                                 (i) The audited Consolidated financial statements of the Borrower and its Consolidated Subsidiaries for the fiscal years ended 2007, 2008 and 2009 together with the related Consolidated statements of operations, changes in stockholders’ equity and of cash flows for the fiscal years ended on such dates, (ii) the unaudited Consolidated financial statements of the Borrower and its Subsidiaries for the year-to-date period ending on June 30, 2010, together with the related Consolidated statements of operations for the year-to-date period ending on such date and (iii) a pro forma balance sheet of the Borrower and its Subsidiaries as of June 30, 2010:

 

(A)                               were prepared in accordance with GAAP but without footnotes for the unaudited statements, consistently applied throughout the period covered thereby, except as otherwise expressly noted therein;

 

(B)                               fairly present the financial condition of the Borrower and its Subsidiaries, as applicable, as of the date thereof (subject, in the case of the unaudited financial statements, to normal year-end adjustments) and results of operations for the period covered thereby; and

 

(C)                               show all material Indebtedness and other liabilities, direct or contingent, as required by GAAP, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and contingent obligations.

 

(b)                                 The three-year projections of the Borrower and its Subsidiaries delivered to the Lenders on or prior to the Closing Date have been prepared in good faith based upon reasonable assumptions.

 

Section 3.2                                   No Material Adverse Effect; Internal Control Event.

 

Since June 30, 2010 (and, in addition, after delivery of annual audited financial statements in accordance with Section 5.1(a), from the date of the most recently delivered annual audited financial statements), there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect and (b) no known Internal Control Event has occurred that has not been (i) disclosed to the Administrative Agent and the Lenders and (ii) remedied or otherwise diligently addressed (or is in the process of being diligently addressed) by the Borrower and/or the applicable Credit Party.

 

Section 3.3                                   Corporate Existence; Compliance with Law.

 

Each of the Credit Parties (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (b) has the requisite power and authority and the legal right to own and operate all its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged and has taken all actions necessary to maintain all rights, privileges, licenses and franchises necessary or

 

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required in the normal conduct of its business,  except to the extent such failure could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (c) is duly qualified to conduct business and in good standing under the laws of (i) the jurisdiction of its organization or formation, (ii) the jurisdiction where its chief executive office is located and (iii) each other jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to so qualify or be in good standing in any such other jurisdiction could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the business or operations of the Credit Parties and their Subsidiaries in such jurisdiction and (d) is in compliance with all Requirements of Law, organizational documents, government permits and government licenses except to the extent such non-compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Set forth on Schedule 3.3 as of the Closing Date, or as of the last date such Schedule was required to be updated in accordance with Section 5.2, is the following information for each Credit Party:  the exact legal name and any former legal names of such Credit Party in the four (4) months prior to the Closing Date, the state of incorporation or organization, the type of organization, the jurisdictions in which such Credit Party is qualified to do business, the chief executive office, the principal place of business, the business phone number, the organization identification number and ownership information (e.g. publicly held, if private or partnership, the owners and partners of each of the Credit Parties).  Set forth on Schedule 2 to the Disclosure Letter is the federal tax identification number for each Credit Party as of the Closing Date.

 

Section 3.4                                   Corporate Power; Authorization; Enforceable Obligations.

 

Each of the Credit Parties has full power and authority and the legal right to make, deliver and perform the Credit Documents to which it is party and has taken all necessary limited liability company, partnership or corporate action to authorize the execution, delivery and performance by it of the Credit Documents to which it is party.  Each Credit Document to which it is a party has been duly executed and delivered on behalf of each Credit Party.  Each Credit Document to which it is a party constitutes a legal, valid and binding obligation of each Credit Party, enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

 

Section 3.5                                   No Legal Bar; No Default.

 

The execution, delivery and performance by each Credit Party of the Credit Documents to which such Credit Party is a party, the borrowings thereunder and the use of the proceeds of the Loans (a) will not violate any Requirement of Law or any Contractual Obligation of any Credit Party (except those as to which waivers or consents have been obtained), (b) will not conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws, articles of organization, operating agreement or other organization documents of the Credit Parties or any material agreement or other material instrument to which such Person is a party or by which any of its properties may be bound or any material approval or material consent from any Governmental Authority relating to such Person, and (c) will not result in, or require, the creation or imposition of any Lien on any Credit Party’s properties or revenues pursuant to any Requirement of Law or Contractual Obligation other than the Liens arising under or contemplated in connection with the Credit Documents or Permitted Liens.  No Credit Party is in default under or with respect to any of its Contractual Obligations in any material respect.  No Default or Event of Default has occurred and is continuing.

 

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Section 3.6                                   No Material Litigation.

 

No litigation, investigation, claim, criminal prosecution, civil investigative demand, imposition of criminal or civil fines and penalties, or any other proceeding of or before any arbitrator or Governmental Authority is pending or, to the best knowledge of the Credit Parties, threatened by or against any Credit Party or any of its Subsidiaries or against any of its or their respective properties or revenues (a) with respect to the Credit Documents or any Extension of Credit or any of the transactions contemplated hereby, or (b) which could reasonably be expected to have a Material Adverse Effect.  No permanent injunction, temporary restraining order or similar decree has been issued against any Credit Party or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect.

 

Section 3.7                                   Investment Company Act; etc.

 

No Credit Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.  No Credit Party is subject to regulation under the Federal Power Act, the Interstate Commerce Act, or any federal or state statute or regulation limiting its ability to incur the Credit Party Obligations.

 

Section 3.8                                   Margin Regulations.

 

No part of the proceeds of any Extension of Credit hereunder will be used directly or indirectly for any purpose that violates, or that would require any Lender to make any filings in accordance with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.  The Credit Parties and their Subsidiaries (a) are not engaged, principally or as one of their important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” “margin stock” within the respective meanings of each of such terms under Regulation U and (b) taken as a group do not own “margin stock” except as identified in the financial statements referred to in Section 3.1 or delivered pursuant to Section 5.1 and the aggregate value of all “margin stock” owned by the Credit Parties and their Subsidiaries taken as a group does not exceed 25% of the value of their assets.

 

Section 3.9                                   ERISA.

 

Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and

 

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the Code.  No termination of a Single Employer Plan has occurred resulting in any liability that has remained underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period.  The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits.  Neither any Credit Party nor any Commonly Controlled Entity is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan.

 

Section 3.10                            Environmental Matters.

 

Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect:

 

(a)                                 The facilities and properties owned, leased or operated by the Credit Parties or any of their Subsidiaries (the “Properties”) do not contain any Materials of Environmental Concern in amounts or concentrations which (i) constitute a violation of, or (ii) could give rise to liability on behalf of any Credit Party under, any Environmental Law.

 

(b)                                 The Properties and all operations of the Credit Parties and/or their Subsidiaries at the Properties are in compliance, and have in the last five years been in compliance, with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by the Credit Parties or any of their Subsidiaries (the “Business”).

 

(c)                                  Neither the Credit Parties nor their Subsidiaries have received any written or actual notice of violation, alleged violation, non-compliance, liability or potential liability on behalf of any Credit Party with respect to environmental matters or Environmental Laws regarding any of the Properties or the Business, nor do the Credit Parties or their Subsidiaries have knowledge or reason to believe that any such notice will be received or is being threatened.

 

(d)                                 Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location that could reasonably be expected to give rise to liability on behalf of any Credit Party under any Environmental Law, and no Materials of Environmental Concern have been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability on behalf of any Credit Party under, any applicable Environmental Law.

 

(e)                                  No judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Credit Parties and their Subsidiaries, threatened, under any Environmental Law to which any Credit Party or any Subsidiary is or will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business.

 

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(f)                                   There has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of any Credit Party or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could give rise to liability on behalf of any Credit Party under Environmental Laws.

 

Section 3.11                            Use of Proceeds.

 

The proceeds of the Extensions of Credit shall be used by the Borrower solely (a) to refinance certain existing Indebtedness of the Credit Parties and their Subsidiaries, (b) to pay any costs, fees and expenses associated with this Agreement on the Closing Date, (c) to finance Permitted Acquisitions, (d) to provide for the working capital and other general corporate purposes of the Credit Parties and their Subsidiaries, (e) to repurchase shares of the Borrower’s Equity Interests to the extent permitted under this Agreement and (f) for such other purposes as may be agreed upon by the Required Lenders from time to time.

 

Section 3.12                            Subsidiaries; Joint Ventures; Partnerships.

 

Set forth on Schedule 3.12 is a complete and accurate list of all Subsidiaries, joint ventures and partnerships of the Credit Parties as of the Closing Date.  Information on the attached Schedule includes the following:  (a) the number of shares of each class of Equity Interest or other equity interests of each Subsidiary outstanding and (b) the number and percentage of outstanding shares of each class of Equity Interest owned by the Borrower or any of its Subsidiaries.  The outstanding Equity Interest and other equity interests of all such Subsidiaries is validly issued, fully paid and non-assessable and is owned free and clear of all Liens (other than those arising under or contemplated in connection with the Credit Documents).  There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to any Equity Interest of the Borrower or any Subsidiary, except as contemplated in connection with the Credit Documents.  The Borrower shall update Schedule 3.12 from time to time, in accordance with Section 5.2, by providing a replacement Schedule 3.12 to the Administrative Agent.

 

Section 3.13                            Ownership.

 

Each of the Credit Parties and its Subsidiaries is the owner of, and has good and marketable title to or a valid leasehold interest in, all of its respective assets, which, together with assets leased or licensed by the Credit Parties and their Subsidiaries, represents all assets in the aggregate material to the conduct of the business of the Credit Parties and their Subsidiaries, and (after giving effect to the Transactions) none of such assets is subject to any Lien other than Permitted Liens.  Each Credit Party and its Subsidiaries enjoys peaceful and undisturbed possession under all of its leases and all such leases are valid and subsisting and in full force and effect.

 

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Section 3.14                            Indebtedness.

 

Except as otherwise permitted under Section 6.1, the Credit Parties and their Subsidiaries have no Indebtedness.

 

Section 3.15                            Taxes.

 

Each of the Credit Parties and its Subsidiaries has filed, or caused to be filed, all income tax returns and all other material tax returns (federal, state, local and foreign) required to be filed and paid (a) all amounts of taxes shown thereon to be due (including interest and penalties) and (b) all other taxes, fees, assessments and other governmental charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing by it, except for such taxes (i) that are not yet delinquent or (ii) that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with GAAP.  None of the Credit Parties or their Subsidiaries is aware as of the Closing Date of any proposed tax assessments against it or any of its Subsidiaries.

 

Section 3.16                            Intellectual Property Rights.

 

Each of the Credit Parties and its Subsidiaries owns, or has the legal right to use, all material Intellectual Property necessary for each of them to conduct its business as currently conducted.  Set forth on Schedule 3.16 is a list of all registered or issued Intellectual Property (including all applications for registration and issuance) owned by each of the Credit Parties or that each of the Credit Parties has the right to use as of the Closing Date or as of the date such Schedule was last updated in accordance with the terms of Section 5.2 (including name/title, current owner, registration or application number, and registration or application date).  Except as disclosed in Schedule 3.16 hereto, (a) each Credit Party has the right to use its material Intellectual Property in perpetuity and without payment of royalties, (b) all registrations with and applications to Governmental Authorities in respect of such material Intellectual Property are valid and in full force and effect and are not subject to the payment of any taxes or maintenance fees or the taking of any interest therein, held by any of the Credit Parties to maintain their validity or effectiveness, and (c) there are no restrictions on the direct or indirect transfer of any Contractual Obligation, or any interest therein, held by any of the Credit Parties in respect of such material Intellectual Property which has not been obtained.  None of the Credit Parties is in default (or with the giving of notice or lapse of time or both, would be in default) under any license to use its material Intellectual Property; no claim has been asserted and is pending by any Person challenging or questioning the use of any such material Intellectual Property or the validity or effectiveness of any such material Intellectual Property, nor do the Credit Parties or any of their Subsidiaries know of any such claim; and, to the knowledge of the Credit Parties or any of their Subsidiaries, the use of such material Intellectual Property by any of the Credit Parties or any of its Subsidiaries does not infringe on the rights of any Person.  The Credit Parties have recorded or deposited with and paid to the United States Copyright Office, the Register of Copyrights, the Copyrights Royalty Tribunal or other Governmental Authority, all notices,

 

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statements of account, royalty fees and other documents and instruments required under the terms and conditions of any Contractual Obligation of the Credit Parties and/or under Title 17 of the United States Code and the rules and regulations issued thereunder (collectively, the “Copyright Act”), and are not liable to any Person for copyright infringement under the Copyright Act or any other law, rule, regulation, contract or license as a result of their business operations.  Schedule 3.16 shall be updated from time to time, in accordance with Section 5.2, by the Borrower to include new Intellectual Property acquired after the Closing Date by giving written notice thereof to the Administrative Agent.

 

Section 3.17                            Solvency.

 

After giving effect to the Transactions, (a) each of the Credit Parties is solvent and is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, and (b) the fair saleable value of each Credit Party’s assets, measured on a going concern basis, exceeds all probable liabilities, including those to be incurred pursuant to this Agreement.  After giving effect to the Transactions, none of the Credit Parties (i) has unreasonably small capital in relation to the business in which it is or proposes to be engaged or (ii) has incurred, or believes that it will incur debts beyond its ability to pay such debts as they become due.  In executing the Credit Documents and consummating the Transactions, none of the Credit Parties intends to hinder, delay or defraud either present or future creditors or other Persons to which one or more of the Credit Parties is or will become indebted.

 

Section 3.18                            Investments.

 

All Investments of each of the Credit Parties and its Subsidiaries are Permitted Investments.

 

Section 3.19                            Location of Collateral.

 

Set forth on Schedule 3.19(a) is a list of all Properties of the Credit Parties as of the Closing Date with street address, county and state where located.  Set forth on Schedule 3.19(b) is a list of all locations where any tangible personal property of the Credit Parties (excluding (a) inventory in transit or on temporary display at a customer location or (b) locations where the value of such tangible personal property is less than $100,000) is located as of the Closing Date, including county and state where located.  Set forth on Schedule 3.19(c) is the state of incorporation or organization, the chief executive office, the principal place of business and organization identification number of each of the Credit Parties and their Subsidiaries as of the Closing Date.

 

Section 3.20                            [Reserved].

 

Section 3.21                            Brokers’ Fees.

 

None of the Credit Parties or their Subsidiaries has any obligation to any Person in respect of any finder’s, broker’s, investment banking or other similar fee in connection with any of the transactions contemplated under the Credit Documents other than the closing and other fees payable pursuant to this Agreement and as set forth in the Fee Letter.

 

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Section 3.22                            Labor Matters.

 

There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Credit Parties or any of their Subsidiaries as of the Closing Date, other than as set forth in Schedule 3.22 hereto, and none of the Credit Parties or their Subsidiaries (a) has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years, other than as set forth in Schedule 3.22 hereto, or (b) has knowledge of any potential or pending strike, walkout or work stoppage.  Other than as set forth on Schedule 3.22, no unfair labor practice complaint is pending against any Credit Party or any of its Subsidiaries.   There are no strikes, walkouts, work stoppages or other material labor difficulty pending or threatened against any Credit Party.

 

Section 3.23                            Accuracy and Completeness of Information.

 

All factual information heretofore, contemporaneously or hereafter furnished by or on behalf of any Credit Party or any of its Subsidiaries to the Administrative Agent, the Arrangers or any Lender for purposes of or in connection with this Agreement or any other Credit Document, or any transaction contemplated hereby or thereby, is or will be true and accurate in all material respects and not incomplete by omitting to state any material fact necessary to make such information not misleading.  There is no fact now known to any Credit Party or any of its Subsidiaries which, individually or in the aggregate, has, or could reasonably be expected to have, a Material Adverse Effect, which fact has not been set forth herein, in the financial statements of the Borrower and its Subsidiaries furnished to the Administrative Agent and the Lenders, or in any certificate, opinion or other written statement made or furnished by any Credit Party to the Administrative Agent and the Lenders.

 

Section 3.24                            Material Contracts.

 

Schedule 1 of the Disclosure Letter sets forth a complete and accurate list of all Material Contracts of the Credit Parties and their Subsidiaries in effect as of the Closing Date.  Each Material Contract is, and after giving effect to the Transactions will be, in full force and effect in accordance with the terms thereof.  The Credit Parties have delivered to the Administrative Agent a true and complete copy of each Material Contract.  Schedule 1 of the Disclosure Letter shall be updated from time to time, in accordance with Section 5.2 by the Borrower to include new Material Contracts by giving written notice thereof to the Administrative Agent.

 

Section 3.25                            Insurance.

 

The insurance coverage of the Credit Parties and their Subsidiaries as of the Closing Date is outlined as to carrier, policy number, expiration date, type and amount on Schedule 4 to the Disclosure Letter and such insurance coverage complies with the requirements set forth in Section 5.5(b).  Schedule 4 to the Disclosure Letter shall be updated from time to time, in accordance with Section 5.2 by the Borrower to include additional insurance coverage.

 

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Section 3.26                            Security Documents.

 

The Security Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby.  Except as set forth in the Security Documents, such security interests and Liens are currently (or will be, upon (a) the filing of appropriate financing statements with the Secretary of State of the state of incorporation or organization for each Credit Party, the filing of appropriate assignments or notices with the United States Patent and Trademark Office and the United States Copyright Office, and the recordation of the Mortgage Instruments, in each case in favor of the Administrative Agent, on behalf of the Lenders, and (b) the Administrative Agent obtaining Control (as defined in the Security Agreement) or possession over those items of Collateral in which a security interest is perfected through Control or possession) perfected security interests and Liens, prior to all other Liens other than Permitted Liens.

 

Section 3.27                            Regulation H.

 

No Mortgaged Property is a Flood Hazard Property.

 

Section 3.28                            Classification of Senior Indebtedness.

 

The Credit Party Obligations constitute “Senior Indebtedness”, “Designated Senior Indebtedness” or any similar designation under and as defined in any agreement governing any Subordinated Debt and the subordination provisions set forth in each such agreement are legally valid and enforceable against the parties thereto.

 

Section 3.29                            Anti-Terrorism Laws.

 

Neither any Credit Party nor any of its Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended.  Neither any Credit Party nor any or its Subsidiaries is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or (c) the Patriot Act.  None of the Credit Parties, any of its Subsidiaries or, to the knowledge of the Borrower, any director, officer or Affiliate (i) is a blocked person described in Section 1 of the Anti-Terrorism Order or is subject or target of any sanctions administered or enforced by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority (“Sanctions”), (ii) is located, organized or resident in a country, region or territory that is, or whose government is, the subject of territorial based Sanctions, or (iii) to the best of its knowledge, engages in any dealings or transactions, or is otherwise associated, with any such Person, except to the extent such dealing or transaction was previously authorized by all required United States Governmental Authorities (and other non-United States Governmental Authorities, as applicable).

 

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Section 3.30                            Compliance with OFAC Rules and Regulations.

 

Except to the extent such activity was previously authorized by all required United States Governmental Authorities (and other non-United States Governmental Authorities, as applicable), no part of the proceeds of any Extension of Credit hereunder will be used directly or indirectly (i) to fund any operations in, finance any investments or activities in or make any payments to, a Person that is, or in any country or territory that is, or whose government is, at the time of such funding or payment, the subject of Sanctions or (ii) in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender or otherwise) of Sanctions.

 

Section 3.31                            Compliance with FCPA.

 

Each of the Credit Parties and their Subsidiaries is in compliance with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and any foreign counterpart thereto.  None of the Credit Parties or their Subsidiaries has made a payment, offering, or promise to pay, or authorized the payment of, money or anything of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to a foreign official, foreign political party or party official or any candidate for foreign political office, and (c) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to such Credit Party or its Subsidiary or to any other Person, in violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

 

Section 3.32                            Consent; Governmental Authorizations.

 

No approval, consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with acceptance of Extensions of Credit by the Borrower or the making of the Guaranty hereunder or with the execution, delivery or performance of any Credit Document by the Credit Parties (other than those which have been obtained) or with the validity or enforceability of any Credit Document against the Credit Parties (except such filings as are necessary in connection with the perfection of the Liens created by such Credit Documents).

 

Section 3.33                            Government Contracts.

 

No Credit Party or any of its Subsidiaries is materially in default as to the terms of any Material Government Contract or has received any notices of default or notices to cure under any Material Government Contract for which the performance deficiency noted by any Governmental Authority has not been cured or otherwise resolved to such Governmental Authority’s satisfaction.

 

Section 3.34                            Assignment of Payments.

 

Except with respect to contracts for which the government has determined that a prohibition on assignment of claims is in the government’s interest, each of the Credit Parties and their Subsidiaries has the right to assign to the Administrative Agent all payments due or to become due under each of such Person’s Government Contracts, and there exists no uncancelled prior assignment of payments under any of such Credit Party’s Government Contracts.

 

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ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1                                   Conditions to Closing Date.

 

This Agreement shall become effective upon, and the obligation of each Lender to make the initial Revolving Loans on the Closing Date is subject to, the satisfaction of the following conditions precedent:

 

(a)                                 Execution of Credit Agreement; Credit Documents and Lender Consents.  The Administrative Agent shall have received (i) counterparts of this Agreement, executed by a duly authorized officer of each party hereto, (ii) for the account of each Revolving Lender requesting a promissory note, a Revolving Note, (iii) for the account of the Swingline Lender requesting a promissory note, the Swingline Note, (iv) counterparts of the Security Agreement and the Pledge Agreement, in each case conforming to the requirements of this Agreement and executed by duly authorized officers of the Credit Parties or other Person, as applicable, (v) counterparts of any other Credit Document, executed by the duly authorized officers of the parties thereto, including without limitation the Disclosure Letter, and (vi) executed  Lender Consents from each Lender authorizing the Administrative Agent to enter this Credit Agreement on their behalf.

 

(b)                                 Authority Documents.  The Administrative Agent shall have received the following:

 

(i)                                     Articles of Incorporation/Charter Documents.  Original certified articles of incorporation or other charter documents, as applicable, of each Credit Party certified (A) by an officer of such Credit Party (pursuant to an officer’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) as of the Closing Date to be true and correct and in force and effect as of such date, and (B) to be true and complete as of a recent date by the appropriate Governmental Authority of the state of its incorporation or organization, as applicable.

 

(ii)                                  Resolutions.  Copies of resolutions of the board of directors or comparable managing body of each Credit Party approving and adopting the Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by an officer of such Credit Party (pursuant to an officer’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) as of the Closing Date to be true and correct and in force and effect as of such date.

 

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(iii)                               Bylaws/Operating Agreement.  A copy of the bylaws or comparable operating agreement of each Credit Party certified by an officer of such Credit Party (pursuant to an officer’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) as of the Closing Date to be true and correct and in force and effect as of such date.

 

(iv)                              Good Standing.  Original certificates of good standing, existence or its equivalent with respect to each Credit Party certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation or organization and each other state in which the failure to so qualify and be in good standing could reasonably be expected to have a Material Adverse Effect.

 

(v)                                 Incumbency.  An incumbency certificate of each Credit Party certified by an officer (pursuant to an officer’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) to be true and correct as of the Closing Date.

 

(c)                                  Legal Opinion of Counsel.  The Administrative Agent shall have received an opinion or opinions (including, if reasonably requested by the Administrative Agent, local counsel opinions) of counsel for the Credit Parties, dated the Closing Date and addressed to the Administrative Agent and the Lenders, in form and substance acceptable to the Administrative Agent (which shall include, without limitation, opinions with respect to the due organization and valid existence of each Credit Party, opinions as to perfection of the Liens granted to the Administrative Agent pursuant to the Security Documents and opinions as to the non-contravention of the Credit Parties’ organizational documents and Material Contracts).

 

(d)                                 Personal Property Collateral.  The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent:

 

(i)                                     (A) searches of UCC filings in the jurisdiction of incorporation or formation, as applicable, of each Credit Party and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Administrative Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens and (B) tax lien, judgment and pending litigation searches;

 

(ii)                                  searches of ownership of Intellectual Property in the appropriate governmental offices and such patent/trademark/copyright filings as requested by the Administrative Agent in order to perfect the Administrative Agent’s security interest in the Intellectual Property;

 

(iii)                               completed UCC financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest in the Collateral;

 

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(iv)                              stock or membership certificates, if any, evidencing the Equity Interest pledged to the Administrative Agent pursuant to the Pledge Agreement and duly executed in blank undated stock or transfer powers;

 

(v)                                 duly executed consents as are necessary, in the Administrative Agent’s sole discretion, to perfect the Lenders’ security interest in the Collateral;

 

(vi)                              to the extent required by the Administrative Agent, in the case of any personal property Collateral with an aggregate value in excess of $1,000,000 located at premises leased by a Credit Party and set forth on Schedule 3.19(a) such estoppel letters, consents and waivers from the landlords of such real property to the extent the Borrower is able to secure such letters, consents and waivers after using commercially reasonable efforts (such letters, consents and waivers shall be in form and substance satisfactory to the Administrative Agent, it being acknowledged and agreed that any landlord waiver in the form of Exhibit 4.1(d) is satisfactory to the Administrative Agent);

 

(vii)                           all instruments and chattel paper in the possession of any of the Credit Parties, together with allonges or assignments as may be necessary or appropriate to perfect the Administrative Agent’s and the Lenders’ security interest in the Collateral;

 

(viii)                        with respect to the prior Indebtedness of the Credit Parties, such documentation as may be required by the Administrative Agent to demonstrate that any previously executed deposit account control agreements with respect to the Credit Parties’ deposit accounts have been terminated;

 

(ix)                              with respect to the prior Indebtedness of the Credit Parties, such documentation as may be required by the Administrative Agent to demonstrate that any previously executed securities account control agreements with respect to the Credit Parties’ securities accounts have been terminated; and

 

(x)                                 such documentation as may be required by the Administrative Agent to comply with the Federal Assignment of Claims Act; and the Credit Parties shall take such actions as may be required by the Administrative Agent to file such documentation with the appropriate Governmental Authorities.

 

(e)                                  Real Property Collateral.  The Administrative Agent shall have received copies of fully executed releases of any Mortgage Instruments encumbering the Hawthorne Property.

 

(f)                                   Liability, Casualty, Property and Business Interruption Insurance.  The Administrative Agent shall have received copies of insurance policies or certificates and endorsements of insurance evidencing liability, casualty, property and business interruption insurance meeting the requirements set forth herein or in the Security Documents.  The Administrative Agent shall be named (i) as lender’s loss payee, as its 

 

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interest may appear, with respect to any such insurance providing coverage in respect of any Collateral and (ii) as additional insured, as its interest may appear, with respect to any such insurance providing liability coverage, and the Borrower will use its commercially reasonable efforts to have each provider of any such insurance agree, by endorsement upon the policy or policies issued by it or by independent instruments to be furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be altered or cancelled.

 

(g)                                  Solvency Certificate.  The Administrative Agent shall have received an officer’s certificate prepared by the chief financial officer of the Borrower as to the financial condition, solvency and related matters of the Credit Parties and their Subsidiaries, after giving effect to the initial borrowings under the Credit Documents, in substantially the form of Exhibit 4.1(g) hereto.

 

(h)                                 Account Designation Notice.  The Administrative Agent shall have received the executed Account Designation Notice in the form of Exhibit 1.1(a) hereto.

 

(i)                                     Notice of Borrowing.  The Administrative Agent shall have received a Notice of Borrowing with respect to the Loans to be made on the Closing Date.

 

(j)                                    Consents.  The Administrative Agent shall have received evidence that all boards of directors, governmental, shareholder and material third party consents and approvals necessary in connection with the Transactions have been obtained and all applicable waiting periods have expired without any action being taken by any authority that could restrain, prevent or impose any material adverse conditions on such transactions or that could seek or threaten any of the foregoing.

 

(k)                                 Compliance with Laws.  The financings and other Transactions contemplated hereby shall be in compliance with all applicable laws and regulations (including all applicable securities and banking laws, rules and regulations).

 

(l)                                     Bankruptcy.  There shall be no bankruptcy or insolvency proceedings pending with respect to any Credit Party or any Subsidiary thereof.

 

(m)                             Existing Indebtedness of the Credit Parties.  All of the existing Indebtedness for borrowed money of the Credit Parties and their Subsidiaries (including, without limitation, the Existing Credit Facility but excluding Indebtedness permitted to exist pursuant to Section 6.1) shall be repaid in full and all security interests related thereto shall be terminated on or prior to the Closing Date.

 

(n)                                 Financial Statements.  The Administrative Agent and the Lenders shall have received copies of the financial statements referred to in Section 3.1, each in form and substance satisfactory to it.

 

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(o)                                 No Material Adverse Change.  Since June 30, 2010, there shall have been no material adverse change in the business, properties, operations or condition (financial or otherwise) of the Borrower or any of its Subsidiaries.

 

(p)                                 Financial Condition Certificate.  The Administrative Agent shall have received a certificate or certificates executed by a Responsible Officer of the Borrower as of the Closing Date, substantially in the form of Exhibit 4.1(p) stating that (i) there does not exist any pending or threatened (a) litigation, injunction, order or claim with respect to the Borrower or any of its subsidiaries which could reasonably be expected to have a Material Adverse Effect on the Credit Parties taken as a whole or (b) bankruptcy or insolvency proceedings with respect to the Credit Parties, (ii) immediately after giving effect to this Agreement, the other Credit Documents, and all the Transactions contemplated to occur on such date, (A) no Default or Event of Default exists, (B) all representations and warranties contained herein and in the other Credit Documents are true and correct, and (C) the Credit Parties are in pro forma compliance with each of the initial financial covenants set forth in Section 5.9 (as evidenced through detailed calculations of such financial covenants on a schedule to such certificate) as of June 30, 2010 and (iii) each of the other conditions precedent in Section 4.1 have been satisfied, except to the extent the satisfaction of any such condition is subject to the judgment or discretion of the Administrative Agent or any Lender.

 

(q)                                 Patriot Act Certificate.  At least five (5) Business Days prior to the Closing Date, the Administrative Agent shall have received a certificate satisfactory thereto, substantially in the form of Exhibit 4.1(q), for benefit of itself and the Lenders, provided by the Borrower that sets forth information required by the Patriot Act including, without limitation, the identity of the Credit Parties, the name and address of the Credit Parties and other information that will allow the Administrative Agent or any Lender, as applicable, to identify the Credit Parties in accordance with the Patriot Act.

 

(r)                                    Material Contracts.  The Administrative Agent shall have received true and complete copies, certified by an officer of the Borrower as true and complete, of all Material Contracts not previously delivered to the Administrative Agent, together with all exhibits and schedules.

 

(s)                                   Consolidated Funded Debt.  The Administrative Agent shall have received evidence reasonably satisfactory thereto provided by the Credit Parties that Consolidated Funded Debt minus the outstanding amount of all Performance Letters of Credit (including Letters of Credit issued hereunder that are Performance Letters of Credit) is less than or equal to $100,000,000.00 after giving effect to the initial borrowings under the Credit Agreement and the consummation of the Transactions.

 

(t)                                    Fees and Expenses.  The Administrative Agent and the Lenders shall have received all fees and expenses, if any, owing pursuant to the Fee Letter and Section 2.5.

 

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(u)                                 Additional Matters.  All other documents and legal matters in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

 

Section 4.2                                   Conditions to All Extensions of Credit.

 

The obligation of each Lender to make any Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent on the date of making such Extension of Credit:

 

(a)                                 Representations and Warranties.  The representations and warranties made by the Credit Parties herein, in the Security Documents and which are contained in any certificate furnished at any time under or in connection herewith shall (i) with respect to representations and warranties that contain a materiality qualification, be true and correct and (ii) with respect to representations and warranties that do not contain a materiality qualification, be true and correct in all material respects, in each case on and as of the date of such Extension of Credit as if made on and as of such date except for any representation or warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date.

 

(b)                                 No Default or Event of Default.  No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Extension of Credit to be made on such date unless such Default or Event of Default shall have been waived in accordance with this Agreement.

 

(c)                                  Compliance with Commitments.  Immediately after giving effect to the making of any such Extension of Credit (and the application of the proceeds thereof), (i) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving Committed Amount then in effect, (ii) the outstanding LOC Obligations shall not exceed the LOC Committed Amount, and (iii) the outstanding Swingline Loans shall not exceed the Swingline Committed Amount.

 

(d)                                 Additional Conditions to Revolving Loans.  If a Revolving Loan is requested, all conditions set forth in Section 2.1 shall have been satisfied.

 

(e)                                  Additional Conditions to Letters of Credit.  If the issuance of a Letter of Credit is requested, all conditions set forth in Section 2.3 shall have been satisfied.

 

(f)                                   Additional Conditions to Swingline Loans.  If a Swingline Loan is requested, all conditions set forth in Section 2.4 shall have been satisfied.

 

Each request for an Extension of Credit and each acceptance by the Borrower of any such Extension of Credit shall be deemed to constitute representations and warranties by the Credit Parties as of the date of such Extension of Credit that the conditions set forth above in paragraphs (a) through (f), as applicable, have been satisfied.

 

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ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Each of the Credit Parties hereby covenants and agrees that on the Closing Date, and thereafter (a) for so long as this Agreement is in effect, (b) until the Commitments have terminated, and (c) until no Note remains outstanding and unpaid and the Credit Party Obligations and all other amounts owing to the Administrative Agent or any Lender hereunder are paid in full, such Credit Party shall, and shall cause each of their Subsidiaries (other than in the case of Sections 5.1 or 5.2 hereof), to:

 

Section 5.1                                   Financial Statements.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(a)                                 Annual Financial Statements.  As soon as available and in any event no later than the earlier of (i) to the extent applicable, the date the Borrower is required by the SEC to deliver its Form 10-K for each fiscal year of the Borrower and (ii) ninety (90) days after the end of each fiscal year of the Borrower, a copy of the Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at the end of such fiscal year and the related Consolidated statements of operations and changes in stockholders’ equity and of cash flows of the Borrower and its Consolidated Subsidiaries for such year, which shall be audited by a firm of independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent (including Moss Adams LLP), setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification indicating that the scope of the audit was inadequate to permit such independent certified public accountants to certify such financial statements without such qualification;

 

(b)                                 Quarterly Financial Statements.  As soon as available and in any event no later than the earlier of (i) to the extent applicable, the date the Borrower is required by the SEC to deliver its Form 10-Q for any fiscal quarter of the Borrower and (ii) forty-five (45) days after the end of each fiscal quarter of the Borrower, a copy of the Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at the end of such period and related Consolidated statements of operations for the Borrower and its Consolidated Subsidiaries for such quarterly period; and

 

(c)                                  Annual Income Statement and Cash Flow Projections.  As soon as available, but in any event within sixty (60) days after the end of each fiscal year, a copy of the detailed annual income statement and cash flow projections of the Borrower and its Subsidiaries for the next four fiscal quarter period prepared on a quarterly basis, in form and detail reasonably acceptable to the Administrative Agent and the Lenders, together with a summary of the material assumptions made in the preparation of such annual budget or plan;

 

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all such financial statements to be complete and correct in all material respects (subject, in the case of interim statements, to normal recurring year-end audit adjustments) and to be prepared in reasonable detail and, in the case of the annual, quarterly financial statements provided in accordance with subsections (a) and (b) and above, in accordance with GAAP applied consistently throughout the periods reflected therein and further accompanied by a description of, and an estimation of the effect on the financial statements on account of, a change, if any, in the application of accounting principles as provided in Section 1.3.

 

Notwithstanding the foregoing, financial statements and reports required to be delivered pursuant to the foregoing provisions of this Section may be delivered electronically and if so, shall be deemed to have been delivered on the date on which the Administrative Agent receives such reports from the Borrower through electronic mail; provided that, upon the Administrative Agent’s request, the Borrower shall provide paper copies of any documents required hereby to the Administrative Agent.

 

Section 5.2                                   Certificates; Other Information.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(a)                                 [Reserved].

 

(b)                                 Officer’s Certificate. Concurrently with the delivery of the financial statements referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a Responsible Officer substantially in the form of Exhibit 5.2(b) stating that (i) (A) such financial statements present fairly the financial position of the Borrower and its Subsidiaries for the periods indicated in conformity with GAAP applied on a consistent basis, (B) each of the Credit Parties during such period observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in this Agreement to be observed, performed or satisfied by it, and (C) such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and such certificate shall include the calculations in reasonable detail required to indicate compliance with Section 5.9 as of the last day of such period.

 

(c)                                  Updated Schedules.  Concurrently with or prior to the delivery of the financial statements referred to in Sections 5.1(a) and 5.1(b) above, (i) an updated copy of Schedule 3.3 and Schedule 3.12 if the Borrower or any of its Subsidiaries has formed or acquired a new Subsidiary since the Closing Date or since such Schedule was last updated, as applicable, (ii) an updated copy of Schedule 3.16 if the Borrower or any of its Subsidiaries has registered, applied for registration of, acquired or otherwise obtained ownership of any new Intellectual Property since the Closing Date or since Schedule 3.16 was last updated, as applicable, (iii) an updated copy of Schedule 1 to the Disclosure Letter if any new Material Contract has been entered into since the Closing Date or since Schedule 1 to the Disclosure Letter was last updated, as applicable, together with a copy 

 

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of each new Material Contract, and (iv) an updated copy of Schedule 4 to the Disclosure Letter if the Borrower or any of its Subsidiaries has altered or acquired any insurance policies since the Closing Date or since Schedule 4 to the Disclosure Letter was last updated.  The foregoing notwithstanding, with respect to any Material Contract which is a Material Government Contract that is restricted from disclosure by a Requirement of Law, the Credit Parties shall not be required to furnish a copy thereof with the updated copy of Schedule 1 of the Disclosure Letter.

 

(d)                                 Reports; SEC Filings; Regulatory Reports; Press Releases; Etc.  Promptly upon their becoming available, (i) copies of all reports (other than those provided pursuant to Section 5.1 and those which are of a promotional nature) and other financial information which the Borrower sends to its shareholders, (ii) copies of all reports and all registration statements and prospectuses, if any, which the Borrower may make to, or file with, the SEC (or any successor or analogous Governmental Authority) or any securities exchange or other private regulatory authority and (iii) all material regulatory reports, except that, to the extent such documents are filed through and available on the SEC’s EDGAR database, paper copies shall be provided only upon the Administrative Agent’s request.

 

(e)                                  Calculations.  Within ninety (90) days after the end of each fiscal year of the Borrower, a certificate containing the amount of all acquisitions and all Investments (including Permitted Acquisitions) made during the prior fiscal year.

 

(f)                                   Management Letters; Etc.  Promptly upon receipt thereof, a copy or summary of any other report, or “management letter” or similar report submitted by independent accountants to the Borrower or any of its Subsidiaries in connection with any annual, interim or special audit of the books of such Person.

 

(g)                                  General Information. Promptly, such additional financial and other information as the Administrative Agent, on behalf of any Lender, may from time to time reasonably request.

