Document:

exhibit101assetpurchasea

** Information contained in portions of this Exhibit has been redacted because the Company has  determined that such information (i) is not material and (ii) would likely cause competitive harm to the  Company if it were to be publicly disclosed. Information redacted from this Exhibit has been marked by  the following [**].                                                                      Exhibit 10.1                          ASSET PURCHASE AGREEMENT                                                 This Asset Purchase Agreement (this “Agreement”) is made and entered into as of September 17,  2019 (the “Effective Date”), by and among CVG FSE, LLC, a Delaware limited liability company  (“Buyer”), First Source Electronics, LLC, a Maryland limited liability company (“Seller”), Kevin  Popielarczyk and Richard Vuoto (collectively, “Principals” and, individually, a “Principal”) and  Commercial Vehicle Group, Inc., a Delaware corporation (“Guarantor” solely for purposes of Section  5.6).  Unless defined elsewhere herein, capitalized terms used herein are defined in Annex A hereof.                            PRELIMINARY STATEMENTS:         Seller is in the business of manufacturing, distributing, marketing and selling cable and electro- mechanical assemblies, control panels and other business and consumer electronics products and services  (hereinafter referred to as the “Business”).  Principals are the ultimate owners of Seller and will receive  substantial benefits if the transactions contemplated by this Agreement are consummated, and Buyer is  unwilling to enter into this Agreement without the agreements of Principals set forth herein. Subject to the  limitations and exclusions contained in this Agreement and on the terms and conditions hereinafter set  forth, Seller desires to sell, and Buyer desires to purchase, all of Seller’s right, title and interest in and to  substantially all of the assets of the Business, and Buyer proposes to assume certain specified liabilities  and obligations of Seller related to the Business.                                     AGREEMENT:                                                 NOW, THEREFORE, in consideration of these premises and the mutual and dependent promises  hereinafter set forth, the parties hereto, intending to be legally bound, agree as follows:                                     ARTICLE I                               PURCHASE AND SALE         1.1   Agreement to Purchase and Sell.  On the terms and subject to the conditions of this  Agreement and except as otherwise specifically provided in Section 1.2, at the Closing, Seller will grant,  sell, assign, transfer and deliver to Buyer or its nominee, and Buyer or such nominee will purchase and  acquire from Seller, free and clear of all Liens, all right, title and interest of Seller in and to the following  assets, properties, rights and business (collectively referred to herein as the “Purchased Assets”):               (a)   all inventory, raw materials and work-in-progress of Seller, determined pursuant  to an actual physical inventory to be performed within five days of the Closing, relating to the Business  (the “Inventory”);                  (b)   all Seller Proprietary Rights, including the exclusive right to use the name “First  Source Electronics”;               (c)   all claims and rights of Seller under all Assumed Contracts;               (d)   all Accounts Receivable;               (e)   all fixed assets, machinery, equipment (including computer hardware), vehicles,  furniture, fixtures, leasehold improvements, network and telephone equipment and supplies and other  tangible personal property of Seller relating to the Business; 

 

            (f)   all causes of action, judgments, claims or demands of whatever kind or  description that Seller has or may have against any Person relating to the Purchased Assets or Assumed  Liabilities;               (g)   all insurance benefits, including rights and proceeds, arising from or relating to  the Purchased Assets or the Assumed Liabilities prior to the Closing;               (h)   all deposits and prepaid expenses, claims for refunds and rights to offset in  respect thereof relating to the Business;               (i)   all claims and rights of Seller under or pursuant to all warranties, representations  and guarantees made by suppliers, manufacturers and contractors in connection with products sold or  services provided to Seller for or in connection with the Business or with respect to any Purchased Asset;               (j)   all information, files, correspondence, manuals, records, Data, plans and reports  relating to the Business and the Purchased Assets, all accounting or other books and records, and all  information and records related to the operation and maintenance of the Business and the Purchased  Assets, in whatever media retained or stored;                (k)   all customer, supplier, distribution, price, and mailing lists (collectively “Lists”),  each of which shall only be transmitted electronically (and not on paper or other tangible media) utilizing  an appropriate method of transfer agreed to by Seller and Buyer prior to Closing; and               (l)   all goodwill of Seller relating to the Business.         1.2   Excluded  Assets.   Notwithstanding  the  foregoing  provisions  of Section  1.1 above,  the  Purchased  Assets  shall  not  include  any  of  the  following  assets  or  properties  of  Seller  (the  “Excluded  Assets”):               (a)   any equity interests, capital stock, membership interests or similar securities of any  Person;               (b)   all charter documents, minute books, ownership records and other similar records  related to Seller’s entity organization;               (c)   all  ownership  and  other  rights  with  respect  to  Seller’s  Plans  and  any  assets  attributable thereto;               (d)   all  bank  accounts  and  all  cash  and  cash  equivalents, deposits  or  marketable  securities of Seller;               (e)   except as provided in Section 1.1(g), all insurance policies and insurance contracts  and all rights to applicable claims and proceeds thereunder;                (f)   all rights of Seller arising under this Agreement and under any other agreement  between Buyer and Seller entered into in connection with this Agreement;                (g)   those  Contracts,  assets,  properties  and  rights  set  forth  on Section  1.2(g) of  the  Disclosure Schedule; and               (h)   all Tax assets (including Tax refunds and prepayments) of Seller.                                          2 

 

      1.3   Assumption of Certain Liabilities.  At the Closing, Buyer shall assume and agree to pay,  discharge or perform, as appropriate, only the following liabilities and obligations of Seller existing as of  the Closing and arising out of the conduct of the Business prior to or as of the Closing (collectively, the  “Assumed Liabilities”):               (a)   those current liabilities of the Business that are included in the Working Capital  Amount to the extent they are reflected on the Closing Date Balance Sheet or related to an Assumed  Contract;                (b)   any liability or obligation arising or first required to be performed after the  Closing under the Assumed Contracts, other than any liability or obligation arising out of or relating to a  breach or violation of any such Assumed Contract that occurred or relates to events that occurred prior to  the Closing; and                (c)   any liability or obligations arising under or related to the Seller’s health insurance  plan for the period from the Closing Date through December 31, 2019, excluding any liability arising out  of or related to a breach or violation of the plan that occurred or relates to events that occurred prior to the  Closing.         1.4   Liabilities Not Assumed.                (a)   Except for the Assumed Liabilities, Buyer shall not, by the execution and  performance of this Agreement, or otherwise, assume or otherwise be or become responsible for any  liability or obligation of Seller of any nature, or claims of such liability or obligation, whether matured or  unmatured, liquidated or unliquidated, fixed or contingent, known or unknown, and whether arising out of  occurrences prior to, at or after the date hereof (the “Excluded Liabilities”).                 (b)   Seller shall pay or otherwise satisfy in full, promptly when due, all liabilities and  obligations of Seller other than the Assumed Liabilities.  If any such liabilities and obligations are not so  paid, or if Buyer reasonably determines that failure to make any payments will impair Buyer’s use or  enjoyment of the Purchased Assets or its conduct of the Business, Buyer may, at any time after the  Closing Date, elect to make all such payments directly (but will have no obligation to do so) and shall be  reimbursed for such payments from the Escrow Account or Seller directly. For avoidance of doubt, the  Seller shall remain liable for all amounts that may become due or payable under this section 1.4(b) and  the Buyer may set-off any such amounts not paid through the Escrow Account or Seller directly from  amounts due and payable to Seller.          1.5   Closing.  The closing of the transactions contemplated hereby (the “Closing”) shall take  place electronically or at such place as the parties may agree, on the Effective Date (the “Closing Date”).   The Closing shall be deemed effective at 11:59 p.m. Eastern Time on the Closing Date solely for Tax and  accounting purposes.         1.6   Closing Deliveries.                (a)   Closing Deliveries of Seller and Principals.  Seller and Principals shall deliver to  Buyer, at or prior to Closing, and as a condition precedent to the performance of Buyer’s obligations  hereunder, each of the following (unless otherwise waived by Buyer in its sole discretion):                     (i)   A General Conveyance, Assignment and Bill of Sale in the form attached        hereto as Exhibit 1.6(a)(i), executed by Seller.                                          3 

 

                  (ii)  An Assignment and Assumption Agreement in the form attached hereto        as Exhibit 1.6(a)(ii) (the “Assignment and Assumption Agreement”), executed by Seller.                     (iii) All vendor, lessee, lessor, licensee, licensor, Governmental Authority        and other third party consents, approvals, waivers and estoppel certificates listed on Section        1.6(a)(iii) of the Disclosure Schedule, each in form and substance reasonably satisfactory to        Buyer.                     (iv)  Evidence of the termination of all Liens on the Purchased Assets and the        termination of each Uniform Commercial Code financing statement set forth on Section 1.6(a)(iv)        of the Disclosure Schedule or a pay-off letter from the secured party under each such financing        statement that commits to the termination of such financing statement upon payment at Closing of        the obligation secured by the Lien evidenced by such financing statement.                     (v)   Offer Letters in the form attached hereto as Exhibit 1.6(a)(v), between        Buyer and each of the Principals (the “Offer Letters”), executed by each Principal.                     (vi)  An Escrow Agreement among Buyer, Seller and Escrow Agent, in a        form mutually agreement to the parties thereto (the “Escrow Agreement”), executed by Seller.               (b)   Closing Deliveries of Buyer.  Buyer shall deliver to Seller and Principals, at or  prior to Closing, and as a condition precedent to the performance of Seller’s and Principals’ obligations  hereunder, each of the following (unless otherwise waived by Seller and Principals in their sole  discretion):                      (i)   The Closing Payment less the Escrow Amount.                     (ii)  The Assignment and Assumption Agreement, executed by Buyer.                     (iii) The Offer Letters, executed by Buyer.                     (iv)  The Escrow Agreement, executed by Buyer.         1.7   Non-Assignable Contracts.  To the extent that third party consents relating to the  assignment or transfer to Buyer of any Assumed Contract have not been obtained by Seller as of the  Closing, Seller and Principals shall, during the remaining term of such Assumed Contracts (the “Non- Assignable Contracts”), use all commercially reasonable efforts to (a) obtain the consent of the applicable  third party, (b) make the benefit of such Non-Assignable Contracts available to Buyer, to the extent  permitted by Applicable Law and the Non-Assignable Contract, and (c) enforce at the request of Buyer  and at the expense and for the account of Buyer, any rights of Seller arising from such Non-Assignable  Contracts against the other party or parties thereto (including the right to elect to terminate any such Non- Assignable Contract in accordance with the terms thereof), to the maximum extent permitted by  Applicable Law and the Non-Assignable Contract.  Neither Seller nor Principals will take any action or  suffer any omission which would limit or restrict or terminate in any material respect the benefits to  Buyer of such Non-Assignable Contracts.  With respect to any Non-Assignable Contract as to which the  necessary approval or consent for the assignment or transfer to Buyer is obtained following the Closing,  Seller shall transfer such Non-Assignable Contract to Buyer by execution and delivery of an instrument of  conveyance reasonably satisfactory to Buyer and Seller within three Business Days following receipt of  such approval or consent.                                            4 

 

                                 ARTICLE II                  PURCHASE PRICE; ADJUSTMENTS; ALLOCATION         2.1   Consideration.  In consideration for the sale by Seller to Buyer of the Purchased Assets  and the representations, warranties and covenants made by Seller and Principals to Buyer, in addition to  Buyer’s assumption of the Assumed Liabilities and subject to adjustment pursuant to Section 2.6, the  aggregate purchase price for the Purchased Assets shall be an amount equal to (i) $34 million (the “Initial  Payment”) plus (ii) the Milestone Payments, if earned (collectively, the “Purchase Price”).          2.2   Closing Payment.  At the Closing, Buyer shall pay to Seller an amount equal to the Initial  Payment, less the Estimated Closing Indebtedness Amount (the “Closing Payment”).  Buyer shall pay the  Closing Payment as follows: (A) Buyer shall deposit an amount equal to $3,000,000 (the “Escrow  Amount”) in an account established by the Escrow Agent pursuant to the Escrow Agreement (the  “Escrow Account”) for the purpose of providing for the payment of certain indemnification obligations  pursuant to this Agreement, if any, and (B) Buyer shall deliver the balance of the Closing Payment to  Seller by wire transfer of immediately available funds to an account designated by Seller in writing  (including the beneficiary’s name, address and account information).  At the Closing, Buyer shall pay for  the account and on behalf of Seller (and without assuming any obligations or liabilities of Seller  thereunder) the Estimated Closing Indebtedness Amount (if any) of Seller deducted in calculating the  Closing Payment by wire transfer of immediately available funds to the applicable lender(s) pursuant to  the instructions in the applicable payoff letter(s) relating to such Indebtedness Amount (which shall  include the beneficiary’s name, address and account information).          2.3   Earn-Out.               (a)   Milestone Payments. As additional consideration for the Purchased Assets, Buyer  (or, at the direction of Buyer, a designee of Buyer so long as Buyer remains an obligor thereof) shall pay  to Seller, the following amounts (each a “Milestone Payment” and collectively the “Milestone Payments”)  upon the achievement by or on behalf of Buyer (or a designee of Buyer) of the following events:                     (i)   USD $1 million upon the Business achieving an EBITDA target of [**]        (less 11/20th of the EBITDA earned in September 2019 (the “September 2019 EBITDA”)) for the        period commencing September 18, 2019 and ending September 17, 2020 (“Milestone Period 1”).         For the avoidance of doubt, the EBITDA target of [**] (less the September 2019 EBITDA) is to        be achieved over a 12 month period; and                     (ii)  USD $6 million (less any amounts previously paid under Section        2.3(a)(i)) upon the Business achieving an EBITDA target of [**] (less the September 2019        EBITDA) for the period commencing September 18, 2019 and ending March 17, 2021        (“Milestone Period 2”).  For the avoidance of doubt, the EBITDA target of [**] (less the        September 2019 EBITDA) is to be achieved over an 18 month period; and                       (iii) USD $4.75 million upon the Business achieving an EBITDA target of        [**] for the period commencing March 18, 2021 and ending September 17, 2022  (“Milestone        Period 3”).  For avoidance of doubt, the EBITDA target of [**] is to be achieved over an 18        month period.                      (iv)  Notwithstanding the foregoing, if the Business achieves an EBITDA        target of [**] (less the September 2019 EBITDA) for the period commencing September 18, 2019        and ending September 17, 2022, the Seller shall receive USD $10.75 million less any amounts        previously paid under Sections 2.3(a)(i), (ii), and (iii).  For avoidance of doubt, the EBITDA                                          5 

 

target of [**] (less the September 2019 EBITDA) is to be achieved over a 36 month period  (“Milestone Period 4” and together with Milestone Period 1, Milestone Period 2 and Milestone  Period 3, each a “Milestone Period” collectively, the “Milestone Periods”).               (v)   Each Milestone Payment is payable on a sliding scale beginning with  90% of the EBITDA target up to 100% of achieving the EBITDA target.  For illustrative  purposes, Seller would be paid $950,000 upon achieving 95% of the initial EBITDA target of  [**] (if that were the initial target) by delivering an EBITDA of [**].               (vi)  With respect to the EBITDA calculations in this Section 2.3(a) for each  partial month included in a Milestone Period, the EBITDA for the entire month shall be  multiplied by the following formula:  the numerator being the actual number of Business Days of  the partial month included in the applicable Milestone Period divided by the denominator being  the total number of Business Days in that month, resulting in the agreed upon EBITDA to be  allocated to such partial month.         (b)   Notification and Payment by Buyer.                (i)   Within 45 calendar days of the end of each Milestone Period, Buyer shall  prepare in good faith and deliver or cause to be so prepared and delivered to Seller a statement (“a  Proposed Milestone Statement”) setting forth, in reasonable detail, Buyer’s calculation of the  actual EBITDA for such Milestone Period, and its calculation of the resulting Milestone Payment  for such Milestone Period, calculated pursuant to the rules set forth in Section 2.3(a)(v) above and  Section 2.3(d) hereunder.               (ii)     Buyer shall grant Seller, Principals and their authorized representatives  reasonable access to such work papers or other documents and information reasonably requested  by Seller or Principals relating to Buyer’s calculation of amounts included in a Proposed  Milestone Statement in connection with Seller’s review of such Proposed Milestone Statement.               (iii) Within 30 days after Seller’s receipt of a Proposed Milestone Statement,  Seller shall deliver to Buyer a written notice (A) of acceptance of the Proposed Milestone  Statement (a “Milestone Acceptance”) or (B) of any dispute regarding the amounts reflected in  the Proposed Milestone Statement (a “Milestone Dispute Notice”). If Seller does not deliver a  Milestone Acceptance or a Milestone Dispute Notice within such 30 day period, the Proposed  Milestone Statement shall be deemed to have been accepted and agreed to by Seller in the form in  which it was delivered, and shall be binding on Buyer and Seller in all respects. Any Milestone  Dispute Notice, as to each dispute, shall to the extent practicable set forth in reasonable detail the  items and amounts with which Seller disagrees, including the amounts of any adjustments that are  necessary in the reasonable judgment of Seller for the computations contained in the Proposed  Milestone Statement to conform to the requirements of this Agreement and the specific reason(s)  for Seller’s suggested adjustments. During the 20 day period following the date Seller delivers a  Milestone Dispute Notice, if provided by Seller, Buyer and Seller shall make reasonable good  faith efforts to attempt to resolve such disputed items and agree in writing upon the final content  of the disputed items of the Proposed Milestone Statement (a “Dispute Notice Resolution”).                (iv)  If Buyer and Seller do not resolve all disputed items relating to the  Proposed Milestone Statement within the 20 day period referenced in Section 2.3(b)(iii), the  matters with respect to which no resolution is reached (the “Milestone Disputed Items”) shall be  submitted to and resolved by the Accountant, which shall be appointed as specified in Section  2.7(c).                                    6 