 

Section 5.3                                   Payment of Taxes and Other Obligations.

 

Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, subject, where applicable, to specified grace periods, (a) all of its taxes (Federal, state, local and any other taxes) and (b) all of its other obligations and liabilities of whatever nature in accordance with industry practice and (c) any additional costs that are imposed as a result of any failure to so pay, discharge or otherwise satisfy such taxes, obligations and liabilities, except when the amount or validity of any such taxes, obligations and liabilities is currently being contested in good faith by appropriate proceedings and reserves, if applicable, in conformity with GAAP with respect thereto have been provided on the books of the Credit Parties.

 

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Section 5.4                                   Conduct of Business and Maintenance of Existence.

 

Except as permitted by Section 6.4, continue to engage in business of the same general type as now conducted by it on the Closing Date and preserve, renew and keep in full force and effect its corporate or other formative existence and good standing, take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business and to maintain its goodwill and comply with all contractual obligations and Requirements of Law.

 

Section 5.5                                   Maintenance of Property; Insurance.

 

(a)                                 Keep all material property useful and necessary in its business in good working order and condition (ordinary wear and tear and obsolescence excepted).

 

(b)                                 Maintain with financially sound and reputable insurance companies liability, casualty, property and business interruption insurance (including, without limitation, insurance with respect to its tangible Collateral) in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to the Administrative Agent, upon the request of the Administrative Agent, full information as to the insurance carried. The Administrative Agent shall be named (i) as Lender’s loss payee, as its interest may appear with respect to any property insurance, and (ii) as additional insured, as its interest may appear, with respect to any such liability insurance, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments to be furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be altered or canceled, and such policies shall provide that no act or default of the Credit Parties or any of their Subsidiaries or any other Person shall affect the rights of the Administrative Agent or the Lenders under such policy or policies.

 

(c)                                  In case of any material loss, damage to or destruction of the Collateral of any Credit Party or any part thereof, such Credit Party shall promptly give written notice thereof to the Administrative Agent generally describing the nature and extent of such damage or destruction.  In case of any such material loss, damage to or destruction of the Collateral of any Credit Party or any part thereof, if required by the Administrative Agent or the Required Lenders, such Credit Party (whether or not the insurance proceeds, if any, received on account of such damage or destruction shall be sufficient for that purpose), at such Credit Party’s cost and expense, will promptly repair or replace the Collateral of such Credit Party so lost, damaged or destroyed.

 

Section 5.6                                   Inspection of Property; Books and Records; Discussions.

 

Keep proper books, records and accounts in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its businesses and activities; and permit, during regular business hours and upon reasonable notice by the Administrative Agent or any Lender, the Administrative Agent or any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired, and to discuss the business, operations, properties, financial conditions and other conditions of the Credit Parties and their Subsidiaries with officers and employees of the Credit Parties and their Subsidiaries and with its independent certified public accountants.

 

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Section 5.7                                   Notices.

 

Give notice in writing to the Administrative Agent (which shall promptly transmit such notice to each Lender):

 

(a)                                 promptly, but in any event within three (3) Business Days after any Credit Party knows thereof, the occurrence of any Default or Event of Default;

 

(b)                                 promptly, any default or event of default under any Contractual Obligation of any Credit Party or any of its Subsidiaries which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or involve a monetary claim in excess of $35,000,000;

 

(c)                                  promptly, (i) any litigation, or any investigation or proceeding known or threatened to any Credit Party affecting any Credit Party or any of its Subsidiaries which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or involve a monetary claim in excess of $35,000,000 or involving injunctions or requesting injunctive relief by or against any Credit Party or any Subsidiary of any Credit Party, (ii) any litigation, or any investigation or proceeding known or threatened to any Credit Party affecting or with respect to this Agreement, any other Credit Document or any security interest or Lien created thereunder, or (iii) any material litigation, investigation or proceeding known or threatened to any Credit Party by any Governmental Authority relating to the Borrower or any Subsidiary thereof and alleging fraud, deception or willful misconduct by such Person;

 

(d)                                 [reserved];

 

(e)                                  of any attachment, judgment, lien, levy or order exceeding $35,000,000 that may be assessed against or threatened against any Credit Party other than Permitted Liens;

 

(f)                                   as soon as possible and in any event within thirty (30) days after any Credit Party knows or has reason to know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC (other than a Permitted Lien) or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or any Credit Party, any Commonly Controlled Entity or any Multiemployer Plan, with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan;

 

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(g)                                  promptly after becoming aware of the occurrence of any Internal Control Event;

 

(h)                                 [reserved];

 

(i)                                     promptly, any notice of any material violation received by any Credit Party from any Governmental Authority including, without limitation, any notice of material violation of Environmental Laws; and

 

(j)                                    promptly, any other development or event which could reasonably be expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action, if any, the Credit Parties propose to take with respect thereto.  In the case of any notice of a Default or Event of Default, the Borrower shall specify that such notice is a Default or Event of Default notice on the face thereof.

 

Section 5.8                                   Environmental Laws.

 

(a)                                 Except as could not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect, comply with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws and obtain and comply with and maintain, and ensure that all tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws;

 

(b)                                 Except as could not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect, conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings; and

 

(c)                                  Defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective employees, agents, officers and directors and affiliates, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Credit Parties or any of their Subsidiaries or the Properties, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor.  The agreements in this paragraph shall survive repayment of the Credit Party Obligations and all other amounts payable hereunder and termination of the Commitments and the Credit Documents.

 

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Section 5.9                                   Financial Covenants.

 

Comply with the following financial covenants:

 

(a)                                 Consolidated Net Leverage Ratio.  The Consolidated Net Leverage Ratio, for the four consecutive fiscal quarter period ending as of each fiscal quarter end, shall be less than or equal 4.00 to 1.00; provided that for the four (4) consecutive fiscal quarters following a Material Permitted Acquisition, the Consolidated Net Leverage Ratio required hereby shall be increased to 4.50 to 1.00 (beginning with the fiscal quarter in which such Material Permitted Acquisition is consummated).

 

(b)                                 Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio, for the four consecutive fiscal quarter period ending as of each fiscal quarter end, shall be greater than or equal to 1.20 to 1.0.

 

(c)                                  Consolidated Secured Net Leverage Ratio. The Consolidated Secured Net Leverage Ratio, for the four consecutive fiscal quarter period ending as of each fiscal quarter end, shall be less than or equal 3.75 to 1.00.

 

Notwithstanding the above, the parties hereto acknowledge and agree that, for purposes of all calculations made in determining compliance for any applicable period with the financial covenants set forth in this Section, (i) after consummation of any Permitted Acquisition, (A) income statement items and other balance sheet items (whether positive or negative) attributable to the Target acquired in such transaction shall be included in such calculations to the extent relating to such applicable period, including, to the extent permitted under the definition of “Consolidated EBITDA”, any cost saving synergies associated with such Permitted Acquisition, and (B) Indebtedness of a Target which is retired in connection with a Permitted Acquisition shall be excluded from such calculations and deemed to have been retired as of the first day of such applicable period and (ii) after any disposition permitted by Section 6.4(a)(vi), (A) income statement items, cash flow statement items and other balance sheet items (whether positive or negative) attributable to the property or assets disposed of shall be excluded in such calculations to the extent relating to such applicable period, subject to adjustments mutually acceptable to the Borrower and the Administrative Agent (after consultation with the Lenders) and (B) Indebtedness  that is repaid with the proceeds of such disposition shall be excluded from such calculations and deemed to have been repaid as of the first day of such applicable period.

 

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Section 5.10                            Additional Guarantors.

 

The Credit Parties will cause each of their Material Domestic Subsidiaries, whether newly formed, after acquired or otherwise existing to promptly (and in any event within thirty (30) days after such Material Domestic Subsidiary is formed or acquired (or such longer period of time as agreed to by the Administrative Agent in its reasonable discretion)) to become a Guarantor hereunder by way of execution of a Joinder Agreement.  The Credit Party Obligations shall be secured by, among other things, a first priority perfected security interest in the Collateral of such new Guarantor and a pledge of 100% of the Equity Interest of such new Guarantor and its Domestic Subsidiaries and 65% (or such higher percentage that would not result in material adverse tax consequences for such new Guarantor) of the voting Equity Interest and 100% of the non-voting Equity Interest of its first-tier Foreign Subsidiaries.  In connection with the foregoing, the Credit Parties shall deliver to the Administrative Agent, with respect to each new Guarantor to the extent applicable, substantially the same documentation required pursuant to Sections 4.1(b) — (f), (j) and 5.12 and such other documents or agreements as the Administrative Agent may reasonably request.

 

Section 5.11                            Compliance with Law.

 

(a)                                 Comply with all Requirements of Law and orders (including Environmental Laws), and all applicable restrictions imposed by all Governmental Authorities, applicable to it and the Collateral if noncompliance with any such Requirements of Law, order or restriction could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(b)                                 Comply in all material respects with all Contractual Obligations.

 

Section 5.12                            Pledged Assets.

 

(a)                                 Each Credit Party will cause 100% of the Equity Interest in each of its direct or indirect Domestic Subsidiaries (unless such Domestic Subsidiary is owned by a Foreign Subsidiary) and 65% (to the extent the pledge of a greater percentage would be unlawful or would cause any materially adverse tax consequences to the Borrower or any Guarantor) of the voting Equity Interest and 100% of the non-voting Equity Interest of its first-tier Foreign Subsidiaries, in each case to the extent owned by such Credit Party, to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Security Documents or such other security documents as the Administrative Agent shall reasonably request.

 

(b)                                 Subject to the terms of subsection (c) below, each Credit Party will cause its real property located in the United States acquired after the Closing Date and all tangible and intangible personal property now owned or hereafter acquired to be subject at all times to a first priority, perfected Lien (subject in each case to Permitted Liens) in favor of the Administrative Agent pursuant to the terms and conditions of the Security Documents or such other security documents as the Administrative Agent shall reasonably request.  Each Credit Party shall, and shall cause each of its Subsidiaries to, adhere to the covenants set forth in the Security Documents.

 

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(c)                                  To the extent otherwise permitted hereunder, if any Credit Party intends to acquire a fee ownership interest in any real property (“Real Estate”) after the Closing Date and such Real Estate has a fair market value in excess of $50,000,000, it shall provide to the Administrative Agent promptly (i) such security documentation as the Administrative Agent may request to cause such Real Estate to be subject at all times to a first priority, perfected Lien (subject in each case to Permitted Liens) in favor of the Administrative Agent and (ii) such other documentation as the Administrative agent may reasonably request in connection with the foregoing, including, without limitation, title, insurance policies, surveys, environmental reports and opinions of counsel, all in form and substance reasonably satisfactory to the Administrative Agent.

 

(d)                                 Each Credit Party shall timely and fully pay and perform its obligations under all leases and other agreements with respect to each leased location or public warehouse where any Collateral is or may be located.

 

Section 5.13                            Covenants Regarding Patents, Trademarks and Copyrights.

 

(a)                                 Notify the Administrative Agent promptly if it knows that any material application, letters patent or registration relating to any material Patent, Patent License, Trademark or Trademark License of the Credit Parties or any of their Subsidiaries may become abandoned, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court) regarding any Credit Party’s or any of its Subsidiary’s ownership of any material Patent or Trademark, its right to patent or register the same, or to enforce, keep and maintain the same, or its rights under any material Patent License or Trademark License.

 

(b)                                 Notify the Administrative Agent promptly after it knows of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in any court) regarding any material Copyright or Copyright License of the Credit Parties or any of their Subsidiaries, whether (i) such material Copyright or Copyright License may become invalid or unenforceable prior to its expiration or termination, or (ii) any Credit Party’s or any of its Subsidiary’s ownership of such material Copyright, its right to register the same or to enforce, keep and maintain the same, or its rights under such material Copyright License, may become affected.

 

(c)                                  (i)                                     In accordance with Section 5.2, provide the Administrative Agent and its counsel a complete and correct list of all Intellectual Property owned by or licensed to the Credit Parties or any of their Subsidiaries that have not been set forth as annexes of such documents and instruments showing all filings and recordings for the protection of the security interest of the Administrative Agent therein pursuant to the agreements of the United States Patent and Trademark Office or the United States Copyright Office.

 

(ii)                                  Upon request of the Administrative Agent, execute and deliver any and all agreements, instruments, documents, and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent’s security interest in the Intellectual Property and the general intangibles referred to in clauses (i) and (ii), including, without limitation, the goodwill of the Credit Parties and their Subsidiaries relating thereto or represented thereby (or such other Intellectual Property or the general intangibles relating thereto or represented thereby as the Administrative Agent may reasonably request).

 

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(d)                                 Take all necessary actions, including, without limitation, in any proceeding before the United States Patent and Trademark Office or the United States Copyright Office, to maintain each item of material Intellectual Property of the Credit Parties and their Subsidiaries, including, without limitation, payment of maintenance fees, filing of applications for renewal, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings.

 

(e)                                  In the event that any Credit Party becomes aware that any material Intellectual Property owned by any Credit Party is infringed, misappropriated or diluted by a third party in any material respect, notify the Administrative Agent promptly after it learns thereof and, unless the Credit Parties shall reasonably determine that such Intellectual Property is not material to the business of the Credit Parties and their Subsidiaries taken as a whole, promptly use reasonable efforts to pursue claims for infringement, misappropriation or dilution and to recover damages for such infringement, misappropriation or dilution as reasonably determined by the Credit Parties to be appropriate, and take such other actions as the Credit Parties shall reasonably deem appropriate under the circumstances to protect such material Intellectual Property.

 

Section 5.14                            Landlord Waivers.

 

In the case of any personal property Collateral located at premises leased by a Credit Party with a value in excess of $10,000,000, the Credit Parties will promptly provide the Administrative Agent with such estoppel letters, consents and waivers from the landlords on such real property to the extent Borrower is able to secure such letters, consents and waivers after using commercially reasonable efforts (such letters, consents and waivers shall be in form and substance satisfactory to the Administrative Agent, it being acknowledged and agreed that any landlord waiver in the form of Exhibit 4.1(d) is satisfactory to the Administrative Agent); provided that it is acknowledged and agreed that to the extent such estoppel letters, consents and/or waivers are not delivered prior to the Closing Date, the Credit Parties will provide such estoppel letters, consents and/or waivers to the Administrative Agent within thirty (30) days of the Closing Date (or such other time period as agreed to by the Administrative Agent) to the extent the Borrower is able to secure such letters, consents and waivers after using commercially reasonable efforts.

 

Section 5.15                            Federal Assignment of Claims Act.

 

The Borrower will execute all documents necessary to comply with the Federal Assignment of Claims Act and comparable state law with respect to the accounts arising from any Material Government Contract (to the extent not already delivered to the Administrative Agent), in each case within sixty (60) days (or such extended period of time as agreed to by the Administrative Agent) after entering into such Material Government Contract, such documents to be held in escrow by the Administrative Agent in accordance with the terms of Section 10(b) of the Security Agreement.

 

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Section 5.16                            Further Assurances.

 

(a)                                 Public/Private Designation.  Borrower will cooperate with the Administrative Agent in connection with the publication certain materials and/or information provided by or on behalf of the Borrower to the Administrative Agent and Lenders (collectively, “Information Materials”) pursuant to this Article V and will designate Information Materials (i) that are either available to the public or not material with respect to the Borrower and its Subsidiaries or any of their respective securities for purposes of United States federal and state securities laws, as “Public Information” and (ii) that are not Public Information as “Private Information”.

 

(b)                                 Intellectual Property.  Within ninety (90) days after the Closing Date (or such extended period of time as agreed to by the Administrative Agent) the Administrative Agent shall have received evidence that (i) all chain-of-title issues with respect to the Intellectual Property of the Credit Parties have been resolved to the satisfaction of the Administrative Agent,  (ii) all third party security interests with respect to the Intellectual Property of the Credit Parties have been released of record with the United States Patent and Trademark Office and the United States Copyright Office; provided that any Indebtedness associated with such security interests shall have been paid in full and terminated on or prior to the Closing Date and (iii) the patent/trademark/copyright filings requested by the Administrative Agent in order to perfect the Administrative Agent’s security interest in the Intellectual Property have been properly filed in the appropriate filing offices; provided, however, that with respect to clauses (i) and (ii) above, the Administrative Agent shall be able to waive such requirements to the extent the Administrative Agent shall have received satisfactory evidence from the Credit Parties that the Credit Parties have used commercially reasonable efforts to resolve such chain-of-title issues or obtain such releases and have been unsuccessful.

 

(c)                                  Other Further Assurances. Upon the reasonable request of the Administrative Agent, promptly perform or cause to be performed any and all acts and execute or cause to be executed any and all documents for filing under the provisions of the Uniform Commercial Code or any other Requirement of Law which are necessary or advisable to maintain in favor of the Administrative Agent, for the benefit of the Secured Parties, Liens on the Collateral that are duly perfected in accordance with the requirements of, or the obligations of the Credit Parties under, the Credit Documents and all applicable Requirements of Law.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Each of the Credit Parties hereby covenants and agrees that on the Closing Date, and thereafter (a) for so long as this Agreement is in effect, (b) until the Commitments have terminated, (c) until no Note remains outstanding and unpaid and the Credit Party Obligations and (d) until all other amounts owing to the Administrative Agent or any Lender hereunder are paid in full:

 

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Section 6.1                                   Indebtedness.

 

No Credit Party will, nor will it permit any Subsidiary to, contract, create, incur, assume or permit to exist any Indebtedness, except:

 

(a)                                 Indebtedness arising or existing under this Agreement and the other Credit Documents;

 

(b)                                 Indebtedness of the Credit Parties and their Subsidiaries existing as of the Closing Date as referenced in the financial statements referenced in Section 3.1 (and set out more specifically in Schedule 5 to the Disclosure Letter) and any renewals, refinancings or extensions thereof in a principal amount not in excess of that outstanding as of the date of such renewal, refinancing or extension;

 

(c)                                  Indebtedness of the Credit Parties and their Subsidiaries incurred after the Closing Date consisting of Capital Leases or Indebtedness incurred to provide all or a portion of the purchase price or cost of construction of an asset; provided that (i) such Indebtedness when incurred shall not exceed the purchase price or cost of construction of such asset; (ii) no such Indebtedness shall be renewed, refinanced or extended for a principal amount in excess of the principal balance outstanding thereon at the time of such renewal, refinancing or extension; and (iii) the total amount of all such Indebtedness shall not exceed $75,000,000 at any time outstanding;

 

(d)                                 Unsecured intercompany Indebtedness among the Credit Parties;

 

(e)                                  Indebtedness and obligations owing under Secured Hedging Agreements and other Hedging Agreements entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;

 

(f)                                   Indebtedness of a Person existing at the time such Person becomes a Subsidiary of a Credit Party in a transaction permitted hereunder in an aggregate principal amount not to exceed $75,000,000 for all such Persons during the period beginning on the Fifth Amendment Effective Date and ending on the Maturity Date; provided that any such Indebtedness was not created in anticipation of or in connection with the transaction or series of transactions pursuant to which such Person became a Subsidiary of a Credit Party;

 

(g)                                  Guaranty Obligations (a) in respect of Indebtedness of any Subsidiary to the extent such Indebtedness is permitted to exist or be incurred pursuant to this Section, and (b) to the extent such Guaranty Obligations guaranty the performance of Subsidiaries under real property lease agreements or product sales and service agreements and are entered into in the ordinary course of business;

 

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(h)                                 so long as no Default or Event of Default has occurred and is continuing or would otherwise arise as a result of the incurrence of such Indebtedness, subordinated or unsecured high yield or convertible debt of the Borrower and refinancings, exchanges, extensions and renewals thereof; provided that (i) the Credit Parties shall demonstrate to the reasonable satisfaction of the Administrative Agent that, after giving effect to any such  incurrence, the Credit Parties are in compliance with the financial covenants on a Pro Forma Basis set forth in Section 5.9 and (ii) such Indebtedness shall otherwise be on terms and conditions reasonably acceptable to the Administrative Agent;

 

(i)                                     (A) Foreign Subsidiaries may incur cash borrowings (excluding Foreign Mortgage Indebtedness and non-cash Indebtedness under foreign lines of credit) in an aggregate amount not to exceed $75,000,000 at any time outstanding and (B) Foreign Subsidiaries may collectively incur Indebtedness under letters of credit in an aggregate amount not to exceed $75,000,000 at any time outstanding;

 

(j)                                    letters of credit (to the extent fully cash collateralized) in an aggregate amount not to exceed $75,000,000 at any time outstanding;

 

(k)                                 other unsecured Indebtedness of the Credit Parties which does not exceed the greater of (i) $50,000,000 and (ii) 7.5% of Consolidated Total Tangible Assets, in the aggregate at any time outstanding; and

 

(l)                                     Obligations in respect of export/import bank financing arrangements of the Borrower with a lender that is reasonably acceptable to the Administrative Agent, subject to execution and delivery by all relevant parties of documentation (such loan agreements, security agreements and intercreditor agreements) that is reasonably satisfactory to Administrative Agent, so long as the principal amount of Indebtedness and other obligations secured thereby does not exceed $10,000,000 in the aggregate.

 

Section 6.2                                   Liens.

 

The Credit Parties will not, nor will they permit any Subsidiary to, contract, create, incur, assume or permit to exist any Lien with respect to any of their respective property or assets of any kind (whether real or personal, tangible or intangible), whether now owned or hereafter acquired, except for Permitted Liens.  Notwithstanding the foregoing, if a Credit Party shall grant a Lien on any of its assets in violation of this Section, then it shall be deemed to have simultaneously granted an equal and ratable Lien on any such assets in favor of the Administrative Agent for the ratable benefit of the Lenders, the Hedging Agreement Providers and the Cash Management Banks, to the extent such Lien has not already been granted to the Administrative Agent.

 

Section 6.3                                   Nature of Business.

 

No Credit Party will, nor will it permit any Subsidiary to, alter the character of its business in any material respect from that conducted as of the Closing Date.

 

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Section 6.4                                   Consolidation, Merger, Sale or Purchase of Assets, etc.

 

The Credit Parties will not, nor will they permit any Subsidiary to,

 

(a)                                 dissolve, liquidate or wind up its affairs, or sell, transfer, lease or otherwise dispose of its property or assets or agree to do so at a future time, except the following, without duplication, shall be expressly permitted:

 

(i)                                     (A) the sale, transfer, lease or other disposition of inventory and materials in the ordinary course of business and (B) the conversion of cash into Cash Equivalents and Cash Equivalents into cash;

 

(ii)                                  Dispositions resulting in Extraordinary Receipts for which such Credit Party or such Subsidiary has received any cash insurance proceeds or condemnation or expropriation award with respect to such property or assets;

 

(iii)                               the sale, lease, transfer or other disposition of machinery, parts and equipment no longer used or useful in the conduct of the business of the Credit Parties or any of their Subsidiaries;

 

(iv)                              (A) the sale, lease or transfer of property or assets from one Credit Party to another Credit Party, (B) the sale, lease or transfer of property or assets from a Subsidiary to a Credit Party, (C) the sale, lease or transfer of property or assets from a Subsidiary that is not a Credit Party to another Subsidiary that is not a Credit Party, (D) the dissolution of any Credit Party to the extent any and all assets of such Credit Party at the time of such dissolution are distributed to another Credit Party, (E) the dissolution of a Subsidiary that is not a Credit Party to the extent any and all assets of such Subsidiary at the time of such dissolution are distributed to another Subsidiary;

 

(v)                                 the termination of any Hedging Agreement;

 

(vi)                              the sale, lease or transfer of property or assets not to exceed the greater of, in any fiscal year, (i) $50,000,000 and (ii) 7.5% of Consolidated Total Tangible Assets, excluding transfers made pursuant to Section 6.4(a)(iv);

 

(vii)                           the dissolution, liquidation or winding up of the affairs of, or the sale, transfer, lease or other disposition of the property or assets of, any Subsidiary in connection with the Permitted Reorganization; and

 

(viii)                        sale leaseback transactions to the extent permitted pursuant to Section 6.12;

 

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provided that (A) with respect to clauses (i)(A), (ii), (iii), (vi) and (viii) above, at least 75% of the consideration received therefor by the Credit Parties or any such Subsidiary shall be in the form of cash or Cash Equivalents, (B) after giving effect to any disposition pursuant to clause (vi) above, the Credit Parties shall be in compliance on a Pro Forma Basis with the financial covenants set forth in Section 5.9 hereof, recalculated for the most recently ended month for which information is available, and (C) with respect to clauses (iv), (v), (vi) and (viii) above, no Default or Event of Default shall exist or shall result therefrom; provided, further, that with respect to sales of assets permitted hereunder only, the Administrative Agent shall be entitled, without the consent of  any Lender, to release its Liens relating to the particular assets sold; or

 

(b)                                 (i) purchase, lease or otherwise acquire (in a single transaction or a series of related transactions) the property or assets of any Person, other than (A) Permitted Acquisitions and Permitted Investments and (B) except as otherwise limited or prohibited herein, purchases or other acquisitions of inventory, materials, property and equipment in the ordinary course of business, or (ii) enter into any transaction of merger or consolidation, except for (A)  Investments or acquisitions permitted pursuant to Section 6.5 so long as the Credit Party subject to such merger or consolidation is the surviving entity, (B) (y) the merger or consolidation of a Subsidiary that is not a Credit Party with and into a Credit Party; provided that such Credit Party will be the surviving entity and (z) the merger or consolidation of a Credit Party with and into another Credit Party; provided that if the Borrower is a party thereto, the Borrower will be the surviving corporation, and (C) the merger or consolidation of a Subsidiary that is not a Credit Party with and into another Subsidiary that is not a Credit Party.

 

For avoidance of doubt, an issuance by the Borrower of its Equity Interests shall not be prohibited by this Section 6.4.

 

Section 6.5                                   Advances, Investments and Loans.

 

The Credit Parties will not, nor will they permit any Subsidiary to, make any Investment except for Permitted Investments.

 

Section 6.6                                   Transactions with Affiliates.

 

The Credit Parties will not, nor will they permit any Subsidiary to, enter into any transaction or series of transactions, whether or not in the ordinary course of business, with any officer, director, shareholder or Affiliate other than on terms and conditions substantially as favorable as would be obtainable in a comparable arm’s-length transaction with a Person other than an officer, director, shareholder or Affiliate.

 

Section 6.7                                   Ownership of Subsidiaries; Restrictions.

 

The Credit Parties will not, nor will they permit any Subsidiary to, create, form or acquire any Subsidiaries, except for (i) Domestic Subsidiaries that are joined as Additional Credit Parties as required by the terms hereof and (ii) Foreign Subsidiaries.  The Credit Parties will not sell, transfer, pledge or otherwise dispose of any Equity Interest or other equity interests in any of their Subsidiaries, nor will they permit any of their Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of any of their Equity Interest or other equity interests, except in a transaction permitted by Section 6.4.

 

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Section 6.8                                   Corporate Changes; Material Contracts.

 

No Credit Party will, nor will it permit any of its Subsidiaries to, (a) change its fiscal year, (b) amend, modify or change its articles of incorporation, certificate of designation (or corporate charter or other similar organizational document) operating agreement or bylaws (or other similar document) in any respect materially adverse to the interests of the Lenders without the prior written consent of the Required Lenders, which consent shall not be unreasonably withheld, (c) [Reserved], (d) change its state of incorporation, organization or formation without the consent of the Administrative Agent or have more than one state of incorporation, organization or formation or (e) change its accounting method (except in accordance with GAAP) in any manner adverse to the interests of the Lenders without the prior written consent of the Required Lenders, which consent shall not be unreasonably withheld.

 

Section 6.9                                   Limitation on Restricted Actions.

 

The Credit Parties will not, nor will they permit any Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Person to (a) pay dividends or make any other distributions to any Credit Party on its Equity Interest or with respect to any other interest or participation in, or measured by, its profits, (b) pay any Indebtedness or other obligation owed to any Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease or transfer any of its properties or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets pursuant to the Credit Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (a)-(d) above) for such encumbrances or restrictions existing under or by reason of (i) this Agreement and the other Credit Documents, (ii) applicable law, (iii) any document or instrument governing Indebtedness incurred pursuant to Section 6.1(c); provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, or (iv) any Permitted Lien or any document or instrument governing any Permitted Lien; provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien.

 

Section 6.10                            Restricted Payments.

 

The Credit Parties will not, nor will they permit any Subsidiary to, directly or indirectly, declare, order, make or set apart any sum for or pay any Restricted Payment, except (a) to make dividends payable solely in the same class of Equity Interest of such Person;  (b) to make dividends or other distributions payable to the Credit Parties (directly or indirectly through its Subsidiaries); (c) the Borrower may make (i) any payment of cash in lieu of fractional shares pursuant to the terms of any Permitted Bond Hedge Transaction or any convertible Indebtedness permitted pursuant to Section 6.1(h) and (ii) any cash settlement upon conversion of convertible Indebtedness permitted pursuant to Section 6.1(h) in an amount not to exceed the principal amount of such convertible Indebtedness so converted, and (d) so long as (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom 

 

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and (ii) the Borrower shall be in pro forma compliance with the financial covenants set forth in Sections 5.9 after giving effect to any such payment:

 

(A) the Credit Parties may purchase shares (or the equivalent, or rights to acquire shares or the equivalent) held by directors, officers and employees of such Credit Party;

 

(B) the Credit Parties may make regularly scheduled interest payments with respect to Subordinated Debt; and

 

(C) (i) the Credit Parties may make unlimited Restricted Payments (subject to the terms of any applicable subordination agreement); provided that, after giving effect to any Restricted Payment made pursuant to this clause (C)(i), on a Pro Forma Basis, (1) there is at least $35,000,000 of Revolver Availability and (2) the Consolidated Net Leverage Ratio is less than or equal to 3.00 to 1.00 and (ii) if the Borrower does not meet the criteria set forth in clause (C)(i) above, the Borrower may make Restricted Payments with respect to share repurchases of any class of Equity Interest of any Credit Party or any of its Subsidiaries and dividends or distributions on account of any shares of any class of Equity Interest of any Credit Party or any of its Subsidiaries in an aggregate amount, during the term of this Agreement, not to exceed (x) $50,000,000 minus (y) the aggregate amount of Permitted Investments made in reliance on item (ii) of the proviso to clause (k) of the definition of “Permitted Investments”; provided that (1) any Restricted Payments made pursuant to the above clause (C)(i) shall not be included in the limit provided in this clause (C)(ii) and (2) after giving effect to any Restricted Payment made pursuant to this clause (C)(ii), on a Pro Forma Basis, there is at least $35,000,000 of Revolver Availability.

 

Section 6.11                            Amendment of Subordinated Debt.

 

The Credit Parties will not, nor will they permit any Subsidiary to, without the prior written consent of the Required Lenders, amend, modify, waive or extend or permit the amendment, modification, waiver or extension of any term of any document governing or relating to any Subordinated Debt in a manner that is materially adverse to the interests of the Lenders.

 

Section 6.12                            Sale Leasebacks.

 

The Credit Parties will not, nor will they permit any Subsidiary to, directly or indirectly, become or remain liable as lessee or as guarantor or other surety with respect to any lease, whether an Operating Lease or a Capital Lease, of any property (whether real, personal or mixed), whether now owned or hereafter acquired, (a) which any Credit Party or any Subsidiary has sold or  transferred or is to sell or transfer to a Person which is not a Credit Party or a Subsidiary or (b) which any Credit Party or any Subsidiary intends to use for substantially the same purpose as any other property which has been sold or is to be sold or transferred by a Credit Party or a Subsidiary to another Person which is not a Credit Party or a Subsidiary in connection with such lease; provided, however, that the Credit Parties shall be permitted to make sale leaseback transactions (i) with respect to the Hawthorne Property and (ii) otherwise, so long as the fair market value of Property subject thereto does not exceed $25,000,000 in the aggregate for all such transactions during the period beginning on the Fifth Amendment Effective Date and ending on the Maturity Date.

 

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Section 6.13                            No Further Negative Pledges.

 

The Credit Parties will not, nor will they permit any Subsidiary to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon any of their properties or assets, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation, except (a) pursuant to this Agreement and the other Credit Documents, (b) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 6.1(c); provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, and (c) in connection with any Permitted Lien or any document or instrument governing any Permitted Lien; provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien.

 

Section 6.14                            Bank Accounts.

 

Set forth on Schedule 6 to the Disclosure Letter is a complete and accurate list of all checking, savings or other accounts (including securities accounts) of the Credit Parties at any bank or other financial institution, or any other account where money is or may be deposited or maintained with any Person as of the Closing Date.  Upon the Administrative Agent’s request, the Credit Parties agree to execute and delivery any deposit account control agreements or securities account control agreements as the Administrative Agent, in its sole discretion, may deem reasonably necessary; provided that in no event shall deposit account control agreements or securities account control agreement be required for (a) deposit accounts established solely as payroll and other zero balance accounts and (b) deposit accounts, so long as the balance in any such account does not exceed $100,000 and the aggregate balance in all such accounts does not exceed $500,000.

 

Section 6.15                            Permitted Reorganization.

 

Notwithstanding anything to the contrary contained in Article V or this Article VI, the Credit Parties and their respective Subsidiaries may engage in all or some of the transactions set forth on Schedule 6.15 in connection with the Permitted Reorganization.  In the event the Credit Parties or any of their respective Subsidiaries engages in a transaction set forth on Schedule 6.15 in connection with the Permitted Reorganization, the Borrower shall provide written notice thereof to the Administrative Agent within 60 days thereof, which notice shall identify the entities involved in such transaction and the nature of the transaction.

 

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Section 6.16                            Use of Proceeds.

 

The Credit Parties will not, nor will they permit any Subsidiary to, use any part of the proceeds of any Extension of Credit hereunder in any manner contrary to the uses contemplated under Sections 3.8, 3.11 and 3.30.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

Section 7.1                                   Events of Default.

 

An Event of Default shall exist upon the occurrence of any of the following specified events (each an “Event of Default”):

 

(a)                                 Payment.  (i) The Borrower shall fail to pay any principal on any Loan or Note when due (whether at maturity, by reason of acceleration or otherwise) in accordance with the terms hereof or thereof; or (ii) the Borrower shall fail to reimburse the Issuing Lender for any LOC Obligations when due (whether at maturity, by reason of acceleration or otherwise)  in accordance with the terms hereof; or (iii) the Borrower shall fail to pay any interest on any Loan or any fee or other amount payable hereunder when due (whether at maturity, by reason of acceleration or otherwise) in accordance with the terms hereof and such failure shall continue unremedied for three (3)  Business Days; or (iv) or any Guarantor shall fail to pay on the Guaranty in respect of any of the foregoing or in respect of any other Guaranty Obligations hereunder (after giving effect to the grace period in clause (iii)); or

 

(b)                                 Misrepresentation.  Any representation or warranty made or deemed made herein, in the Security Documents or in any of the other Credit Documents or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement shall prove to have been incorrect, false or misleading in any material respect on or as of the date made or deemed made; or

 

(c)                                  Covenant Default.  (i) Any Credit Party shall fail to perform, comply with or observe any term, covenant or agreement applicable to it contained in Sections 5.1, 5.2, 5.4, 5.7, 5.9, 5.11, 5.13 (except for subsection 5.13(c)), or Article VI hereof (other than as set forth in Section 7.1(c)(ii)); (ii) any Credit Party shall fail to perform, comply with or observe any term, covenant or agreement applicable to it contained in Sections 5.1 or 5.2 (to the extent curable) and such breach or failure to comply is not cured within three (3) Business Days of its occurrence;  or (iii) any Credit Party shall fail to comply with any other covenant contained in this Agreement or the other Credit Documents or any other agreement, document or instrument among any Credit Party, the Administrative Agent and the Lenders or executed by any Credit Party in favor of the Administrative Agent or the Lenders (other than as described in Sections 7.1(a) or 7.1(c)(i) above), and such breach or failure to comply is not cured within thirty (30) days of its occurrence; or

 

(d)                                 Indebtedness Cross-Default.  (i) Any Credit Party shall default in any payment of principal of or interest on any Indebtedness (other than the Loans, 

 

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Reimbursement Obligations and the Guaranty) in a principal amount outstanding of at least $35,000,000 for the Borrower and any of its Subsidiaries in the aggregate beyond any applicable grace period (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) any Credit Party shall default in the observance or performance of any other agreement or condition relating to any Indebtedness (other than the Loans, Reimbursement Obligations and the Guaranty) in a principal amount outstanding of at least $35,000,000 in the aggregate for the Credit Parties and their Subsidiaries or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to be repurchased, prepaid, deferred or redeemed (automatically or otherwise); provided that, for the avoidance of doubt, for the purpose of this clause (ii), it is agreed that neither a conversion of convertible Indebtedness permitted pursuant to Section 6.1(h) nor the occurrence of the events giving rise to such conversion right shall be considered to constitute such Indebtedness becoming due prior to its stated maturity or being required to be repurchased, prepaid, deferred or redeemed (automatically or otherwise); or (iii) any Credit Party shall breach or default any payment obligation under any Secured Hedging Agreement; or

 

(e)                                  [Reserved]; or

 

(f)                                   Bankruptcy Default.  (i) A Credit Party or any of its Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or a Credit Party or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against a Credit Party or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against a Credit Party or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) a Credit Party or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) a Credit Party or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing their inability to, pay its debts as they become due; or

 

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(g)                                  Judgment Default.  (i) One or more judgments or decrees (other than in respect of the GSA Matter to the extent the amounts applicable thereto are consistent in all material respects with the existing public disclosures made by the Borrower) shall be entered against a Credit Party or any of its Subsidiaries involving in the aggregate a liability (to the extent not covered by insurance) of $35,000,000 or more and all such judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within the earlier to occur of (A) thirty (30) days from the entry thereof or (B) the expiration of the period during which an appeal of such judgment or decree is permitted or (ii) any injunction, temporary restraining order or similar decree shall be issued against a Credit Party or any of its Subsidiaries that, individually or in the aggregate, could result in a Material Adverse Effect; or

 

(h)                                 ERISA Default.  (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any material “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan (other than a Permitted Lien) shall arise on the assets of the Credit Parties or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) a Credit Party, any of its Subsidiaries or any Commonly Controlled Entity shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, any Multiemployer Plan or (vi) any other similar event or condition shall occur or exist with respect to a Plan; or

 

(i)                                     Change of Control.  There shall occur a Change of Control; or

 

(j)                                    Invalidity of Guaranty.  At any time after the execution and delivery thereof, the Guaranty, for any reason other than the satisfaction in full of all Credit Party Obligations, shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void, or  any Credit Party shall contest the validity, enforceability, perfection or priority of the Guaranty, any Credit Document, or any Lien granted thereunder in writing or deny in writing that it has any further liability, including with respect to future advances by the Lenders, under any Credit Document to which it is a party; or

 

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(k)                                 Invalidity of Credit Documents.  Any other Credit Document shall fail to be in full force and effect or to give the Administrative Agent and/or the Lenders the security interests, liens, rights, powers, priority and privileges purported to be created thereby (except as such documents may be terminated or no longer in force and effect in accordance with the terms thereof, other than those indemnities and provisions which by their terms shall survive) or any Lien granted pursuant to any Credit Document shall fail, in violation of the terms of this Agreement, to be a first priority, perfected Lien on a material portion of the Collateral; or

 

(l)                                     Subordinated Debt.  Any subordination provisions contained in any agreement or instrument entered into or issued in connection with any Subordinated Debt shall cease to be in full force and effect or shall cease to give the Lenders the rights, powers and privileges purported to be created thereby; or

 

(m)                             Uninsured Loss.  Any uninsured damage to or loss, theft or destruction of any assets of the Credit Parties or any of their Subsidiaries shall occur (other than in respect of the GSA Matter to the extent the amounts applicable thereto are consistent in all material respects with the existing public disclosures made by the Borrower) that is in excess of $35,000,000.