 

                  (v)   Buyer and Seller (A) shall each promptly enter into a customary        engagement letter with the Accountant in which the scope of the Accountant’s engagement is        specified in reasonable detail that is consistent with this Agreement and (B) shall instruct the        Accountant that a written determination (which shall contain the underlying reasoning) of the        Accountant with respect to such Milestone Disputed Items and the accuracy of the Proposed        Milestone Statement as a result of the resolution of such Milestone Disputed Items shall be        completed and distributed to Buyer and Seller within 30 days after the engagement of the        Accountant.  The Accountant shall only resolve each Milestone Disputed Item by making an        adjustment to the Proposed Milestone Statement that is within the range for such Milestone        Disputed Item defined by the amount of such Milestone Disputed Item in the Proposed Milestone        Statement delivered by Buyer pursuant to Section 2.3(b)(iii) and the amount of such Milestone        Disputed Item included in Seller’s Milestone Dispute Notice.  The resolution and determination        of the Milestone Disputed Items by the Accountant shall be based solely on the provisions of this        Agreement and on written submissions and presentations by Buyer and Seller (or their respective        representatives), and not on independent review by the Accountant, and such resolution by the        Accountant shall be conclusive, final, and binding on Buyer and Seller in all respects (absent        manifest error on the part of the Accountant or fraud).  No party (or their respective        representatives) may have any ex parte communication with the Accountant.                      (vi)  The term “Final Milestone Calculation Date” means, as applicable, (A)        the date upon which Buyer receives a Milestone Acceptance in accordance with Section        2.3(b)(iii)(A); (B) the date upon which the 30 day period, during which Seller may deliver a        Milestone Acceptance or a Milestone Dispute Notice, expires without Seller’s delivery of such        acceptance or notice in accordance with Section 2.3(b)(iii)(B); (C) the date upon which Buyer        and Seller mutually agree in writing to a Dispute Notice Resolution in accordance with Section        2.3(b)(iii); or (D) if there are Milestone Disputed Items, the date upon which a Milestone        Payment is determine by the Accountant after its resolution and determination of the Milestone        Disputed Items in accordance with Sections 2.3(b)(iv) and 2.3(b)(v).                        (vii) Within 15 Business Days after the Final Milestone Payment Calculation        Date, Buyer shall pay or cause to be paid the corresponding Milestone Payment by wire transfer        of immediately available funds to such bank accounts as directed in writing by Seller.                      (viii)   The fees, costs, and expenses of the Accountant shall be borne  proportionately by Buyer, on the one hand, and Seller, on the other hand, based on the percentage that the  portion of the contested amount not awarded to Buyer and Seller, as applicable, bears to the amount  contested by such party, as finally determined by the Accountant.               (c)   Sale of Business. At any time prior to the payment of the Milestone Payments to  Seller, or a determination by Buyer that no further Milestone Payments are or may be payable to Seller, if  Buyer effects a sale, exchange or other transfer, directly or indirectly, in one transaction or a series of  related transactions, of all or substantially all of the assets of the Business, or a merger, consolidation,  recapitalization or other transaction in which any person other than Buyer or any wholly owned  subsidiary or affiliate of Buyer becomes the beneficial owner, directly or indirectly, of 60% or more of  the combined voting power of all interests in Buyer, Buyer shall (i) remain responsible for all of its  obligations with respect to the Milestone Payments set forth in subsection (a) hereof; and (ii) make  provision for the transferee or successor to assume and succeed to the obligations of Buyer in this Section  2.3.               (d)   Post-Closing Operation of the Business. Subject to the terms of this Agreement,  and the other ancillary documents, subsequent to the Closing, Buyer shall have sole discretion with regard                                         7 

 

to all matters relating to the operation of the Business; provided, that Buyer shall act in good faith with  respect to opportunity for achievement, and calculation, of the EBITDA targets described in Section  2.3(a).  Buyer shall not, directly or indirectly, take any action, or omit to take any action, with the intent  of (i) adversely impacting Seller’s ability to earn the maximum Milestone Payment possible or (ii)  minimizing or reducing the Milestone Payment, including taking any action, directly or indirectly, with  the intent to cause the Milestone Payment to be less than the Milestone Payment that would have resulted  absent such action.  Without limiting the generality of the foregoing, until the end of the Milestone  Periods, Buyer shall, and shall cause its Affiliates to, act in good faith vis-à-vis the earn-out contemplated  in this Section 2.3 and shall do all of the following (in each case, unless the failure to take such action  would not have a material adverse impact on the Milestone Payments or as otherwise consented to by  Seller (which consent shall not be unreasonably withheld (from the perspective of Seller)):                     (i)   cause the Business to remain in material compliance with all applicable        Laws;                      (ii)  maintain adequate records that will allow Seller to independently        determine, review and calculate the EBITDA targets and Milestone Payments;                     (iii) not change the Business’ fiscal year or materially alter the Business’        accounting methods, policies, practices and procedures, including classification and estimation        methodologies, used in the preparation of the financial statements of the Business, except in        accordance with GAAP;                      (iv)  operate the Business in the ordinary course of business;                      (v)   not, directly or indirectly, engage in any practice intended to have the        effect of postponing to periods after the Milestone Periods any revenue that would otherwise be        expected (based on past practice but subject to compliance with GAAP) to be recognized during        the Milestone Periods; and                     (vi)  not, directly or indirectly, engage in any practice intended to have the        effect of accelerating to any Milestone Period expenses incurred by the Business that would        otherwise be expected (based on past practice but subject to compliance with GAAP) to be        incurred after such Milestone Period.    For purposes of this Agreement, “EBITDA” shall mean, for any Milestone Period, the net income of the  Business, as determined in accordance with GAAP, plus interest, income taxes, depreciation and  amortization for such Milestone Period; provided, however, that for purposes of calculating EBITDA:                      (i)   the effect of any change in GAAP during the Milestone Periods shall be        excluded; and                      (ii)  the parties acknowledge that EBITDA shall otherwise be determined in        accordance with the guidelines and inclusion and exclusion of expenses as determined on        Exhibit 2.3(d) attached hereto.                   (e)   New Opportunities.  In the event that, during the Milestone Periods, any  opportunity arises that could reasonably be allocated either to a business unit of Buyer or any of its  Affiliates, on the one hand, or the Business, on the other hand, Buyer will give due consideration to the  interests of Seller in achieving the full Milestone Payments and will allocate the opportunity in a manner                                         8 

 

that is fair and reasonable to both Parties.  Additionally, Buyer will give due consideration to reasonably  allocate incremental EBITDA as quoted for cable assembly and harness business revenue generated  substantially as a result of the activities of personnel involved with or engaged by the Business.  For  example, cable and harness assembly sold through Seller’s assemblies and through Seller’s operations  will be supplied by Buyer at the normal and customary intercompany transfer price model of Buyer and  due consideration will be given to allocate to Seller’s EBITDA as set forth in this subsection (e).               (f)   No Security. The parties hereto understand and agree that (i) the contingent rights  to receive any Milestone Payment shall not be represented by any form of certificate or other instrument,  are not transferable, except by operation of laws relating to descent and distribution, divorce and  community property, and do not constitute an equity or ownership interest in Buyer, (ii) Seller shall not  have any rights as a security-holder of Buyer as a result of Seller's contingent right to receive any  Milestone Payment hereunder, and (iii) no interest shall ever be payable with respect to any Milestone  Payment.         2.4   Purchase Price Allocation.  The Purchase Price and the Assumed Liabilities for Tax  purposes shall be allocated in accordance with Exhibit 2.4 attached hereto and incorporated herein by  reference (the “Allocation Methodology”). Buyer shall deliver an allocation of the Purchase Price and  Assumed Liabilities, which shall be consistent with the Allocation Methodology, to Seller within 90 days  after the Closing Date (or, if later, within 30 Business Days after determination of the Final Closing  Statement).  If Seller does not provide written notice to Buyer of any dispute to such allocation within 30  calendar days after delivery, such allocation shall be final and binding on the parties.  If Seller delivers  written notice of a dispute to Buyer within such 30-day period, Buyer and Seller shall negotiate in good  faith to resolve any such disputes for a period of 30 calendar days.  If the parties are unable to resolve  such disputes, the parties shall submit the disputes to the Accountant to determine the allocation of the  Purchase Price and Assumed Liabilities in a manner consistent with the Allocation Methodology, and  such determination shall be final and binding on the parties.  Buyer, Seller and Principals shall file all Tax  Returns (including amended returns and claims for refund) and information reports in a manner consistent  with the final and binding allocation as determined pursuant to this Section 2.4.  No party shall take any  position (whether in Tax audits or Tax Returns) that is inconsistent with such final and binding allocation  unless required to do so by Applicable Laws.          2.5   Allocation of Certain Items.  Notwithstanding anything herein to the contrary, personal  property Taxes on the Purchased Assets, if any, will be apportioned between Buyer and Seller based upon  the number of days occurring before and after the Closing Date during the billing period for each such  charge.  Appropriate cash payments by Seller or Buyer, as the case may require, shall be made hereunder  from time to time as soon as practicable after the facts giving rise to the obligation for such payments are  known in the amounts necessary to give effect to the allocations provided for in this Section 2.5.         2.6   Working Capital and Indebtedness Adjustment.               (a)   On the second Business Day prior to the Closing Date, Seller shall furnish Buyer  with a certificate signed by Principals and on Seller’s behalf by an executive officer of Seller in charge of  finance setting forth a reasonable good faith estimate of the Indebtedness Amount as of the Closing Date  and including an estimated Closing Date Balance Sheet prepared in good faith and attached thereto (the  “Closing Certificate”); provided that Buyer and Seller will update the Closing Certificate prior to Closing  to reflect any reasonable comments of Buyer.               (b)   Within 90 days after the Closing Date, Buyer shall prepare and deliver to Seller a  statement (the “Closing Statement”) consisting of (i) an unaudited Closing Date Balance Sheet, (ii) a  calculation of the Indebtedness Amount as of the Closing Date, and (iii) a calculation of the Working                                         9 

 

Capital Amount as of the Closing Date.  The Closing Statement will be finalized (as finalized, the “Final  Closing Statement”) by the parties in accordance with the procedures of Sections 2.6(c) and 2.7.                 (c)   If Seller does not object in writing to any item set forth on the Closing Statement  within 30 days after the delivery thereof by complying in full with Section 2.7, the Closing Statement  shall be deemed to have been finalized by the parties as the Final Closing Statement and, as a result  thereof shall be final, conclusive and binding on each of the parties.  If Seller objects in writing to any  item set forth on the Closing Statement within 30 days after the delivery thereof by complying in full with  Section 2.7, then the Final Closing Statement shall be finally and conclusively determined in accordance  with Section 2.7.               (d)   Based on the Final Closing Statement, the Purchase Price shall not be adjusted if  the Working Capital Amount as set forth on the Final Closing Statement is between $3,700,000 and  $4,300,000. If the Working Capital Amount is below $3,700,000, the Buyer shall be compensated by the  Seller on a dollar-for-dollar basis in an amount that is the difference between such amount and $3,700,000  by wire transfer of immediately available funds to an account designated by Buyer within five Business  Days after the date of approval of the Final Closing Statement and the Purchase Price shall be reduced by  such amount. If the Working Capital Amount is above $4,300,000, the Seller shall be compensated by the  Buyer on a dollar-for-dollar basis for any amount in excess of $4,300,000 by wire transfer of immediately  available funds to an account designated by Seller in writing within five Business Days after the date of  approval of the Final Closing Statement and the Purchase Price shall be increased by such amount.                (e)   In addition to any adjustments to the Purchase Price as set forth above, the  Purchase Price shall be adjusted on a dollar-for-dollar basis by the positive or negative amount equal to (i)  the Estimated Closing Indebtedness Amount minus (ii) the Indebtedness Amount as set forth on the Final  Closing Statement (the “Indebtedness Adjustment”).  If the Indebtedness Adjustment is a negative  amount, then the Purchase Price shall be reduced by the absolute value of the Indebtedness Adjustment,  and Seller shall pay the amount of such decrease to Buyer by wire transfer of immediately available funds  to an account designated by Buyer within five Business Days after the date of approval of the Final  Closing Statement.  If the Indebtedness Adjustment is a positive amount, the Purchase Price shall be  increased by the Indebtedness Adjustment, and Buyer shall pay the amount of such increase to Seller by  wire transfer of immediately available funds to an account designated by Seller in writing within five  Business Days after the date of approval of the Final Closing Statement.               (f)   The amounts payable under this Section 2.6 with respect to the payments under  subsection (d) above and the Indebtedness Adjustment may be offset against each other, as applicable.   The parties agree that any amount paid pursuant to this Section 2.6 shall be deemed to be a decrease or an  increase, as applicable, in the amount of the Purchase Price for all purposes.         2.7   Objections.               (a)   If Seller has any objections to the Closing Statement as prepared by Buyer, then  Seller must, within 30 days after receipt thereof, give written notice (the “Notice”) to Buyer specifying in  reasonable detail such objections.  The Notice shall only include disagreements based on mathematical  errors or based on the Working Capital Amount or the Indebtedness Amount not being calculated in  accordance with the definitions contained in this Agreement.                (b)   With respect to any disputed amounts, Seller and Buyer shall negotiate in good  faith during the 30-day period (the “Resolution Period”) after the date of Buyer’s receipt of the Notice to  resolve any such disputes.                                          10 

 

            (c)   If Seller and Buyer are unable to resolve all such disputes within the Resolution  Period, then either party may submit the disputes to Grant Thornton (or such other firm as may be  selected by mutual agreement between the Parties) (the “Accountant”), who shall be engaged by both  parties to provide a final and conclusive resolution of all unresolved disputes within 30 days after such  engagement or as soon thereafter as is reasonably practicable.  If Grant Thornton is unable or unwilling to  serve as the Accountant, the Accountant shall be an independent accounting firm, with no material  relationship to any of the parties or their Affiliates, of national or regional reputation in the United States  selected promptly by agreement of Seller and Buyer.               (d)   The Accountant shall act as an expert to determine only those issues identified in  the Notice that remain in dispute applying the principles, policies and practices referred to in Section 2.5  and the definitions contained in this Agreement, and such determination shall be based solely on a review  of the factual materials presented by Seller and Buyer, either on their own initiative or at the specific  request of the Accountant, and the applicable provisions of this Agreement. The parties shall instruct the  Accountant to not assign a value to any item in dispute greater than the greatest value for such item  assigned by Buyer in the Closing Statement, on the one hand, or Seller in the Notice, on the other hand, or  less than the smallest value for such item assigned by Buyer in the Closing Statement, on the one hand, or  Seller in the Notice, on the other hand.         2.8   The determination of the Accountant shall be final, binding and conclusive on the parties,  and the Closing Statement as adjusted by such determination shall be the Final Closing Statement.  The  fees and expenses of the Accountant shall be borne equally by each party.                                     ARTICLE III                             REPRESENTATIONS AND                             WARRANTIES OF BUYER         To induce Seller and Principals to enter into this Agreement, Buyer hereby represents and  warrants to Seller and Principals that the statements contained in this Article III are true, correct and  complete.         3.1   Organization and Standing.  Buyer is a limited liability company duly organized, validly  existing and in good standing under the Applicable Laws of the State of Delaware.         3.2   Corporate Power and Authority.  Buyer has all requisite power and authority to enter into  this Agreement and the Additional Documents and to consummate the transactions contemplated hereby  and thereby.  The execution and delivery of this Agreement and the Additional Documents and the  consummation of the transactions contemplated hereby and thereby have been duly authorized by all  necessary corporate action on the part of Buyer.  This Agreement has been duly executed and delivered  by Buyer, and constitutes the legal, valid and binding obligation of Buyer enforceable against it in  accordance with its terms. The Additional Documents to which Buyer is a party, when duly executed by  Buyer, will constitute the legal, valid and binding obligations of Buyer, enforceable against Buyer in  accordance with their respective terms.         3.3   Conflicts, Consents and Approvals.  Neither the execution and delivery of this Agreement  by Buyer nor the consummation of the transactions contemplated hereby will: (a) conflict with, or result  in a breach of any provision of, the Organizational Documents of Buyer; (b) violate any decree, writ,  judgment, decision, injunction or other order (whether temporary, preliminary or permanent) (an “Order”)  or Applicable Laws applicable to Buyer or its properties or assets; or (c) require any action or consent or  approval of, or review by, or registration or filing by Buyer with, any third party or Governmental  Authority; except in the case of clauses (b) and (c) for any of the foregoing that would not, individually or                                         11 