 

Section 7.2                                   Acceleration; Remedies.

 

Upon the occurrence and during the continuance of an Event of Default, then, and in any such event, (a) if such event is a Bankruptcy Event of Default, automatically the Commitments shall immediately terminate and the Loans (with accrued interest thereon), and all other amounts under the Credit Documents (including without limitation the maximum amount of all contingent liabilities under Letters of Credit) shall immediately become due and payable, and (b) if such event is any other Event of Default, any or all of the following actions may be taken:  (i) with the written consent of the Required Lenders, the Administrative Agent may, or upon the written request of the Required Lenders, the Administrative Agent shall, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; (ii) the Administrative Agent may, or upon the written request of the Required Lenders, the Administrative Agent shall, declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable forthwith and direct the Borrower to pay to the Administrative Agent cash collateral as security for the LOC Obligations for subsequent drawings under then outstanding Letters of Credit an amount equal to the maximum amount of which may be drawn under Letters of Credit then outstanding, whereupon the same shall immediately become due and payable; and/or (iii) with the written consent of the Required Lenders, the Administrative Agent may, or upon the written request of the Required Lenders, the Administrative Agent shall, exercise such other rights and remedies as provided under the Credit Documents and under applicable law.

 

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ARTICLE VIII

 

THE ADMINISTRATIVE AGENT

 

Section 8.1                                   Appointment and Authority.

 

Each of the Lenders and the Issuing Lender hereby irrevocably appoints Wells Fargo to act on its behalf as the Administrative Agent hereunder and under the other Credit Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and neither the Borrower nor any other Credit Party shall have rights as a third party beneficiary of any of such provisions.

 

Section 8.2                                   Nature of Duties.

 

Anything herein to the contrary notwithstanding, none of the Bookrunners,  Arrangers or other agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Lender hereunder.  Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

 

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

Notwithstanding anything contained in this Agreement to the contrary, the Syndication Agent and Documentation Agents are named as such for recognition purposes only and in their capacities as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Credit Documents or the Transactions; it being understood and agreed that the Syndication Agent and the Documentation Agents shall be entitled to all indemnification and reimbursement rights in favor of the Administrative Agent, as and to the extent, otherwise provided for in this Agreement. Without limitation of the foregoing, the Syndication Agent and the Documentation Agents shall not, solely by reason of this Agreement or any other Credit Document, have any fiduciary relationship in respect of any Lender or any other Person.

 

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Section 8.3                                   Exculpatory Provisions.

 

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Credit Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)                                 shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Credit Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Credit Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Credit Document or applicable law; and

 

(c)                                  shall not, except as expressly set forth herein and in the other Credit Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 9.1 and 7.2) or (ii) in the absence of its own gross negligence or willful misconduct.

 

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

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Section 8.4                                   Reliance by Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other  distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

Section 8.5                                   Notice of Default.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders.  The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided, however, that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders except to the extent that this Agreement expressly requires that such action be taken, or not taken, only with the consent or upon the authorization of the Required Lenders, or all of the Lenders, as the case may be.

 

Section 8.6                                   Non-Reliance on Administrative Agent and Other Lenders.

 

Each Lender and the Issuing Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representation or warranty to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of any Credit Party, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender.  Each Lender and the Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and the Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Credit Document or any related agreement or any document furnished hereunder or thereunder.

 

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Section 8.7                                   Indemnification.

 

The Lenders agree to indemnify the Administrative Agent, the Issuing Lender, and the Swingline Lender in its capacity hereunder and their Affiliates and their respective officers, directors, agents and employees (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Credit Party Obligations) be imposed on, incurred by or asserted against any such indemnitee in any way relating to or arising out of any Credit Document or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any such indemnitee under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from such indemnitee’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction.  The agreements in this Section shall survive the termination of this Agreement and payment of the Notes, any Reimbursement Obligation and all other amounts payable hereunder.

 

Section 8.8                                   Administrative Agent in Its Individual Capacity.

 

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

Section 8.9                                   Successor Administrative Agent.

 

The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, or an Affiliate of any such bank.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent meeting the qualifications set forth above provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) 

 

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the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents (except that in the case of any Collateral held by the Administrative Agent  on behalf of the Lenders or the Issuing Lender under any of the Credit Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this paragraph.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Credit Documents (if not already discharged therefrom as provided above in this paragraph).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Credit Documents, the provisions of this Article and Section 9.5 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

 

Any resignation by Wells Fargo Bank, as Administrative Agent pursuant to this Section shall also constitute its resignation as Issuing Lender and Swingline Lender.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender and Swingline Lender, (b) the retiring Issuing Lender and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Credit Documents, and (c) the successor Issuing Lender shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.

 

Section  8.10                         Collateral and Guaranty Matters.

 

(a)                                 Each Lender irrevocably authorizes (including in its or any of its Affiliate’s capacity as a potential Hedging Agreement Provider or Cash Management Bank) and directs the Administrative Agent:

 

(i)                                     to release any Lien on any Collateral granted to or held by the Administrative Agent under any Credit Document (i) upon termination of the Revolving Commitments and payment in full of all Credit Party Obligations (other than (1) contingent indemnification obligations and (2) obligations and liabilities under Secured Cash Management Agreements as to which arrangements satisfactory to the applicable Cash Management Bank shall have been made) and the expiration or termination of all Letters of Credit, (ii) that is transferred or to be transferred as part of or in connection with any sale or other disposition permitted under Section 6.4 and Section 6.12 or (iii) subject to Section 9.1, if approved, authorized or ratified in writing by the Required Lenders;

 

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(ii)                                  to subordinate any Lien on any Collateral granted to or held by the Administrative Agent under any Credit Document to the holder of any Lien on such Collateral that is permitted by clause (c) of the definition of “Permitted Liens”;

 

(iii)                               to release any Guarantor from its obligations under the applicable Guaranty if such Person ceases to be a Guarantor as a result of a transaction permitted hereunder; and

 

(iv)                              as provided in Sections 4.1(d)(viii), 4.1(d)(ix) and 4.1(e), to release any Lien on any Collateral granted to or held by the Administrative Agent with respect to any prior Indebtedness.

 

(b)                                 In connection with a termination or release pursuant to this Section, the Administrative Agent shall promptly execute and deliver to the applicable Credit Party, at the Borrower’s expense, all documents that the applicable Credit Party shall reasonably request to evidence such termination or release.  Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of Collateral, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section.

 

Section 8.11.                         Secured Cash Management Agreements.  No Cash Management Bank that obtains the benefits of Section 2.11(b) or any Collateral by virtue of the provisions hereof or of any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Credit Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Credit Documents.  Notwithstanding any other provision of this Article VIII to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Cash Management Agreements unless the Administrative Agent has received written notice of such Secured Cash Management Agreements, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1                                   Amendments, Waivers and Release of Collateral.

 

Neither this Agreement nor any of the other Credit Documents, nor any terms hereof or thereof may be amended, modified, extended, restated, replaced, or supplemented (by amendment, waiver, consent or otherwise) except in accordance with the provisions of this 

 

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Section nor may Collateral be released except as specifically provided herein or in the Security Documents or in accordance with the provisions of this Section.  The Required Lenders may or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into  with the Borrower written amendments, supplements or modifications hereto and to the other Credit Documents for the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive or consent to the departure from, on such terms and conditions as the Required Lenders may specify in such instrument, any of the requirements of this Agreement or the other Credit Documents or any Default or Event of Default and its consequences; provided, however, that no such amendment, supplement, modification, release, waiver or consent shall:

 

(i)                                     reduce the amount or extend the scheduled date of maturity of any Loan or Note or any installment thereon, or reduce the stated rate of any interest or fee payable hereunder (except in connection with a waiver of interest at the increased post-default rate set forth in Section 2.8 which shall be determined by a vote of the Required Lenders) or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Lender’s Commitment, in each case without the written consent of each Lender directly affected thereby; or

 

(ii)                                  amend, modify or waive any provision of this Section or reduce the percentage specified in the definition of Required Lenders, without the written consent of all the Lenders; or

 

(iii)                               release the Borrower or all or substantially all of the Guarantors from obligations under the Guaranty, without the written consent of all of the Lenders and Hedging Agreement Providers; or

 

(iv)                              release all or substantially all of the Collateral without the written consent of all of the Lenders and Hedging Agreement Providers; or

 

(v)                                 subordinate the Loans to any other Indebtedness without the written consent of all of the Lenders; or

 

(vi)                              permit a Letter of Credit to have an original expiry date more than eighteen (18) months from the date of issuance without the consent of each of the Revolving Lenders; provided, that the expiry date of any Letter of Credit may be extended in accordance with the terms of Section 2.3(a); or

 

(vii)                           permit the Borrower to assign or transfer any of its rights or obligations under this Agreement or other Credit Documents without the written consent of all of the Lenders; or

 

(viii)                        amend, modify or waive any provision of the Credit Documents requiring consent, approval or request of the Required Lenders or all Lenders without the written consent of the Required Lenders or all the Lenders as appropriate; or

 

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(ix)                              amend, modify or waive the order in which Credit Party Obligations are paid or in a manner that would alter the pro rata sharing of payments by and among the Lenders in Section 2.11(b) without the written consent of each Lender and each Hedging Agreement Provider directly affected thereby; or

 

(x)                                 amend, modify or waive any provision of Article VIII without the written consent of the then Administrative Agent; or

 

(xi)                              amend or modify the definition of Credit Party Obligations to delete or exclude any obligation or liability described therein without the written consent of each Lender, each Hedging Agreement Provider and each Cash Management Bank directly affected thereby; or

 

(xii)                           (A) amend the definitions of “Hedging Agreement,” “Secured Hedging Agreement,” or “Hedging Agreement Provider” without the consent of any Hedging Agreement Provider that would be adversely affected thereby or (B) amend the definitions of “Cash Management Agreement,” “Secured Cash Management Agreement,” or “Cash Management Bank” without the consent of any Cash Management Bank that would be adversely affected thereby;

 

provided, further, that no amendment, waiver or consent affecting the rights or duties of the Administrative Agent, the Issuing Lender or the Swingline Lender under any Credit Document shall in any event be effective, unless in writing and signed by the Administrative Agent, the Issuing Lender and/or the Swingline Lender, as applicable, in addition to the Lenders required hereinabove to take such action.

 

Any such waiver, any such amendment, supplement or modification and any such release shall apply equally to each of the Lenders and shall be binding upon the Borrower, the other Credit Parties, the Lenders, the Administrative Agent and all future Participants, Lenders or assignees.  In the case of any waiver, the Borrower, the other Credit Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the outstanding Loans and Notes and other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

 

Notwithstanding any of the foregoing to the contrary, the consent of the Borrower and the other Credit Parties shall not be required for any amendment, modification or waiver of the provisions of Article VIII (other than the provisions of Section 8.9).

 

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (a) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein and (b) the Required Lenders may consent to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding.

 

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For the avoidance of doubt and notwithstanding any provision to the contrary contained in this Section 9.1, this Agreement may be amended (or amended and restated) with the written consent of the Credit Parties and the Required Lenders (i) to increase the aggregate Commitments of the Lenders (provided that no Lender shall be required to increase its commitment without its consent), (ii) to add one or more additional borrowing Tranches to this Agreement and to provide for the ratable sharing of the benefits of this Agreement and the other Credit Documents with the other then outstanding Credit Party Obligations in respect of the extensions of credit from time to time outstanding under such additional borrowing Tranche(s) and the accrued interest and fees in respect thereof and (iii) to include appropriately the lenders under such additional borrowing Tranches in any determination of the Required Lenders and/or to provide consent rights to such lenders under subsections (ix) and/or (x) of Section 9.1 corresponding to the consent rights of the other Lenders thereunder.

 

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (a) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein, (b) the Required Lenders may consent to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and (c) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except (i) that the Commitment of such Lender may not be increased or extended without the consent of such Lender and (ii) to the extent such amendment, waiver or consent impacts such Defaulting Lender more than the other Lenders.

 

Section 9.2                                   Notices.

 

(a)                                 Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:

 

(i)                                     If to the Borrower or any other Credit Party:

 

12525 Chadron Avenue

Hawthorne, CA 90250

Attention:                                         Chief Financial Officer

Telephone:                                   (310) 978-0516

Fax:                                                                       (310) 644-6765

 

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With a copy to:

 

12525 Chadron Avenue

Hawthorne, CA 90250

Attention: General Counsel

Telephone:                                   (310) 978-0516

Fax:                                                                       (310) 644-6765

 

(ii)                                  If to the Administrative Agent:

 

Wells Fargo Bank, National Association, as Administrative Agent

Commercial Banking Group

South Bay RCBO

MAC E2076-052

111 West Ocean Blvd., Suite 530

Long Beach, CA  90802

Attention:                                         Tom Sigurdson, Vice President

Telephone:                                   (562) 628-2108

Fax:                                                                       (562) 437-6698

Email:                                                            sigurdt@wellsfargo.com

 

With a copy to:

 

King & Spalding LLP

100 N. Tryon St.

Suite 3900

Charlotte, NC 28202

Attention:                                         William H. Fuller

Telephone:                                   (704) 503-2589

Email:                                                            bfuller@kslaw.com

 

(iii)                               if to a Lender, to it at its address (or telecopier number) set forth in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

(b)                                 Electronic Communications.  Notices and other communications to the Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Lender pursuant to Article II if such Lender 

 

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or the Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  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.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)                                  Change of Address, Etc.  Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

 

Section 9.3                                   No Waiver; Cumulative Remedies.

 

No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Section 9.4                                   Survival of Representations and Warranties.

 

All representations and warranties made hereunder and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans; provided that all such representations and warranties shall terminate on the date upon which the Commitments have been terminated and all amounts owing hereunder and under any Notes have been paid in full.

 

Section 9.5                                   Payment of Expenses and Taxes; Indemnity.

 

(a)                                 Costs and Expenses.  The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), and shall pay all fees and time charges and disbursements for attorneys who may be

 

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employees of the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Credit Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Lender and the Swingline Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or Swingline Loan or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender, the Issuing Lender or the Swingline Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the Issuing Lender), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender, the Issuing Lender or the Swingline Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Credit Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit; provided, however, that with respect to the above clause (iii), the Borrower shall only pay the reasonable fees and disbursements of counsel for a single counsel selected by the Administrative Agent and a single counsel selected by all of the Lenders (unless any such Lender, in good faith, shall reasonably determine that there is a conflict of interest that causes it to be necessary for such Lender to be represented by separate counsel).

 

(b)                                 Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, the Issuing Lender and the Swingline Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable and documented fees, charges and disbursements of any one counsel for the Indemnitees collectively, and, if reasonably necessary, a conflicts counsel), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Credit Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Credit Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Materials of Environmental Concern on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any liability under Environmental Law related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or 

 

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proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Credit Party, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and nonappealable  judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (B) result from a claim brought by the Borrower or any other Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Credit Document, if the Borrower or such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

(c)                                  Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender, Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Lender, Swingline Lender or such Related Party, as the case may be, such Lender’s Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Issuing Lender or Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), Issuing Lender or Swingline Lender in connection with such capacity.

 

(d)                                 Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the Credit Parties shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Credit Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in paragraph (b) above 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 Credit Documents or the transactions contemplated hereby or thereby.

 

(e)                                  Payments.  All amounts due under this Section shall be payable promptly/not later than five (5) Business Days after written demand therefor.

 

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Section 9.6                                   Successors and Assigns; Participations.

 

(a)                                 Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                               in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

 

(ii)                                  Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.

 

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(iii)                               Required Consents.  No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

 

(A)                               the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof;

 

(B)                               the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender with a Commitment in respect of such facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

 

(C)                               the consent of the Issuing Lender and Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of a Revolving Commitment.

 

(iv)                              Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption and, if such assignee is not a Lender, an Affiliate of a Lender or an Approved Fund, a processing and recordation fee of $3,500, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)                                 No Assignment to Certain Persons.  No such assignment shall be made to (A) any Credit Party or any Credit Party’s Affiliates or Subsidiaries or (B) any Defaulting Lender or any of its Subsidiaries or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

 

(vi)                              No Assignment to Natural Persons.  No such assignment shall be made to a natural person.

 

(vii)                           Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set 

 

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forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Applicable Percentage.  Notwithstanding the foregoing, in  the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.14, 2.16 and 9.5 with respect to facts and circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

 

(c)                                  Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in Charlotte, North Carolina 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 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, and the Borrower, the Administrative Agent and the Lenders may 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, notwithstanding notice to the contrary.  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.

 

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(d)                                 Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders, Issuing Lender and Swingline Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that affects such Participant.  Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided such Participant agrees to be subject to Section 2.19 as if it were a Lender.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.7 as though it were a Lender, provided such Participant agrees to be subject to Section 2.11 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register in the United States 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 Credit Documents (the “Participant Register”).  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.

 

(e)                                  Limitations Upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Sections 2.14 and 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent (such consent not to be unreasonably withheld or delayed).

 

(f)                                   Certain Pledges.  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; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

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Section 9.7                                   Right of Set-off; Sharing of Payments.

 

(a)                                 If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Lender, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower or such Credit Party now or hereafter existing under this Agreement or any other Credit Document to such Lender or the Issuing Lender, irrespective of whether or not such Lender or the Issuing Lender shall have made any demand under this Agreement or any other Credit Document and although such obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to a branch or office of such Lender or the Issuing Lender different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender, the Issuing Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Lender or their respective Affiliates may have.  Each Lender and the Issuing Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

(b)                                 If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (i) notify the Administrative Agent of such fact, and (ii) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)                                  the provisions of this paragraph shall not be construed to apply to (A)          any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Letters of Credit to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

 

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(c)                                  Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Credit Party in the amount of such participation.

 

Section 9.8                                   Table of Contents and Section Headings.

 

The table of contents and the Section and subsection headings herein are intended for convenience only and shall be ignored in construing this Agreement.

 

Section 9.9                                   Counterparts; Integration; Effectiveness; Electronic Execution.

 

(a)                                 Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Credit Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or email shall be effective as delivery of a manually executed counterpart of this Agreement.

 

(b) Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

Section 9.10                            Severability.

 

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

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Section 9.11                            Integration.

 

This Agreement and the other Credit Documents represent the agreement of the Borrower, the other Credit Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, the Borrower, the other Credit Parties, or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or therein.

 

Section 9.12                            Governing Law.

 

This Agreement shall be governed by, and construed in accordance with, the law of the State of New York.

 

Section 9.13                            Consent to Jurisdiction; Service of Process and Venue.

 

(a)                                 Consent to Jurisdiction. The Borrower and each other Credit Party irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Credit Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York sitting State court or, to the fullest extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or in any other Credit Document shall affect any right that the Administrative Agent, any Lender or the Issuing Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Credit Document against the Borrower or any other Credit Party or its properties in the courts of any jurisdiction.

 

(b)                                 Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.2.  Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

 

(c)                                  Venue. The Borrower and each other Credit Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Credit Document in any court referred to in paragraph (a) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

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Section 9.14                            Confidentiality.

 

Each of the Administrative Agent, the Lenders and the Issuing Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives (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 it (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 hereto, (e) in connection with the exercise of any remedies hereunder, under any other Credit Document, Secured Hedging Agreement or Secured Cash Management Agreement or any action or proceeding relating to this Agreement, any other Credit Document, Secured Hedging Agreement or Secured Cash Management Agreement or the enforcement of rights hereunder or thereunder,  (f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (g) (i) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (ii) an investor or prospective investor in securities issued by an Approved Fund that also agrees that Information shall be used solely for the purpose of evaluating an investment in such securities issued by the Approved Fund, (iii) a trustee, collateral manager, servicer, backup servicer, noteholder or secured party in connection with the administration, servicing and reporting on the assets serving as collateral for securities issued by an Approved Fund, or (iv) a nationally recognized rating agency that requires access to information regarding the Credit Parties, the Loans and Credit Documents in connection with ratings issued in respect of securities issued by an Approved Fund (in each case, 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), (h) with the consent of the Borrower or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Lender on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries, 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 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.

 

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Section 9.15                            Acknowledgments.

 

The Borrower and the other Credit Parties each hereby acknowledges that:

 

(a)                                 it has been advised by counsel in the negotiation, execution and delivery of each Credit Document;

 

(b)                                 neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrower or any other Credit Party arising out of or in connection with this Agreement and the relationship between the Administrative Agent and the Lenders, on one hand, and the Borrower and the other Credit Parties, on the other hand, in connection herewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture exists among the Lenders or among the Borrower or the other Credit Parties and the Lenders.

 

Section 9.16                            Waivers of Jury Trial; Waiver of Consequential Damages.

 

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

 

Section 9.17                            Patriot Act Notice.

 

Each Lender and the Administrative Agent (for itself and not on behalf of any other party) hereby notifies the Borrower that, pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower and the other Credit Parties, which information includes the name, address and tax identification and address of the Borrower and the other Credit Parties and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower and the other Credit Parties in accordance with the Patriot Act.

 

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Section 9.18                            Resolution of Drafting Ambiguities.

 

Each Credit Party acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of this Agreement and the other Credit Documents to which it is a party, that it and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof or thereof.

 

Section 9.19                            Continuing Agreement.

 

This Credit Agreement shall be a continuing agreement and shall remain in full force and effect until all Loans, LOC Obligations, interest, fees and other Credit Party Obligations (other than those obligations that expressly survive the termination of this Credit Agreement) have been paid in full and all Commitments and Letters of Credit have been terminated.  Upon termination, the Credit Parties shall have no further obligations (other than those obligations that expressly survive the termination of this Credit Agreement) under the Credit Documents and the Administrative Agent shall, at the request and expense of the Borrower, deliver all the Collateral in its possession to the Borrower and release all Liens on the Collateral; provided that should any payment, in whole or in part, of the Credit Party Obligations be rescinded or otherwise required to be restored or returned by  the Administrative Agent or any Lender, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, then the Credit Documents shall automatically be reinstated and all Liens of the Administrative Agent shall reattach to the Collateral and all amounts required to be restored or returned and all costs and expenses incurred by the Administrative Agent or any Lender in connection therewith shall be deemed included as part of the Credit Party Obligations.

 

Section 9.20                            Lender Consent

 

Each Person signing a Lender Consent (a) approves the Credit Agreement, (b) authorizes and appoints the Administrative Agent as its agent in accordance with the terms of Article VIII, (c) authorizes the Administrative Agent to execute and deliver this Agreement on its behalf, and (d) is a Lender hereunder and therefore shall have all the rights and obligations of a Lender under this Agreement as if such Person had directly executed and delivered a signature page to this Agreement.

 

Section 9.21                            Judgment Currency.

 

If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Credit Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent, the Issuing Lender or other applicable Lender could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given.  The obligation of the Borrower in respect of any such sum due from it to Administrative Agent, the Issuing Lender or other applicable Lender hereunder or under the other Credit Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable 

 

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provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent, the Issuing Lender or other applicable Lender of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent, the Issuing Lender or other applicable Lender may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent, the Issuing Lender or other applicable Lender from the Borrower in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent, the Issuing Lender or other applicable Lender against such loss.  If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent, the Issuing Lender or other applicable Lender in such currency, the Administrative Agent, the Issuing Lender or other applicable Lender agrees to return the amount of any excess to the Borrower (or to any other Person who may be entitled thereto under applicable law).

 

Section 9.22                            Press Releases and Related Matters.

 

The Credit Parties and their Affiliates agree that they will not in the future issue any press releases or other public disclosure using the name of Administrative Agent or any Lender or their respective Affiliates or referring to this Agreement or any of the Credit Documents without the prior written consent of such Person, which consent shall not be unreasonably withheld or delayed,  unless (and only to the extent that) the Credit Parties or such Affiliate is required to do so under law and then, in any event, the Credit Parties or such Affiliate will consult with such Person before issuing such press release or other public disclosure.  The Credit Parties consent to the publication by Administrative Agent or any Lender of customary advertising material relating to the Transactions using the name, product photographs, logo or trademark of the Credit Parties.

 

Section 9.23                            No Advisory or Fiduciary Responsibility.

 

In connection with all aspects of each Transaction, each of the Credit Parties acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:  (a) the credit facility provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document) are an arm’s-length commercial transaction between the Credit Parties and their Affiliates, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Credit Parties are capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the Transactions and by the other Credit Documents (including any amendment, waiver or other modification hereof or thereof); (b) in connection with the process leading to such transaction, the Administrative Agent, the Arrangers and the Lenders each are and have been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any Credit Party or any of their Affiliates, stockholders, creditors or employees or any other Person; (c) none of the Administrative Agent, the Arrangers nor the Lenders have assumed or will assume an advisory, agency or fiduciary responsibility in favor of any Credit Party with respect to any of the Transactions or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other 

 

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Credit Document (irrespective of whether the Administrative Agent, the Arrangers or the Lenders have advised or are currently advising any Credit Party or any of its Affiliates on other matters) and none of the Administrative Agent, the Arrangers nor the Lenders have any obligation to any Credit Party or any of their Affiliates with respect to the Transactions except those obligations expressly set forth herein and in the other Credit Documents; (d) the Administrative Agent, the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Credit Parties and their Affiliates, and none of the Administrative Agent, the Arrangers nor the Lenders have any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (e) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the Transactions (including any amendment, waiver or other modification hereof or of any other Credit Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  Each of the Credit Parties hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, the Arrangers or the Lenders with respect to any breach or alleged breach of agency or fiduciary duty.

 

ARTICLE X

 

GUARANTY

 

Section 10.1                            The Guaranty.

 

In order to induce the Lenders to enter into this Agreement, any Hedging Agreement Provider to enter into any Secured Hedging Agreement and any Cash Management Bank to enter into any Secured Cash Management Agreement and to extend credit hereunder and thereunder and in recognition of the direct benefits to be received by the Guarantors from the Extensions of Credit hereunder and any Secured Hedging Agreement or any Secured Cash Management Agreement, each of the Guarantors hereby agrees with the Administrative Agent, the Lenders, the Hedging Agreement Providers and the Cash Management Banks as follows: each Guarantor hereby unconditionally and irrevocably jointly and severally guarantees as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, by acceleration or otherwise, of any and all Credit Party Obligations.  If any or all of the indebtedness becomes due and payable hereunder or under any Secured Hedging Agreement or any Secured Cash Management Agreement, each Guarantor unconditionally promises to pay such indebtedness to the Administrative Agent, the Lenders, the Hedging Agreement Providers, the Cash Management Banks, or their respective order, or demand, together with any and all reasonable expenses which may be incurred by the Administrative Agent or the Lenders in collecting any of the Credit Party Obligations.  The Guaranty set forth in this Article X is a guaranty of timely payment and not of collection.  The word “indebtedness” is used in this Article X in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of the Borrower, including specifically all Credit Party Obligations, arising in connection with this Agreement, the other Credit Documents, any Secured Hedging Agreement or any Secured Cash Management Agreement, in each case, heretofore, now, or hereafter made, incurred or created, whether voluntarily or involuntarily, absolute or contingent, liquidated or 

 

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unliquidated, determined or undetermined, whether or not such indebtedness is from time to time reduced, or extinguished and thereafter increased or incurred, whether the Borrower may be liable individually or jointly with others, whether or not recovery upon such indebtedness may be or hereafter become barred by any statute of limitations, and whether or not such indebtedness may be or hereafter become otherwise unenforceable.

 

Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each such Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the Bankruptcy Code).

 

Section 10.2                            Bankruptcy.

 

Additionally, each of the Guarantors unconditionally and irrevocably guarantees jointly and severally the payment of any and all Credit Party Obligations of the Borrower to the Lenders, any Hedging Agreement Provider and any Cash Management Bank whether or not due or payable  by the Borrower upon the occurrence of any Bankruptcy Event and unconditionally promises to pay such Credit Party Obligations to the Administrative Agent for the account of the Lenders and to any such Hedging Agreement Provider or any such Cash Management Bank, or order, on demand, in lawful money of the United States.  Each of the Guarantors further agrees that to the extent that the Borrower or a Guarantor shall make a payment or a transfer of an interest in any property to the Administrative Agent, any Lender, any Hedging Agreement Provider or any Cash Management Bank, which payment or transfer or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to the Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.

 

Section 10.3                            Nature of Liability.

 

The liability of each Guarantor hereunder is exclusive and independent of any security for or other guaranty of the Credit Party Obligations of the Borrower whether executed by any such Guarantor, any other guarantor or by any other party, and no Guarantor’s liability hereunder shall be affected or impaired by (a) any direction as to application of payment by the Borrower or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Credit Party Obligations of the Borrower, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, or (e) any payment made to the Administrative Agent, the Lenders, any Hedging Agreement Provider or any Cash Management Bank on the Credit Party Obligations which the Administrative Agent, such Lenders, such Hedging Agreement Provider or such Cash Management Bank repay the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each of the Guarantors waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding.

 

135

 

Section 10.4                            Independent Obligation.

 

The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor or the Borrower and whether or not any other Guarantor or the Borrower is joined in any such action or actions.

 

Section 10.5                            Authorization.

 

Each of the Guarantors authorizes the Administrative Agent, each Lender, each Hedging Agreement Provider and each Cash Management Bank without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of the Credit Party Obligations or any part thereof in accordance with this Agreement, any Secured Hedging  Agreement and any Secured Cash Management Agreement, as applicable, including any increase or decrease of the rate of interest thereon, (b) take and hold security from any Guarantor or any other party for the payment of this Guaranty or the Credit Party Obligations and exchange, enforce waive and release any such security, (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent and the Lenders in their discretion may determine, (d) release or substitute any one or more endorsers, Guarantors, the Borrower or other obligors and (e) to the extent otherwise permitted herein, release or substitute any Collateral.

 

Section 10.6                            Reliance.

 

It is not necessary for the Administrative Agent, the Lenders, any Hedging Agreement Provider or any Cash Management Bank to inquire into the capacity or powers of the Borrower or the officers, directors, members, partners or agents acting or purporting to act on its behalf, and any Credit Party Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

 

Section 10.7                            Waiver.

 

(a)                                 Each of the Guarantors waives any right (except as shall be required by applicable statute and cannot be waived) to require the Administrative Agent, any Lender, any Hedging Agreement Provider or any Cash Management Bank to (i) proceed against the Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security held from the Borrower, any other guarantor or any other party, or (iii) pursue any other remedy in the Administrative Agent’s, any Lender’s, any Hedging Agreement Provider’s or any Cash Management Bank’s power whatsoever.  Each of the Guarantors waives any defense based on or arising out of any defense of the Borrower, any other guarantor or any other party other than payment in full of the Credit Party 

 

136

 

Obligations (other than contingent indemnity obligations), including without limitation any defense based on or arising out of the disability of the Borrower, any other guarantor or any other party, or the unenforceability of the Credit Party Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full of the Credit Party Obligations.  The Administrative Agent may, at its election, foreclose on any security held by the Administrative Agent or a Lender by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Administrative Agent or any Lender may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Credit Party Obligations have been paid in full and the Commitments have been terminated.  Each of the Guarantors waives any defense arising out of any such election by the Administrative Agent or any of the Lenders, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantors against the Borrower or any other party or any security.

 

(b)                                 Each of the Guarantors waives all presentments, demands for performance, protests and notices, including without limitation notices of nonperformance, notice of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional Credit Party Obligations.  Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Credit Party Obligations and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any Lender shall have any duty to advise such Guarantor of information known to it regarding such circumstances or risks.

 

(c)                                  Each of the Guarantors hereby agrees it will not exercise any rights of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders, any Hedging Agreement Provider or any Cash Management Bank against the Borrower or any other guarantor of the Credit Party Obligations of the Borrower owing to the Lenders, such Hedging Agreement Provider or such Cash Management Bank (collectively, the “Other Parties”) and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of this Guaranty until such time as the Credit Party Obligations shall have been paid in full and the Commitments have been terminated.  Each of the Guarantors hereby further agrees not to exercise any right to enforce any other remedy which the Administrative Agent, the Lenders, any Hedging Agreement Provider or any Cash Management Bank now have or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the Credit Party Obligations of the Borrower and any benefit of, and any right to participate in, any security or collateral given to or for the benefit of the Lenders, the Hedging Agreement Providers and/or the Cash Management Banks to secure payment of the Credit Party Obligations of the Borrower until such time as the Credit Party Obligations (other than contingent indemnity obligations) shall have been paid in full and the Commitments have been terminated.

 

137

 

Section 10.8                            Limitation on Enforcement.

 

The Lenders, the Hedging Agreement Providers and the Cash Management Banks agree that this Guaranty may be enforced only by the action of the Administrative Agent acting upon the instructions of the Required Lenders, such Hedging Agreement Provider (only with respect to obligations under the applicable Secured Hedging Agreement) or such Cash Management Bank (only with respect to obligations under the applicable Secured Cash Management Agreement) and that no Lender, Hedging Agreement Provider or Cash Management Bank shall have any right individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the Lenders under the terms of this Agreement, for the benefit of any Hedging Agreement Provider under any Secured Hedging Agreement and for the benefit of any Cash Management Bank under any Secured Cash Management Agreement.  The Lenders, the Hedging Agreement Providers and the Cash Management Banks further agree that this Guaranty may not be enforced against any director, officer, employee or stockholder of the Guarantors.

 

Section 10.9                            Confirmation of Payment.

 

The Administrative Agent and the Lenders will, upon request after payment of the Credit Party Obligations which are the subject of this Guaranty and termination of the Commitments relating thereto, confirm to the Borrower, the Guarantors or any other Person that such indebtedness and obligations have been paid and the Commitments relating thereto terminated, subject to the provisions of Section 10.2.

 

Section 10.10                     Eligible Contract Participant.

 

Notwithstanding anything to the contrary in any Credit Document, no Guarantor shall be deemed under this Article X to be a guarantor of any Swap Obligations if such Guarantor was not an “eligible contract participant” as defined in § 1a(18) of the Commodity Exchange Act, at the time the guarantee under this Article X becomes effective with respect to such Swap Obligation and to the extent that the providing of such guarantee by such Guarantor would violate the Commodity Exchange Act; provided however that in determining whether any Guarantor is an “eligible contract participant” under the Commodity Exchange Act, the guarantee of the Credit Party Obligations of such Guarantor under this Article X by a Guarantor that is also a Qualified ECP Guarantor shall be taken into account.

 

Section 10.11                     Keepwell.

 

Without limiting anything in this Article X, each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time to each Guarantor that is not an “eligible contract participant” under the Commodity Exchange Act at the time the guarantee under this Article X becomes effective with respect to any Swap Obligation, to honor all of the Obligations of such Guarantor under this Article X in respect of such Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 10.11 for the maximum amount of such liability that can be hereby incurred without 

 

138

 

rendering its undertaking under this Section 10.11, or otherwise under this Article X, voidable under applicable Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The undertaking of each Qualified ECP Guarantor under this Section 10.11 shall remain in full force and effect until termination of the Commitments and payment in full of all Loans and other Credit Party Obligations. Each Qualified ECP Guarantor intends that this Section 10.11 constitute, and this Section 10.11 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Guarantor that would otherwise not constitute an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder.

 

Section 10.12                     Acknowledgment and Consent to Bail-In of EEA Financial Institutions.

 

Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)         the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)         the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or

 

(iii)                               the variation of the terms of such liability  in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

[Signature Pages Follow]

 

139

 

OSI SYSTEMS, INC.

CREDIT AGREEMENT

 

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

 

 

	
BORROWER:
    	
OSI   SYSTEMS, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GUARANTORS:
    	
FERSON   TECHNOLOGIES, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
OSI   DEFENSE SYSTEMS, LLC,
    
	
 
    	
a   Florida limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
OSI   ELECTRONCS, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

	
 
    	
OSI   OPTOELECTRONICS, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
RAPISCAN   LABORATORIES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
RAPISCAN   SYSTEMS, INC.,
    
	
 
    	
a   California corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
SPACELABS   HEALTHCARE, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
SPACELABS   HEALTHCARE, L.L.C.,
    
	
 
    	
a   Washington limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

	
 
    	
SPACELABS   MEDICAL, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
S2   GLOBAL, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TSA   SYSTEMS, LTD.,
    
	
 
    	
a   Colorado corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
OSI   LASER DIODE, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
RAPISCAN   GOVERNMENT SERVICES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

	
 
    	
 
    
	
ADMINISTRATIVE   AGENT:
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent on behalf of the Lenders
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

EXHIBIT B

Schedule 1.1(c)

Lender Commitments

 

	
Lender
    	
 
    	
Commitment
    	
 
    	
Commitment
   Percentage
    	
 
    
	
Wells Fargo   Bank, National Association
    	
 
    	
$
    	
110,000,000.00
    	
 
    	
20.95238095238
    	
%
    
	
Bank of America,   N.A.
    	
 
    	
$
    	
108,000,000.00
    	
 
    	
20.57142857143
    	
%
    
	
JPMorgan Chase   Bank, N.A.
    	
 
    	
$
    	
98,000,000.00
    	
 
    	
18.66666666667
    	
%
    
	
U.S. Bank, N.A.
    	
 
    	
$
    	
75,000,000.00
    	
 
    	
14.28571428571
    	
%
    
	
HSBC Bank USA   N.A.
    	