 

in the aggregate, have a material adverse effect on the ability of Buyer to consummate the transactions  contemplated hereby.         3.4   Sufficiency of Funds.  Buyer has sufficient cash on hand or other sources of immediately  available funds to enable it to pay the Purchase Price and consummate the transactions contemplated by  this Agreement.         3.5   Independent Investigation.  Buyer has conducted its own independent investigation,  review and analysis of the Business and the Purchased Assets, and acknowledges that it has been  provided adequate access to personnel, properties, assets, premises, books and records, and other  documents and data of Seller for such purpose.  Buyer acknowledges and agrees that (a) in making its  decision to enter into this Agreement and consummate the transaction contemplated hereby, Buyer has  relied solely upon its own investigation and the express representations and warranties of Seller set forth  in Article IV of this Agreement (including related portions of the Disclosure Schedules); and (b) neither  Seller nor any other Person has made any representation or warranty as to Seller, the Business, the  Purchased Assets or this Agreement, except as expressly set forth in Article IV of this Agreement  (including the related portions of the Disclosure Schedules).                                    ARTICLE IV                       REPRESENTATIONS AND WARRANTIES                           OF SELLER AND PRINCIPALS         To induce Buyer to enter into this Agreement, Seller and Principals hereby jointly and severally  represent and warrant to Buyer that the statements contained in this Article IV are true, correct and  complete.  Such representations and warranties are subject to the qualifications and exceptions set forth in  the disclosure schedule delivered by Seller to Buyer and dated the date hereof, which has been arranged in  separately numbered sections corresponding to the sections of this Agreement (the “Disclosure  Schedule”).          4.1   Organization and Standing.  Seller is a limited liability company duly organized, validly  existing and in good standing under the Applicable Laws of the State of Maryland with full power and  authority to own, lease, use and operate its properties and to conduct the Business as and where now  owned, leased, used, operated and conducted.  Seller has heretofore furnished to Buyer a complete and  correct copy of its Organizational Documents.           4.2   Subsidiaries.  Seller does not have any Subsidiaries.             4.3   Power and Authority. Seller and Principals have all requisite power and authority to enter  into this Agreement and the Additional Documents and to consummate the transactions contemplated  hereby and thereby.  The execution and delivery of this Agreement and the Additional Documents and the  consummation of the transactions contemplated hereby and thereby have been duly authorized by all  necessary action on the part of Seller.  This Agreement has been duly executed and delivered by Seller  and Principals and constitutes the legal, valid and binding obligation of Seller and Principals, enforceable  against Seller and Principals in accordance with its terms.  The Additional Documents to which Seller  and/or a Principal is a party, when duly executed by Seller and/or such Principal, as the case may be, will  constitute the legal, valid and binding obligations of Seller and/or such Principal, enforceable against  Seller and/or such Principal in accordance with their respective terms.           4.4   Capitalization.  Principals, indirectly through holding entities, collectively own,  beneficially and of record, all of the issued and outstanding membership interests of Seller.                                            12 

 

      4.5   Conflicts, Consents and Approvals.  Except as set forth in Section 4.5 of the Disclosure  Schedule, neither the execution and delivery of this Agreement by Seller or Principals nor the  consummation by them of the transactions contemplated hereby or by the Additional Documents will: (a)  conflict with, or result in a breach of any provision of, the Organizational Documents of Seller or any of  its Affiliates; (b) violate or constitute a default (or an event which, with the giving of notice, the passage  of time or otherwise, would constitute a default) under, or entitle any party (with the giving of notice, the  passage of time or otherwise) to terminate, accelerate, modify or call a default under, or result in the  creation of any Lien on any of the Purchased Assets under, any indenture, contract, agreement, Seller  Permit or other instrument or obligation to which Seller or a Principal is a party; (c) violate any Order,  Seller Permit or Applicable Laws relating to Seller, Principals, any of their respective Affiliates or their  respective properties or assets; or (d) require any action or consent or approval of, or review by, or  registration or filing or payment by Seller, Principals or any of their respective Affiliates with any third  party or any Governmental Authority.         4.6   Absence of Certain Changes.  Since December 31, 2018, Seller has operated the Business  in the Ordinary Course of Business and there has not been any change, occurrence or event that has had a  material adverse effect on the Business, the Purchased Assets or the operations, assets, properties,  employees or sales personnel, customer base, prospects, rights or condition (financial or otherwise) of  Seller relating to the Business (a “Material Adverse Effect”).  Without limiting the foregoing, except as  set forth on Section 4.6 of the Disclosure Schedule, since December 31, 2018, Seller has not:               (a)   directly or indirectly sold, transferred, leased, pledged, encumbered or otherwise  disposed of any of the Purchased Assets, other than the sale of Inventory in the Ordinary Course of  Business;               (b)   incurred, assumed, guaranteed or otherwise became liable for any Indebtedness  Amount;               (c)   changed its method of doing business or changed any method or principle of  accounting in a manner that is inconsistent with past practice;               (d)   written up, written down or written off the book value of any assets included in  the Purchased Assets, except for amortization in accordance with GAAP;               (e)   modified, amended or terminated, or waived, released or assigned any material  rights or claims with respect to, any Assumed Contract;               (f)   made any capital expenditure or investment in excess of $25,000, individually, or  $50,000, in the aggregate;               (g)   managed working capital components in a fashion inconsistent with past practice,  including (i) failing to make normal capital expenditures, repairs, improvements and dispositions and (ii)  failing to conduct cash management customs and practices in the ordinary course of business consistent  with past practice with respect to the collection of accounts receivable and payment of accounts payable;               (h)   made or changed any election, changed an annual accounting period, adopted or  changed any accounting method, filed any amended Tax Return, entered into any closing agreement,  settled any Tax claim or assessment relating to Seller, surrendered any right to claim a refund of Taxes,  consented to any extension or waiver of the limitation period applicable to any Tax claim or assessment  relating to Seller, or taken any other similar action relating to the filing of any Tax Return or the payment  of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or                                          13 

 

other action may have the effect of increasing the Tax liability of the Business for any period ending after  the Closing Date or decreasing any Tax attribute of the Business existing on the Closing Date;               (i)   entered into, terminated, or made a material modification to any agreement or  arrangement with any current or former employee, sales personnel, officer, manager, director,  independent contractor or consultant of Seller relating to the Business or with respect to the compensation  thereof; or               (j)   agreed in writing or otherwise to take any of the foregoing actions.         4.7   Financial Statements.  Seller has furnished to Buyer the balance sheets of the Business as  of December 31, 2018 and December 31, 2017 and the related statements of income and cash flows for  the years then ended, including the related notes as reviewed by the Seller’s independent accounting firm  (collectively, the “Annual Statements”).  Seller has also furnished to Buyer the unaudited balance sheet of  the Business as of June 30, 2019 (the “Latest Balance Sheet”), and the related statements of income and  cash flows for the 6 month period then ended.  The Annual Statements, and except as set forth on Section  4.7 of the Disclosure Schedule, the Latest Balance Sheet and the statements of income and cash flows  related to the Latest Balance Sheet (i) have been prepared in conformity with GAAP (subject, in the case  of the Latest Balance Sheet and the statements of income and cash flows related to the Latest Balance  Sheet, to normal year-end adjustments with respect to inventory and discretionary bonuses, as well as  other normal year-end adjustments that are not material and the absence of notes), which Seller has made  available to Buyer and (ii) fairly present, in all material respects, the financial condition of the Business as  of the dates stated and the related results of its operations and changes in cash flows for the periods then  ended.         4.8   Taxes.                 (a)   Seller has duly filed all Tax Returns that it was required to have filed prior to the  Closing Date.  All of such Tax Returns filed are true, correct and complete.  All Taxes due and owing by  Seller as of the Closing Date have been paid.                   (b)   No Tax audits or administrative or judicial Tax Actions are pending or being  conducted that would affect the Purchased Assets or the Business.  There are no pending requests for  waivers of the time to assess any Tax.  Seller has not waived any statute of limitations in respect of Taxes  or agreed to any extension of time with respect to a Tax assessment or deficiency.  No claim or indication  has ever been made by a Governmental Authority in a jurisdiction where Seller does not file Tax Returns  that Seller is or may be subject to Tax by that jurisdiction.                 (c)   Except as set forth on Section 4.8(c) of the Disclosure Schedule, Seller has  withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or  owing to any employee, independent contractor, creditor, shareholder, member, director, manager, agent,  representative, attorney-in-fact or other third party.               (d)   There is no property or obligation of Seller relating to the Business, including  uncashed checks to vendors, customers, or employees, non-refunded overpayments, or unclaimed  amounts, including, but not limited to, charge-backs to vendors and any other amount that is, or may  become, escheatable or reportable as unclaimed property to any state or municipality under any applicable  escheatment, unclaimed property or similar laws.                                          14 

 