 
    	
$
    	
75,000,000.00
    	
 
    	
14.28571428571
    	
%
    
	
Branch Banking   and Trust Company
    	
 
    	
$
    	
35,000,000.00
    	
 
    	
6.66666666667
    	
%
    
	
Manufacturers   Bank
    	
 
    	
$
    	
14,000,000.00
    	
 
    	
2.66666666667
    	
%
    
	
California   Bank & Trust
    	
 
    	
$
    	
10,000,000.00
    	
 
    	
1.90476190476
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
$
    	
525,000,000.00
    	
 
    	
100.000000000
    	
%
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

EXHIBIT C

Schedule 1.1(d)

AS&E Cost Savings and Synergies Add-Backs

 

	
AS&E Cost Savings and Synergies Add-Back
    	
 
    	
Four Fiscal Quarter Period Ending
    
	
$
    	
18,000,000.00
    	
 
    	
December 31, 2016
    
	
$
    	
18,000,000.00
    	
 
    	
March 31, 2017
    
	
$
    	
15,000,000.00
    	
 
    	
June 30, 2017
    
	
$
    	
12,000,000.00
    	
 
    	
September 30, 2017
    
	
$
    	
11,000,000.00
    	
 
    	
December 31, 2017
    
	
$
    	
10,000,000.00
    	
 
    	
March 31, 2018
    
	
$
    	
9,000,000.00
    	
 
    	
June 30, 2018
    
	
$
    	
0
    	
 
    	
Each four fiscal quarter period ending after   June 30, 2018
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

EXHIBIT D

Schedule 6.15

Permitted Reorganization

 

	
 
    	
 
    	
Company
    	
 
    	
Old Owner(s)
    	
 
    	
New Owner(s)
    	
 
    	
Action(s)
    	
 
    
	
37.
    	
 
    	
Rapiscan Mexico Holdings LLC
    	
 
    	
Rapiscan Systems, Inc.
    	
 
    	
any Foreign Subsidiary of the   Borrower
    	
 
    	
Rapiscan Systems, Inc.   will transfer 100% ownership to a Foreign Subsidiary of the   Borrower
    	
 
    

 

 

OSI SYSTEMS, INC.

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

EXHIBIT E

New Lenders

 

1.              Branch Banking and Trust CompanyExhibit

Exhibit 10.1

FIFTH AMENDED AND RESTATED  
FINANCING AND SECURITY AGREEMENT
Dated
December 15, 2016
By and Between
GP STRATEGIES CORPORATION
as US Borrower
And
General Physics (UK) Ltd.
GP Strategies Holdings Limited
GP Strategies Limited 
And
GP Strategies Training Limited
collectively as UK Borrowers
And
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Lender

TABLE OF CONTENTS
	
				
	ARTICLE I DEFINITIONS
	2
	

	Section 1.1
	Certain Defined Terms.
	2
	

	Section 1.2
	Accounting Terms and Other Definitional Provisions.
	22
	

	ARTICLE II THE CREDIT FACILITIES
	23
	

	Section 2.1
	The US Revolving Credit Facility.
	23
	

	2.1.1
	US Revolving Credit Facility.
	23
	

	2.1.2
	Procedure for Making Advances Under the US Revolving Loan; Lender Protection Loans.
	23
	

	2.1.3
	US Revolving Credit Note.
	24
	

	2.1.4
	Optional Prepayments of US Revolving Loan.
	24
	

	2.1.5
	US Revolving Loan Account.
	24
	

	2.1.6
	US Revolving Credit Unused Line Fee.
	25
	

	Section 2.2
	The Letter of Credit Facility.
	25
	

	2.2.1
	Letters of Credit.
	25
	

	2.2.2
	Letter of Credit Fees.
	25
	

	2.2.3
	Terms of Letters of Credit.
	26
	

	2.2.4
	Procedures for Letters of Credit.
	27
	

	2.2.5
	Payments of Letter of Credit Obligations.
	27
	

	2.2.6
	Change in Law; Increased Cost.
	28
	

	2.2.7
	General Letter of Credit Provisions.
	29
	

	Section 2.3
	The Term Loan Facility.
	30
	

	2.3.1
	Term Loan.
	30
	

	2.3.2
	The Term Note.
	30
	

	2.3.3
	Term Loan Installment Payments.
	30
	

	2.3.4
	Optional Prepayments of Term Loan.
	30
	

	Section 2.4
	The UK Revolving Credit Facility.
	31
	

	Section 2.5
	Applicable Interest Rates.
	33
	

	Section 2.6
	General Financing Provisions.
	33
	

	2.6.1
	Borrowers’ Representatives.
	33
	

	2.6.2
	Use of Proceeds of the Revolving Loan.
	35
	

	2.6.3
	Computation of Interest and Fees.
	35
	

	2.6.4
	Maximum Interest Rate.
	35
	

	2.6.5
	Payments.
	35
	

	2.6.6
	Liens; Setoff.
	36
	

	2.6.7
	Requirements of Law.
	36
	

	2.6.8
	Guaranty.
	37
	

	2.6.9
	ACH Transactions and Swap Contracts.
	40
	

	2.6.10
	Termination of Revolving Credit Facility.
	41
	

	ARTICLE III THE COLLATERAL
	41
	

	Section 3.1
	Debt and Obligations Secured.
	41
	

	Section 3.2
	Grant of Liens.
	41
	

	Section 3.3
	Collateral Disclosure List.
	42
	

	Section 3.4
	Personal Property.
	42
	

	
				
	Section 3.5
	Record Searches.
	43
	

	Section 3.6
	Costs.
	43
	

	Section 3.7
	Release.
	43
	

	Section 3.8
	Limitations.
	44
	

	Section 3.9
	Inconsistent Provisions.
	44
	

	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	44
	

	Section 4.1
	Representations and Warranties.
	44
	

	4.1.1
	Subsidiaries.
	44
	

	4.1.2
	Existence.
	44
	

	4.1.3
	Power and Authority.
	45
	

	4.1.4
	Binding Agreements.
	45
	

	4.1.5
	No Conflicts.
	45
	

	4.1.6
	No Defaults, Violations.
	45
	

	4.1.7
	Compliance with Laws.
	46
	

	4.1.8
	Margin Stock.
	46
	

	4.1.9
	Investment Company Act; Margin Stock.
	46
	

	4.1.10
	Litigation.
	46
	

	4.1.11
	Financial Condition.
	46
	

	4.1.12
	Full Disclosure.
	47
	

	4.1.13
	Indebtedness for Borrowed Money.
	47
	

	4.1.14
	Taxes.
	47
	

	4.1.15
	ERISA.
	47
	

	4.1.16
	Title to Properties.
	48
	

	4.1.17
	Patents, Trademarks, Etc.
	48
	

	4.1.18
	Employee Relations.
	48
	

	4.1.19
	Presence of Hazardous Materials or Hazardous Materials Contamination.
	48
	

	4.1.20
	Perfection and Priority of Collateral.
	49
	

	4.1.21
	No Suspension or Debarment.
	49
	

	4.1.22
	Collateral Disclosure List.
	49
	

	4.1.23
	Business Names and Addresses.
	50
	

	4.1.24
	Accounts.
	50
	

	4.1.25
	Patent Collateral
	50
	

	Section 4.2
	Survival; Updates of Representations and Warranties.
	51
	

	ARTICLE V CONDITIONS PRECEDENT
	51
	

	Section 5.1
	Conditions to the Initial Advance and Initial Letter of Credit.
	51
	

	5.1.1
	Organizational Documents.
	51
	

	5.1.2
	Opinion of Borrowers’ Counsel.
	52
	

	5.1.3
	Notes.
	52
	

	5.1.4
	Financing Documents, Security Documents and Collateral.
	52
	

	5.1.5
	Other Documents, Etc.
	52
	

	5.1.6
	Payment of Fees.
	52
	

	5.1.7
	Collateral Disclosure List.
	52
	

	5.1.8
	Recordings and Filings.
	53
	

	5.1.9
	Insurance Certificate.
	53
	

	Section 5.2
	Conditions to all Extensions of Credit.
	53
	

	5.2.1
	Compliance.
	53
	

	
				
	5.2.2
	Default.
	53
	

	5.2.3
	Representations and Warranties.
	53
	

	5.2.4
	Adverse Change.
	53
	

	5.2.5
	Legal Matters.
	54
	

	ARTICLE VI COVENANTS
	54
	

	Section 6.1
	Affirmative Covenants.
	54
	

	6.1.1
	Financial Statements.
	54
	

	6.1.2
	Reports to SEC and to Stockholders.
	55
	

	6.1.3
	Recordkeeping, Rights of Inspection, Field Examination, Etc.
	55
	

	6.1.4
	Existence.
	56
	

	6.1.5
	Compliance with Laws.
	56
	

	6.1.6
	Preservation of Properties.
	57
	

	6.1.7
	Line of Business.
	57
	

	6.1.8
	Insurance.
	57
	

	6.1.9
	Taxes.
	57
	

	6.1.10
	ERISA.
	58
	

	6.1.11
	Notification of Events of Default and Adverse Developments.
	58
	

	6.1.12
	Hazardous Materials; Contamination.
	59
	

	6.1.13
	Financial Covenants.
	59
	

	6.1.14
	Equipment.
	60
	

	6.1.15
	Defense of Title and Further Assurances.
	61
	

	6.1.16
	Business Names; Locations.
	61
	

	6.1.17
	Protection of Collateral.
	61
	

	6.1.18
	Depository Relationship.
	62
	

	Section 6.2
	Negative Covenants.
	62
	

	6.2.1
	Fundamental Changes.
	62
	

	6.2.2
	Acquisitions.
	63
	

	6.2.3
	Subsidiaries.
	63
	

	6.2.4
	Indebtedness.
	63
	

	6.2.5
	Investments, Loans and Other Transactions.
	64
	

	6.2.6
	Subordinated Indebtedness.
	64
	

	6.2.7
	Liens.
	65
	

	6.2.8
	Restricted Payments.
	65
	

	6.2.9
	Other Businesses.
	65
	

	6.2.10
	ERISA Compliance.
	65
	

	6.2.11
	Prohibition on Hazardous Materials.
	65
	

	6.2.12
	Method of Accounting; Fiscal Year.
	66
	

	6.2.13
	Disposition of Collateral.
	66
	

	ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES
	66
	

	Section 7.1
	Events of Default.
	66
	

	7.1.1
	Failure to Pay.
	66
	

	7.1.2
	Breach of Representations and Warranties.
	66
	

	7.1.3
	Failure to Comply with Specific Covenants.
	67
	

	7.1.4
	Failure to Comply with Covenants.
	67
	

	7.1.5
	Default Under Other Financing Documents or Obligations.
	67
	

	7.1.6
	Receiver; Bankruptcy.
	67
	

	
				
	7.1.7
	Involuntary Bankruptcy, etc.
	67
	

	7.1.8
	Judgment.
	68
	

	7.1.9
	Execution; Attachment.
	68
	

	7.1.10
	Default Under Other Borrowings.
	68
	

	7.1.11
	Challenge to Agreements.
	68
	

	7.1.12
	Material Adverse Change.
	68
	

	7.1.13
	Contract Default, Debarment or Suspension.
	68
	

	7.1.14
	Liquidation, Termination, Dissolution, etc.
	69
	

	Section 7.2
	Remedies.
	69
	

	7.2.1
	Acceleration.
	69
	

	7.2.2
	Further Advances.
	69
	

	7.2.3
	Uniform Commercial Code.
	69
	

	7.2.4
	Specific Rights With Regard to Collateral.
	70
	

	7.2.5
	Application of Proceeds.
	71
	

	7.2.6
	Performance by the Lender.
	71
	

	7.2.7
	Other Remedies.
	72
	

	ARTICLE VIII MISCELLANEOUS
	72
	

	Section 8.1
	Notices.
	72
	

	Section 8.2
	Amendments; Waivers.
	73
	

	Section 8.3
	Cumulative Remedies.
	74
	

	Section 8.4
	Severability.
	75
	

	Section 8.5
	Assignments by the Lender.
	75
	

	Section 8.6
	Participations by the Lender.
	76
	

	Section 8.7
	Disclosure of Information by the Lender.
	76
	

	Section 8.8
	Successors and Assigns.
	76
	

	Section 8.9
	Continuing Agreements.
	76
	

	Section 8.10
	Enforcement Costs.
	76
	

	Section 8.11
	Applicable Law; Jurisdiction.
	77
	

	8.11.1
	Applicable Law.
	77
	

	8.11.2
	Submission to Jurisdiction.
	77
	

	8.11.3
	Service of Process.
	77
	

	Section 8.12
	Duplicate Originals and Counterparts.
	77
	

	Section 8.13
	Headings.
	78
	

	Section 8.14
	No Agency.
	78
	

	Section 8.15
	Date of Payment.
	78
	

	Section 8.16
	Entire Agreement.
	78
	

	Section 8.17
	Waiver of Trial by Jury.
	78
	

	Section 8.18
	LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES.
	79
	

	Section 8.19
	Liability of the Lender.
	79
	

	Section 8.20
	Indemnification.
	79
	

	Section 8.21
	Confidentiality.
	80
	

	Section 8.22
	Compliance with Laws.
	81
	

	Section 8.23
	Electronic Transmission of Data.
	81
	

	Section 8.24
	Arbitration.
	81
	

	 
	 
	 

FIFTH AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
THIS FIFTH AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this “Agreement”) is made as of December 15, 2016, by and between GP STRATEGIES CORPORATION, a Delaware corporation (“GP” or the “US Borrower”), General Physics (UK) Ltd., a company organized and existing under the laws of England and Wales (“General Physics UK”), GP Strategies Holdings Limited, a company organized and existing under the laws of England and Wales (“GP Holdings UK”), GP Strategies Limited, a company organized and existing under the laws of England and Wales (“GP Strategies UK”) and GP Strategies Training Limited, a company organized and existing under the laws of England and Wales (“GP Strategies Training UK”) (each of General Physics UK, GP Holdings UK, GP Strategies UK and GP Strategies Training UK, individually a “UK Borrower” and collectively, the “UK Borrowers”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Lender”).  
RECITALS
A.    The US Borrower, the UK Borrowers and the Lender are parties to a Fourth Amended and Restated Financing and Security Agreement dated as of September 2, 2014 (as amended by that certain First Amendment to Fourth Amended and Restated Financing and Security Agreement dated as of September 28, 2015, as amended by that certain Second Amendment to Fourth Amended and Restated Financing and Security Agreement dated July __, 2016, and as amended, restated, modified, substituted, extended and renewed from time to time,  the “Fourth Amendment and Restatement”) pursuant to which the Lender has provided (i) to the US Borrower (a) a revolving credit facility in the maximum principal amount of $65,000,000 and (b) a term loan in the original principal amount of $40,000,000 and (ii) to the UK Borrowers, a revolving credit facility in the maximum principal amount of $7,000,000, in each case to be used by the US Borrower or the UK Borrowers for the certain Permitted Uses as defined in the Fourth Amendment and Restatement.
B.    The US Borrower has applied to the Lender for (i) an increase in the revolving credit facility to the maximum principal amount of $100,000,000, (ii) a term loan in the principal amount of up to $40,000,000 and (iii) for an extension of the Term Loan Maturity Date, UK Revolving Credit Expiration Date and the US Revolving Credit Expiration Date.
C.    The Lender has agreed with the US Borrower and the UK Borrowers to restate the Fourth Amendment and Restatement in its entirety upon the terms and subject to the conditions set forth in this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

ARTICLE I 
DEFINITIONS
		
	Section 1.1
	Certain Defined Terms.

As used in this Agreement, the terms defined in the Preamble and Recitals hereto shall have the respective meanings specified therein, and the following terms shall have the following meanings:
“Account” individually and “Accounts” collectively mean all presently existing or hereafter acquired or created accounts, accounts receivable, health-care insurance receivables, contract rights, notes, drafts, instruments, acceptances, chattel paper, leases and writings evidencing a monetary obligation or a security interest in, or a lease of, goods, all rights to payment of a monetary obligation or other consideration under present or future contracts (including, without limitation, all rights (whether or not earned by performance) to receive payments under presently existing or hereafter acquired or created letters of credit), or by virtue of property that has been sold, leased, licensed, assigned or otherwise disposed of, services rendered or to be rendered, loans and advances made or other considerations given, by or set forth in or arising out of any present or future chattel paper, note, draft, lease, acceptance, writing, bond, insurance policy, instrument, document or general intangible, and all extensions and renewals of any thereof, all rights under or arising out of present or future contracts, agreements or general interest in goods which gave rise to any or all of the foregoing, including all commercial tort claims, other claims or causes of action now existing or hereafter arising in connection with or under any agreement or document or by operation of law or otherwise, all collateral security of any kind (including, without limitation, real property mortgages and deeds of trust) Supporting Obligations, letter-of-credit rights and letters of credit given by any Person with respect to any of the foregoing, all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing and all equipment and general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all Proceeds of the foregoing.
“Account Debtor” means any Person who is obligated on a Receivable and “Account Debtors” mean all Persons who are obligated on the Receivables.
“ACH Transactions” means any cash management or related services including the automatic clearing house transfer of funds by Lender for the account of any Borrower pursuant to agreement or overdrafts.
“Additional Borrower” means each Person that has executed and delivered an Additional Borrower/Guarantor Joinder Supplement in the capacity of a Borrower that has been accepted and approved by Lender.  
“Additional Borrower/Guarantor Joinder Supplement” means an Additional Borrower/Guarantor Joinder Supplement in substantially the form attached to the Financing Agreement as EXHIBIT A, with the blanks appropriately completed and executed and delivered by the Additional Borrower or the Additional Guarantor and accepted by the Lender.  

2

“Additional Guarantor” means each Person that has executed and delivered an Additional Borrower/Guarantor Joinder Supplement in the capacity of a Guarantor and accepted by the Lender.  
 “Adjusted EBITDA” has the meaning set forth in Section 6.1.13(a) (Financial Covenant Definitions).
“Adjustment Date” has the meaning described in Section 8.5 (Assignments by Lender).
“Affiliate” means, with respect to any designated Person, any other Person, (a) directly or indirectly controlling, directly or indirectly controlled by, or under direct or indirect common control with the Person designated, (b) directly or indirectly owning or holding twenty percent (20%) or more of any equity interest in such designated Person, or (c) twenty percent (20%) or more of whose stock or other equity interest is directly or indirectly owned or held by such designated Person.  For purposes of this definition, the term “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or other equity interests or by contract or otherwise. 
“Agreement” means this Fifth Amended and Restated Financing and Security Agreement, as amended, restated, supplemented or otherwise modified in writing in accordance with the provisions of Section 8.2 (Amendments; Waivers).
“Applicable Margin” means the applicable rate per annum added to either Daily One Month LIBOR for borrowing in Dollars and Sterling or Daily One Month EURIBOR for borrowings in Euros and the applicable rate per annum, as set forth in Sections 2.1.6 (US Revolving Credit Unused Line Fee), established as the US Revolving Credit Unused Line Fee.  The Applicable Margin (expressed as basis points) shall vary depending upon the Maximum Leverage Ratio, as follows:
	
					
	Pricing  
Tier
	Maximum Leverage Ratio
	Applicable to  
Interest Rate 

	Applicable to 
Unused Line Fee
	 

	I
	Less than 1.00 to 1.00
	125 basis points
	15 basis points
	 

	II
	Greater than or equal to 1.00 to 1.00  
but less than 1.50 to 1.00
	175 basis points
	20 basis points
	 

	III
	Greater than or equal to 1.50 to 1.00  
but less than 2.00 to 1.00
	200 basis points
	25 basis points
	 

	IV
	Greater than or equal to 2.00 to 1.00
	250 basis points
	25 basis points
	 

	 
	 
	 
	 
	 

The Applicable Margin, as of the date of this Agreement, shall be based on Pricing Tier II above.  Changes in the Applicable Margin shall be made not more frequently than quarterly based on the Maximum Leverage Ratio, determined by the Lender subsequent to its review of the quarterly reports required by Section 6.1.1(c) (Quarterly Statements and Certificates) and shall be effective within three (3) Business Days after receipt and satisfactory review by the Lender of the quarterly reports and Compliance Certificate required under Section 6.1.1(c).  

3

“Applicable Rate” means the sum of (a) the Applicable Margin plus (b) (i) Daily One Month LIBOR for borrowings in Dollars and Sterling or (ii) Daily One Month EURIBOR for borrowings in Euros.  
“Assets” means at any date all assets that, in accordance with GAAP consistently applied, should be classified as assets on a consolidated balance sheet of US Borrower and its consolidated Subsidiaries.
“Assignee” means any Person to which the Lender assigns all or any portion of its interests under this Agreement, any Commitment, the US Revolving Loan, the UK Revolving Loan or the Term Loan, in accordance with the provisions of Section 8.5 (Assignments by Lender), together with any and all successors and assigns of such Person; “Assignees” means the collective reference to all Assignees.
“Available Foreign Currencies” means Euro, Sterling, Danish Kroner, Japanese Yen, Swedish Krona, Swiss Francs, Hong Kong Dollars, Canadian Dollars, Singapore Dollars, Kuwaiti Dinars, and any other available and freely-convertible foreign currency selected by the US Borrower and approved by the Lender at the time of issuance of the applicable Letter of Credit. 
“Bankruptcy Code” means (a) Title 11 of the United States Code, as amended from time to time and any successor Laws in the United States and (b) with respect to any of the UK Borrowers, the Insolvency Act of 1986, as amended from time to time and any successor Laws in England and Wales.
“Borrower” means the US Borrower, the UK Borrowers and each Additional Borrower; “Borrowers” means the collective reference to the US Borrower, the UK Borrowers and all Additional Borrowers.
“Business Day” means (a) for purposes of payments by the US Borrower, any day other than a Saturday, Sunday or other day on which commercial banks in the State are authorized or required to close; and (b) for purpose of payments by any of the UK Borrowers and for purposes of determining the Daily One Month LIBOR and Daily One Month EURIBOR rates, the term “Business Day” shall mean a London Business Day.  
 “Capital Adequacy Regulation” means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.
“Capital Lease” means with respect to any Person any lease of real or personal property, for which the related Lease Obligations have been or should be, in accordance with GAAP consistently applied, capitalized on the balance sheet of that Person.

4

“Cash Equivalents” means (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit with maturities of one (1) year or less from the date of acquisition of, or money market accounts maintained with, Lender, any Affiliate of Lender, or any other domestic commercial bank having capital and surplus in excess of One Hundred Million Dollars ($100,000,000.00) or such other domestic financial institutions or domestic brokerage houses to the extent disclosed to, and approved by, Lender and (c) commercial paper of a domestic issuer rated at least either A-1 by Standard & Poor’s Corporation (or its successor) or P-1 by Moody’s Investors Service, Inc. (or its successor) with maturities of six (6) months or less from the date of acquisition. 
“Cash Flow” has the meaning set forth in Section 6.1.13(a) (Financial Covenant Definitions). 
“Change of Control” shall be deemed to have occurred if (i) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, capital stock of the US Borrower (or other securities convertible into such capital stock) representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the US Borrower and, in connection with such acquisition, Continuing Directors shall cease to constitute a majority of the members of the board of directors of the US Borrower then in office, (ii) the direct or indirect sale, assignment, transfer, lease, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the US Borrower, any UK Borrower or any of their respective Subsidiaries, taken as a whole, to any “person” (individually and as that term is used in Section 13(d)(3) and Section 14(d)(2) of the Exchange Act), other than the US Borrower, the UK Borrowers or one of their respective Subsidiaries, or (iii) Continuing Directors shall cease for any reason to constitute a majority of the members of the board of directors of the US Borrower then in office.
“Chattel Paper” means a record or records (including, without limitation, electronic chattel paper) that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, or a lease of specific goods; all Supporting Obligations with respect thereto; any returned, rejected or repossessed goods and software covered by any such record or records and all proceeds (in any form including, without limitation, accounts, contract rights, documents, chattel paper, instruments and general intangibles) of such returned, rejected or repossessed goods; and all Proceeds of the foregoing.
“Closing Date” means the date of this Agreement.
“Collateral” means all property of each and every Borrower subject from time to time to the Liens of this Agreement, any of the Security Documents and/or any of the other Financing Documents, together with any and all Proceeds thereof; provided, however, in no event shall the grant of any Lien under any of Financing Documents secure an Excluded Swap Obligation of the granting Credit Party and in no event shall the Collateral include the Excluded Assets.
“Collateral Disclosure List” has the meaning described in Section 3.3 (Collateral Disclosure List).

5

“Commitments” means the collective reference to each and every commitment to extend credit under the terms of this Agreement including, without limitation, the US Revolving Credit Commitment, the Term Loan Commitment and the UK Revolving Credit Commitment.  
“Committed Amount” means the Lender’s US Revolving Loan Committed Amount, the Term Loan Committed Amount or the UK Revolving Loan Committed Amount, as the case may be, and “Committed Amounts” means collectively the US Revolving Loan Committed Amount, the Term Loan Committed Amount and UK Revolving Committed Amount.  
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Compliance Certificate” means a periodic Compliance Certificate described in Section 6.1.1 (Financial Statements).
“Commonly Controlled Entity” means an entity, whether or not incorporated, which together with the US Borrower would be deemed to be a “single employer” within the meaning of Internal Revenue Code §414(b) or (c), and for the purpose of ERISA §302 and/or Internal Revenue Code §§412, 4971, 4977, 4980D, 4980E and/or each “applicable section” under Internal Revenue Code §14(t)(2), within the meaning of the Internal Revenue Code §414(b), (c) (m) or (o).
“Continuing Directors” means, during any period of up to 12 consecutive months after the date hereof, individuals who at the beginning of such 12 month period were directors of the US Borrower (together with any new director whose election by the US Borrower’s board of directors or whose nomination for election by the US Borrower’s stockholders was approved by a vote of (i) at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved or (ii) stockholders representing not less than 50% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of the US Borrower).
“Copyrights” means and includes, in each case whether now existing or hereafter arising, all rights, title and interest in and to (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, copyright applications, and all renewals of any of the foregoing, (b) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past, current or future infringements of any of the foregoing, (c) the right to sue for past, present and future infringements of any of the foregoing, and (d) all rights corresponding to any of the foregoing throughout the world.
“Credit Facility” means each credit facility now or hereafter extended under or secured by this Agreement and “Credit Facilities” means the collective reference to any one or more of the credit facilities included as a Credit Facility. On the date of this Agreement, the Credit Facilities include the US Revolving Credit Facility (including, without limitation, the Letter of Credit Facility), the Term Loan Facility and the UK Revolving Credit Facility.  
“Credit Parties” means, collectively, the US Borrower, each of the UK Borrowers and each Person who becomes a Borrower or a Guarantor after the date of this Agreement and each Person who at any time provides a guaranty or other credit support or collateral support of any nature whatsoever with respect to the Obligations. The term “Credit Party” means each Person included among the Credit Parties.  

6

“Current Letter of Credit Obligations” has the meaning described in Section 2.2.5 (Payments of Letters of Credit).
“Daily One Month EURIBOR” means, for any day, the rate of interest equal to EURIBOR then in effect for delivery for a one (1) month period.  
“Daily One Month LIBOR” means, for any day, the rate of interest equal to LIBOR then in effect for delivery for a one (1) month period.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” means an event which, with the giving of notice or lapse of time, or both, would reasonably be expected to constitute an Event of Default under the provisions of this Agreement.
“Documents” means all documents of title or receipts, whether now existing or hereafter acquired or created, and all Proceeds of the foregoing.
“Dollars” means dollars in lawful currency of the United States of America.
 “Dollar Equivalent” means, on the date of determination, the amount of Dollars which results from the sale of a given amount of Euros or Sterling as determined by the Lender based on the arithmetical mean of the buy and sell spot rates of exchange for such currency, such amount being available for Borrowers’ information on Bloomberg by following this link: http://www.bloomberg.com/markets/currencies.   
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States (but excluding any territory or possession thereof).
“EBITDA” has the meaning set forth in Section  6.1.13(a) (Financial Covenant Definitions).
“Enforcement Costs” means all reasonable expenses, charges, costs and fees whatsoever of any nature whatsoever paid or incurred by or on behalf of the Lender in connection with (a) any or all of the Obligations, this Agreement and/or any of the other Financing Documents, (b) the creation, perfection, collection, maintenance, preservation, defense, protection, realization upon, disposition, sale or enforcement of all or any part of the Collateral, this Agreement or any of the other Financing Documents, including, without limitation, those costs and expenses more specifically enumerated in Section 3.6 (Costs) and/or Section 8.10 (Enforcement Costs), and further including, without limitation, amounts paid to lessors, processors, bailees, warehousemen, sureties, judgment creditors and others in possession of or with a Lien against or claimed against the Collateral, and (c) the monitoring, administration, processing and/or servicing of any or all of the Obligations, the Financing Documents, and/or the Collateral.

7

“Equipment” means all equipment, machinery, computers, chattels, tools, parts, machine tools, furniture, furnishings, fixtures and supplies of every nature, presently existing or hereafter acquired or created and wherever located, whether or not the same shall be deemed to be affixed to real property, and all of such types of property leased and all rights and interests with respect thereto under such leases (including, without limitation, options to purchase), together with all accessions, additions, fittings, accessories, special tools, and improvements thereto and substitutions therefor and all parts and equipment which may be attached to or which are necessary or beneficial for the operation, use and/or disposition of such personal property, all licenses, warranties, franchises and General Intangibles related thereto or necessary or beneficial for the operation, use and/or disposition of the same, together with all Accounts, Chattel Paper, Instruments and other consideration received on account of the sale, lease or other disposition of all or any part of the foregoing, and together with all rights under or arising out of present or future Documents and contracts relating to the foregoing and all Proceeds of the foregoing.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“EURIBOR” means the rate per annum (rounded upwards, if necessary to the nearest 1/100 of 1%) published by ICE Benchmark Administration Limited (or if not so published, then as determined by the Lender from another recognized source or interbank quotation) as the London interbank offered rate for deposits in EUROs for delivery of funds for periods of one (1) month; provided, however, that if EURIBOR determined as provided above would be less than zero (0.0%), then EURIBOR shall be deemed to be zero percent (0.0%).  
“Euros” means the currency of the participating member states of the European Communities that have adopted the Euro as their lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.  
“Event of Default” has the meaning described in ARTICLE VII (Default and Rights and Remedies).
“Excluded Assets” means (a) all assets or property of the Credit Parties that would otherwise be included as Collateral but for the express terms of (i) any permit, lease, license, contract or other agreement or instrument constituting or applicable to such asset or (ii) applicable Law (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity) that, in each case, prohibits 

8

the grant to the Lender of a security interest in and to such asset or property or under which the grant to the Lender of a security interest in and to such asset or property may impair the validity or enforceability of such asset or property (including any United States intent to use trademark applications); provided, however, that such assets or Property shall constitute “Excluded Assets” only to the extent and for so long as such permit, lease, license, contract or other agreement or applicable law validly prohibits the creation of a Lien on such property in favor of the Lender and, upon the termination of such prohibition (by written consent or in any other manner), such property shall cease to constitute “Excluded Assets”, (b) Equity Interests of any first tier Foreign Subsidiary which is not constituted as tax pass-through for US purposes in excess of 65% of the aggregate Equity Interests of such first tier Foreign Subsidiary (such excess Equity Interest, the “Excluded Equity”), (c) to the extent that applicable law requires that a Subsidiary of any Borrower issue nominee or directors’ qualifying shares, such nominee or qualifying shares, (d) any motor vehicle or other Equipment covered by a certificate of title or other evidence of ownership to the extent that a security interest in such asset cannot be perfected by the filing of a financing statement under the Uniform Commercial Code, and (e) other assets to the extent the Lender determines that the cost of obtaining such pledge or security interest is excess in relation to the benefit thereof; provided, however, that Excluded Assets shall not include any Proceeds of property described in clauses (a) through (e) above (unless such Proceeds are also described in such clauses).
“Excluded Perfection Actions” means the following actions: (i) the giving of notice or taking other actions (other than the filing of UCC financing statements) in respect of any (A) letter-of-credit rights, and (B) intellectual property in any jurisdiction other than the United States or any state, territory or other political division thereof, other than the execution and delivery of the UK Debentures and the performance by the respective Credit Party of its obligations thereunder with respect to intellectual property and (ii) taking any actions to establish a security interest or Lien in any deposit or bank account maintained outside the United States, other than the execution and delivery of the UK Debentures and the performance by the respective Credit Party of its obligations thereunder with respect thereto.
 “Excluded Swap Obligation” means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Credit Party, including under Section 2.6.8 (Guaranty) of this Agreement).  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

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“Facilities” means the collective reference to the loan, letter of credit, interest rate protection, foreign exchange risk, cash management, and other credit facilities now or hereafter provided to any one or more of the Borrowers by the Lender. 
“Fees” means, without duplication, the collective reference to each fee payable to Lender under the terms of this Agreement or under the terms of any of the other Financing Documents.  
“Financing Documents” means at any time collectively this Agreement, the Notes, the Security Documents, the Letter of Credit Documents, and any other instrument, agreement or document previously, simultaneously or hereafter executed and delivered by any Borrower and/or any other Person, singly or jointly with another Person or Persons, evidencing, securing, guarantying or in connection with this Agreement, any Note, any of the Security Documents, any of the Facilities, and/or any of the Obligations.
“Fixed or Capital Assets” of a Person at any date means all assets which would, in accordance with GAAP consistently applied, be classified on the balance sheet of such Person as property, plant or equipment at such date.
“Fixed Charges” has the meaning set forth in Section 6.1.13(a) (Financial Covenant Definitions).
“Foreign Currency Equivalent” means, on any date of determination, the amount of Euros or Sterling, as appropriate, which results from the sale of a given amount of US Dollars as determined by the Lender based on the arithmetical mean of the buy and sell spot rates of exchange for such currency, such amount being available for Borrowers’ information on Bloomberg by following this link: http://www.bloomberg.com/markets/currencies.   
“Foreign Subsidiary” means any Subsidiary of a Credit Party that is not a Domestic Subsidiary.
“Fourth Amendment and Restatement” has the meaning given to such term in the Recitals.
“Funded Debt” has the meaning set forth in Section 6.1.13(a) (Financial Covenant Definitions).
“GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.
“General Intangibles” means all general intangibles of every nature, whether presently existing or hereafter acquired or created, and without implying any limitation of the foregoing, further means all books and records, commercial tort claims, other claims (including without limitation all claims for income tax and other refunds), payment intangibles, Supporting Obligations, choses in action, claims, causes of action in tort or equity, contract rights, judgments, customer lists, software, Patents, Trademarks, licensing agreements, rights in intellectual property, goodwill (including goodwill of any Borrower’s business symbolized by and associated with any and all Trademarks, trademark licenses, Copyrights and/or service marks), royalty payments, licenses, letter-of-credit rights, letters of credit, contractual rights, the right to receive refunds of unearned insurance premiums, rights as lessee under any lease of real or personal property, literary rights, Copyrights, service names, service marks, logos, trade secrets, amounts received as an award in or settlement of a suit in damages, deposit accounts, interests in joint ventures, general or limited partnerships, or limited liability companies or partnerships, rights in applications for any of the 

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foregoing, books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing, all Supporting Obligations with respect to any of the foregoing, and all Equipment and General Intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all Proceeds of the foregoing.
“General Physics UK” means General Physics (UK) Ltd., a company organized and existing under the laws of England and Wales.
 “GP Holdings UK” means GP Strategies Holdings Limited, a company organized and existing under the laws of England and Wales.
“GP Strategies UK” means GP Strategies Limited, a company organized and existing under the laws of England and Wales.
 “GP Strategies Training UK” means GP Strategies Training Limited, a company organized and existing under the laws of England and Wales.
 “Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of government and any department, agency or instrumentality thereof.
“Government Contracts” means any contract with the United States or any department, agency or instrumentality of the United States.
“Guarantor” means each Borrower and all Additional Guarantors.
“Hazardous Materials” means (a) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder; (b) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; and (c) any substance the presence of which on any property now or hereafter owned, acquired or operated by any Borrower is prohibited by any Law similar to those set forth in this definition.
“Hazardous Materials Contamination” means the contamination (whether presently existing or occurring after the date of this Agreement) by Hazardous Materials of any property owned, operated or controlled by any Borrower or for which any Borrower has responsibility, including, without limitation, improvements, facilities, soil, ground water, air or other elements on, or of, any property now or hereafter owned, acquired or operated by any Borrower, and any other contamination by Hazardous Materials for which any Borrower is responsible.
“Indebtedness” of a Person means at any date the total liabilities of such Person at such time determined in accordance with GAAP consistently applied.

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“Indebtedness for Borrowed Money” of a Person means at any time the sum at such time of (a) Indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) any obligations of such Person in respect of letters of credit, banker’s or other acceptances or similar obligations issued or created for the account of such Person, (c) Lease Obligations of such Person with respect to Capital Leases, (d) all liabilities secured by any Lien on any property owned by such Person, to the extent attached to such Person’s interest in such property, even though such Person has not assumed or become personally liable for the payment thereof, (e) obligations of third parties which are being guaranteed or indemnified against by such Person or which are secured by the property of such Person; (f) any obligation of such Person under an employee stock ownership plan or other similar employee benefit plan; (g) any obligation of such Person or a Commonly Controlled Entity to a Multiemployer Plan; and (h) any obligations, liabilities or indebtedness of such Person, contingent or otherwise, under or in connection with, any Swap Contract; but excluding trade and other accounts payable in the ordinary course of business in accordance with customary trade terms and which are not overdue (as determined in accordance with customary trade practices) or which are being disputed in good faith by such Person and for which adequate reserves are being provided on the books of such Person in accordance with GAAP.
“Indemnified Parties” and “Indemnified Party” have the meaning set forth in Section 8.20 (Indemnification).
“Instrument” means a negotiable instrument or any other writing which evidences a right to payment of a monetary obligation and is not itself a security agreement or lease and is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment, and all Supporting Obligations with respect to any of the foregoing and all Proceeds with respect to any of the foregoing.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, and the Income Tax Regulations issued and proposed to be issued thereunder.
“Inventory” means all goods whether now owned or hereafter acquired and other personal property furnished under any contract of service or intended for sale or lease, including, without limitation, all raw materials, work-in-process, finished goods and materials and supplies of any kind, nature or description which are used or consumed or are or might be used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods and other personal property and all licenses, warranties, franchises, General Intangibles, personal property and all documents of title or documents relating to the same, together with all Accounts, Chattel Paper, Instruments and other consideration received on account of the sale, lease or other disposition of all or any part of the foregoing, and together with all rights under or arising out of present or future Documents and contracts relating to the foregoing and all Proceeds of the foregoing.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, guaranty or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another 

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Person that constitute a business unit.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“Investment Property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account and all Proceeds of, and Supporting Obligations with respect to, the foregoing.  Notwithstanding anything to the contrary in this Agreement or any Financing Documents, “Investment Property” shall not include any Excluded Equity.
“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).
“Item of Payment” means each check, draft, cash, money, instrument, item, and other remittance in payment or on account of payment of the Receivables or otherwise with respect to any Collateral, including, without limitation, cash proceeds of any returned, rejected or repossessed goods, the sale or lease of which gave rise to a Receivable, and other proceeds of Collateral; and “Items of Payment” means the collective reference to all of the foregoing.
“Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs, or decrees of any Governmental Authority.
“Lease Obligations” of a Person means for any period the rental commitments of such Person for such period under leases for real and/or personal property (net of rent from subleases thereof, but including taxes, insurance, maintenance and similar expenses which such Person, as the lessee, is obligated to pay under the terms of said leases, except to the extent that such taxes, insurance, maintenance and similar expenses are payable by sublessees), including rental commitments under Capital Leases.
“Letter of Credit” and “Letters of Credit” shall have the meanings described in Section 2.2.1 (Letters of Credit).
“Letter of Credit Agreement” means the collective reference to each letter of credit application and agreement substantially in the form of the Lender’s then standard form of application for letter of credit or such other form as may be approved by the Lender, executed and delivered by the US Borrower in connection with the issuance of a Letter of Credit, as the same may from time to time be amended, restated, supplemented or modified and “Letter of Credit Agreements” means all of the foregoing in effect at any time and from time to time.
“Letter of Credit Cash Collateral Account” has the meaning described in Section 2.2.3 (Terms of Letters of Credit).
“Letter of Credit Documents” means any and all drafts under or purporting to be under a Letter of Credit, any Letter of Credit Agreement, and any other instrument, document or agreement executed and/or delivered by the US Borrower or any other Person under, pursuant to or in connection with a Letter of Credit or any Letter of Credit Agreement.