      4.9   Compliance with Law, Permits and Ethical Practices.                 (a)   Seller is in compliance in all material respects with, and has at all times during  the past three (3) years been in compliance in all material respects with, all applicable laws, statutes,  orders, rules, regulations, policies or guidelines of, or Orders entered by, any Governmental Authority  (collectively, “Applicable Laws”) relating to Seller, the Business or the Purchased Assets (including (i)  compliance with Applicable Laws relating to pollution, occupational safety or protection of human health  and the environment and (ii) maintenance of and compliance with all licenses, permits and authorizations  necessary to operate the Business).  Seller has made available to Buyer copies of all material written  correspondence during the past three (3) years from and to all Governmental Authorities and inspectors.               (b)   Seller is not subject to any enforcement, regulatory or administrative proceedings  by any Governmental Authority and, to the Knowledge of Seller, no such proceedings have been  threatened.  Seller has not received any written communication of any Action pending or, to the  Knowledge of Seller, threatened, alleging that it is not in compliance with any and all Applicable Laws.   To the Knowledge of Seller, (x) Seller is not under an investigation by any Governmental Authority with  respect to the violation of any Applicable Laws or Seller Permit and (y) neither Seller nor any employee  or contractor of Seller is or has been the subject of any similar pending or threatened Action described in  Section 4.9(b)(ii).                   (c)   Seller is in possession of all Seller Permits.  Section 4.9(c) of the Disclosure  Schedule sets forth a true and complete list of all material Seller Permits.  The Seller Permits are in full  force and effect, and Seller is not and has not been since the date of issuance of the Seller Permits in  default or violation of any such Seller Permit and there is no Action pending or, to the Knowledge of  Seller, threatened regarding any of the Seller Permits.  To the Knowledge of Seller, all applications  required to have been filed for the renewal of such Seller Permits have been duly filed with the  appropriate Governmental Authority, and all other filings required to have been made with respect to such  Seller Permits and Applicable Laws have been duly made on a timely basis with the appropriate  Governmental Authority.                 (d)   Neither Seller nor any of its directors, officers, employees, managers,  consultants, owners, agents or sales representatives acting for, or on behalf of, Seller, directly or  indirectly, have offered or given, and, to the Knowledge of Seller, no other Person acting for, or on behalf  of, Seller has offered or given on its behalf, anything of value to: (i) any official of a Governmental  Authority, any political party or official thereof, or any candidate for political office; (ii) any customer or  member of any Governmental Authority; or (iii) any other Person, in any such case while knowing or  having reason to know that all or a portion of such money or thing of value may be offered, given or  promised, directly or indirectly, to any customer, political party or official thereof, official or member of  any Governmental Authority, candidate for political office or any other Person that is prohibited under the  U.S. Foreign Corrupt Practices Act or any other Applicable Laws regarding illegal payments and  gratuities for the purpose of the following: (A) influencing any action or decision of such Person, in such  Person’s official capacity, including a decision to fail to perform such Person’s official function; (B)  inducing such Person to use such Person’s influence with any Governmental Authority to affect or  influence any act or decision of such Governmental Authority to assist Seller in obtaining or retaining  business for, or with, or directing business to, any Person; or (C) where such payment would constitute a  bribe, illegal kickback or other improper payment to assist Seller in obtaining or retaining business for, or  with, or directing business to, any Person.                                            15 

 

      4.10  Proprietary Rights.               (a)   Section 4.10(a) of the Disclosure Schedule lists all Seller Proprietary Rights that  are (i) Registered Proprietary Rights or (ii) otherwise material to the Business. Except as set forth on  Section 4.10(a) of the Disclosure Schedule, Seller does not own any Registered Proprietary Rights used in  the Business.  Seller is the exclusive owner of all worldwide right, title, and interest in and to each of the  Seller Proprietary Rights owned by or purported to be owned by Seller, free and clear of all Liens, except  for the Liens set forth on Section 4.10(a) of the Disclosure Schedule, which will be terminated at the  Closing.  To the Knowledge of Seller, none of the Seller Proprietary Rights are being infringed by any  Person.  The use, exploitation and distribution by Seller of any Seller Proprietary Rights, the operation of  the Business and distribution, marketing and sale of any products and services by Seller in connection  with the Business do not violate any license or infringe or are alleged to infringe any Proprietary Rights of  any third party, violate the rights of any Person (including rights to privacy or publicity) or constitute  unfair competition or trade practices under Applicable Laws.                 (b)   Seller has taken all reasonable and customary precautions to protect the  proprietary nature of each item of owned Seller Proprietary Rights, and to maintain in confidence all  Trade Secrets.  Each item of Registered Proprietary Rights has been properly filed and maintained  (including payment of filing, examination and maintenance fees and proofs of use) and is valid, subsisting  and in full force and effect and not subject to any pending cancellation, opposition or reexamination  proceeding.               (c)   Seller is not a party to any Contract or subject to any other obligation that, (i)  following the date of this Agreement, would prevent Buyer or its Affiliates from using the Data or (ii)  prevent the transfer of the Data to Buyer.  Seller has not received any claims or controversies regarding  the use of any Data.  Seller has taken commercially reasonable steps (including any legally or  contractually required measures) to protect the integrity and security of its software, databases, systems,  networks and all proprietary information and Data stored or contained therein or transmitted thereby from  unauthorized or improper access, modification, transmittal or use.               (d)   Seller has a sufficient license to use all software of third parties that is used in the  conduct of the Business and following Closing Buyer will have the right to use any software owned,  licensed or otherwise used by Seller in connection with the Business.          4.11  Title to Purchased Assets; Sufficiency; Condition.  Except for the Liens set forth on  Section 4.11 of the Disclosure Schedule, which will be terminated at the Closing, Seller has good, valid  and indefeasible title to, or a valid leasehold interest in, all of the Purchased Assets, free and clear of all  Liens.  The Purchased Assets constitute all of the assets and property (including tangible and intangible)  necessary to conduct the Business consistent with past practice.  The tangible assets included in the  Purchased Assets are, except for ordinary wear and tear, in good condition and repair and are usable by  the Business in the Ordinary Course of Business.          4.12  Undisclosed Liabilities.  Except as disclosed on the Latest Balance Sheet or incurred in  the Ordinary Course of Business subsequent to the date thereof and except as set forth on Section 4.12 of  the Disclosure Schedule, Seller does not have any material liabilities or obligations of any nature, whether  matured or unmatured, liquidated or unliquidated, fixed or contingent, relating to the Business.          4.13  Litigation.  There is no suit, claim, action, investigation or proceeding (each, an  “Action”) pending or, to the Knowledge of Seller, threatened or being investigated, with respect to Seller  or any of its officers, managers or directors in connection with the operation of the Business or that  otherwise relates to or may affect the Business or the Purchased Assets (including Actions under any                                         16 

 

warranty or guaranty).  There has not been during the past three (3) years any Action with respect to  Seller or any of its officers, managers or directors in connection with the operation of the Business or that  otherwise relates to the Business or the Purchased Assets (including Actions under any warranty or  guaranty).  Seller is not subject to any outstanding Order that, individually or in the aggregate, has had or,  insofar as can be reasonably foreseen, could have an adverse effect on the Business.  There is no Action  pending or, to the Knowledge of Seller, threatened relating to the transactions contemplated hereby or by  the Additional Documents.  Neither Seller nor any Principal is subject to any outstanding Order relating  to the transactions contemplated hereby or by the Additional Documents.         4.14  Brokerage and Finder’s Fees.  Except as set forth on Section 4.14 of the Disclosure  Schedule, none of Seller, any Principal or, to the Knowledge of Seller, any director, officer, manager,  employee or Affiliate of Seller, has incurred or will incur on behalf of Seller or any Principal, any  brokerage, finder’s or similar fee in connection with the transactions contemplated hereby.         4.15  Employee Benefit Matters.                 (a)   Section 4.15(a) of the Disclosure Schedule lists all material Plans sponsored,  maintained or contributed to, or required to be contributed to, by Seller or any of its ERISA Affiliates  with respect to current and former employees of the Business and dependents or beneficiaries thereof.   Seller and its ERISA Affiliates have complied and are now in compliance with all provisions of ERISA,  the Code and other Applicable Laws applicable to the Plans covering current and former employees of the  Business and dependents or beneficiaries thereof, including the timely filing of all reports required by  ERISA, the Code and other Applicable Laws, and the timely giving of any notices required to be given to  participants in any Plan under ERISA, the Code and other Applicable Laws.  Each Plan has been  established, funded and operated in compliance with its terms and in accordance with all Applicable Laws  and each such Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the  Code (a “Qualified Plan”) has received a favorable determination letter as to its qualification from the IRS  and nothing has occurred, whether by action or inaction, that would reasonably be expected to cause the  loss of such qualification.  There is not now, and there are no existing, circumstances that could give rise  to, any requirement for the posting of security with respect to a Plan or the imposition of any Lien on the  Purchased Assets under ERISA, the Code, or other Applicable Laws or the terms of any Plan.  No Plan is  subject to Title IV or Section 302 of ERISA.  No Plan is a “multiemployer plan” within the meaning of  Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing  sponsors at least two of whom are not under common control, within the meaning of Section 4063 of  ERISA (a “Multiple Employer Plan”), nor has Seller or any of its ERISA Affiliates, at any time,  sponsored, maintained, contributed to or been obligated to contribute to or had any actual or contingent  liability with respect to any employee benefit plan subject to Title IV or Section 302 of ERISA, any  Multiemployer Plan or Multiple Employer Plan.               (b)   Except as disclosed in Section 4.15(b) of the Disclosure Schedule, there does not  now exist, and there are no existing, circumstances that could result in, any Controlled Group Liability  that would be a liability of Buyer following the Closing. Without limiting the generality of the foregoing,  neither Seller nor any of its ERISA Affiliates has engaged in any transaction described in Section 4069 of  ERISA or any transaction that constitutes a withdrawal under Section 4201 et seq. of ERISA.               (c)   There are no Actions pending or, to the Knowledge of Seller, threatened (other  than claims for benefits in the Ordinary Course of Business), which have been asserted or instituted  against the Plans, any fiduciaries thereof with respect to their duties to the Plans or the assets of any of the  trusts under any of the Plans which could reasonably be expected to result in any material liability of  Seller or the Business.                                          17 

 

            (e)   Except to the extent required by Applicable Law (e.g. Section 4980B of the  Code), nothing contained in any of the Plans will obligate Buyer to provide any benefits to current or  former employees of the Business or dependents or beneficiaries thereof, or to make any contributions to  any Plans from and after the Closing.           4.16  Officers, Employees and Compensation.  Section 4.16 of the Disclosure Schedule lists  and describes the date of hire and the salary, allowances, bonuses, commissions and other earnings and  compensation for the employees, independent contractors, officers and managers employed or engaged by  Seller in connection with the Business.  Except as disclosed in Sections 4.15(a) and 4.16 of the Disclosure  Schedule, there are no other forms of compensation paid or payable to any employee, independent  contractor, manager or officer of Seller in connection with the Business.  Except as set forth on Section  4.8(c) of the Disclosure Schedule, Seller is, and at all times during the three (3) years preceding the  Closing Date has been, in compliance in all material respects with all Applicable Laws relating to the  employment of labor, including provisions thereof relating to wages and hours, leaves of absence, worker  classification, equal opportunity, affirmative action, collective bargaining, workplace safety, immigration,  layoffs, and payment of social security and other Taxes.  There are no Actions pending or, to the  Knowledge of Seller, threatened against Seller with respect to or by any current or former employee,  consultant or independent contractor of Seller.         4.17  Contracts.  Section 4.17 of the Disclosure Schedule lists all current written or oral  contracts, agreements, arrangements, understandings, purchase and sale orders, guarantees, leases and  executory commitments, including any oral or written modifications thereof (each a “Contract”), to which  Seller is a party relating to the Business. All Assumed Contracts are valid and binding obligations of  Seller and, to the Knowledge of Seller, are valid and binding obligations of each other party thereto  enforceable in accordance with their terms.  Except as set forth on Section 4.17 of the Disclosure  Schedule, neither Seller nor, to the Knowledge of Seller, any other party thereto is in violation in any  material respect of, nor, to the Knowledge of Seller, has there occurred an event or condition which with  the passage of time or giving of notice (or both) would constitute a default under or permit the termination  of, any Assumed Contract.  Seller has not given or received from any other Person any written notice or,  to the Knowledge of Seller, other oral communication regarding any actual, alleged, possible or potential  breach or any intended termination of any Assumed Contract.  There are no renegotiations of, attempts to  renegotiate or outstanding rights to renegotiate any amounts paid by or payable to Seller under the  Assumed Contracts with any Person having the contractual or statutory right to demand or require such  renegotiation, and no such Person has made a demand (whether oral or written) for such renegotiation.         4.18  Accounts Receivable; Inventories.                 (a)   All Accounts Receivable reflected on the balance sheet included in the Annual  Statements, the Latest Balance Sheet or on the books and records of Seller as of the Closing represent (or  will represent) valid obligations arising from sales actually made or services actually performed and have  arisen in the Ordinary Course of Business.  All Accounts Receivable outstanding as of the Closing will be  collected in full within 120 days of the Closing.  There is no contest, claim, defense or right of setoff  under any Contract with any account debtor of Accounts Receivable relating to the amount of or validity  of such Accounts Receivable. Section 4.18(a) of the Disclosure Schedule contains a complete and  accurate list as of the date of this Agreement of all Accounts Receivable that are included in the  Purchased Assets, which disclosure schedule also sets forth the aging of such Accounts Receivable as of  the date hereof.               (b)   The Inventory reflected on the balance sheet included in the Annual Statements  and on the Latest Balance Sheet has been valued in accordance with GAAP.  Physical adjustments to  Inventory since the date of the balance sheet included in the Annual Statements have been correctly                                         18 

 

recorded in the Seller’s inventory management system in the Ordinary Course of Business, with year-end  adjustments to be recorded in the Seller’s financial statements in the Ordinary Course of Business with all  other year-end adjustments.  The Inventory (i) is carried at an amount not in excess of the lower of cost or  net realizable value on a first in, first out basis, and (ii) does not include any inventory that is obsolete,  surplus or not usable or saleable in the Ordinary Course of Business, except with respect to such  Inventory set forth on Section 4.18(b) of the Disclosure Schedule.  The Inventory consists of items of  quality and quantity that are adequate for the conduct of the Business and inventory levels are not in  excess of normal operating requirements of Seller.           4.19  Labor Matters.  Except as set forth on Section 4.19 of the Disclosure Schedule, Seller  does not have any labor contracts, collective bargaining agreements or employment or consulting  agreements with any Persons employed in or otherwise relating to the Business. No Person employed by  Seller or any Affiliate relating to the Business is represented by a labor union in connection with such  Person’s employment with Seller or any Affiliate. There is no labor strike, dispute, slowdown or stoppage  pending or, to the Knowledge of Seller, threatened against Seller relating to the Business, and Seller has  not experienced any labor strike, dispute, slowdown or stoppage or other labor difficulty relating to the  Business involving its employees.           4.20  Operation of Business; Relationships.  Section 4.20 of the Disclosure Schedule sets forth  a complete and accurate list of the top twenty suppliers of goods or services to the Business based on the  aggregate amount paid to such suppliers during the twenty four-month period ended June 30, 2019 (each,  a “Major Supplier”), together with the amount paid during such period.  Section 4.20 of the Disclosure  Schedule also sets forth a list of the top twenty customers of the Business based on the aggregate amount  paid to Seller during the twenty four-month period ended June 30, 2019 (each, a “Major Customer”),  together with the amount paid during such period.  Except as set forth on Section 4.20 of the Disclosure  Schedule, no Major Supplier or Major Customer has terminated its business relations with the Business.   Seller is not engaged in any dispute with any Major Supplier or Major Customer.  The relationships of the  Business and Seller with the customers, suppliers and subcontractors of the Business are satisfactory, and,  to the Knowledge of Seller, the execution of this Agreement, and the consummation of the transactions  contemplated hereby and by the Additional Documents, will not materially adversely affect the  relationships of the Business or Seller with such customers, suppliers or subcontractors.  No Major  Supplier or Major Customer is an Affiliate of Seller or any Principal.           4.21  Insurance.  The assets, properties and operations of Seller relating to the Business are and  have been insured under commercially reasonable property, commercial general liability, product liability  and other insurance policies in amounts which are customary, adequate and suitable in relation to the  Business and the assets and liabilities relating thereto.          4.22  Affiliate Transactions.  Except as disclosed in Section 4.22 of the Disclosure Schedule,  (a) there are and have been no liabilities or obligations between Seller, on the one hand, and either  Principal or any Affiliate of Seller or either Principal, on the other, relating to the Business, (b) neither  either Principal nor any officer, manager, director or Affiliate of Seller or either Principal has any direct  or indirect interest in any Assumed Contract, (c) neither either Principal nor any Affiliate of Seller or  either Principal provides any assets or services to the Business, and (d) Seller does not with respect to the  Business provide any assets or services to either Principal or any Affiliate of Seller or either Principal.   No owner, member, officer, manager, director or employee of Seller or any Affiliate of Seller or either  Principal owns, directly or indirectly, any interest in any Person that is a supplier, customer or competitor  of Seller relating to the Business.  For purposes of this Section 4.22, an “Affiliate” of a person shall  include, but not be limited to, any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,  father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of that person.                                           19 

 