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“Letter of Credit Facility” means the facility established as part of the US Revolving Credit Facility pursuant to Section 2.2 (US Letter of Credit Facility).
“Letter of Credit Fee” and “Letter of Credit Fees” have the meanings described in Section 2.2.2 (Letter of Credit Fees).
“Letter of Credit Obligations” means all Obligations of the US Borrower with respect to the Letters of Credit and the Letter of Credit Agreements.
“Letter-of-credit right” means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance.
“Liabilities” means at any date all liabilities that in accordance with GAAP consistently applied should be classified as liabilities on a consolidated balance sheet of Borrowers and their respective Subsidiaries.
“LIBOR” means the rate per annum (rounded upwards, if necessary to the nearest 1/100 of 1%) published by ICE Benchmark Administration Limited (or if not so published, then as determined by the Lender from another recognized source or interbank quotation) as the London interbank offered rate for deposits in United States Dollars or Sterling for delivery of funds for  a period of one (1) month; provided, however, that if LIBOR determined as provided above would be less than zero (0.0%), then LIBOR shall be deemed to be zero percent (0.0%).   
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).
“Loan” means each of the US Revolving Loan, the Term Loan, the UK Revolving Loan or each other loan now or hereafter extended under or secured by this Agreement, as the case may be, and “Loans” means the collective reference to the US Revolving Loan, the Term Loan, the UK Revolving Loan and each other loan now or hereafter extended under or secured by this Agreement.   
“Loan Notice” has the meaning described in Sections 2.1.2 and 2.4.2 (Procedure for Making Advances).  
“London Business Day” means any date that is a day for trading by and between banks in United States Dollars, Euro or Sterling deposits in the Relevant Interbank Market. 
“Maximum Leverage Ratio” has the meaning set forth in Section 6.1.13(a) (Financial Covenant Definitions).
“Maximum Rate” has the meaning described in Section 2.6.4 (Maximum Interest Rate).

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“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Worth” means the consolidated shareholders’ equity, defined in accordance with GAAP, of the US Borrower and its Subsidiaries.
“Notice” means a communication delivered in accordance with the terms of Section 8.1 (Notices).
“Note” means any  promissory note that may from time to time evidence all or any portion of the Obligations and “Notes” means collectively all such promissory notes.  On the date of this Agreement, the Notes consist of the US Revolving Credit Note, the Term Note and the UK Revolving Credit Note.  
“Obligations” means, without duplication, all present and future indebtedness, duties, obligations, and liabilities, whether now existing or contemplated or hereafter arising, of any one or more of Borrowers to Lender under, arising pursuant to, in connection with and/or on account of the provisions of this Agreement, each Note, each Security Document, and/or any of the other Financing Documents, the US Revolving Loan, the Term Loan, the UK Revolving Loan, any Swap Contract and/or any of the Facilities including, without limitation, the principal of, and interest on, each Note, late charges, the Fees, Enforcement Costs, and prepayment fees (if any), letter of credit reimbursement obligations, letter of credit fees or fees charged with respect to any guaranty of any letter of credit, regardless of whether such indebtedness, duties, obligations, and liabilities be direct, indirect, primary, secondary, joint, several, joint and several, fixed or contingent; and also means any and all renewals, extensions, substitutions, amendments, restatements and rearrangements of any such indebtedness, duties, obligations, and liabilities provided, that Obligations of a Credit Party shall not include its Excluded Swap Obligations.   The Obligations include the UK Obligations.
“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.
“Outstanding Letter of Credit Obligations” has the meaning described in Section 2.2.3 (Terms of Letters of Credit).
“Patents” means and includes, in each case whether now existing or hereafter arising, all rights, title and interest in and to (a) any and all patents and patent applications, (b) any and all inventions and improvements described and claimed in such patents and patent applications, (c) reissues, divisions, continuations, renewals, extensions and continuations-in-part of any patents and patent applications, (d) income, royalties, damages, claims and payments now or hereafter due and/or payable under and with respect to any patents or patent applications, including, without limitation, damages and payments for past and future infringements, (e) rights to sue for past, present and future infringements of patents, and (f) all rights corresponding to any of the foregoing throughout the world.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Permitted Acquisitions” means acquisitions which may be made by any Credit Party or any Wholly Owned Subsidiary thereof, provided that (a) the Maximum Leverage Ratio is less than or equal to 2.0 to 1.0 both prior to the acquisition and on a pro-forma basis, and (b) there is no Default or Event of Default both prior to the acquisition and on a pro-forma basis, and (c) the 

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aggregate cash purchase price paid at closing plus the projected cash earnout payments to be paid for all Permitted Acquisitions in any one fiscal year do not exceed Fifty Million Dollars ($50,000,000) or the Foreign Currency Equivalent thereof.  In the event that the Maximum Leverage Ratio is greater than 2.0 to 1.0 but less than 3.0 to 1.0 both prior to the acquisition and on a pro-forma basis, and there is no Default or Event of Default both prior to the acquisition and on a pro-forma basis, Permitted Acquisitions shall not exceed Thirty Million Dollars ($30,000,000) or the Foreign Currency Equivalent thereof in aggregate cash purchase price paid at closing plus the projected cash earnout payments in any one fiscal year.  In no event will the cash purchase price paid at closing plus the projected cash earnout payments for any single Permitted Acquisition exceed Thirty Million Dollars ($30,000,000) or the Foreign Currency Equivalent thereof.
“Permitted Liens” means:  (a) Liens for Taxes which are not delinquent or which the Lender has determined in the exercise of its sole and absolute discretion (i) are being diligently contested in good faith and by appropriate proceedings, and such contest operates to suspend collection of the contested Taxes and enforcement of a Lien, (ii) the applicable Borrower, has the financial ability to pay, with all penalties and interest, at all times without materially and adversely affecting such Borrower, and (iii) are not, and will not be with appropriate filing, the giving of notice or the passage of time alone, entitled to priority over any Lien of the Lender; (b) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; (c) Liens securing the Obligations; (d) judgment Liens to the extent the entry of such judgment does not constitute an Event of Default under the terms of this Agreement or result in the sale or levy of, or execution on, any of the Collateral; (e) Liens existing as of the date hereof; (f) Liens securing Capital Leases that are otherwise permitted hereunder; (g) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Borrower; (h) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Borrower; and (i) such other Liens, if any, as are set forth on Schedule 4.1.20 attached hereto and made a part hereof.
“Permitted Uses” means (a) with respect to the Term Loan, the refinancing of the principal balance of the term loan made under the Fourth Amendment and Restatement and the refinancing of a portion of the outstanding principal balance of the US Revolving Loan, (b) with respect to the US Revolving Loan, amounts payable (i) for working capital purposes, (ii) the payment of the purchase price for Permitted Acquisitions and earnout payments in connection with Permitted Acquisitions, and (iii) to support the issuance of Letters of Credit; provided, however, if the US Revolving Credit Availability is less than $20,000,000, the only Permitted Uses of the US Revolving Loan are for working capital purposes and payment of pre-existing earnout obligations in connection with Permitted Acquisitions; and (c) with respect to the UK Revolving Loan, for working capital purposes, and payment of the purchase price for Permitted Acquisitions and earnout payments in connection with Permitted Acquisitions.  

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“Person” means and includes an individual, a corporation, a partnership, a joint venture, a limited liability company or partnership, a trust, an unincorporated association, a Governmental Authority, or any other organization or entity.
“Plan” means any “pension plan” as defined in ERISA Section 3(2) maintained by any Borrower or a Commonly Controlled Entity in which any Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA and which is intended to qualify for favorable tax treatment pursuant to Internal Revenue Code Section 401(a).
“Post-Default Rate” means the Applicable Rate in effect from time to time, plus three percent (3%) per annum.
“Post-Expiration Date Letter of Credit” and “Post-Expiration Date Letters of Credit” have the meanings described in Section 2.2.3 (Terms of Letters of Credit).
“Prepayment” means a US Revolving Loan Optional Prepayment, a Term Loan Mandatory Prepayment, a Term Loan Optional Prepayment, a UK Revolving Loan Mandatory Prepayment or a UK Revolving Loan Optional Prepayment, as the case may be, and “Prepayments” mean collectively all US Revolving Loan Optional Prepayments, all Term Loan Mandatory Prepayments, all Term Loan Optional Prepayments, all UK Revolving Loan Mandatory Prepayments and all UK Revolving Loan Optional Prepayments.  
“Proceeds” has the meaning described in the Uniform Commercial Code as in effect from time to time.
“Receivable” means a now owned or hereafter owned, acquired or created Account, Chattel Paper, General Intangible or Instrument and all Proceeds thereof; and “Receivables” means all now or hereafter owned, acquired or created Accounts, Chattel Paper, General Intangibles and Instruments, and all Proceeds thereof.
“Registered Organization” means an organization organized solely under the law of a single state or the United States and as to which the state or the United States must maintain a public record showing the organization to have been organized.
“Relevant Interbank Market” means (a) as to Dollars and Sterling, the London interbank market, and (b) as to Euros, the European interbank market.   
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder.
“Responsible Officer” means, with respect to a Person, the chief executive officer or the president of such Person or, with respect to financial matters, the chief financial officer of such Person.

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“Restricted Payment” means any Transaction Payment or any dividend or distribution (either in cash, stock or other property) on or in respect of the US Borrower’s stock now or hereafter outstanding.
“Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/sanctions/, or as otherwise published from time to time.
“Sanctioned Person” means (i) a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country to the extent subject to a sanctions program administered by OFAC.
“Security Documents” means, collectively, the Stock Pledges, the UK Debentures and any assignment, pledge agreement, security agreement, mortgage, deed of trust, deed to secure debt, financing statement and any similar instrument, document or agreement under or pursuant to which a Lien is now or hereafter granted to, or for the benefit of, the Lender on any real or personal property of any Person to secure all or any portion of the Obligations, all as the same may from time to time be amended, restated, supplemented or otherwise modified.
“State” means the State of Maryland.
“Sterling” means the lawful currency of the United Kingdom.   
“Stock Pledges” means, collectively, the Pledge, Assignment and Security Agreement executed and delivered in favor of the Lender on or about the date of this Agreement by the US Borrower and the UK Share Charges covering shares in certain designated Subsidiaries, as the same may from time to time be amended, restated, supplemented or otherwise modified.   
“Subordinated Indebtedness” means all Indebtedness incurred at any time by any Borrower or Borrowers, which is in amount, subject to repayment terms, and subordinated to the Obligations, as set forth in one or more written agreements, all in form and substance satisfactory to Lender in its sole and absolute discretion.
“Subsidiary” means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of capital stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

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“Supporting Obligation” means a letter-of-credit right, secondary obligation or obligation of a secondary obligor or that supports the payment or performance of an account, chattel paper, document, general intangible, instrument or investment property.
“Swap Contract” means any document, instrument or agreement between any Borrower and the Lender or any Affiliate of the Lender, now existing or entered into in the future, relating to an interest rate swap transaction, forward rate transaction, interest rate cap, floor or collar transaction, any similar transaction, any option to enter into any of the foregoing, and any combination of the foregoing, which agreement may be oral or in writing, including, without limitation, any master agreement relating to or governing any or all of the foregoing and any related schedule or confirmation, each as amended from time to time.
“Swap Obligation” means, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Taxes” means all taxes and assessments whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character (including all penalties or interest thereon), which at any time may be assessed, levied, confirmed or imposed by any Governmental Authority on any Borrower or any of its or their properties or assets or any part thereof or in respect of any of its franchises, businesses, income or profits.  For the avoidance of doubt, sales taxes, value added taxes and similar taxes imposed on customers of a Borrower, but collected by such Borrower, are not Taxes of such Borrower.
“Term Loan” has the meanings described in Section 2.3.1 (Term Loan Commitment).
“Term Loan Commitment” has the meaning described in Section 2.3.1 (Term Loan Commitment).
“Term Loan Committed Amount” has the meaning described in Section 2.3.1 (Term Loan Commitment).
“Term Loan Facility” means the facility established by the Lender pursuant to Section 2.3 (Term Loan Facility).
“Term Loan Installment Payments” means the collective reference to each payment on the Term Loan provided in Section 2.3.3 (Term Loan Installment Payments).
“Term Loan Maturity Date” means the earlier of April 30, 2020, or the Revolving Credit Termination Date.
“Term Loan Optional Prepayment” and “Term Loan Optional Prepayments” have the meanings described in Section 2.3.4 (Optional Prepayments of Term Loan).
“Term Note” has the meaning described in Section 2.3.2 (The Term Note). 
 “Trademarks” means and includes in each case whether now existing or hereafter arising, all rights, title and interest in and to (a) any and all trademarks (including service marks), trade names and trade styles, and applications for registration thereof and the goodwill of the business symbolized by any of the foregoing, (b) any and all licenses of trademarks, service marks, trade 

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names and/or trade styles, whether as licensor or licensee, (c) any renewals of any and all trademarks, service marks, trade names, trade styles and/or licenses of any of the foregoing, (d) income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including, without limitation, damages, claims, and payments for past, present and future infringements thereof, (e) rights to sue for past, present and future infringements of any of the foregoing, including the right to settle suits involving claims and demands for royalties owing, and (f) all rights corresponding to any of the foregoing throughout the world.
“Transaction Documents” means any Offer to Purchase for Cash by GP, including, without limitation, the schedules and exhibits thereto, filed or to be filed with the Securities and Exchange Commission in connection with the Transaction and any dealer manager agreement relating to such Transaction.
“Transaction Payments” means amounts paid in cash (a) to the US Borrower’s shareholders for the repurchase of their common stock pursuant to the Transaction Documents and (b) to effect the Transaction including, without limitation, the payment of fees, costs and expenses therewith.
“UK Borrower” means any one of the UK Borrowers.  
“UK Borrowers” means, collectively, General Physics (UK), GP Holdings UK, GP Strategies UK and GP Strategies Training UK.  
“UK Debentures” means, collectively, the Debentures executed and delivered by each of the UK Borrower on or about the date of this Agreement to secure their individual UK Obligations and, in respect of General Physics UK, all Obligations, as the same may from time to time be amended, restated, supplemented or otherwise modified.
“UK Obligations” means the Obligations of each individual UK Borrower arising out of or in connection with the UK Revolving Credit Facility.  The UK Obligations do not include other Obligations under this Agreement.
“UK Revolving Credit Commitment” means the agreement of the Lender relating to the making of the UK Revolving Loan and advances thereunder subject to and in accordance with the provisions of this Agreement.  
“UK Revolving Credit Commitment Period” means the period of time from the Closing Date to the Business Day preceding the UK Revolving Credit Termination Date.  
“UK Revolving Credit Committed Amount” means the Foreign Currency Equivalent of US $10,000,000, which constitutes a sublimit under the US Revolving Credit Committed Amount.  
“UK Revolving Credit Expiration Date” means December 31, 2021 unless otherwise extended for successive periods of one (1) year beyond the then existing maturity date commencing as of the first anniversary date of this Agreement, by the Lender in the exercise of its sole and absolute discretion. 

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“UK Revolving Credit Facility” means the facility established by the Lender pursuant to Section 2.6 (UK Revolving Credit Facility), which is constituted as a subfacility under the US Revolving Credit Facility.  
“UK Revolving Credit Note” has the meaning described in Section 2.4.3 (UK Revolving Credit Note).  
“UK Revolving Credit Termination Date” means the earlier of (a) the UK Revolving Credit Expiration Date, or (b) the date on which the UK Revolving Credit Commitment is terminated pursuant to Section 7.2 (Remedies) or otherwise.  
“UK Revolving Loan” has the meaning described in Section 2.4.1 (UK Revolving Credit Facility).  
“UK Revolving Loan Account” has the meaning described in Section 2.4.5 (UK Revolving Loan Account).  
“UK Revolving Loan Mandatory Prepayment” and “UK Revolving Loan Mandatory Prepayments” have the meanings described in Section 2.4.4 (Prepayments of UK Revolving Loan).  
“UK Revolving Loan Optional Prepayment” and “UK Revolving Loan Optional Prepayments” have the meanings described in Section 2.4.4 (Prepayments of UK Revolving Loan).  
“UK Share Charges” means, collectively, the Share Charges executed and delivered by General Physics UK and GP Holdings UK on or about the date of this Agreement to secure their respective UK Obligations and, in respect of General Physics UK, all Obligations, as the same may from time to time be amended, restated supplemented or otherwise modified.
“US Borrower” means GP Strategies Corporation, a Delaware corporation.
“US Revolving Credit Availability” means, at any time, an amount equal to the US Revolving Credit Committed Amount minus the outstanding US Revolving Loans and the Outstanding Letter of Credit Obligations.
“US Revolving Credit Commitment” means the agreement of Lender relating to the making of the Revolving Loan and advances thereunder subject to and in accordance with the provisions of this Agreement.
“US Revolving Credit Commitment Period” means the period of time from the Closing Date to the Business Day preceding the US Revolving Credit Termination Date.

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“US Revolving Credit Committed Amount” means the principal amount of $100,000,000, minus the Dollar Equivalent of outstanding principal under the UK Revolving Credit.  
“US Revolving Credit Expiration Date” means December 31, 2021, unless otherwise extended for successive periods of one (1) year beyond the then existing maturity date commencing as of the first anniversary date of this Agreement, by the Lender in the exercise of its sole and absolute discretion.   
“US Revolving Credit Facility” means the facility established by the Lender pursuant to Section 2.1 (Revolving Credit Facility).
“US Revolving Credit Note” has the meaning described in Section 2.1.3 (Revolving Credit Note).
“US Revolving Credit Termination Date” means the earlier of (a) the US Revolving Credit Expiration Date, or (b) the date on which the US Revolving Credit Commitment is terminated pursuant to Section 7.2 (Remedies) or otherwise.
“US Revolving Credit Unused Line Fee” and “Revolving Credit Unused Line Fees” have the meanings described in Section 2.1.6 (Revolving Credit Unused Line Fee).
“US Revolving Loan” has the meaning described in Section 2.1.1 (US Revolving Credit Facility).
“US Revolving Loan Account” has the meaning described in Section 2.1.5 (US Revolving Loan Account).
“US Revolving Loan Optional Prepayment” and “US Revolving Loan Optional Prepayments” have the meanings described in Section 2.1.4 (Optional Prepayment of US Revolving Loan).
“Uniform Commercial Code” means, unless otherwise provided in this Agreement, the Uniform Commercial Code as adopted by and in effect from time to time in the State or in any other jurisdiction, as applicable.
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person all of the outstanding capital stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
		
	Section 1.2
	Accounting Terms and Other Definitional Provisions.

Unless otherwise defined herein, as used in this Agreement and in any certificate, report or other document made or delivered pursuant hereto, accounting terms not otherwise defined herein, and accounting terms only partly defined herein, to the extent not defined, shall have the respective meanings given to them under GAAP, as consistently applied to the applicable Person.  All terms used herein which are defined by the Uniform Commercial Code shall have the same meanings as assigned to them by the Uniform Commercial Code unless and to the extent varied by this Agreement.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this 

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Agreement, and article, section, subsection, schedule and exhibit references are references to articles, sections or subsections of, or schedules or exhibits to, as the case may be, this Agreement unless otherwise specified.  As used herein, the singular number shall include the plural, the plural the singular and the use of the masculine, feminine or neuter gender shall include all genders, as the context may require.  Reference to any one or more of the Financing Documents shall mean the same as the foregoing may from time to time be amended, restated, substituted, extended, renewed, supplemented or otherwise modified.
ARTICLE II 
THE CREDIT FACILITIES
		
	Section 2.1
	The US Revolving Credit Facility.

		
	2.1.1
	US Revolving Credit Facility.

Subject to and upon the provisions of this Agreement, the Lender establishes a revolving credit facility in favor of the US Borrower in the US Revolving Credit Committed Amount.  The aggregate of all advances under the US Revolving Credit Facility is sometimes referred to in this Agreement as the “US Revolving Loan”.
During the US Revolving Credit Commitment Period, the Lender agrees to make advances under the US Revolving Credit Facility in accordance with the provisions of this Agreement in amounts not to exceed the US Revolving Credit Availability.  Advances under the US Revolving Credit Facility shall be made in Dollars.
Unless sooner paid, the unpaid US Revolving Loan, together with interest accrued and unpaid thereon, and all other Obligations shall be due and payable in full on the US Revolving Credit Expiration Date.
		
	2.1.2
	Procedure for Making Advances Under the US Revolving Loan; Lender Protection Loans.

The US Borrower may borrow under the US Revolving Credit Facility on any Business Day.  Advances under the US Revolving Loan shall be deposited to a demand deposit account of GP with the Lender (or an Affiliate of the Lender) or shall be otherwise applied as directed by GP, which direction the Lender may require to be in writing.  No later than 12:00 p.m. (Eastern Time) on the date of the requested borrowing, GP shall give the Lender oral or written notice (a “Loan Notice”) of the amount and (if requested by the Lender) the purpose of the requested borrowing.  Any oral Loan Notice shall be confirmed in writing by GP within three (3) Business Days after the making of the requested advance under the US Revolving Loan.  Each Loan Notice shall be irrevocable.
In addition, the US Borrower hereby irrevocably authorizes the Lender at any time and from time to time, without further request from or notice to any Borrower, to make advances under the US Revolving Loan, which the Lender, in its sole and absolute discretion, deems necessary or appropriate to protect the interests of the Lender, including, without limitation, advances and reserves under the US Revolving Loan made to cover debit balances in the US Revolving Loan Account, principal of, and/or interest on, the US Revolving Loan, the Obligations (including, without limitation, any Letter of Credit Obligations), and/or Enforcement Costs, prior to, on, or after the termination of other advances under this Agreement, regardless of whether the outstanding principal 

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amount of the US Revolving Loan that Lender may advance or reserve hereunder exceeds the Revolving Credit Committed Amount.  The Lender shall communicate to GP from time to time any action taken under this paragraph either orally or in writing.
Notwithstanding any provisions contained herein to the contrary, so long as a Wells Fargo Stagecoach Sweep Agreement is in effect, advances shall be made in accordance with such agreement.
		
	2.1.3
	US Revolving Credit Note.

The obligation of the US Borrower to pay the US Revolving Loan, with interest, shall be evidenced by a Fourth Amended and Restated Revolving Credit Note (as from time to time extended, amended, restated, supplemented or otherwise modified, the “Revolving Credit Note”) substantially in the form of EXHIBIT B-1 attached hereto and made a part hereof, with appropriate insertions.  The US Revolving Credit Note shall be payable to the order of Lender at the times provided in the US Revolving Credit Note, and shall be in the principal amount of the US Revolving Credit Committed Amount.  The US Borrower acknowledges and agrees that, if the outstanding principal balance of the US Revolving Loan outstanding from time to time exceeds the face amount of the US Revolving Credit Note, the excess shall bear interest at the Post-Default Rate for the US Revolving Loan and shall be payable, with accrued interest, ON DEMAND.  The US Revolving Credit Note shall not operate as a novation of any of the Obligations or nullify, discharge, or release any such Obligations or the continuing contractual relationship of the parties hereto in accordance with the provisions of this Agreement.
		
	2.1.4
	Optional Prepayments of US Revolving Loan.

The US Borrower shall have the option, at any time and from time to time, to prepay (each a “US Revolving Loan Optional Prepayment” and collectively the “US Revolving Loan Optional Prepayments”) the US Revolving Loan, in whole or in part without premium or penalty.
		
	2.1.5
	US Revolving Loan Account.

The Lender will establish and maintain a loan account on its books (the “US Revolving Loan Account”) to which the Lender will (a) debit (i) the principal amount of each advance of the US Revolving Loan made by the Lender hereunder as of the date made, (ii) the amount of any interest accrued on the US Revolving Loan as and when due, and (iii) any other amounts due and payable by the US Borrower to the Lender from time to time under the provisions of this Agreement in connection with the US Revolving Loan, including, without limitation, Enforcement Costs, Fees, late charges, and service, collection and audit fees, as and when due and payable, and (b) credit all payments made by the US Borrower or any Credit Party to the Lender on account of the US Revolving Loan as of the date made.  The Lender may debit the US Revolving Loan Account for the amount of any Item of Payment that is returned to the Lender unpaid.  All credit entries to the US Revolving Loan Account are conditional and shall be readjusted as of the date made if final and indefeasible payment is not received by the Lender in cash or solvent credits.  Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the US Revolving Loan Account shall be final, binding and conclusive upon the US Borrower in all respects, absent manifest error, unless the Lender receives specific written objection thereto from the US Borrower within thirty (30) Business Days after such statement or reconciliation shall have been sent by the Lender.

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	2.1.6
	US Revolving Credit Unused Line Fee.

The US Borrower shall pay to the Lender a revolving credit facility fee (collectively, the “US Revolving Credit Unused Line Fees” and individually, a “Revolving Credit Unused Line Fee”) in an amount equal to the Applicable Margin multiplied by the average daily unused and undisbursed portion of the US Revolving Credit Committed Amount in effect from time to time accruing during each quarter.  The accrued and unpaid portion of the US Revolving Credit Unused Line Fee shall be paid in arrears by the US Borrower to the Lender for each calendar quarter ending September 30, December 31, March 31, and June 30, payable on the immediately following the first day of each October, January, April and July, commencing on the first such date following the date hereof, and on the US Revolving Credit Termination Date.
		
	Section 2.2
	The Letter of Credit Facility.

		
	2.2.1
	Letters of Credit.

Subject to and upon the provisions of this Agreement, and as a part of the US Revolving Credit Commitment, the US Borrower, upon the prior approval of the Lender, may obtain standby letters of credit (as the same may from time to time be amended, supplemented or otherwise modified, each a “Letter of Credit” and collectively the “Letters of Credit”) from the Lender from time to time from the Closing Date until the Business Day preceding the US Revolving Credit Termination Date.  The US Borrower will be entitled to obtain a Letter of Credit hereunder unless (a) after giving effect to the request, the outstanding principal balance of the US Revolving Loan and of the Letter of Credit Obligations would exceed the US Revolving Credit Availability or (b) without the prior written consent of the Lender, the sum of the aggregate face amount of the then outstanding Letters of Credit (including the face amount of the requested Letter of Credit) would exceed Fifteen Million Dollars ($15,000,000).  The US Borrower may serve as applicant and account party on Letters of Credit which it requests the Lender to issue on behalf of its Subsidiaries, provided that the US Borrower will be solely responsible for the resulting Letter of Credit Obligations.  A Letter of Credit may be issued in US Dollars or an Available Foreign Currency; provided that the Letter of Credit Obligations shall be determined as the Dollar Equivalent of drawings honored in any Available Foreign Currency with all costs associated with the conversion of foreign currency to be for the account of the US Borrower.
		
	2.2.2
	Letter of Credit Fees.

Prior to or simultaneously with the opening of each Letter of Credit, the US Borrower shall pay to the Lender, a letter of credit fee (each a “Letter of Credit Fee” and collectively the “Letter of Credit Fees”) in an amount equal to the Applicable Margin applicable to interest rates multiplied by the face amount of the Letter of Credit, but not less than the customary fee charged commercial customers for issuing a Letter of Credit from time to time.  The Letter of Credit Fees shall be paid upon the opening of each Letter of Credit and upon each anniversary thereof, if any.  In addition, the US Borrower shall also pay to the Lender all other reasonable and customary amendment, negotiation, processing, transfer or other fees to the extent and as and when required by the provisions of any Letter of Credit Agreement.  All Letter of Credit Fees and all such other additional fees are included in and are a part of the “Fees” payable by Borrowers under the provisions of this Agreement and are a part of the Obligations.

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	2.2.3
	Terms of Letters of Credit.

Each Letter of Credit shall (a) be opened pursuant to a Letter of Credit Agreement.  If any Letter of Credit has an expiration date later than the Business Day preceding the Revolving Credit Termination Date (each a “Post-Expiration Date Letter of Credit” and collectively, the “Post-Expiration Date Letters of Credit”), effective as of the Business Day preceding the Revolving Credit Termination Date and without prior notice to or the consent of the US Borrower, the Lender shall make advances under the US Revolving Loan for the account of the US Borrower in the aggregate face amount of all Post-Expiration Date Letters of Credit.  The Lender shall deposit the proceeds of such advances into one or more non-interest bearing accounts with and in the name of Lender and over which Lender alone shall have exclusive power of access and withdrawal (collectively, the “Letter of Credit Cash Collateral Account”).  The Letter of Credit Cash Collateral Account is to be held by the Lender as additional collateral and security for any Letter of Credit Obligations relating to the Post-Expiration Date Letters of Credit.  The US Borrower hereby assigns, pledges, grants and sets over to Lender a first priority security interest in, and Lien on, all of the funds on deposit in the Letter of Credit Cash Collateral Account, together with any and all proceeds and products thereof as additional collateral and security for the Letter of Credit Obligations relating to the Post-Expiration Date Letters of Credit.  The US Borrower acknowledges and agrees that Lender shall be entitled to fund any draw or draft on any Post-Expiration Date Letter of Credit from the monies on deposit in the Letter of Credit Cash Collateral Account with notice to but without the consent of the US Borrower.  The US Borrower further acknowledges and agrees that the Lender’s election to fund any draw or draft on any Post-Expiration Date Letter of Credit from the Letter of Credit Cash Collateral shall in no way limit, impair, lessen, reduce, release or otherwise adversely affect the US Borrower’s obligation to pay any Letter of Credit Obligations under or relating to the Post-Expiration Date Letters of Credit.  As Post-Expiration Date Letters of Credit expire or are cancelled, a proportionate amount of the Letter of Credit Cash Collateral Account shall be applied to the outstanding Obligations.  At such time as all Post-Expiration Date Letters of Credit have expired or cancelled, all Obligations have been paid in full, and the Commitment has been terminated, any remaining funds on deposit in the Letter of Credit Cash Collateral Account shall be paid to the US Borrower.
The aggregate face amount of all Letters of Credit at any one time outstanding and issued by the Lender pursuant to the provisions of this Agreement, including, without limitation, any and all Post-Expiration Date Letters of Credit, plus the amount of any unpaid Letter of Credit Fees accrued thereon, and less the aggregate amount of all drafts issued under or purporting to have been issued under such Letters of Credit that have been paid by the Lender and for which the Lender has been reimbursed by the US Borrower in full in accordance with Section 2.2.5 (Payments of Letters of Credit) and the Letter of Credit Agreements, and for which the Lender has no further obligation or commitment to restore all or any portion of the amounts drawn and reimbursed, is herein called the “Outstanding Letter of Credit Obligations”.

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	2.2.4
	Procedures for Letters of Credit.

The US Borrower shall give Lender written notice at least five (5) Business Days prior to the date on which the US Borrower desires Lender to issue a Letter of Credit.  Such notice shall be accompanied by a duly executed Letter of Credit Agreement specifying, among other things:  (a) the name and address of the intended beneficiary of the Letter of Credit, (b) the requested face amount of the Letter of Credit, (c) whether the Letter of Credit is to be revocable or irrevocable, (d) the Business Day on which the Letter of Credit is to be opened and the date on which the Letter of Credit is to expire, (e) the terms of payment of any draft or drafts which may be drawn under the Letter of Credit, and (f) any other terms or provisions the US Borrower desires to be contained in the Letter of Credit.  Such notice shall also be accompanied by such other information, certificates, confirmations, and other items as the Lender may require to assure that the Letter of Credit is issued in accordance with the provisions of this Agreement and a Letter of Credit Agreement.  In the event of any conflict between the provisions of this Agreement and the provisions of a Letter of Credit Agreement, the provisions of this Agreement shall prevail and control unless otherwise expressly provided in the Letter of Credit Agreement.  Upon (x) receipt of such notice, (y) payment of all Letter of Credit Fees and all other Fees payable in connection with the issuance of such Letter of Credit, and (z) receipt of a duly executed Letter of Credit Agreement, the Lender shall process such notice and Letter of Credit Agreement in accordance with its customary procedures and open such Letter of Credit on the Business Day specified in such notice.
		
	2.2.5
	Payments of Letter of Credit Obligations.

The US Borrower hereby promises to pay to the Lender, ON DEMAND and in United States Dollars, the following which are herein collectively referred to as the “Current Letter of Credit Obligations”:
(a)    the amount which the Lender has paid or will be required to pay under each draft or draw on a Letter of Credit, whether such demand be in advance of the Lender’s payment or for reimbursement for such payment;
(b)    any and all reasonable charges and expenses which the Lender may pay or incur relative to the Letter of Credit and/or such draws or drafts; and
(c)    interest on the amounts described in (a) and (b) not paid by the US Borrower as and when due and payable under the provisions of (a) and (b) above from the day the same are due and payable until paid in full at the Post-Default Rate.
In addition, the US Borrower hereby promises to pay any and all other Letter of Credit Obligations as and when due and payable in accordance with the provisions of this Agreement and the applicable Letter of Credit Agreement.  The obligation of the US Borrower to pay Current Letter of Credit Obligations and all other Letter of Credit Obligations shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which any Borrower or any other account party may have or have had against the beneficiary of such Letter of Credit, the Lender, or any other Person, including, without limitation, any defense based on the failure of any draft or draw to conform to the terms of such Letter of Credit, any draft or other document proving to be forged, fraudulent or invalid, or the 

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legality, validity, regularity or enforceability of such Letter of Credit, any draft or other documents presented with any draft, any Letter of Credit Agreement, this Agreement, or any of the other Financing Documents, all whether or not the Lender had actual or constructive knowledge of the same, and irrespective of any Collateral, security or guarantee therefor or right of offset with respect thereto and irrespective of any other circumstances whatsoever which constitutes, or might be construed to constitute, an equitable or legal discharge of Borrowers for any Letter of Credit Obligations, in bankruptcy or otherwise; provided, however, that US Borrower shall not be obligated to reimburse the Lender for any wrongful payment under such Letter of Credit made as a direct result of the Lender’s gross negligence or willful misconduct.  The obligation of the US Borrower to pay the Letter of Credit Obligations shall not be conditioned or contingent upon the pursuit by the Lender or any other Person at any time of any right or remedy against any Person which may be or become liable in respect of all or any part of such obligation or against any Collateral, security or guarantee therefor or right of offset with respect thereto.
The Letter of Credit Obligations shall continue to be effective, or be reinstated, as the case may be, if at any time payment of all or any portion of the Letter of Credit Obligations is rescinded or must otherwise be restored or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Person, or upon or as a result of the appointment of a receiver, intervenor, or conservator of, or trustee or similar officer for, any Person, or any substantial part of such Person’s property, all as though such payments had not been made.
		
	2.2.6
	Change in Law; Increased Cost.

If any change in any law or regulation or in the interpretation thereof by any court or other Governmental Authority charged with the administration thereof occurring after the date of this Agreement shall either (a) impose, modify or deem applicable any reserve, special deposit or similar requirement against Letters of Credit issued by the Lender, or (b) impose on the Lender any other condition regarding this Agreement or any Letter of Credit, and the result of any event referred to in clauses (a) or (b) above shall be to increase the cost to the Lender of issuing, maintaining or extending the Letter of Credit or the cost to Lender of funding any obligation under or in connection with the Letter of Credit (other than a cost relating to net income, franchise or similar taxes), then, upon demand by the Lender, the US Borrower shall immediately pay to the Lender from time to time as specified by the Lender, additional amounts which shall be sufficient to compensate the Lender for such increased cost, together with interest on each such amount from the date demanded until payment in full thereof at a rate per annum equal to the then highest current rate of interest on the US Revolving Loan.  A certificate as to such increased cost incurred by the Lender, submitted by the Lender to the US Borrower, shall be conclusive, absent manifest error.

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	2.2.7
	General Letter of Credit Provisions.

The US Borrower consents to the Lender’s payment of any draft complying with the terms of any Letter of Credit irrespective of any instructions to the contrary.  As between the US Borrower and the Lender, the US Borrower assumes all risks of the acts and omissions of the beneficiary and other users of any Letter of Credit.  The Lender and its respective branches, Affiliates and/or correspondents shall not be responsible for, and the US Borrower hereby indemnifies and holds Lender and its respective branches, Affiliates and/or correspondents harmless from and against, all liability, loss and expense (including reasonable attorney’s fees and costs) incurred by the Lender and/or its branches, Affiliates and/or correspondents relative to and/or as a consequence of (a) any failure by the US Borrower to perform the agreements hereunder and under any Letter of Credit Agreement, (b) any Letter of Credit Agreement, this Agreement, any Letter of Credit and any draft, draw and/or acceptance under or purported to be under any Letter of Credit, (c) any action taken or omitted by the Lender and/or any of its respective branches, Affiliates and/or correspondents at the request of the US Borrower, (d) any failure or inability to perform in accordance with the terms of any Letter of Credit by reason of any control or restriction rightfully or wrongfully exercised by any de facto or de jure Governmental Authority, group or individual asserting or exercising governmental or paramount powers, and/or (e) any consequences arising from causes beyond the control of the Lender and/or any of its respective branches, Affiliates and/or correspondents.
Except for gross negligence or willful misconduct, the Lender and its respective branches, Affiliates and/or correspondents, shall not be liable or responsible in any respect for any (a) error, omission, interruption or delay in transmission, dispatch or delivery of any one or more messages or advices in connection with any Letter of Credit, whether transmitted by cable, telegraph, mail or otherwise and despite any cipher or code which may be employed, and/or (b) action, inaction or omission which may be taken or suffered by it or them in good faith or through inadvertence in identifying or failing to identify any beneficiary or otherwise in connection with any Letter of Credit.
Subject to the terms of the Letter of Credit, a Letter of Credit may be amended, modified or revoked only upon the receipt by the Lender from the US Borrower and the beneficiary (including any transferee and/or assignee of the original beneficiary), of a written consent and request therefor.
If any Laws, order of court and/or ruling or regulation of any Governmental Authority of the United States (or any state thereof) and/or any country other than the United States permits a beneficiary under a Letter of Credit to require the Lender and/or any of its respective branches, Affiliates and/or correspondents to pay drafts under or purporting to be under a Letter of Credit after the expiration date of the Letter of Credit, the US Borrower shall reimburse the Lender, as appropriate, for any such payment pursuant to provisions of Section 2.2.6 (Change in Law; Increased Cost).
Except as may otherwise be specifically provided in a Letter of Credit or Letter of Credit Agreement, the laws of the State and (a) the Uniform Customs and Practice for Documentary Credits in effect at the time of issuance (“UCP”) of the International Chamber of 

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Commerce Publication shall govern commercial Letters of Credit and (b) the International Standby Practices in effect at the time of issuance (the “ISP”) of the International Chamber of Commerce shall govern standby Letters of Credit.  In the event of a conflict between the UCP and ISP and the laws of the State, the UCP and ISP shall prevail.
Section 2.3    The Term Loan Facility.
		
	2.3.1
	Term Loan.

Subject to and upon the provisions of the Fourth Amendment and Restatement, the Lender made a term loan to the US Borrower in October of 2014, in the principal amount of Forty Million Dollars ($40,000,000) of which $11,111,111.14 remains outstanding as of the date of this Agreement.  On or about the Closing Date, the Lender will make available a new term loan (the “Term Loan”) to the US Borrower in the amount of up to Forty Million Dollars ($40,000,000) (the “Term Loan Committed Amount”), which will be used to refinance the outstanding principal balance of the term loan made under the Fourth Amendment and Restatement and to refinance a portion of the outstandings under the US Revolving Loan.  Any portion of the Term Loan Committed Amount which is not advanced on the Closing Date shall cease to be available to the US Borrower.  Amounts repaid or prepaid on the Term Loan may not be reborrowed.     
		
	2.3.2
	The Term Note.

The obligation of US Borrower to repay the Term Loan with interest is evidenced by the Amended and Restated Term Note in substantially the form of Exhibit B-2 executed and delivered to the Lender on or about the Closing Date.  The Term Note shall not operate as a novation of any of the Obligations or nullify, discharge or release any such Obligations or the continuing contractual relationship of the parties hereto in accordance with the provisions of this Agreement.
		
	2.3.3
	Term Loan Installment Payments.

The US Borrower shall make installment payments of principal on the Term Loan in the amount of One Million Dollars ($1,000,000) each on the first day of each month commencing January 1, 2017.  If not sooner paid, the Term Loan shall mature on the Term Loan Maturity Date. 
		
	2.3.4
	Optional Prepayments of Term Loan.

The US Borrower shall have the option, at any time and from time to time, to prepay (each a “Term Loan Optional Prepayment” and collectively the “Term Loan Optional Prepayments”) the Term Loan, in whole or in part, upon five (5) Business Days prior written notice, specifying the date and amount of prepayment.  The amount to be so prepaid, together with interest accrued thereon to date of prepayment if the amount is intended as a prepayment of the Term Loan in whole, shall be paid by the US Borrower to the Lender on the date specified for such prepayment.  Partial Term Loan Optional Prepayments shall be in an amount not less than the aggregate amount of the next principal installment under the Term Note and shall be applied first to all accrued and unpaid interest on the principal of the Term Note, then to the any principal payment due at maturity and then to principal against the principal installments in the inverse order of their maturity.

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Section 2.4    The UK Revolving Credit Facility.
2.4.1    UK Revolving Credit Facility.
Subject to and upon the provisions of this Agreement, the Lender establishes a revolving credit facility in favor of the UK Borrowers in the UK Revolving Credit Committed Amount.  The aggregate of all advances under the UK Revolving Credit Facility is sometimes referred to in this Agreement as the “UK Revolving Loan”.  The UK Revolving Credit Facility is established as a subfacility under the US Revolving Credit Facility, and the UK Revolving Credit Committed Amount is a sublimit under the US Revolving Credit Committed Amount, not an additional commitment.
During the UK Revolving Credit Commitment Period, the Lender agrees to make advances under the UK Revolving Credit Facility in accordance with the provisions of this Agreement; provided that after giving effect to any request duly made pursuant to this Agreement, the aggregate outstanding principal balance of the UK Revolving Loan would not exceed the UK Revolving Credit Committed Amount.  Advances under the UK Revolving Credit Facility shall be made in minimum amounts of 100,000 Euros or Sterling, as applicable and in integral multiples of 100,000 Euros or Sterling, as applicable.
Unless sooner paid, the unpaid UK Revolving Loan, together with interest accrued and unpaid thereon, and all other related Obligations shall be due and payable in full on the UK Revolving Credit Expiration Date.
No Letters of Credit are available under the UK Revolving Loan.
2.4.2    Procedure for Making Advances Under the UK Revolving Loan; Lender Protection Loans.
On behalf of any of the UK Borrowers, GP may request an advance under the UK Revolving Credit Facility in Euros or Sterling to be made on any Business Day.  Advances under the UK Revolving Loan shall be deposited to a demand deposit account of the applicable UK Borrower with the Lender (or an Affiliate of the Lender) or shall be otherwise applied as directed by GP in writing.  No later than 11:00 a.m. (London Time) on the date which is two Business Days in advance of the date of the requested borrowing, GP shall give the Lender written notice (a “Loan Notice”) of the amount and (if requested by the Lender) the purpose of the requested borrowing.  
In addition, each UK Borrower hereby irrevocably authorizes Lender at any time and from time to time, without further request from or notice to such UK Borrower, to make advances under the UK Revolving Loan, which the Lender, in its sole and absolute discretion, deems necessary or appropriate to protect the interests of the Lender, including, without limitation, advances and reserves under the UK Revolving Loan made to cover debit balances in the UK Revolving Loan Account, principal of, and/or interest on, the UK Revolving Loan, the Obligations, and/or Enforcement Costs relating to the UK Revolving Loan, prior to, on, or after the termination of other advances under this Agreement, regardless of whether the outstanding principal amount of the UK Revolving Loan that the Lender may advance or reserve hereunder exceeds the UK Revolving Credit Committed Amount.  The Lender shall communicate to GP from time to time any action taken under this paragraph either orally or in writing.

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2.4.3    UK Revolving Credit Note.
The obligation of the UK Borrowers to pay the UK Revolving Loan, with interest, shall be evidenced by the Amended and Restated UK Revolving Credit Note (as from time to time extended, amended, restated, supplemented or otherwise modified, the “UK Revolving Credit Note”) substantially in the form of Exhibit B-3 attached hereto and made a part hereof, with appropriate insertions.  The UK Revolving Credit Note shall be payable to the order of the Lender at the times provided in the UK Revolving Credit Note and shall be in the principal amount of the UK Revolving Credit Committed Amount.  The UK Borrowers acknowledge and agree that, if the outstanding principal balance of the UK Revolving Loan outstanding from time to time exceeds the face amount of the UK Revolving Credit Note, the excess shall bear interest at the Post-Default Rate for the UK Revolving Loan and shall be payable, with accrued interest, ON DEMAND.  The UK Revolving Credit Note shall not operate as a novation of any of the Obligations or nullify, discharge, or release any such Obligations or the continuing contractual relationship of the parties hereto in accordance with the provisions of this Agreement.
2.4.4    Prepayments of UK Revolving Loan.
The UK Borrowers shall be required to prepay (each a “UK Revolving Loan Mandatory Prepayment” and collectively the “UK Revolving Loan Mandatory Prepayments”) the UK Revolving Loan by any amount by which the outstanding UK Revolving Loan exceeds the UK Revolving Credit Committed Amount, whether due to the fluctuation in the value of Euros or Sterling to Dollars or otherwise, pro rata on the basis of outstandings to each UK Borrower.
The UK Borrowers shall have the option, at any time and from time to time, to prepay (each a “UK Revolving Loan Optional Prepayment” and collectively the “UK Revolving Loan Optional Prepayments”) the UK Revolving Loan, in whole or in part in a minimum amount of not less than 100,000 Euros or Sterling, as applicable, without premium or penalty.
2.4.5    UK Revolving Loan Account.
The Lender will establish and maintain a loan account on its books (the “UK Revolving Loan Account”) for each UK Borrower to which the Lender will (a) debit (i) the principal amount of each advance of the UK Revolving Loan made by the Lender hereunder as of the date made, specifying both the currency in which the advance is made and the UK Borrower to which it is made, (ii) the amount of any interest accrued on the UK Revolving Loan as and when due, and (iii) any other amounts due and payable by the UK Borrowers to the Lender from time to time under the provisions of this Agreement in connection with the UK Revolving Loan, including, without limitation, Enforcement Costs, Fees, late charges, and service, collection and audit fees relating to the UK Revolving Loan, as and when due and payable, and (b) credit all payments made by any UK Borrower to the Lender on account of the UK Revolving Loan as of the date.  The Lender may debit the UK Revolving Loan Account for the amount of any Item of Payment that is returned to the Lender unpaid.  All credit entries to the UK Revolving Loan Account are conditional and shall be readjusted as of the date made if final and indefeasible payment is not received by the Lender in cash or solvent credits.  Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the UK Revolving Loan Account shall be final, binding and conclusive upon the UK Borrower in all respects, absent manifest error, 

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unless the Lender receives specific written objection thereto from a UK Borrower within thirty (30) Business Days after such statement or reconciliation shall have been sent by the Lender.  
Section 2.5    Applicable Interest Rates.
(a)    Each unpaid advance of the US Revolving Loan, the Term Loan and the UK Revolving Loan shall bear interest until maturity (whether by acceleration, declaration, extension or otherwise) at the Applicable Rate.
(b)    Notwithstanding the foregoing, following the occurrence and during the continuance of an Event of Default, at the option of the Lender, all unpaid advances of the US Revolving Loan, the Term Loan, the UK, Revolving Loan  and all other Obligations shall bear interest at the Post-Default Rate.
		
	Section 2.6
	General Financing Provisions.

		
	2.6.1
	Borrowers’ Representatives.

The Borrowers hereby represent and warrant to the Lender that each of them will derive benefits, directly and indirectly, from each Letter of Credit and from each advance of the US Revolving Loan, the Term Loan and the UK Revolving Loan, both in their separate capacity and as a member of the integrated group to which each of Borrowers belong and because the successful operation of the integrated group is dependent upon the continued successful performance of the functions of the integrated group as a whole, because (a) the terms of the consolidated financing provided under this Agreement are more favorable than would otherwise be obtainable by the Borrowers individually, and (b) the Borrowers’ additional administrative and other costs and reduced flexibility associated with individual financing arrangements which would otherwise be required if obtainable would substantially reduce the value to the Borrowers of the financing.  The Borrowers in the discretion of their respective managements are to agree among themselves as to the allocation of the benefits of Letters of Credit and the proceeds of the US Revolving Loan, the Term Loan and the UK Revolving Loan, provided, however, that the Borrowers shall be deemed to have represented and warranted to the Lender at the time of allocation that each benefit and use of proceeds is a Permitted Use.
For administrative convenience, each Borrower hereby irrevocably appoints GP as Borrower’s attorney-in-fact, with power of substitution (with the prior written consent of the Lender in the exercise of its sole and absolute discretion), in the name of GP or in the name of any Borrower or otherwise to take any and all actions with respect to  this Agreement, the other Financing Documents, the Obligations and/or the Collateral (including, without limitation, the Proceeds thereof) as GP may so elect from time to time, including, without limitation, actions to (i) request advances under the US Revolving Loan, and the UK Revolving Loan, apply for and direct the benefits of Letters of Credits, and direct the Lender to disburse or credit the proceeds of any US Revolving Loan or UK Revolving Loan directly to an account of GP, any one or more of Borrowers or otherwise, which direction shall evidence the making of such US Revolving Loan or UK Revolving Loan  and shall constitute the acknowledgment by each of Borrowers of the receipt of the proceeds of such US Revolving  Loan or UK Revolving Loan or the benefit of such Letter of Credit, (ii) enter into, execute, deliver, amend, modify, restate, substitute, extend and/or renew this Agreement, any Additional Borrower/Guarantor Joinder Supplement, any other Financing 

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Documents, security agreements, mortgages, deposit account agreements, instruments, certificates, waivers, letter of credit applications, releases, documents and agreements from time to time, and (iii) endorse any check or other item of payment in the name of any Borrower or in the name of GP.  The foregoing appointment is coupled with an interest, cannot be revoked without the prior written consent of the Lender, and may be exercised from time to time through GP’s duly authorized officer, officers or other Person or Persons designated by GP to act from time to time on behalf of GP.
The Lender assumes no responsibility or liability for any errors, mistakes, and/or discrepancies in the oral, telephonic, written or other transmissions of any instructions, orders, requests and confirmations between the Lender and the Borrowers in connection with the Credit Facilities, any advance of the US Revolving Loan, the Term Loan or UK Revolving Loan, any Letter of Credit or any other transaction in connection with the provisions of this Agreement. Without implying any limitation on the joint and several nature of the Obligations, the Lender agrees that, notwithstanding any other provision of this Agreement, the Borrowers may create reasonable inter-company indebtedness between or among the Borrowers with respect to the allocation of the benefits and proceeds of the advances and Credit Facilities under this Agreement.  The Borrowers agree among themselves, and the Lender consents to that agreement, that each Borrower shall have rights of contribution from all of the other Borrowers to the extent such Borrower incurs Obligations in excess of the proceeds of the Loans received by, or allocated to purposes for the direct benefit of, such Borrower.  All such indebtedness and rights shall be, and are hereby agreed by Borrowers to be, subordinate in priority and payment to the indefeasible repayment in full in cash of the Obligations, and, unless the Lender agrees in writing otherwise, shall not be exercised or repaid in whole or in part until all of the Obligations have been indefeasibly paid in full in cash.  The Borrowers agree that all of such inter-company indebtedness and rights of contribution are part of the Collateral and secure the Obligations.  Until this Agreement has been terminated and the Obligations have been paid in full in cash, each Borrower hereby waives all rights of counterclaim, recoupment and offset between or among themselves arising on account of that indebtedness and otherwise.  No Borrower shall evidence the inter-company indebtedness or rights of contribution by note or other instrument nor secure such indebtedness or rights of contribution with any Lien or security.  Notwithstanding anything contained in this Agreement to the contrary, the amount covered by each Borrower under the Obligations (including, without limitation, Section 2.6.8 (Guaranty)) shall be limited to an aggregate amount (after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Borrower in respect of the Obligations) which, together with other amounts owing by such Borrower to the Lender under the Obligations, is equal to the largest amount that would not be subject to avoidance under the Bankruptcy Code or any applicable provisions of any applicable, comparable state or other Laws.

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	2.6.2
	Use of Proceeds of the Revolving Loan.

The proceeds of each advance under the US Revolving Loan, the Term Loan and the UK Revolving Loan shall be used by Borrowers for Permitted Uses, and for no other purposes except as may otherwise be agreed by Lender in writing.
		
	2.6.3
	Computation of Interest and Fees.

All applicable Fees and interest shall be calculated on the basis of a year of 360 days for the actual number of days elapsed.
		
	2.6.4
	Maximum Interest Rate.

In no event shall any interest rate provided for hereunder exceed the maximum rate permissible for corporate borrowers under applicable law for loans of the type provided for hereunder (the “Maximum Rate”).  If, in any month, any interest rate, absent such limitation, would have exceeded the Maximum Rate, then the interest rate for that month shall be the Maximum Rate, and, if in future months, that interest rate would otherwise be less than the Maximum Rate, then that interest rate shall remain at the Maximum Rate until such time as the amount of interest paid hereunder equals the amount of interest which would have been paid if the same had not been limited by the Maximum Rate.  In the event that, upon payment in full of the Obligations, the total amount of interest paid or accrued under the terms of this Agreement is less than the total amount of interest which would, but for this Section, have been paid or accrued if the interest rates otherwise set forth in this Agreement had at all times been in effect, then the Borrowers shall, to the extent permitted by applicable law, pay to the Lender, an amount equal to the excess of (a) the lesser of (i) the amount of interest which would have been charged if the Maximum Rate had, at all times, been in effect or (ii) the amount of interest which would have accrued had the interest rates otherwise set forth in this Agreement, at all times, been in effect over (b) the amount of interest actually paid or accrued under this Agreement.  In the event that a court determines that the Lender has received interest and other charges hereunder in excess of the Maximum Rate, such excess shall be deemed received on account of, and shall automatically be applied to reduce, the Obligations other than interest, in the inverse order of maturity, and if there are no Obligations outstanding, the Lender shall refund to Borrowers such excess.
		
	2.6.5
	Payments.

All payments of the Obligations, including, without limitation, principal, interest, Prepayments, and Fees, shall be paid by Borrowers without setoff, recoupment or counterclaim to the Lender in immediately available funds not later than 2:00 p.m. (Eastern Time) on the due date of such payment; provided that payments made in respect of the UK Revolving Loan and related Obligations shall be paid not later than 11:00 a.m. (London time) on the due date for such payment.  All payments received by the Lender after such time shall be deemed to have been received by the Lender for purposes of computing interest and Fees and otherwise as of the next Business Day.  Payments shall not be considered received by the Lender until such payments are paid to the Lender in immediately available funds to the Lender’s principal office in Baltimore, Maryland or at such other location as the Lender may at any time and from time to time notify Borrowers.  Alternatively, at its sole discretion, the Lender may charge any deposit account of the Borrowers at the Lender or 

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any Affiliate of the Lender with all or any part of any amount due to the Lender under this Agreement or any of the other Financing Documents to the extent that Borrowers shall have not otherwise tendered payment to the Lender.  Without implying any limitation on the foregoing, the US Borrower authorizes the Lender to debit the US Borrower’s demand deposit account number with the last four digits *********1818 or any other account with the Lender (routing number 121-000248) designated in writing by the US Borrower, beginning as of the date hereof for any payments due for periodic Fees. The US Borrower further certifies that the US Borrower holds legitimate ownership of this account and preauthorizes this periodic debit as part of its right under said ownership.  All payments shall be made without premium or penalty.
		
	2.6.6
	Liens; Setoff.

Subject to Section 2.6.8(f), each Borrower hereby grants to Lender as additional collateral and security for all of its Obligations, a continuing Lien on any and all monies, Investment Property, and other property of such Borrower, in each case excluding the Excluded Assets,  and any and all proceeds thereof, now or hereafter held or received by or in transit to, the Lender, and/or any Affiliate of the Lender, from or for the account of, such Borrower, and also upon any and all deposit accounts (general or special) and credits of such Borrower, if any, with the Lender or any Affiliate of the Lender, at any time existing, excluding any deposit accounts held by such Borrower in its capacity as trustee for Persons who are not Affiliates of such Borrower.  Without implying any limitation on any other rights the Lender may have under the Financing Documents or applicable Laws, during the continuance of an Event of Default, the Lender is hereby authorized by each Borrower at any time and from time to time, without notice to, or consent of, any Borrower, to set off, appropriate, seize, freeze and apply any or all items hereinabove referred to against all Obligations then outstanding (whether or not then due), all in such order and manner as shall be determined by the Lender in its sole and absolute discretion.
		
	2.6.7
	Requirements of Law.

In the event that the Lender shall have determined in good faith that (a) the adoption of any Capital Adequacy Regulation, or (b) any change in any Capital Adequacy Regulation or in the interpretation or application thereof or (c) compliance by the Lender or any corporation controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority, does or shall have the effect of reducing the rate of return on the capital of the Lender or any corporation controlling the Lender, as a consequence of the obligations of the Lender hereunder to a level below that which the Lender or any corporation controlling the Lender would have achieved but for such adoption, change or compliance (taking into consideration the policies of the Lender and the corporation controlling the Lender, with respect to capital adequacy) by an amount deemed by the Lender, in its discretion, to be material, then from time to time, after submission by the Lender to GP of a written request therefor and a statement of the basis for Lender’s determination, Borrowers shall pay to the Lender ON DEMAND such additional amount or amounts in order to compensate the Lender or its controlling corporation for any such reduction.

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	2.6.8
	Guaranty.

(a)    Subject to Section 2.6.8(f), each Guarantor hereby unconditionally and irrevocably, guarantees (except to the extent such guarantee is an Excluded Swap Obligation with respect such Guarantor) to the Lender:
(i)    the due and punctual payment in full (and not merely the collectability) by the Borrowers of the Obligations, including unpaid and accrued interest thereon, in each case when due and payable, all according to the terms of this Agreement, the Notes and the other Financing Documents;
(ii)    the due and punctual payment in full (and not merely the collectability) by the Borrowers of all other sums and charges which may at any time be due and payable in accordance with this Agreement, the Notes or any of the other Financing Documents;
(iii)    the due and punctual performance by the Borrowers of all of the other terms, covenants and conditions contained in the Financing Documents; and
(iv)    all the other Obligations of the Borrowers.
(b)    Except as limited by Section 2.6.8(f), the obligations and liabilities of each Guarantor under this Section 2.6.8 shall be absolute and unconditional and joint and several, irrespective of the genuineness, validity, priority, regularity or enforceability of this Agreement, any of the Notes or any of the Financing Documents or any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or guarantor.  Each Guarantor expressly agrees that the Lender may, in its sole and absolute discretion, without notice to or further assent of such Guarantor and without in any way releasing, affecting or in any way impairing the joint and several obligations and liabilities of such Guarantor:
(i)    waive compliance with, or any defaults under, or grant any other indulgences under or with respect to any of the Financing Documents;
(ii)    modify, amend, change or terminate any provisions of any of the Financing Documents;
(iii)    grant extensions or renewals of or with respect to the Credit Facilities, the Notes or any of the other Financing Documents;
(iv)    effect any release, subordination, compromise or settlement in connection with this Agreement, any of the Notes or any of the other Financing Documents;

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(v)    agree to the substitution, exchange, release or other disposition of the Collateral or any part thereof, or any other collateral for the Loan or to the subordination of any lien or security interest therein;
(vi)    make advances for the purpose of performing any term, provision or covenant contained in this Agreement, any of the Notes or any of the other Financing Documents with respect to which any Credit Party shall then be in default;
(vii)    make future advances pursuant to this Agreement or any of the other Financing Documents;
(viii)    assign, pledge, hypothecate or otherwise transfer the Commitments, the Obligations, the Notes, any of the other Financing Documents or any interest therein, all as and to the extent permitted by the provisions of this Agreement;
(ix)    deal in all respects with the Borrowers and the other Guarantors as if this Section 2.6.8 were not in effect;
(x)    effect any release, compromise or settlement with any of the other Credit Parties, whether in their capacity as a Borrower or as a Guarantor under this Section 2.6.8; and
(xi)    provide debtor-in-possession financing or allow use of cash collateral in proceedings under the Bankruptcy Code, it being expressly agreed by all Credit Parties that any such financing and/or use would be part of the Obligations.
(c)    The obligations and liabilities of each Guarantor shall be primary, direct and immediate, shall not be subject to any counterclaim, recoupment, set off, reduction or defense based upon any claim that a Guarantor may have against any one or more of the other Borrowers, the Lender, and/or any other Guarantor and shall not be conditional or contingent upon pursuit or enforcement by the Lender of any remedies it may have against the Borrowers with respect to this Agreement, the Notes or any of the other Financing Documents, whether pursuant to the terms thereof or by operation of law.  Without limiting the generality of the foregoing, the Lender shall not be required to make any demand upon any of the Borrowers, or to sell the Collateral or otherwise pursue, enforce or exhaust its remedies against the Borrowers or the Collateral either before, concurrently with or after pursuing or enforcing its rights and remedies hereunder.  Any one or more successive or concurrent actions or proceedings may be brought against each Guarantor under this Section 2.6.8, either in the same action, if any, brought against any one or more of the Borrowers or in separate actions or proceedings, as often as the Lender may deem expedient or advisable.  Without limiting the foregoing, it is specifically understood that any modification, limitation or discharge of any of the liabilities or obligations of any one or more of the Borrowers, any other Guarantor or any obligor under any of the Financing Documents, arising out of, or by virtue of, any bankruptcy, arrangement, reorganization or similar proceeding for relief of debtors under federal or state law initiated by or against any one or more of Borrowers, in their respective 

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capacities as Borrowers and Guarantors under this Section 2.6.8, or under any of the Financing Documents shall not modify, limit, lessen, reduce, impair, discharge, or otherwise affect the liability of each Guarantor under this Section 2.6.8 in any manner whatsoever, and this Section 2.6.8 shall remain and continue in full force and effect.  It is the intent and purpose of this Section 2.6.8 that each Guarantor shall and does hereby waive all rights and benefits which might accrue to any other Guarantor by reason of any such proceeding, and the Guarantors agree that they shall be liable for the full amount of the obligations and liabilities under this Section 2.6.8, regardless of, and irrespective to, any modification, limitation or discharge of the liability of any one or more of the Borrowers, any other Guarantor or any obligor under any of the Financing Documents, that may result from any such proceedings.
(d)    Each Guarantor hereby unconditionally, jointly and severally, irrevocably and expressly waives:
(i)    presentment and demand for payment of the Obligations and protest of non-payment;
(ii)    notice of acceptance of this Section 2.6.8 and of presentment, demand and protest thereof;
(iii)    notice of any default hereunder or under the Notes or any of the other Financing Documents and notice of all indulgences;
(iv)    notice of any increase in the amount of any portion of or all of the indebtedness guaranteed by this Section 2.6.8;
(v)    demand for observance, performance or enforcement of any of the terms or provisions of this Section 2.6.8, the Notes or any of the other Financing Documents;
(vi)    all errors and omissions in connection with the Lender’s administration of all indebtedness guaranteed by this Section 2.6.8, except errors and omissions resulting from acts of bad faith;
(vii)    any right or claim of right to cause a marshalling of the assets of any one or more of the other Borrowers;
(viii)    any act or omission of the Lender which changes the scope of the risk as guarantor hereunder; and 
(ix)    all other notices and demands otherwise required by law which Borrower may lawfully waive.
Within ten (10) days following any request of the Lender so to do, each Guarantor will furnish the Lender and such other persons as the Lender may direct with a written certificate, duly acknowledged stating in detail whether or not any credits, offsets or defenses exist with respect to this Section 2.6.8.

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(e)    Subject to Section 2.6.8(f), each Guarantor that is a Qualified ECP Guarantor (as defined below) hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds and other support as may be needed from time to time by each other Credit Party to honor all of its obligations under this Section 2.6.8 and the other Financing Documents in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section, or otherwise under this Agreement or any other Financing Documents, voidable under Debtor Relief Laws and not for any greater amount).  Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.  For purposes of this Section, “Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit Party that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(f)    The US Borrower and General Physics UK guarantee all Obligations under this Agreement.  Notwithstanding anything to the contrary in this Agreement or any other Financing Documents, GP Holdings UK, GP Strategies UK and GP Strategies Training UK shall not guarantee, or grant a security interest in or pledge any of its assets or properties to secure, any of the Obligations other than the Obligations solely relating to the UK Revolving Loan, and GP Holdings UK, GP Strategies UK and GP Strategies Training UK shall not and do not guarantee, or grant a security interest in or pledge any of its assets or properties to secure,  any of the Obligations relating to the US Revolving Loan, the Letter of Credit Facility or the Term Loan.  The UK Borrowers are individually, but not jointly and severally, liable for the Obligations relating to the UK Revolving Loan.
		
	2.6.9
	ACH Transactions and Swap Contracts.

The Borrowers may request and Lender or its Affiliates may, in their sole and absolute discretion, provide ACH Transactions and Swap Contracts.  In the event a Borrower requests the Lender or its Affiliates to procure ACH Transactions or Swap Contracts, then such Borrower agrees to indemnify and hold the Lender or its Affiliates harmless from any and all obligations now or hereafter owing to the Lender or its Affiliates in connection with such ACH Transactions or Swap Contracts other than obligations arising as a direct result of the Lender’s or its Affiliates’ gross negligence or willful misconduct.  The Borrowers agree to pay the Lender or its Affiliates all amounts owing to the Lender or its Affiliates pursuant to ACH Transactions and Swap Contracts.  In the event the Borrowers shall not have paid to Lender or its Affiliates such amounts, the Lender may cover such amounts by an advance under the US Revolving Loan or UK Revolving Loan, as appropriate, which advance shall be deemed to have been requested by Borrowers.  The Borrowers acknowledge and agree that the obtaining of ACH Transactions and Swap Contracts from Lender or its Affiliates (a) is in the sole and absolute discretion of the Lender or its Affiliates and (b) is subject to all rules and regulations of the Lender or its Affiliates.

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	2.6.10
	Termination of Revolving Credit Facility.

GP shall have the right to terminate or reduce the US Revolving Credit Commitment or the UK Revolving Credit Commitment, in whole or in part, upon at least three (3) Business Days prior written notice to the Lender, without any premium or penalty; provided, however, that all Outstanding Letter of Credit Obligations shall be secured as provided in Section 2.2.3 (Terms of Letters of Credit), all Obligations in respect of any portion of the US Revolving Credit Commitment or UK Credit Commitment which is terminated shall have been paid in full and that the Obligations with respect to the Term Loan shall have been paid in full.

ARTICLE III
THE COLLATERAL
		
	Section 3.1
	Debt and Obligations Secured.

All property (other than the Excluded Assets) of the US Borrower and any other Credit Party that is a Domestic Subsidiary and all Liens assigned, pledged or otherwise granted under or in connection with this Agreement (including, without limitation, those under Section 3.2 (Grant of Liens)) or any of the Financing Documents shall secure (a) the payment of all of the Obligations, including, without limitation, any and all Outstanding Letter of Credit Obligations, and (b) the performance, compliance with and observance by the Borrowers of the provisions of this Agreement and all of the other Financing Documents or otherwise under the Obligations.
		
	Section 3.2
	Grant of Liens.

(a)    The US Borrower and each other Credit Party that is a Domestic Subsidiary hereby assigns, pledges and grants to the Lender, and agrees that the Lender shall have a perfected and continuing security interest in, and Lien on (i) all of such Credit Party’s right, title and interest in Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment, Investment Property, and General Intangibles and all deposit accounts with any financial institution, whether now owned or existing or hereafter acquired or arising, (ii) all returned, rejected or repossessed goods, the sale or lease of which shall have given or shall give rise to an Account or Chattel Paper, (iii) all insurance policies relating to the foregoing and the right to receive refunds of unearned insurance premiums under those policies, (iv) all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to the foregoing and all Equipment and General Intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records; and (v) all Proceeds and products of the foregoing; provided, however, notwithstanding the foregoing, neither the US Borrower nor any other Credit Party assigns, pledges or grants to the Lender, or agrees that the Lender shall have a perfected and continuing security interest in, and Lien on, any Excluded Assets. Notwithstanding anything to the contrary in this Agreement or any other Financing Documents, the “Collateral” shall not include the Excluded Assets.  The US Borrower and each other Credit Party that is a Domestic Subsidiary further agrees that the Lender shall have in respect thereof all of the rights and remedies of a secured party under the Uniform Commercial Code as well as those provided in this Agreement, under each of the other Financing Documents to which it is a party and under applicable Laws.

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(b)    The grant of Liens by the US Borrower confirms the grant made by it under the Fourth Amendment and Restatement and each previous executed version of this Agreement.  Nothing contained in this Agreement shall give rise to a novation of the obligations secured by all previous grants of Liens.
(c)    Upon the Lender’s request, the US Borrower covenants and agrees to provide the Lender with all necessary information and will execute and deliver such documents as are required to comply with the Federal Assignment of Claims Act of 1940 (31 U.S.C. §3727 and 41 U.S.C. §15), to perfect the Lender’s security interest in the Accounts arising under Government Contracts with a contract value equal to or greater than Two Hundred Fifty Thousand Dollars ($250,000) and such other Government Contracts as Lender may determine in its sole discretion.
(d)    The UK Borrowers have executed and delivered the UK Debentures and General Physics UK and GP Strategies Holdings have extended and delivered the UK Share Charges, in each case to secure their respective Obligations under this Agreement which are limited to their individual UK Obligations for all UK Borrowers except for General Physics UK which guarantees all Obligations.
		
	Section 3.3
	Collateral Disclosure List.

On or prior to the Closing Date and at any other time reasonably requested by the Lender, each Borrower shall deliver to Lender any updates to the Collateral Disclosure List last provided to the Lender which shall contain such information with respect to business and personal property of the US Borrower or such other Credit Party as the Lender may require and shall be certified by a Responsible Officer of the US Borrower.
		
	Section 3.4
	Personal Property.

The US Borrower and each other Credit Party that is a Domestic Subsidiary acknowledge and agree that it is the intention of the parties to this Agreement that the Lender shall have a first priority, perfected Lien, in form and substance satisfactory to the Lender and its counsel, on all of the Collateral, whether now owned or hereafter acquired, subject only to the Permitted Liens, if any.  In furtherance of the foregoing:
(a)    Promptly following the Lender’s request from time to time and without implying any limitation on the scope of Section 3.2 (Grant of Liens), other than with respect to any Excluded Assets, the US Borrower and each other Credit Party that is a Domestic Subsidiary shall deliver to the Lender the originals of all of its letters of credit, Investment Property, Chattel Paper, Documents and Instruments and, if the Lender so requires, shall execute and deliver separate pledge, assignment and security agreements in form and content acceptable to the Lender, which pledge, assignment and security agreements shall assign, pledge and grant a Lien to Lender on all letters of credit, Investment Property, Chattel Paper, Documents, and Instruments.  Notwithstanding the foregoing, the Lender agrees that the US Borrower may retain possession of Investment Property with an aggregate value of less than One Hundred Thousand Dollars ($100,000) that is received from Account Debtors in payment of Receivables in lieu of cash.

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(b)    Other than with respect to any Excluded Assets, in the event that the US Borrower or any other Credit Party that is a Domestic Subsidiary shall acquire after the Closing Date any letters of credit, Investment Property, Chattel Paper, Documents, or Instruments, the US Borrower or such other Credit Party shall promptly so notify the Lender and deliver the originals of all of the foregoing to Lender promptly and in any event within ten (10) days of each acquisition.
(c)    All letters of credit, Investment Property, Chattel Paper, Documents and Instruments required to be delivered to the Lender shall be delivered to the Lender endorsed and/or assigned as required by any pledge, assignment and security agreement and/or as Lender may require and, if applicable, shall be accompanied by blank irrevocable and unconditional stock or bond powers and/or notices as the Lender may require.
		
	Section 3.5
	Record Searches.

On or prior to the Closing Date and at any other time reasonably requested by the Lender, the Lender is entitled to receive, in form and substance satisfactory to the Lender, such Lien or record searches with respect to the US Borrower and any other Credit Party that is a Domestic Subsidiary demonstrating that the Lien of the Financing Documents will be a perfected first priority Lien on the property (other than the Excluded Assets) covered by such Financing Document subject only to Permitted Liens or to such other matters as the Lender may approve.
		
	Section 3.6
	Costs.

The US Borrower and all other Credit Parties that are Domestic Subsidiaries agree to pay, as part of the Enforcement Costs and to the fullest extent permitted by applicable Laws, on demand all costs, fees and expenses incurred by the Lender in connection with the taking, perfection, preservation, protection and/or release of a Lien on the Collateral, including, without limitation:
(a)    customary fees and expenses incurred in preparing Financing Documents from time to time (including, without limitation, reasonable attorneys’ fees incurred in connection with preparing the Financing Documents, including, any amendments and supplements thereto);
(b)    all filing and/or recording taxes or fees;
(c)    all costs of Lien and record searches;
(d)    reasonable attorneys’ fees in connection with all legal opinions required; and
(e)    all related costs, fees and expenses.
		
	Section 3.7
	Release.

Upon the indefeasible repayment in full in cash of the Obligations and performance of all Obligations under this Agreement and all other Financing Documents, and the termination and/or expiration of the Commitment, all Letters of Credit and all Outstanding Letter of Credit Obligations, or, in the case of Outstanding Letter of Credit Obligations, the cash collateralization thereof pursuant to Section 2.2.3 (Terms of Letters of Credit), upon the request and at sole cost and expense of GP, 

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the Lender shall release and/or terminate any Financing Document and the Liens granted hereunder and thereunder.
		
	Section 3.8
	Limitations.  

Notwithstanding anything to the contrary in this Agreement or the other Financing Documents (other than the UK Debentures and the UK Share Charges), (a) no Borrower or other Credit Party makes any representation or warranties regarding the existence, creation or enforceability of any security interest or Lien granted under this Agreement arising under any laws other than the federal and state laws of the United States and (b) no Credit Party shall be required  to take any Excluded Perfection Action.  
		
	Section 3.9
	Inconsistent Provisions.

In the event that the provisions of any Financing Document directly conflict with any provision of this Agreement, the provisions of this Agreement govern.
ARTICLE IV     
REPRESENTATIONS AND WARRANTIES
		
	Section 4.1
	Representations and Warranties.

The Borrowers, for themselves and for each other, represent and warrant to the Lender, as follows; provided that, notwithstanding anything to the contrary herein, (a) all representations regarding the consolidated financial statements of the Borrowers and their subsidiaries shall be made only by the US Borrower, (b) the UK Borrowers shall not make any representations regarding ERISA, Employee Relations or Business Names and Addresses (being sections 4.1.11, 4.1.15, 4.1.18, 4.1.20 and 4.1.23 of this Agreement), and (c) nothing in this Amendment is intended to cause any UK Borrower to make any representation or warranty regarding compliance with any U.S. law.  
		
	4.1.1
	Subsidiaries.

As of the date of this Agreement, the Borrowers have the Subsidiaries listed on Schedule 4.1.1 and no others.  As of the date of this Agreement, each of the Subsidiaries is a Wholly Owned Subsidiary except as shown on Schedule 4.1.1, which correctly indicates the nature and amount of each entity’s ownership interests therein.
		
	4.1.2
	Existence.

Each Borrower (a) is a Registered Organization under the laws of the jurisdiction under which it is organized, (b) is in good standing (to the extent such concept is recognized) under the laws of the jurisdiction in which it is organized, (c) has the power to own its property and to carry on its business as now being conducted, and (d) is duly qualified to do business and is in good standing (to the extent such concept is recognized) in each jurisdiction in which the character of the properties owned by it therein or in which the transaction of its business makes such qualification necessary, except where the failure to do so in such jurisdiction would not have a material adverse effect on the ability of such Borrower to perform its Obligations, on the conduct of such Borrower’s operations, on such Borrower’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.  Each Borrower is organized under the laws of only one (1) jurisdiction.

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	4.1.3
	Power and Authority.

Each Borrower has full power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to make the borrowings and request Letters of Credit under this Agreement, as applicable, and to incur and perform the Obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary action.  No consent or approval of owners or any creditors of any Borrower, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of any Borrower, is required as a condition to the execution, delivery, validity or enforceability of this Agreement, or any of the other Financing Documents, or the performance by any Borrower of the Obligations.
		
	4.1.4
	Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Borrowers have been properly executed and delivered and constitute the valid and legally binding obligations of the Borrowers and are fully enforceable against the Borrowers in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.
		
	4.1.5
	No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Borrowers nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) any Borrower’s organizational or governing documents, (b) any existing mortgage, indenture, contract or agreement binding on any Borrower or affecting its property, except for any conflict which could not have a materially adverse effect on any Borrower, or (c) any applicable Laws.
		
	4.1.6
	No Defaults, Violations.

(a)    No Default or Event of Default has occurred and is continuing.
(b)    No Borrower nor any Subsidiaries is in default under or with respect to any obligation under any existing mortgage, indenture, contract or agreement binding on it or affecting its property in any respect which could be materially adverse to the business, operations, property or financial condition of any Borrower, or which could materially adversely affect the ability of any Borrower to perform its obligations under this Agreement or the other Financing Documents to which such Borrower is a party.

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	4.1.7
	Compliance with Laws.

No Borrower nor any Subsidiaries is in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting it or any of its properties, the violation of which could materially adversely affect the business, operations or properties of any Borrowers and their Subsidiaries taken as a whole.
		
	4.1.8
	Margin Stock.

None of the proceeds of the US Revolving Loan, the Term Loan or the UK Revolving Loan will be used, directly or indirectly, by the Borrowers or any Subsidiary for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry, any “margin stock” within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System or for any other purpose which might make the transactions contemplated in this Agreement , in each case, in violation of Regulation U or any other regulation of the Board of Governors of the Federal Reserve System or the Securities Exchange Act of 1934 or the Small Business Investment Act of 1958, as amended, or any rules or regulations promulgated under any of such statutes.
		
	4.1.9
	Investment Company Act; Margin Stock.

No Borrower nor any Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, nor is it, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company within the meaning of said Act.  No Borrower nor any Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock” within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System.
		
	4.1.10
	Litigation.

There are no proceedings, actions or, to the knowledge of the Borrowers, investigations pending or, so far as any Borrower knows, threatened before or by any court, arbitrator or any Governmental Authority which, in any one case or in the aggregate, if determined adversely to the interests of the Borrowers or any Subsidiary, would have a material adverse effect on the business, properties, condition (financial or otherwise) or operations of any Borrower.
		
	4.1.11
	Financial Condition.

The consolidated financial statements of the Borrowers dated September 30, 2016 are complete and correct and fairly present the financial position of Borrowers and their Subsidiaries and the results of their operations and transactions in their surplus accounts as of the date and for the period referred to and have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved.  There are no material liabilities, direct or indirect, fixed or contingent, of the Borrowers or their Subsidiaries as of the date of such financial statements that are not reflected therein or in the notes thereto.  There has been no adverse change in the financial condition or operations of the Borrowers or their Subsidiaries since the date of such financial 

46

statements and to the Borrowers’ knowledge no such adverse change is pending or threatened.  Prior to the date hereof, no Borrower nor any Subsidiary has guaranteed the obligations of, or made any investment in or advances to, any Person, except as disclosed in such financial statements or the schedules hereto.
		
	4.1.12
	Full Disclosure.

The financial statements referred to in Section 4.1.11 (Financial Condition), the Financing Documents (including, without limitation, this Agreement), and the statements, reports or certificates furnished by the Borrowers in connection with the Financing Documents (a) do not contain any untrue statement of a material fact and (b) when taken in their entirety, do not omit any material fact necessary to make the statements contained therein not misleading.  There is no fact known to the Borrowers which the Borrowers have not disclosed to the Lender in writing prior to the date of this Agreement with respect to the transactions contemplated by the Financing Documents that materially and adversely affects or in the future could, in the reasonable opinion of Borrowers, materially adversely affect the condition, financial or otherwise, results of operations, business, or assets of the Borrowers and their Subsidiaries taken as a whole.
		
	4.1.13
	Indebtedness for Borrowed Money.

As of the date of this Agreement, except for the Obligations and except as set forth in Schedule 4.1.13 attached hereto and made a part hereof, the Borrowers have no Indebtedness for Borrowed Money other than the Obligations.  The Lender has received photocopies of all promissory notes evidencing any Indebtedness for Borrowed Money set forth in Schedule 4.1.13, together with any and all subordination agreements, other agreements, documents, or instruments securing, evidencing, guarantying or otherwise executed and delivered in connection therewith.
		
	4.1.14
	Taxes.

Each Borrower and its Subsidiaries has filed all returns, reports and forms for Taxes that, to the knowledge of the Borrower, are required to be filed, and has paid all Taxes as shown on such returns or on any assessment received by it, to the extent that such Taxes have become due, unless and to the extent only that such Taxes, assessments and governmental charges are currently contested in good faith and by appropriate proceedings by such Borrower, such Taxes are not the subject of any Liens other than Permitted Liens, and adequate reserves therefor have been established as required under GAAP.  All tax liabilities of the Borrowers were as of the date of financial statements referred to in Section 4.1.11 (Financial Condition), and are now, adequately provided for on the books of the Borrowers or their Subsidiaries, as appropriate.
		
	4.1.15
	ERISA.

With respect to any Plan, and except to the extent that the failure of any of the following statements to be accurate would not result in a material liability to the Borrowers: (a) no “accumulated funding deficiency” as defined in Code §412 or ERISA §302 has occurred, whether or not that accumulated funding deficiency has been waived; (b) no Reportable Event has occurred other than events for which reporting has been waived under applicable PBGC regulations; (c) no termination of any plan subject to Title IV of ERISA has occurred; (d) no Borrower nor any Commonly Controlled Entity has incurred a “complete withdrawal” within the meaning of ERISA §4203 from any Multiemployer Plan; (e) no Borrower nor any Commonly Controlled Entity has 

47

incurred a “partial withdrawal” within the meaning of ERISA §4205 with respect to any Multiemployer Plan; (f) no Multiemployer Plan to which any Borrower or any Commonly Controlled Entity has an obligation to contribute is in “reorganization” within the meaning of ERISA §4241 nor has notice been received by any Borrower or any Commonly Controlled Entity that such a Multiemployer Plan will be placed in “reorganization”.
		
	4.1.16
	Title to Properties.

The Borrowers have good and marketable title to the Collateral and the properties and assets reflected in the balance sheets described in Section 4.1.11 (Financial Condition) to the extent such property and assets have not been disposed of in the ordinary course of business since the date of such balance sheets and excluding any real property.
		
	4.1.17
	Patents, Trademarks, Etc.

Each Borrower and its Subsidiaries owns, possesses, or has the right to use all necessary Patents, licenses, Trademarks, Copyrights, permits and franchises to own its properties and to conduct its business as now conducted, without known conflict with the rights of any other Person.  Any and all obligations to pay royalties or other charges with respect to such properties and assets are properly reflected on the financial statements described in Section 4.1.11 (Financial Condition).
		
	4.1.18
	Employee Relations.

No Borrower nor any Subsidiary nor any of such Borrower’s or Subsidiary’s employees is subject to any collective bargaining agreement, (b) no petition for certification or union election is pending with respect to the employees of any Borrower or any Subsidiary and no union or collective bargaining unit has sought such certification or recognition with respect to the employees of any Borrower, and (c) there are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of the Borrowers after due inquiry, threatened between any Borrower and its employees.  Hours worked and payments made to the employees of the Borrowers have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters.  All payments due from Borrowers or for which any claim may be made against the Borrowers, on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on its books, or shall be paid or accrued as a liability on its books in a future period as required by GAAP.  The consummation of the transactions contemplated by the Financing Agreement or any of the other Financing Documents will not give rise to a right of termination or right of re-negotiation on the part of any union under any collective bargaining agreement to which any Borrower is a party or by which it is bound.
		
	4.1.19
	Presence of Hazardous Materials or Hazardous Materials Contamination.

To the best of the knowledge of the Borrowers, (a) no Hazardous Materials are located on any real property owned, controlled or operated by any Borrower or for which any Borrower is, or is claimed to be, responsible, except for reasonable quantities of necessary supplies for use by any Borrower in the ordinary course of its current line of business and stored, used and disposed in accordance with applicable Laws, except for any non-compliance which individually or in the aggregate could not have a material adverse effect on any Borrower or any of its Subsidiaries taken as a whole; and (b) no property owned, controlled or operated by any Borrower or for which any 

48

Borrower has, or is claimed to have, responsibility has ever been used as a manufacturing, storage, or dump site for Hazardous Materials except in compliance with applicable Laws, except for any non-compliance which individually or in the aggregate could not have a material adverse effect on any Borrower or any of its Subsidiaries taken as a whole nor is affected by Hazardous Materials Contamination at any other property except for any such Hazardous Materials that individually or in the aggregate could not have a material adverse effect on any Borrower or any of its Subsidiaries taken as a whole.
		
	4.1.20
	Perfection and Priority of Collateral.

The Lender has, or upon execution and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations, a valid and perfected Lien on and security interest in all Collateral, free of all other Liens, claims and rights of third parties whatsoever except Permitted Liens, including, without limitation, those described on Schedule 4.1.20 attached hereto and made a part hereof.  Notwithstanding anything to the contrary in this Agreement or the other Financing Documents, no US Borrower or Credit Party that is a Domestic Subsidiary makes any representation or warranties regarding the existence, creation or enforceability of any security interest or Lien granted under this Agreement arising under any laws other than the federal and state laws of the United States.
		
	4.1.21
	No Suspension or Debarment.

Except as disclosed on Schedule 4.1.10, no Borrower nor, to the knowledge of any Borrower, no Affiliate nor any of their respective directors, officers or employees has received any notice of, or information concerning, any proposed, contemplated or initiated suspension or debarment, be it temporary or permanent, due to an administrative or a statutory basis, of any Borrower or any Affiliate by any Governmental Authority.  The Borrowers further warrant and represent that no Borrower nor, to the knowledge of the Borrowers, no Affiliate has defaulted under any Government Contract which default would be a basis of terminating such Government Contract.
		
	4.1.22
	Collateral Disclosure List.

As of the date of this Agreement, the information contained in the most recent Collateral Disclosure List delivered by the US Borrower and each other Credit Party, as applicable, is complete and correct in all material respects.  Such Collateral Disclosure List completely and accurately identifies as of the date of this Agreement with respect to the US Borrower or Credit Party, as applicable, (a) the type of entity, the state of organization and the chief executive office of each Borrower or Credit Party, (b) each other place of business of each Borrower or Credit Party, (c) the location of all books and records pertaining to the Collateral, and (d) each location, other than the foregoing, where any of the Collateral is located.

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	4.1.23
	Business Names and Addresses.

In the five (5) years preceding the date hereof, except as disclosed on Schedule 4.1.23 attached hereto and made a part hereof, or as otherwise disclosed to Lender pursuant to Section 6.1.16 (Business Names; Locations), no Borrower has changed its name, identity or corporate structure, conducted business under any name other than its current name, nor has it conducted its business in any jurisdiction other than those disclosed on the Collateral Disclosure List
		
	4.1.24
	Accounts.

To the best of the Borrower’s knowledge (a) all accounts are genuine, and in all respects what they purport to be, and are not evidenced by a judgment, an Instrument, or Chattel Paper (unless such judgment has been assigned and such Instrument or Chattel Paper has been endorsed and delivered to the Lender); (b) all accounts represent bona fide transactions completed in accordance with the terms and provisions contained in the invoices, purchase orders and other contracts relating thereto, and the underlying transaction therefor is in all material respects in accordance with all applicable Laws; (c) the amounts shown on the US Borrower’s books and records, with respect thereto are actually and absolutely owing to the US Borrower and are not contingent or subject to reduction for any reason other than regular discounts, credits or adjustments allowed by the Borrower in the ordinary course of its business; (d) no payments have been or shall be made thereon except payments turned over to Lender by the Borrower; (e) all Account Debtors thereon have the capacity to contract; and (f) the goods sold, leased or transferred or the services furnished giving rise thereto are not subject to any Liens except Permitted Liens.
		
	4.1.25
	Patent Collateral

With respect to any Patent Collateral as defined in the Patent Security Agreement, the US Borrower represents and warrants as follow:
(a)    Such Patent Collateral is subsisting and has not been adjudged invalid or unenforceable, in whole or in part;
(b)    To the best of its knowledge, such Patent Collateral is valid and enforceable;
(c)    The US Borrower has made all necessary filings and recordations to protect its interest in such Patent Collateral, including, without limitation, recordations of all interests in the Patent Collateral in the United States Patent and Trademark Office;
(d)    The US Borrower is the exclusive owner of the entire and unencumbered right, title and interest in and to such Patent Collateral (subject only to Permitted Liens), and, to the best of its knowledge, no claim has been made that the use of Patent Collateral by the US Borrower does or may violate the asserted rights of any third party;
(e)    The US Borrower has performed and will continue to perform all acts and has paid and will continue to pay all required fees and taxes to maintain each and every item of Patent Collateral in full force and effect in the United States of America, as applicable unless it determines that such Patent Collateral is no longer needed for the conduct of its business; and

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(f)    The attachment to the Patent Security Agreement contains true and complete listings and descriptions of all of the Patent Collateral as of the date of this Agreement.
(g)    Nothing contained in this Section 4.1.25 shall be construed to require the US Borrower to maintain Patent Collateral which it determines is no longer needed for the conduct of its business.
		
	Section 4.2
	Survival; Updates of Representations and Warranties.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the Closing Date, the making of any advance under the US Revolving Loan, the Term Loan and the UK Revolving Loan and extension of credit made hereunder, and the incurring of any other Obligations and shall be deemed to have been made at the time of each request for, and again at the time of the making of, each advance under the US Revolving Loan, the Term Loan and the UK Revolving Loan or the issuance of each Letter of Credit, except that the representations and warranties which relate to the financial statements which are referred to in Section 4.1.11 (Financial Condition), shall also be deemed to cover financial statements furnished from time to time to the Lender pursuant to Section 6.1.1 (Financial Statements).

ARTICLE V 
CONDITIONS PRECEDENT
		
	Section 5.1
	Conditions to the Initial Advance and Initial Letter of Credit.

The Lender’s obligation to extend credit under this Agreement is subject to the fulfilment on or before the Closing Date of the following conditions precedent in a manner satisfactory in form and substance to the Lender and its counsel:
		
	5.1.1
	Organizational Documents.

The Lender shall have received for the US Borrower updated corporate documents as follows:
(a)    a certificate of good standing certified by the Secretary of State, or other appropriate Governmental Authority, of the state of its formation;
(b)    a certified copy from the appropriate Governmental Authority under which the US Borrower is organized, of the US Borrower’s organizational documents and all recorded amendments thereto;
(c)    a certificate of qualification to do business certified by the Secretary of State or other Governmental Authority of each jurisdiction listed on Schedule 5.1.1(c); and
(d)    a certificate dated as of the Closing Date by the Secretary or an Assistant Secretary of the US Borrower covering:

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(i)    true and complete copies of the US Borrower’s organizational and governing documents and all amendments thereto;
(ii)    true and complete copies of the resolutions of its Board of Directors authorizing (A) the execution, delivery and performance of the Financing Documents to which it is a party, (B) the borrowings hereunder, and (C) the granting of the Liens pursuant to this Agreement and the Financing Documents to which the US Borrower is a party;
(iii)    the incumbency, authority and signatures of the officers of the US Borrower authorized to sign this Agreement and the other Financing Documents to which Borrower is a party; and
(iv)    the identity of the US Borrower’s current directors.
		
	5.1.2
	Opinion of Borrowers’ Counsel.

If requested by the Lender, the Lender shall have received the favorable opinion of counsel for the US Borrower addressed to Lender.
		
	5.1.3
	Notes.

The Lender shall have received the UK Revolving Credit Note, the US Revolving Credit Note and the Term Note, conforming to the requirements hereof and executed by a Responsible Officer of the US Borrower and attested by a duly authorized representative of the US Borrower.
		
	5.1.4
	Financing Documents, Security Documents and Collateral.

Each Borrower shall have executed and delivered the Financing Documents and Security Documents, including the Stock Pledges, to be executed by it.
		
	5.1.5
	Other Documents, Etc.

The Lender shall have received such other certificates, opinions, documents and instruments confirmatory of or otherwise relating to the transactions contemplated hereby as may have been reasonably requested by the Lender.
		
	5.1.6
	Payment of Fees.

The Lender shall have received payment of any Fees due on or before the Closing Date.
		
	5.1.7
	Collateral Disclosure List.

Each of the Borrowers shall have delivered a Collateral Disclosure List required under the provisions of Section 3.3 (Collateral Disclosure List) duly executed by a Responsible Officer.

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	5.1.8
	Recordings and Filings.

Each of the Borrowers shall have: (a) authorized, executed and/or delivered all Financing Documents required to be filed, registered or recorded in order to create, in favor of the Lender, a perfected Lien in the Collateral (subject only to the Permitted Liens) in form and in sufficient number for filing, registration, and recording in each office in each jurisdiction in which such filings, registrations and recordations are required, and (b) delivered such evidence as the Lender deems satisfactory that all necessary filing fees and all recording and other similar fees, and all Taxes and other expenses related to such filings, registrations and recordings will be or have been paid in full.
		
	5.1.9
	Insurance Certificate.

The Lender shall have received insurance certificates in accordance with the provisions of Section 6.1.8 (Insurance).
		
	Section 5.2
	Conditions to all Extensions of Credit.

The making of all advances under the Loans and the issuance of all Letters of Credit is subject to the fulfillment of the following conditions precedent in a manner satisfactory in form and substance to Lender and its counsel:
		
	5.2.1
	Compliance.

Each Borrower shall have complied and shall then be in compliance with all terms, conditions and provisions of Article II of this Agreement with respect to the advance or Letter of Credit requested.
		
	5.2.2
	Default.

There shall exist no Event of Default or Default hereunder.
		
	5.2.3
	Representations and Warranties.

The representations and warranties of the Borrowers contained among the provisions of this Agreement shall be true and with the same effect as though such representations and warranties had been made at the time of the making of, and of the request for, each advance under the US Revolving Loan and the UK Revolving Loan, the making of the Term Loan or the issuance of each Letter of Credit, except that the representations and warranties which relate to financial statements which are referred to in Section 4.1.11 (Financial Condition), shall also be deemed to cover financial statements furnished from time to time to the Lender pursuant to Section 6.1.1 (Financial Statements).
		
	5.2.4
	Adverse Change.

No adverse change shall have occurred in the condition (financial or otherwise), operations or business of any Borrower that would, in the good faith judgment of Lender, materially impair the ability of Borrowers to pay or perform any of the Obligations.

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	5.2.5
	Legal Matters.

All legal documents incident to each advance under the Loans and each of the Letters of Credit shall be reasonably satisfactory to counsel for the Lender.
 
ARTICLE VI
COVENANTS 
		
	Section 6.1
	Affirmative Covenants.

So long as any of the Obligations (or the Commitment) shall be outstanding hereunder, the Borrowers agree, jointly and severally, with the Lender as follows; provided that the covenants to provide financial statements and copies of reports delivered to SEC and to stockholders, financial covenants and related calculations, and ERISA compliance (being sections 6.1.1, 6.1.2, 6.1.10 and 6.1.13) and covenants regarding compliance with US laws shall not apply to the UK Borrowers and the liability of the UK Borrowers for the Obligations is limited in accordance with Section 2.6.8 of this Agreement.  
		
	6.1.1
	Financial Statements.

The US Borrower shall furnish to the Lender:
(a)    Annual Statements and Certificates.  The US Borrower shall furnish to the Lender as soon as available, but in no event more than one hundred twenty (120) days after the close of each fiscal year of the US Borrower, (i) a copy of the annual audited financial statement in reasonable detail satisfactory to the Lender relating to the US Borrower and its Subsidiaries, prepared in accordance with GAAP and audited by KPMG LLP or such other independent certified public accountants satisfactory to the Lender, which financial statement shall include a consolidated balance sheet of the US Borrower and its Subsidiaries as of the end of such fiscal year and consolidated and consolidating statements of income, cash flows and changes in shareholders’ equity of the US Borrower and its Subsidiaries for such fiscal year, (ii) a copy of the annual financial statement in reasonable detail satisfactory to the Lender relating to the US Borrower and its Subsidiaries, prepared in accordance with GAAP, which financial statement shall include a consolidated and consolidating balance sheet of the US Borrower and its Subsidiaries as of the end of such fiscal year, (iii) a Compliance Certificate, in substantially the form attached to this Agreement as EXHIBIT C, as may be amended from time to time, containing a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, and a certification that no change has occurred to the information contained in the Collateral Disclosure List (except as set forth in a schedule attached to the certification),  each prepared by a Responsible Officer of the US Borrower in a format acceptable to the Lender and (iii) a management letter in the form prepared by the US Borrower’s independent certified public accountants.
(b)    Independent Auditors Report.  The US Borrower shall furnish to the Lender as soon as available, but in no event more than one hundred twenty (120) days after the close of the US Borrower’s fiscal years, a letter or opinion of the accountant who audited the annual financial statement relating to the US Borrower and its Subsidiaries (which may be included in the statements delivered pursuant to subsection (a) immediately above) (i) stating whether anything in 

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such accountant’s examination has revealed the occurrence of a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto and (ii) acknowledging that the Lender will rely on the statement and that the US Borrower knows of the intended reliance by the Lender.
(c)    Quarterly Statements and Certificates.  The US Borrower shall furnish to the Lender as soon as available, but in no event more than forty-five (45) days after the close of the US Borrower’s fiscal quarters, consolidated and consolidating balance sheets and income statements of the US Borrower and its Subsidiaries as of the close of such period, consolidated statements of cash flows and changes in shareholders equity statements for such period, and a Compliance Certificate, in substantially the form attached to this Agreement as EXHIBIT C, containing a detailed computation of each financial covenant in this Agreement which is applicable for the period reported and a certification that no change has occurred to the information contained in the Collateral Disclosure List (except as set forth on a schedule attached to the certification and including any changes as described in Section 6.1.16), each prepared by a Responsible Officer of GP in a format acceptable to the Lender, all as prepared and certified by a Responsible Officer of GP and accompanied by a certificate of that officer stating whether, to the best of his or her knowledge, any event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto.
(d)    Annual Budget and Projections.  The US Borrower shall furnish to the Lender as soon as available, but in no event later than the end of each fiscal year, a consolidated budget on a quarterly basis for the following fiscal year.
(e)    Additional Reports and Information.  The US Borrower shall furnish to the Lender promptly, such additional information, reports or statements as the Lender may from time to time reasonably request.
		
	6.1.2
	Reports to SEC and to Stockholders.

The US Borrower will furnish to the Lender, promptly upon the filing or making thereof, at least one (l) copy of all financial statements, reports, notices and proxy statements sent by any Borrower to its stockholders, and of all regular and other reports filed by any Borrower with any securities exchange or with the Securities and Exchange Commission.
		
	6.1.3
	Recordkeeping, Rights of Inspection, Field Examination, Etc.

(a)    The Borrowers shall, and shall cause each of their Subsidiaries to, maintain (i) a standard system of accounting in accordance with GAAP, and (ii) proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its properties, business and activities.
(b)    Prior to an Event of Default, the Borrowers shall, and shall cause each of their Subsidiaries to, permit authorized representatives of the Lender to visit and inspect their properties, one (1) time per year during normal business hours, to review, audit, check and inspect the Collateral, to review, audit, check and inspect such Borrower’s other books of record and to make abstracts and photocopies thereof, and to discuss the affairs, finances and accounts of such Borrower and/or any Subsidiaries, with the officers, directors, employees and other representatives of such Borrower and/or any Subsidiaries and their respective accountants.  The annualized cost of such an audit is not anticipated to exceed $15,000 per year.

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(c)    Subsequent to the occurrence of an Event of Default and during the continuance thereof, the Borrowers shall, and shall cause each of their Subsidiaries to, permit authorized representatives of the Lender to visit and inspect their properties, to review, audit, check and inspect the Collateral at any time with or without notice, to review, audit, check and inspect such Borrower’s other books of record at any time with or without notice and to make abstracts and photocopies thereof, and to discuss the affairs, finances and accounts of such Borrower and/or any Subsidiaries, with the officers, directors, employees and other representatives of such Borrower and/or any Subsidiaries and their respective accountants, all at such times and as often as the Lender may request.
(d)    The Borrowers hereby irrevocably authorize and direct all accountants and auditors employed by them and/or any Subsidiaries at any time prior to the repayment in full of the Obligations to exhibit and deliver to the Lender copies of any and all of the financial statements, trial balances, management letters, or other accounting records of any nature of the Borrowers and/or any Subsidiaries in the accountant’s or auditor’s possession, and to disclose to the Lender any information they may have concerning the financial status and business operations of the Borrowers and their Subsidiaries.  Further, the Borrowers hereby authorize all Governmental Authorities to furnish to the Lender copies of reports or examinations relating to the Borrowers and/or any Subsidiaries, whether made by the Borrowers or otherwise.
(e)    Any and all costs and expenses incurred by, or on behalf of, the Lender in connection with the conduct of the foregoing, including, without limitation, travel, lodging, meals, and other expenses for each auditor employed by the Lender for inspections of the Collateral and the Borrowers’ operations, shall be part of the Enforcement Costs and shall be payable to the Lender upon demand.  The Borrowers acknowledge and agree that such expenses may include, but shall not be limited to, any and all out-of-pocket costs and expenses of the Lender’s employees and agents in, and when, traveling to the Borrowers’ facilities.
		
	6.1.4
	Existence.

Except as otherwise permitted under Section 6.2.1 (Capital Structure, etc.), the Borrowers shall (a) maintain, and cause each of their Subsidiaries to maintain, its existence in good standing (to the extent such concept is recognized) in the jurisdiction in which it is organized and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of such Borrower to perform the Obligations, on the conduct of such Borrower’s operations, on such Borrower’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral and (b) remain a Registered Organization under the laws of the jurisdiction stated in the Preamble of this Agreement.
		
	6.1.5
	Compliance with Laws.

The Borrowers shall comply, and cause each of their Subsidiaries to comply, with all applicable Laws and observe the valid requirements of Governmental Authorities, the non-compliance with or the non-observance of which might have a material adverse effect on the ability of such Borrower to perform the Obligations, on the conduct of such Borrower’s operations, on such Borrower’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.

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	6.1.6
	Preservation of Properties.

Subject to the terms of any applicable leases and limited to the extent of the tenant’s obligations thereunder, the Borrowers will, and will cause each of its Subsidiaries to, at all times (a) maintain, preserve, protect and keep its properties, including, but not limited to the Collateral, whether owned or leased, in good operating condition, working order and repair (ordinary wear and tear excepted), and from time to time will make all repairs, maintenance, replacements, additions and improvements thereto necessary to maintain such properties in good operating condition, working order and repair, and (b) do or cause to be done all things necessary to preserve and to keep in full force and effect its material franchises, leases of real and personal property, trade names, Patents, Trademarks, Copyrights and permits which are necessary for the orderly continuance of its business. 
		
	6.1.7
	Line of Business.

The Borrowers will continue to engage substantially only in the business of providing training, training administration/outsourcing, e-learning, management consulting, engineering/construction, supply of liquefied natural gas and related equipment, and technical products and services.
		
	6.1.8
	Insurance.

(a)    General Provisions.  The Borrowers shall, and shall cause each of their Subsidiaries to, maintain insurance satisfactory to the Lender as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of its properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers’ compensation, and any other insurance which is usual for such Borrower’s business.  Each policy shall name the Lender as loss payee or additional insured, as appropriate
(b)    Insurance Covering Collateral.  In addition to the insurance requirements stated above, the US Borrower shall also maintain all risk property damage insurance policies covering the tangible property comprising the Collateral.  The insurance must be issued by an insurance company acceptable to the Lender, must include a lender’s loss payable endorsement in favor of the Lender in a form acceptable to the Lender.
(c)    Evidence of Insurance.  Upon the request of the Lender, the Borrowers shall deliver to the Lender a copy of each insurance policy, or, if permitted by the Lender, a certificate of insurance listing all insurance in force.
		
	6.1.9
	Taxes.

Except to the extent that the validity or amount thereof is being contested in good faith and by appropriate proceedings, the Borrowers will, and will cause each of their Subsidiaries to, pay and discharge all Taxes prior to the date when any interest or penalty would accrue for the nonpayment thereof which, if unpaid, could have a material adverse effect on such Borrower’s business or operation.

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	6.1.10
	ERISA.

The US Borrower will, and will cause each of its Commonly Controlled Entities to, comply with the funding requirements of ERISA § 302 with respect to Plans for its respective employees.  The US Borrower will not permit with respect to any Plan (a) any prohibited transaction or transactions under ERISA or the Internal Revenue Code, which results, or may result, in any material liability of the US Borrower and/or any Subsidiary and/or the US Borrower’s Commonly Controlled Entities, or (b) any Reportable Event if, upon termination of the Plan or Plans with respect to which one or more such Reportable Events shall have occurred, there is or would be any material liability of the US Borrower and/or any Subsidiary and/or the US Borrower’s Commonly Controlled Entities to the PBGC.  Upon the Lender’s request, the US Borrower will deliver to the Lender a copy of the most recent actuarial report, financial statements and annual report completed with respect to any Plan.
		
	6.1.11
	Notification of Events of Default and Adverse Developments.

The Borrowers shall promptly notify the Lender upon obtaining knowledge of the occurrence of:
(a)    any Event of Default;
(b)    any Default;
(c)    any litigation instituted or threatened against such Borrower or any Subsidiaries and of the entry of any judgment or Lien (other than any Permitted Liens) against any of the assets or properties of such Borrower or any Subsidiary where the claims against such Borrower or any Subsidiaries exceed Five Hundred Thousand Dollars ($500,000) and are not covered by insurance;
(d)    any event, development or circumstance whereby the financial statements furnished hereunder fail in any material respect to present fairly, in accordance with GAAP, the financial condition and operational results of such Borrower or any Subsidiaries;
(e)    any judicial, administrative or arbitral proceeding pending against such Borrower or any of its Subsidiaries and any judicial or administrative proceeding known by such Borrower to be threatened against it or any of its Subsidiaries that, if adversely decided, could materially adversely affect its financial condition or operations (present or prospective);
(f)    the receipt by such Borrower or any of its Subsidiaries of any notice, claim or demand from any Governmental Authority which alleges that such Borrower or any Subsidiary is in violation of any of the terms of, or has failed to comply with any applicable Laws regulating its operation and business, including, but not limited to, the Occupational Safety and Health Act and the Environmental Protection Act;
(g)    any default under any Government Contract to which any Borrower is a party, any event which if not corrected could give rise to a default under any Government Contract to which any such Borrower is a party, or any termination for convenience of any Government Contract with a contract value of One Million Dollars ($1,000,000) or greater; and

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(h)    any other development in the business or affairs of such Borrower and any of their Subsidiaries that may be materially adverse to such Persons taken as a whole;
in each case describing in detail satisfactory to the Lender the nature thereof and the action such Borrower proposes to take with respect thereto.
		
	6.1.12
	Hazardous Materials; Contamination.

The Borrowers agree to undertake the following with respect to any matter that could materially adversely affect them or any Subsidiaries taken as a whole:
(a)    give notice to the Lender immediately upon any Borrower’s acquiring knowledge of the presence of any Hazardous Materials or any Hazardous Materials Contamination on any property owned, operated or controlled by any Borrower or for which any Borrower is, or is claimed to be, responsible except to the extent such claims arise out of or relate to any gross negligence or willful misconduct of the Lender (provided that such notice shall not be required for Hazardous Materials placed or stored on such property in accordance with applicable Laws in the ordinary course (including, without limitation, quantity) of any Borrower’s line of business expressly described in this Agreement), with a full description thereof;
(b)    promptly comply with any Laws requiring the removal, treatment or disposal of Hazardous Materials or Hazardous Materials Contamination and provide the Lender with satisfactory evidence of such compliance;
(c)    provide the Lender, within thirty (30) days after a demand by the Lender, with a bond, letter of credit or similar financial assurance evidencing to the Lender’s satisfaction that the necessary funds are available to pay the cost of removing, treating, and disposing of such Hazardous Materials or Hazardous Materials Contamination and discharging any Lien which may be established as a result thereof on any property owned, operated or controlled by any Borrower or for which any Borrower is, or is claimed to be, responsible; and
(d)    as part of the Obligations, defend, indemnify and hold harmless the Indemnified Parties from any and all claims which may now or in the future (whether before or after the termination of this Agreement) be asserted against the Indemnified Parties as a result of the presence of any Hazardous Materials or any Hazardous Materials Contamination on any property owned, operated or controlled by any Borrower or for which any Borrower is, or is claimed to be, responsible except to the extent such claims arise out of or relate to any gross negligence or willful misconduct of the Lender.  The Borrowers acknowledge and agree that this indemnification shall survive the termination of this Agreement and the Commitment and the payment and performance of all of the other Obligations.
		
	6.1.13
	Financial Covenants.

(a)    Financial Covenant Definitions.  As used in this Agreement, the term:

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“Adjusted EBITDA” means, as to GP on a consolidated basis for any period of determination, EBITDA of GP and its consolidated Subsidiaries, minus dividends paid, plus, to the extent deducted in the determination of net income, non-cash compensation.
 “Cash Flow” means, as to GP and its consolidated Subsidiaries for any period of determination, Adjusted EBITDA of GP and its consolidated Subsidiaries, plus rent under leases for real property, minus cash taxes paid, minus unfinanced Capital Expenditures (Capital Expenditures financed solely with cash or the proceeds of the Revolving Loan will be deemed to be unfinanced for the purposes of this Agreement), minus Restricted Payments in the event that US Revolving Loan Availability is less than $20,000,000.
“EBITDA” means, as to GP and its consolidated Subsidiaries for any period of determination, net income of GP and its consolidated Subsidiaries plus, to the extent deducted in the determination of net income, interest, taxes, depreciation and amortization.
“Fixed Charges” means, as to GP and its consolidated Subsidiaries for any period of determination, the scheduled or required payments (including, without limitation, principal and interest) on all Funded Debt and the scheduled or required payments of rent under leases for real property.
“Funded Debt” means, as to GP and its consolidated Subsidiaries, without duplication, all indebtedness, liabilities and obligations, contingent or otherwise, of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or similar instruments, (iii) upon which interest charges are customarily paid, except for corporate credit cards, (iv) with respect to Lease Obligations under Capital Leases, and (v) as an account party in respect of commercial letters of credit and bankers’ acceptances, but specifically excluding reimbursement obligations under standby letters of credit to the extent the same would be duplicative of any indebtedness, liabilities and obligations described in the preceding clauses of this definition.  Notwithstanding anything herein to the contrary, in no event will any “earn-out” obligation payable in connection with the purchase of any assets or any Permitted Acquisition to the extent not past due be included in the calculation of Funded Debt.
“Maximum Leverage Ratio” means the ratio of Funded Debt to Adjusted EBITDA.
(b)    Minimum Fixed Charge Coverage Ratio.  GP and its consolidated Subsidiaries shall maintain at all times a ratio of Cash Flow to Fixed Charges of not less than 1.50 to 1.0, which ratio shall be tested as of the last day of each fiscal quarter for the four-quarter period ending on the test date.
(c)    Maximum Leverage Ratio.  GP and its consolidated Subsidiaries shall maintain at all times, a Maximum Leverage Ratio of not greater than 3.00 to 1.0, which ratio shall be tested as of the last day of each fiscal quarter for the four-quarter period ending on the test date.
		
	6.1.14
	Equipment.

The Borrowers shall (a) maintain all Equipment as personalty, (b) not affix any Equipment to any real estate in such manner as to become a fixture or part of such real estate unless the nature of specific Equipment necessitates such attachment (in which case the Borrowers shall attempt to negotiate with any applicable landlord that such Equipment remains the property of the 

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applicable Borrower and may be removed by such Borrower), and (c) shall hold no Equipment on a sale on approval basis.
		
	6.1.15
	Defense of Title and Further Assurances.

Subject to the terms of any applicable leases, at its expense, the Borrowers will defend the title to the Collateral (and any part thereof), and will immediately execute, acknowledge and deliver any renewal, affidavit, deed, assignment, security agreement, certificate or other document which the Lender may require in order to perfect, preserve, maintain, continue, protect and/or extend the Lien granted to the Lender under this Agreement or under any of the other Financing Documents and the first priority of that Lien, subject only to the Permitted Liens.  The Borrowers hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code or equivalent document under applicable foreign law.  The Borrowers will from time to time do whatever the Lender may reasonably require by way of obtaining, executing, delivering, and/or filing landlord waivers, notices of assignment and other notices and amendments and renewals thereof and the Borrowers will take any and all steps and observe such formalities as the Lender may require, in order to create and maintain a valid Lien upon, pledge of, or paramount security interest in, the Collateral, subject to the Permitted Liens.  The Borrowers shall pay to the Lender on demand all taxes, costs and expenses incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument.  To the extent that the proceeds of any of the Accounts or Receivables of the Borrowers are expected to become subject to the control of, or in the possession of, a party other than the Borrower or the Lender, such Borrower shall cause all such parties to execute and deliver on the Closing Date security documents or other documents as requested by the Lender and as may be necessary to evidence and/or perfect the security interest of the Lender in those proceeds.  The Borrowers hereby irrevocably appoint the Lender as the Borrowers’ attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Borrowers or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Borrowers and without notice to the Borrowers, to execute and deliver any and all of the instruments and other documents and take any action which the Lender may require pursuant the foregoing provisions of this Section 6.1.15.
		
	6.1.16
	Business Names; Locations.

GP will notify the Lender not less than fifteen (15) days prior to (a) any change in the name under which GP conducts its business, (b) any change of the location of the chief executive office of GP, and (c) any change in the location of the places where the books and records of GP, or any part thereof, are kept.  Any change in name, location of chief executive office, location of books and records and the opening of any new place of business or the closing of any existing place of business for any of the Borrowers shall be included in the Quarterly Compliance Certificate required pursuant to Section 6.1.1(c).
		
	6.1.17
	Protection of Collateral.

Subject to the terms of any applicable leases, the Borrowers agree that the Lender may at any time following the occurrence and during the continuance of an Event of Default take such steps as the Lender deems reasonably necessary to protect the interest of Lender in, and to preserve the Collateral, including, the hiring of such security guards or the placing of other security protection measures as the Lender deems appropriate, may employ and maintain at any of the 

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Borrowers’ premises a custodian who shall have full authority to do all acts necessary to protect the interests of the Lender in the Collateral and may lease warehouse facilities to which the Lender may move all or any part of the Collateral to the extent commercially reasonable.  The Borrowers agree to cooperate fully with Lender’s efforts to preserve the Collateral and, subject to the terms of any applicable leases, will take such actions to preserve the Collateral as the Lender may reasonably direct.  All of the Lender’s expenses of preserving the Collateral, including any reasonable expenses relating to the compensation and bonding of a custodian, shall be part of the Enforcement Costs.
		
	6.1.18
	Depository Relationship.

The Borrowers shall maintain their primary depository and cash management relationship with the Lender at all times during the term of the US Revolving Loan, the Term Loan and the UK Revolving Loan.
		
	Section 6.2
	Negative Covenants.

So long as any of the Obligations or the Commitment shall be outstanding hereunder, the Borrowers agree with the Lender as follows; provided that covenants specifically pertaining to ERISA compliance (being Section 6.2.10) shall not apply to the UK Borrowers:
		
	6.2.1
	Fundamental Changes.

No Borrower will enter into any merger or consolidation or amalgamation, windup or dissolve itself (or suffer any liquidation or dissolution) or sell, lease or otherwise dispose of all or substantially all of its assets (whether now owned or hereafter acquired) except that, so long as no Default exists or would result therefrom:
(a)    The Borrowers may engage in Permitted Acquisitions;
(b)    The Borrowers may merge into or consolidate with any other Borrower; provided, that in any such transaction involving the US Borrower, the US Borrower must be the surviving entity;
(c)    Any Subsidiary may merge into or consolidate with any Borrower, so long as (i) the Borrower is the surviving entity and (ii) such merger or consolidation does not render the surviving entity insolvent.
(d)    Any Subsidiary that is not a Borrower may merge into or consolidate with any other Subsidiary that is not a Borrower; and
(e)    Any Subsidiary that is not a Borrower may (i) be liquidated, wound up or dissolved if it has substantially no assets or all or substantially all of its assets are sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to a Borrower or a Subsidiary thereof or (ii) sell, lease or otherwise dispose of all or substantially all of its assets to a Borrower or other Subsidiary.

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	6.2.2
	Acquisitions.

Except for Permitted Acquisitions or as permitted under Section 6.2.1, no Borrower will acquire all or substantially all the assets of any Person.
		
	6.2.3
	Subsidiaries.

No Borrower will create or acquire any Subsidiaries other than the Subsidiaries identified on the Collateral Disclosure List, unless (a) any such Subsidiaries, which are Domestic Subsidiaries or Foreign Subsidiaries which are treated as tax pass-through entities for US law purposes, shall have executed an Additional Borrower/Guarantor Joinder Supplement and (b) such Borrower pledges all of its right, title and interest in the issued and outstanding stock owned in the Subsidiaries, provided, however that, in the case of any Foreign Subsidiary which is not treated as a tax pass-through entity for US law purposes, such Borrower shall not be required to pledge an amount (or number of shares) of Stock of any such Subsidiary possessing more than sixty five percent (65%) of the total combined voting power of all classes of Stock entitled to vote.
		
	6.2.4
	Indebtedness.

No Borrower will, and no Borrower will permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness for Borrowed Money, or permit any Subsidiary to do so, except:
(a)    the Obligations;
(b)    accounts payable arising in the ordinary course;
(c)    Indebtedness secured by Permitted Liens;
(d)    Subordinated Indebtedness;
(e)    Indebtedness in the form of seller financing incurred in connection with Permitted Acquisitions;
(f)    Indebtedness of Subsidiaries permitted under Section 6.2.5 (Investments, Loans, etc.);
(g)    Indebtedness of any Borrower existing on the date hereof and reflected on Schedule 6.2.4 attached hereto and made a part hereof; 
(h)    Guarantees by any Borrower of any obligations of any Subsidiary under any real property leases and any obligations (including the payment of deferred purchase price or any earnout) in connection with any Permitted Acquisition; and
(i)    any obligations, liabilities or indebtedness under any Swap Contract to which US Borrower or any of its Subsidiaries is a counterparty provided that such Swap Contract has not been entered into for speculative purposes.

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	6.2.5
	Investments, Loans and Other Transactions.

Except as otherwise provided in this Agreement, no Borrower will, and no Borrower will permit any of its Subsidiaries to, make any Investments, except:
(a)    any advance to an officer or employee of any Borrower or Subsidiary for travel or other business expenses in the ordinary course of business, provided that the aggregate amount of all such advances by all Borrowers and their Subsidiaries (taken as a whole) outstanding at any time shall not exceed Two Hundred Thousand Dollars ($200,000);
(b)    the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
(c)    Investments held by any Borrower or Subsidiary in the form of Cash Equivalents or short-term marketable debt securities, which are pledged to the Lender as collateral and security for the Obligations;
(d)    trade credit extended to customers in the ordinary course of business;
(e)    Investments of any Borrower in any Wholly-Owned Subsidiary and Investments of any Wholly-Owned Subsidiary in any Borrower or in another Wholly-Owned Subsidiary;
(f)    Loans made to Subsidiaries from and after the Closing Date (i) for Permitted Acquisitions and (ii) for other purposes in an amount not to exceed $10,000,000 in the aggregate at any time outstanding; 
(g)    Permitted Acquisitions; and
(h)    Investments existing on the date hereof and reflected on Schedule 6.2.5 attached hereto and made a part hereof.
		
	6.2.6
	Subordinated Indebtedness.

No Borrower will, and no Borrower will permit any Subsidiary to make:
(a)    any payment of principal of, or interest on, any of the Subordinated Indebtedness, if a Default or an Event of Default then exists hereunder or would result from such payment;
(b)    any payment of the principal or interest due on the Subordinated Indebtedness as a result of acceleration thereunder or a mandatory prepayment thereunder;
(c)    any amendment or modification of or supplement to the documents evidencing or securing the Subordinated Indebtedness; or

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(d)    payment of principal or interest on the Subordinated Indebtedness other than when due (without giving effect to any acceleration of maturity or mandatory prepayment).
		
	6.2.7
	Liens.

Each Borrower agrees that it will not create, incur, assume or suffer to exist any Lien upon any of its properties or assets, whether now owned or hereafter acquired, or permit any Subsidiary so to do other than the following:
(a)    Liens securing the Obligations; and
(b)    Permitted Liens; and
(c)    Liens securing Indebtedness permitted under Section 6.2.4(e) (Indebtedness); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition.
		
	6.2.8
	Restricted Payments.

The US Borrower shall not make any Restricted Payment in excess of (a) $7,000,000 in the aggregate during the fourth fiscal quarter of 2016 (the “4Q16 Restricted Payments Bucket”) or (b) in excess of $7,000,000 plus any portion of the 4Q16 Restricted Payments Bucket which has not been used in any prior period during any other fiscal year.
		
	6.2.9
	Other Businesses.

No Borrower and no Subsidiary of a Borrower will engage in any material line of business substantially different from those lines of business conducted by the Borrower and their Subsidiaries on the date hereof, or which are similar or complementary of such lines of business.
		
	6.2.10
	ERISA Compliance.

Except to the extent that the occurrence of any of the following could not result in a material liability to the US Borrower, no Borrower nor any Commonly Controlled Entity shall:  (a) engage in or permit any “prohibited transaction” (as defined in ERISA); (b) cause any “accumulated funding deficiency” as defined in ERISA and/or the Internal Revenue Code; (c) terminate any Plan in a manner which could result in the imposition of a lien on the property of Borrower pursuant to ERISA; (d) terminate or consent to the termination of any Multiemployer Plan; or (e) incur a complete or partial withdrawal with respect to any Multiemployer Plan.
		
	6.2.11
	Prohibition on Hazardous Materials.

No Borrower shall place, manufacture or store or permit to be placed, manufactured or stored any Hazardous Materials on any property owned, operated or controlled by any Borrower or for which any Borrower is responsible other than Hazardous Materials placed or stored on such property in compliance with applicable Laws in the ordinary course of such Borrower’s business except for any non-compliance which would not result in a material adverse effect on such Borrower.

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	6.2.12
	Method of Accounting; Fiscal Year.

The Borrowers will not:
(a)    change the method of accounting employed in the preparation of any financial statements furnished to the Lender under the provisions of Section 6.1.1 (Financial Statements), unless required to conform to GAAP and on the condition that the Borrowers’ accountants shall furnish such information as the Lender may request to reconcile the changes with the Borrowers’ prior financial statements.
(b)    change their fiscal year from a year ending on December 31.
		
	6.2.13
	Disposition of Collateral.

The Borrowers will not sell, discount, allow credits or allowances, transfer, assign, extend the time for payment on, convey, lease, assign, transfer or otherwise dispose of the Collateral, except, prior to an Event of Default, dispositions expressly permitted elsewhere in this Agreement, the sale of Inventory, leasing of Equipment and licensing of intellectual property in the ordinary course of business, and the sale of unnecessary or obsolete Equipment, but only if the proceeds of the sale of such Equipment are (a) used to purchase similar Equipment to replace the unnecessary or obsolete Equipment or (b) immediately turned over to the Lender for application to the Obligations in accordance with the provisions of this Agreement.  Upon any conveyance, assignment, transfer, sale or disposition of any property permitted pursuant to this Section 6.2.13, any and all Liens granted to the Lender on such property shall be automatically released without any further action by any party.  Without limiting the foregoing, at the request and sole expense of any Borrower, the Lender shall promptly execute and deliver to such Borrower all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such property, as applicable.

ARTICLE VII
DEFAULT AND RIGHTS AND REMEDIES
		
	Section 7.1
	Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:
		
	7.1.1
	Failure to Pay.

The failure of the Borrowers to pay any of the Obligations as and when due and payable in accordance with the provisions of this Agreement, the Notes and/or any of the other Financing Documents.
		
	7.1.2
	Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Borrowers), financial statement or other document furnished in connection with this Agreement, any of the other Financing 

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Documents, or the Obligations, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.
		
	7.1.3
	Failure to Comply with Specific Covenants.

The failure of the Borrowers to perform, observe or comply with any covenant, condition or agreement contained in Section 6.1.4 (Existence) or Section 6.1.8 (Insurance), which failure continues uncured for a period of thirty (30) days after Notice from the Lender to the Borrowers.
		
	7.1.4
	Failure to Comply with Covenants.

The failure of the Borrowers to perform, observe or comply with any covenant, condition or agreement contained in this Agreement not otherwise referred to in this Section 7.1.
		
	7.1.5
	Default Under Other Financing Documents or Obligations.

A default shall occur under any of the other Financing Documents or under any other Obligations, and such default is not cured within any applicable grace period provided therein.
		
	7.1.6
	Receiver; Bankruptcy.

Any Borrower or any Subsidiary shall (a) apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its property, (b) admit in writing its inability to pay its debts as they mature, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent, (e) file a voluntary petition in bankruptcy or a petition or an answer seeking or consenting to reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or take corporate action for the purposes of effecting any of the foregoing, or (f) by any act indicate its consent to, approval of or acquiescence in any such proceeding or the appointment of any receiver of or trustee for any of its property, or suffer any such receivership, trusteeship or proceeding to continue undischarged for a period of sixty (60) days, or (g) by any act indicate its consent to, approval of or acquiescence in any order, judgment or decree by any court of competent jurisdiction or any Governmental Authority enjoining or otherwise prohibiting the operation of a material portion of Borrower’s or any Subsidiary’s business or the use or disposition of a material portion of Borrower’s or any Subsidiary’s assets.
		
	7.1.7
	Involuntary Bankruptcy, etc.

An order for relief shall be entered in any involuntary case brought against any Borrower or any Subsidiary under the Bankruptcy Code, or (b) any such case shall be commenced against any Borrower or any Subsidiary and shall not be dismissed within sixty (60) days after the filing of the petition, or (c) an order, judgment or decree under any other Law is entered by any court of competent jurisdiction or by any other Governmental Authority on the application of a Governmental Authority or of a Person other than the Borrowers or any Subsidiary (i) adjudicating any Borrower, or any Subsidiary bankrupt or insolvent, or (ii) appointing a receiver, trustee or liquidator of Borrower or of any Subsidiary, or of a material portion of Borrower’s or any Subsidiary’s assets, or (iii) enjoining, prohibiting or otherwise limiting the operation of a material portion of any Borrower’s or any Subsidiary’s business or the use or disposition of a material portion of any 

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Borrower’s or any Subsidiary’s assets, and such order, judgment or decree continues unstayed and in effect for a period of thirty (30) days from the date entered.
		
	7.1.8
	Judgment.

Unless adequately insured in the opinion of the Lender, the entry of a final judgment for the payment of money involving more than $1,000,000 against any Borrower or any Subsidiary, and the failure by such Borrower or such Subsidiary to discharge the same, or cause it to be discharged, within thirty (30) days from the date of the order, decree or process under which or pursuant to which such judgment was entered, or to secure a stay of execution pending appeal of such judgment.
		
	7.1.9
	Execution; Attachment.

Any execution or attachment shall be levied against the Collateral, or any part thereof, and such execution or attachment shall not be set aside, discharged or stayed within thirty (30) days after the same shall have been levied.
		
	7.1.10
	Default Under Other Borrowings.

Default shall be made by any Borrower with respect to any Indebtedness for Borrowed Money (other than the Loans) with an outstanding principal amount of greater than $500,000 if the default is a failure to pay at maturity or if the effect of such default is to accelerate the maturity of such Indebtedness for Borrowed Money or to permit the holder or obligee thereof or other party thereto to cause such Indebtedness for Borrowed Money to become due prior to its stated maturity.
		
	7.1.11
	Challenge to Agreements.

Any Borrower shall challenge the validity and binding effect of any provision of any of the Financing Documents or shall state its intention to make such a challenge of any of the Financing Documents or any of the Financing Documents shall for any reason (except to the extent permitted by its express terms) cease to be effective or to create a valid and perfected first priority Lien (except for Permitted Liens) on, or security interest in, any of the Collateral purported to be covered thereby.
		
	7.1.12
	Material Adverse Change.

The Lender in its sole discretion determines in good faith that a material adverse change has occurred in the financial condition of any Borrower or the value of the Collateral taken as a whole.
		
	7.1.13
	Contract Default, Debarment or Suspension.

Default shall be made by any Borrower under any Government Contract with, or any Government Contract is terminated for default by, the United States or any individual department, agency or instrumentality of the United States with which any Borrower has contracts in the aggregate at that point in time with a value in excess of $10,000,000, or if any Borrower is debarred or suspended, whether temporarily or permanently, by the United States or any department, agency or instrumentality of the United States.

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	7.1.14
	 Liquidation, Termination, Dissolution, etc.

Any Borrower shall liquidate, dissolve or terminate its existence or shall suspend or terminate a substantial portion of its business operations, except, in each case, as permitted under Section 6.2.1 of this Agreement, or any Change of Control without the prior written consent of the Lender.
		
	Section 7.2
	Remedies.

Upon the occurrence and during the continuance of any Event of Default, the Lender may, in the exercise of its sole and absolute discretion from time to time, exercise any one or more of the following rights, powers or remedies:
		
	7.2.1
	Acceleration.

The Lender may declare any or all of the Obligations to be immediately due and payable, notwithstanding anything contained in this Agreement or in any of the other Financing Documents to the contrary, without presentment, demand, protest, notice of protest or of dishonor, or other notice of any kind, all of which the Borrowers hereby waive.
		
	7.2.2
	Further Advances.

The Lender may from time to time without notice to the Borrowers suspend, terminate or limit any further advances, loans or other extensions of credit under the Commitments, under this Agreement and/or under any of the other Financing Documents.  Further, upon the occurrence of an Event of Default or Default specified in Section 7.1.6 (Receiver; Bankruptcy) or Section 7.1.7 (Involuntary Bankruptcy, etc.), the Revolving Credit Commitment, the Term Loan Commitment and any agreement in any of the Financing Documents to provide additional credit and/or to issue Letters of Credit shall immediately and automatically terminate and the unpaid principal amount of the Notes (with accrued interest thereon) and all other Obligations then outstanding, shall immediately become due and payable without further action of any kind and without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrowers.
		
	7.2.3
	Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws.  Upon demand by the Lender, the US Borrower shall assemble the Collateral and make it available to the Lender, at a place designated by the Lender.  Subject to the terms of any applicable leases, the Lender or its agents may without notice from time to time enter upon any Borrower’s premises to take possession of the Collateral, to remove it, to render it unusable, to process it or otherwise prepare it for sale, or to sell or otherwise dispose of it.
Any written notice of the sale, disposition or other intended action by the Lender with respect to the Collateral which is sent by regular mail, postage prepaid, to the US Borrower at the address set forth in Section 8.1 (Notices), or such other address of the US Borrower which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the US Borrower.  The Lender may alternatively or additionally give such notice in any other commercially reasonable 

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manner.  Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.
If any consent, approval, or authorization of any state, municipal or other Governmental Authority or of any other Person or of any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Collateral, each Borrower agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.
The US Borrower recognizes that the Lender may be unable to effect a public sale of all or a part of the Collateral consisting of Investment Property by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable Federal and state Laws.  The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof.  The US Borrower covenant and agree to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.   Upon any such sale or disposition, the Lender shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral consisting of securities so sold.
		
	7.2.4
	Specific Rights With Regard to Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to any Borrower, and each Borrower hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender and/or in the name of Borrower for the use and benefit of the Lender, but at the cost and expense of the US Borrower and without notice to the US Borrower:
(a)    request any Account Debtor obligated on any of the Accounts to make payments thereon directly to the Lender, with the Lender taking control of the Proceeds thereof;
(b)    compromise, extend or renew any of the Collateral or deal with the same as it may deem advisable;
(c)    make exchanges, substitutions or surrenders of all or any part of the Collateral;

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(d)    copy, transcribe, or remove from any place of business of any Borrower or any Subsidiary all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Collateral or without cost or expense to the Lender, subject to the terms of any applicable leases, make such use of any Borrower’s or any Subsidiary’s place(s) of business as may be reasonably necessary to administer, control and collect the Collateral;
(e)    repair, alter or supply goods if necessary to fulfill in whole or in part the purchase order of any Account Debtor;
(f)    demand, collect, receipt for and give renewals, extensions, discharges and releases of any of the Collateral;
(g)    institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Collateral;
(h)    settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Collateral or any legal proceedings brought in respect thereof;
(i)    endorse or sign the name of any Borrower upon any Items of Payment, certificates of title, Instruments, Investment Property, stock powers, documents, documents of title, financing statements, assignments, notices, or other writing relating to or part of the Collateral and on any proof of claim in bankruptcy against an Account Debtor;
(j)    clear Inventory through customs in the Lender’s or, as applicable, any Borrower’s name and to sign and deliver to customs officials powers of attorney in any Borrower’s name for such purpose;
(k)    notify the Post Office authorities to change the address for the delivery of mail to any Borrower to such address or Post Office Box as the Lender may designate and receive and open all mail addressed to such Borrower; and
(l)    take any other action necessary or beneficial to realize upon or dispose of the Collateral or to carry out the terms of this Agreement.
		
	7.2.5
	Application of Proceeds.

Any proceeds of sale or other disposition of the Collateral will be applied by the Lender to the payment first of any and all Enforcement Costs, and any balance of such proceeds will be applied to the Obligations in such order and manner as the Lender shall determine.  If the sale or other disposition of the Collateral fails to fully satisfy the Obligations, the US Borrower shall remain liable to the Lender for any deficiency.
		
	7.2.6
	Performance by the Lender.

The Lender without notice to or demand upon the US Borrower and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the US Borrower, and may enter upon the premises of the US Borrower for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose, subject to the terms of any applicable leases, and each Borrower hereby irrevocably 

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appoints The Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender, in the name of the US Borrower or otherwise, for the use and benefit of the Lender, but at the cost and expense of the US Borrower and without notice to the US Borrower.  All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the US Borrower to the Lender on demand, and shall constitute and become a part of the Obligations.
		
	7.2.7
	Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.  The Lender is authorized to offset and apply to all or any part of the Obligations all moneys, credits and other property of any nature whatsoever of the Borrowers now or at any time hereafter in the possession of, in transit to or from, under the control or custody of, or on deposit with, the Lender or any Affiliate of the Lender.

ARTICLE VIII
MISCELLANEOUS
		
	Section 8.1
	Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or five (5) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows:
		
	Borrower:
	GP Strategies Corporation

11000 Broken Land Parkway
Suite 200
Columbia, MD 21044
Attention:    Sharon Esposito-Mayer
		
	with a copy to:
	GP Strategies Corporation

11000 Broken Land Parkway
Suite 200
Columbia, MD 21044
Attention:    Kenneth L. Crawford

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Lender:    Wells Fargo Bank, National Association
MAC R1230-037
7 Saint Paul Street, 3rd Floor
Baltimore, Maryland 21202
Attention:    Lynn S. Manthy
		
	with a copy to:
	Miles & Stockbridge P.C. 

1500 K Street, Suite 800
Washington, DC 20005
Attention:    Cynthia C. Allner, Esq.
By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day.
		
	Section 8.2
	Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Borrowers.  No waiver of any provision of this Agreement or of any of the other Financing Documents or consent to any departure by the Borrowers therefrom, shall in any event be effective unless the same shall be in writing signed by the Lender.  No course of dealing between the Borrowers and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.
Without implying any limitation on the foregoing:
(a)    Any waiver or consent shall be effective only in the specific instance, for the terms and purpose for which given, subject to such conditions as the Lender may specify in any such instrument.
(b)    No waiver of any Default or Event of Default shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereto.
(c)    No notice to or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in the same, similar or other circumstance.
(d)    No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver, amendment or modification of any such term, condition, covenant or agreement or of any such breach or preclude the Lender from exercising any such right, power or remedy at any time or times.

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(e)    By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any of the other Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.
		
	Section 8.3
	Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine, subject to the provisions of this Agreement, and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws.  In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement.  Without limiting the generality of the foregoing and subject to the terms of this Agreement, the Lender may:
(a)    proceed against any Borrower with or without proceeding against any other Person who may be liable (by endorsement, guaranty, indemnity or otherwise) for all or any part of the Obligations;
(b)    proceed against any Borrower with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;
(c)    without reducing or impairing the obligation of any Borrower and without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise;
(d)    without reducing or impairing the obligations of any Borrower and without notice thereof:
(i)    fail to perfect the Lien in any or all Collateral or to release any or all the Collateral or to accept substitute Collateral;
(ii)    approve the making of advances under the Revolving Loan or under the Term Loan under this Agreement;
(iii)    waive any provision of this Agreement or the other Financing Documents;
(iv)    exercise or fail to exercise rights of set-off or other rights; or
(e)    accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

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	Section 8.4
	Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:
(a)    the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;
(b)    the obligation to be fulfilled shall be reduced to the limit of such validity;
(c)    if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Borrowers to the Lender shall become immediately due and payable; and
(d)    if the affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.
		
	Section 8.5
	Assignments by the Lender.

The Lender may, without notice to or consent of the Borrowers, assign to any Person (each an “Assignee” and collectively, the “Assignees”) all or a portion of the Commitment; provided, however, prior to any sale of the Loan, or any portion thereof, to an institution organized under the laws of a foreign jurisdiction, so long as no Event of Default exists and is continuing, the Lender will provide notice to the Borrowers and the Borrowers will have the right to approve or disapprove the sale which approval shall not be unreasonably withheld, conditioned, or delayed, and provided further, however, that the notice and consent right provided to the Borrowers in the foregoing clause will not apply to a transfer to an Affiliate of the Lender or as part of a merger or other extraordinary corporate action with respect to the Lender.  The Lender and its Assignee shall notify the Borrowers in writing of the date on which the assignment is to be effective (the “Adjustment Date”).  On or before the Adjustment Date, the Lender, the Borrowers and the Assignee shall execute and deliver a written assignment agreement in a form acceptable to the Lender, which shall constitute an amendment to this Agreement to the extent necessary to reflect such assignment.  Upon the request of the Lender following an assignment made in accordance with this Section 8.5, the Borrowers shall issue new Notes to the Lender and its Assignee reflecting such assignment, in exchange for the existing Notes held by the Lender.
In addition, notwithstanding the foregoing, the Lender may at any time pledge all or any portion of the Lender’s rights under this Agreement, the Commitment or the Obligations to a Federal Reserve Bank.

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	Section 8.6
	Participations by the Lender.

The Lender may at any time sell to one or more financial institutions participating interests in any of the Lender’s Obligations or Commitment; provided, however, that (a) no such participation shall relieve the Lender from its obligations under this Agreement or under any of the other Financing Documents to which it is a party, (b) the Lender shall remain solely responsible for the performance of its obligations under this Agreement and under all of the other Financing Documents to which it is a party, and (c) the Borrowers shall continue to deal solely and directly with the Lender in connection with the Lender’s rights and obligations under this Agreement and the other Financing Documents.  A participant shall have no rights vis-à-vis the Borrowers under this Agreement.
		
	Section 8.7
	Disclosure of Information by the Lender.

Subject to the provisions of Section 8.21 (Confidentiality), in connection with any sale, transfer, assignment or participation by the Lender in accordance with Section 8.5 (Assignments by the Lender) or Section 8.6 (Participations by the Lender), the Lender shall have the right to disclose to any actual or potential purchaser, assignee, transferee or participant all financial records, information, reports, financial statements and documents obtained in connection with this Agreement and/or any of the other Financing Documents or otherwise.
		
	Section 8.8
	Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Borrowers and the Lender and their respective successors and assigns, except that the Borrowers shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.
		
	Section 8.9
	Continuing Agreements.

All covenants, agreements, representations and warranties made by the Borrowers in this Agreement, in any of the other Financing Documents, and in any certificate delivered pursuant hereto or thereto shall survive the making by the Lender of the Revolving Loan and the Term Loan the issuance of Letters of Credit and the execution and delivery of the Notes, shall be binding upon the Borrowers regardless of how long before or after the date hereof any of the Obligations were or are incurred, and shall continue in full force and effect so long as any of the Obligations are outstanding and unpaid.  From time to time upon the Lender’s request, and as a condition of the release of any one or more of the Security Documents, the Borrowers and other Persons obligated with respect to the Obligations shall provide the Lender with such acknowledgments and agreements as the Lender may require to the effect that there exists no defenses, rights of setoff or recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever in connection with the Obligations against the Lender and/or any of its agents and others, or to the extent there are, the same are waived and released.
		
	Section 8.10
	Enforcement Costs.

The Borrowers shall pay to the Lender on demand all Enforcement Costs, together with interest thereon from the earlier of the date incurred or advanced until paid in full at a per annum rate of interest equal at all times to the Post-Default Rate (other than Enforcement Costs described in clause (c) of the definition of Enforcement Costs to which the Applicable Rate shall apply).  

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Enforcement Costs shall be payable on demand.  Without implying any limitation on the foregoing, the Borrowers shall pay, as part of the Enforcement Costs, upon demand any and all stamp and other Taxes and fees payable or determined to be payable in connection with the execution and delivery of this Agreement and the other Financing Documents and to save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay any Taxes or fees referred to in this Section.  The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreement.
		
	Section 8.11
	Applicable Law; Jurisdiction.

		
	8.11.1
	Applicable Law.

The Borrowers and the Lender acknowledge and agree that this Agreement shall be governed by the Laws of the State.
		
	8.11.2
	Submission to Jurisdiction.

Each Borrower irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents.  Each Borrower irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon Borrower and may be enforced in any court in which Borrower is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon Borrower in one of the manners specified in this Section or as otherwise permitted by applicable Laws.
		
	8.11.3
	Service of Process.

Each Borrower hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to Borrower at Borrower’s address designated in or pursuant to Section 8.1 (Notices).  Each Borrower irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon Borrower in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon Borrower.  Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against Borrower in the courts of any jurisdiction or jurisdictions.
		
	Section 8.12
	Duplicate Originals and Counterparts.

This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same instrument.

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	Section 8.13
	Headings.

The headings in this Agreement are included herein for convenience only, shall not constitute a part of this Agreement for any other purpose, and shall not be deemed to affect the meaning or construction of any of the provisions hereof.
		
	Section 8.14
	No Agency.

Nothing herein contained shall be construed to constitute any Borrower as the Lender’s agent for any purpose whatsoever or to permit any Borrower to pledge any of the credit of the Lender.  The Lender shall not be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof, unless as a result of the Lender’s gross negligence or willful misconduct.  The Lender shall not, by anything herein or in any of the Financing Documents or otherwise, assume any of the Borrowers’ obligations under any contract or agreement assigned to the Lender, and the Lender shall not be responsible in any way for the performance by the Borrowers of any of the terms and conditions thereof.
		
	Section 8.15
	Date of Payment.

Should the principal of or interest on the Notes become due and payable on other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day and in the case of principal, interest shall be payable thereon at the rate per annum specified in the  Notes during such extension.
		
	Section 8.16
	Entire Agreement.

This Agreement is intended by the Lender and the Borrowers to be a complete, exclusive and final expression of the agreements contained herein.  Neither the Lender nor the Borrowers shall hereafter have any rights under any prior agreements pertaining to the matters addressed by this Agreement but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.
		
	Section 8.17
	Waiver of Trial by Jury.

THE BORROWERS AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE  BORROWERS AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE COLLATERAL.  THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by the Borrowers and the Lender, and the Borrowers and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect.  The Borrowers and the Lender further represent that they have been represented in the 

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signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.
Section 8.18    LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES.
EACH OF THE PARTIES HERETO, INCLUDING THE LENDER BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES.  EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE.  THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE REPAYMENT OF THE OTHER OBLIGATIONS AND SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
		
	Section 8.19
	 Liability of the Lender.

The US Borrower hereby agree that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, or otherwise in perfecting, maintaining, protecting or realizing upon any lien or security interest or any other interest in the Collateral or other security for the Obligations.
By inspecting the Collateral or any other properties of the US Borrower or by accepting or approving anything required to be observed, performed or fulfilled by the US Borrower or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.
		
	Section 8.20
	Indemnification.

Each Borrower agrees to indemnify and hold harmless, the Lender, the Lender’s parent and Affiliates and the Lender’s parent’s and Affiliates’ officers, directors, shareholders, employees and agents (each an “Indemnified Party,” and collectively, the “Indemnified Parties”), from and against any and all claims, liabilities, losses, penalties, damages, costs and expenses (whether or not such Indemnified Party is a party to any litigation), including without limitation, reasonable attorney’s fees and costs and costs of investigation, document production, attendance at depositions or other discovery, incurred by any Indemnified Party with respect to, arising out of or as a consequence of (a) this Agreement or any of the other Financing Documents, including without limitation, any failure of the Borrowers to pay when due (at maturity, by acceleration or otherwise) any principal, interest, fee or any other amount due under this Agreement or the other Financing Documents, or 

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any other Event of Default (b) the use by the Borrowers of any proceeds advanced hereunder; (c) the transactions contemplated hereunder; or (d) any claim, investigation, demand, action, cause of action litigation or other proceeding (whether or not any Indemnified Party is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Loans, this Agreement, any other Financing Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby.  Notwithstanding anything herein or elsewhere to the contrary, no Borrower shall be obligated to indemnify or hold harmless any Indemnified Party from any liability, loss or damage resulting from the gross negligence, willful misconduct or unlawful actions of such Indemnified Party.  Any amount payable to the Lender or any other Indemnified Party under this Section will be due upon incurrence and payable no later than five (5) Business Days after demand) and will bear interest at the Post-Default Rate from the due date until paid.  The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreement.
Section 8.21    Confidentiality.
The Lender understands that some of the information furnished to it pursuant to this Agreement and the other Financing Documents may be received by it prior to the time that such information shall have been made public, and the Lender hereby agrees that it will keep, and will direct its officers and employees to keep, all the information provided to it pursuant to this Agreement and the other Financing Documents confidential prior to its becoming public subject, however, to (a) disclosure to officers, directors, employees, representatives, agents, auditors, consultants, advisors, lawyers and Affiliates of the Lender, in the ordinary course of business, (b) disclosure to such officers, directors, employees, agents and representatives of a prospective assignee or participant as need to know such information in connection with the evaluation of a possible participation in the Commitment (who will be informed of the confidential nature of the material), or (c) the obligations of the Lender or a participant under applicable Law, or pursuant to subpoenas or other legal process, to make information available to governmental agencies and examiners or to others and the right of the Lender to use such information in proceedings to enforce their rights and remedies hereunder or under any other Financing Documents or in any proceeding against the Lender in connection with this Agreement or under any other Financing Document or the transactions contemplated hereunder or thereunder.
Notwithstanding the foregoing, each of the Lender, the Borrowers and any assignee or participant hereunder (and each employee, representative or other agent of such parties) may disclose to any and all Persons, without limitation of any kind, the tax treatment and any facts that may be relevant to the tax structure of the transaction; provided, however, that no such Person shall disclose any information that is not relevant to understanding the tax treatment and structure of the transaction (including the identity of any party and any information that could lead another to determine the identity of any party), or any information to the extent that such disclosure could result in a violation of any federal or state securities law or any stock exchange regulation.

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Section 8.22    Compliance with Laws.
No Borrower is a Sanctioned Person and no Borrower has any of its assets in a Sanctioned Country or does business in or with, or derives any of its operating income from investments in or transactions with, Sanctioned Persons or Sanctioned Countries in violation of economic sanctions administered by OFAC.  The proceeds from the Credit Facilities will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country.  Each Borrower will implement and maintain policies and procedures which are designed to ensure compliance with laws relating to bribery or corruption and will not knowingly engage in any activity in violation of such laws. 
Section 8.23    Electronic Transmission of Data.
The Lender and the Borrowers agree that certain data related to the Credit Facilities (including confidential information, documents, applications and reports) may be transmitted electronically, including transmission over the Internet.  This data may be transmitted to, received from or circulated among agents and representatives of the Borrowers and/or the Lender and their Affiliates and other Persons involved with the subject matter of this Agreement.  The Borrowers acknowledge and agree that (a) there are risks associated with the use of electronic transmission and that the Lender does not control the method of transmittal or service providers, (b) the Lender has no obligation or responsibility whatsoever and assumes no duty or obligation for the security, receipt or third party interception of any such transmission, and (c) the Borrowers will release, hold harmless and indemnify the Lender from any claim, damage or loss, including that arising in whole or part from the Lender’s strict liability or sole, comparative or contributory negligence, which is related to the electronic transmission of data.
Section 8.24    Arbitration.
(a)    Arbitration.  The parties hereto agree, upon demand by any party, whether made before the institution of a judicial proceeding or not more than 60 days after service of a complaint, third party complaint, cross-claim, counterclaim or any answer thereto or any amendment to any of the above, to submit to binding arbitration all claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the Financing Documents, and their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit; provided, however, that subject to subsection (c) below, nothing herein shall preclude or limit the Lender’s right to confess judgment; and provided, further, that no party shall have the right to demand binding arbitration of any claim, dispute or controversy seeking to open a judgment obtained by confession.
(b)    Governing Rules.  Any arbitration proceeding will (i) proceed in a location in Maryland selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the 

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AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to herein, as applicable, as the “Rules”).  If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control.  Any party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute.  Nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law.
(c)    No Waiver of Provisional Remedies, Self-Help and Foreclosure.  Nothing in this Agreement, including, without limitation, the arbitration requirement, shall limit the right of any party to (i) foreclose against real or personal property collateral, or exercise power of sale rights; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or repossession; (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver; or (iv) confess judgment.  This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in sections (i), (ii) (iii) and (iv) of this subsection.
(d)    Arbitrator Qualifications and Powers.  Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00.  Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations.  The arbitrator will be a neutral attorney licensed in the State of Maryland or a neutral retired judge of the state or federal judiciary of Maryland, in either case with a minimum of ten years’ experience in the substantive law applicable to the subject matter of the dispute to be arbitrated.  The arbitrator will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim.  In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication.  The arbitrator shall resolve all disputes in accordance with the substantive law of Maryland and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award.  The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the Maryland Rules of Civil Procedure or other applicable law.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction.  The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.

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(e)    Discovery.  In any arbitration proceeding, discovery will be permitted in accordance with the Rules.  All discovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than twenty (20) days before the hearing date.  Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation and that no alternative means for obtaining information is available.
(f)    Class Proceedings and Consolidations.  No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, except parties who have executed any Financing Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity. 
(g)    Payment Of Arbitration Costs And Fees.  The arbitrator shall award all costs and expenses of the arbitration proceeding.
(h)    Miscellaneous.  To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA.  No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation.  If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Financing Documents or the subject matter of the dispute shall control. This Agreement may be amended or modified only in writing signed by each party hereto. If any provision of this Agreement shall be held to be prohibited by or invalid under applicable law such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or any remaining provisions of this Agreement. This arbitration provision shall survive termination, amendment or expiration of any of the Financing Documents or any relationship between the parties.
(i)    Small Claims Court.  Notwithstanding anything herein to the contrary, each party retains the right to pursue in Small Claims Court any dispute within that court’s jurisdiction. Further, this arbitration provision shall apply only to disputes in which either party seeks to recover an amount of money (excluding attorneys’ fees and costs) that exceeds the jurisdictional limit of the Small Claims Court.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, each of the parties hereto have executed and delivered this Agreement under their respective seals as of the day and year first written above.
	
			
	WITNESS OR ATTEST:
	 
	GP STRATEGIES CORPORATION

	 
	 
	 

	 
	 
	By:/s/ Sharon Esposito-Mayer (Seal)

	 
	 
	Sharon Esposito-Mayer

	 
	 
	Executive Vice President & Chief Financial Officer

	 
	 
	 

	WITNESS:
	 
	GENERAL PHYSICS (UK) LTD.

	 
	 
	 

	 
	 
	By:/s/ Scott Greenberg (Seal)

	 
	 
	Name: Scott Greenberg

	 
	 
	Title: Director

	 
	 
	 

	WITNESS:
	 
	GP STRATEGIES HOLDINGS LIMITED

	 
	 
	 

	 
	 
	By:/s/ Scott Greenberg (Seal)

	 
	 
	Name: Scott Greenberg

	 
	 
	Title: Director

	 
	 
	 

	WITNESS:
	 
	GP STRATEGIES LIMITED

	 
	 
	 

	 
	 
	By:/s/ Scott Greenberg (Seal)

	 
	 
	Name: Scott Greenberg

	 
	 
	Title: Director

	 
	 
	 

	WITNESS:
	 
	GP STRATEGIES TRAINING LIMITED

	 
	 
	 

	 
	 
	By:/s/ Scott Greenberg (Seal)

	 
	 
	Name: Scott Greenberg

	 
	 
	Title: Director

	 
	 
	 

	WITNESS:
	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION

	 
	 
	 

	 
	 
	By:/s/ Lynn S. Manthy (Seal)

	 
	 
	Lynn S. Manthy

	 
	 
	Senior Vice President

[signature page to Fifth Amended and Restated Financing and Security Agreement]

LIST OF EXHIBITS
A.    Form of Additional Borrower/Guarantor Joinder Supplement
B-1.    Form of Fourth Amended and Restated US Revolving Credit Note
B-2.    Form of Term Note 
B-3.    Form of Amended and Restated UK Revolving Credit Note
C.    Form of Compliance Certificate

LIST OF SCHEDULES
Schedule 4.1.1    Subsidiaries
Schedule 4.1.13    Other Indebtedness
Schedule 4.1.20    Permitted Liens
Schedule 4.1.23    Business Names
Schedule 5.1.1(c)    Jurisdictions of Qualification
Schedule 6.2.4    Indebtedness
Schedule 6.2.5    Investments, Loans and Other Transactions

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