      4.23  Real Property.                (a)   Seller does not own any real property.               (b)   Section 4.23 of the Disclosure Schedule lists, with the common address, all real  property leased, subleased, licensed to or otherwise used or occupied by Seller (the “Leased Real  Property”) and sets forth a true and complete list of all leases for each such Leased Real Property.  The  Leased Real Property constitutes all of the real property used for the conduct of the Business as currently  conducted.  Seller has made available to the Buyer true and complete copies of the leases set forth on  Section 4.23 of the Disclosure Schedule.  With respect to each lease set forth on Section 4.23 of the  Disclosure Schedule, Seller has not subleased, licensed or otherwise granted any Person the right to use or  occupy such Leased Real Property or any portion thereof.  To the Knowledge of Seller, no portion of the  Leased Real Property is subject to any pending or threatened condemnation or eminent domain  proceeding.         4.24  Environmental and Safety Matters.               (a)   Except as set forth in Section 4.24(a) of the Disclosure Schedule, Seller has not  received any written notice or report regarding any actual or alleged violation of or liabilities or potential  liabilities under any Applicable Law relating to environmental or public or worker health and safety  matters.               (b)   Seller has not released any hazardous or toxic substance, or, to the Knowledge of  Seller, owned or operated any facility or property contaminated by any hazardous or toxic substance and  to the Knowledge of Seller none of the Leased Real Property is contaminated by any hazardous or toxic  substance, in each case, so as to give rise to material liabilities pursuant to Applicable Law.               (c)   Seller has not provided an indemnity with respect to any material liability of any  other Person concerning environmental or public or worker health and safety matters.               (d)   Seller has made available to the Buyer all material environmental audits and  environmental assessments prepared by or on behalf of Seller in the past three (3) years relating to the  Business and the Leased Real Property that are in Seller’s possession.         4.25  Product Warranty and Liability.  No product or service sold by Seller is subject to any  other guaranty, warranty or other indemnity beyond the applicable terms and conditions of sale that have  been provided to Buyer for each such customer.  There are no Actions pending or, to the Knowledge of  Seller, threatened or being investigated with respect to Seller arising out of (i) any injury to any Person or  property as a result of the ownership, possession or use of any product or service sold by Seller prior to  the Closing or (ii) any defects or deficiencies in any product or service sold by Seller prior to the Closing.         4.26  Disclosure.  Any information furnished to Buyer by Seller or Principals in this  Agreement or the Disclosure Schedule hereto is true, correct and complete in all material respects.  In  addition, no representation or warranty of Seller or Principals in this Agreement or the Disclosure  Schedule hereto omits to state a material fact necessary to make the statements herein or therein, in light  of the circumstances in which they were made, not misleading.                                          20 

 

                                 ARTICLE V                                   COVENANTS                                 OF THE PARTIES         5.1   Mutual Covenants.  The parties hereto agree as follows with respect to the period from  and after the execution of this Agreement:               (a)   General.  Each of the parties shall use all reasonable efforts to take all action and  to do all things necessary, proper or advisable to consummate the transactions contemplated hereby.               (b)   Other Governmental Matters.  Each of the parties shall use all reasonable efforts  to take any additional action that may be necessary, proper or advisable in connection with any notices to,  filings with, and authorizations, consents and approvals of any Governmental Authority that it may be  required to give, make or obtain.                   (c)   Confidentiality.  Seller and Buyer are parties to a confidentiality and non- disclosure agreement dated February 26, 2019, which remains in full force and effect.  Upon Closing,  Buyer will have no further confidentiality obligations thereunder with respect to confidential information  relating to the Business or the Purchased Assets.  Seller and Principals agree that they will keep  confidential and not disclose, except to their representatives for the purpose of consummating the  transactions contemplated by this Agreement or as required by Applicable Laws, any information relating  to the Business or any information received from Buyer or its Subsidiaries or Affiliates.                 (d)   Further Assurances.  Seller and Principals from time to time after the Closing, at  Buyer’s request, shall execute and deliver to Buyer such other instruments of conveyance and transfer and  shall take such other actions and execute and deliver such other documents, certifications and further  assurances as Buyer may reasonably request in order to vest in Buyer any of the Purchased Assets.  Each  party hereto will cooperate with the other party and execute and deliver to the other party such other  instruments and documents and take such other actions as may be reasonably requested from time to time  by the other party as necessary to carry out, evidence and confirm the intended purposes of this  Agreement.  In addition to the foregoing, Seller appoints Buyer, effective as of the Closing, the attorney  of Seller with full power of substitution, in the name of Buyer or the name of Seller, on behalf of and for  the benefit of Buyer, to collect all Accounts Receivable and other items hereby transferred and assigned  to Buyer, to endorse, without recourse, all checks in the name of Seller the proceeds of which Buyer is  entitled to hereunder and to prosecute, in the name of Seller, all proceedings which Buyer may deem  proper to enforce any claim of any kind in or to the Purchased Assets.  Seller agrees that the foregoing  powers are coupled with an interest, shall be irrevocable, and shall not be affected by the dissolution of  Seller or for any other reason.  Seller further agrees that Buyer shall retain for its own account any  amounts collected pursuant to the foregoing powers, and Seller shall promptly pay or transfer to Buyer, if  and when received, any amounts which shall be received by Seller after the Closing in respect of any  Accounts Receivable or other Purchased Assets or rights hereby transferred to Buyer or otherwise in  respect of the operation of the Business by Buyer after Closing.         5.2   Covenants of Seller and Principals.               (a)   Non-competition.                     (i)   Seller and Principals (each, a “Restricted Party” and collectively, the        “Restricted Parties”) acknowledge that a substantial portion of the consideration given by Buyer        pursuant to this Agreement is attributable to the goodwill, trade secrets and confidential        information of the Business and that their direct or indirect competition with the Business after                                          21 

 

the Closing would have a material adverse effect on such goodwill, trade secrets and confidential  information.  Each Restricted Party shall not, at any time during the Restricted Period, without the  prior written consent of Buyer, directly or indirectly, contact for employment, solicit, recruit,  retain or employ (whether as an employee, officer, manager, director, agent, consultant or  independent contractor) any Person who was or is at any time during the previous 12 months an  employee, agent, independent contractor, representative, officer or manager of the Business.   Further, during the Restricted Period, each Restricted Party shall not take any action that is  intended to cause any such Person to cease their relationship with the Business for any reason.   The “Restricted Period” means the period commencing on the Closing Date and ending on the  date that is five years after the Closing Date.               (ii)  During the Restricted Period, each Restricted Party shall not (either  directly or indirectly or as an officer, manager, agent, employee, partner or director of any other  Person) solicit, service, or accept, directly or indirectly, the business of (i) any current or former  customer of the Business, or (ii) any potential customer of the Business which the Restricted  Party knew to be an identified, prospective purchaser of services or products of the Business, for  the purpose of offering, marketing, selling or otherwise providing products and/or services that  are the same as, similar to or competitive with those offered, marketed, sold and/or otherwise  provided by, or in the process of being developed by, the Business (“Competitive Products and  Services”).               (iii) During the Restricted Period, each Restricted Party shall not, directly or  indirectly, (i) offer, market, sell or provide any Competitive Products and Services or (ii) invest in  or hold equity or investments in (other than in a publicly traded company with a maximum  investment of no more than 2% of the outstanding securities), counsel, advise, consult or be  otherwise engaged or employed by, any Person (other than Buyer or its Affiliates) that offers,  markets, sells or provides any Competitive Products and Services.               (iv)  Each Restricted Party shall hold in a fiduciary capacity for the benefit of  the Business and Buyer and all of its parents, subsidiaries, partnerships, joint ventures, limited  liability companies, and other Affiliates (collectively, the “Buyer Group”), all secret or  confidential information, knowledge or data relating to the Business (including any proprietary  and not publicly available information concerning any processes, methods, Trade Secrets,  research, secret data, costs, names of users or purchasers of their respective products or services,  business methods, operating procedures or programs or methods of promotion and sale) that is  not public knowledge (other than as a result of the Restricted Party’s violation of this Section  5.2(a)(iv)) (“Confidential Information”).  For the purposes of this Section 5.2(a)(iv), information  shall not be deemed to be publicly available merely because it is embraced by general disclosures  or because individual features or combinations thereof are publicly available.  Each Restricted  Party shall not communicate, divulge or disseminate Confidential Information at any time, except  with the prior written consent of Buyer or as otherwise required by Applicable Laws or Orders.   All records, files, memoranda, reports, customer lists, drawings, plans, documents and the like  related to the Business that each Restricted Party used, prepared or came into contact with on or  prior to the Closing Date shall remain the sole property of the Business and/or the Buyer Group,  as applicable, and shall be turned over to Buyer.  Notwithstanding the foregoing, for purposes of  this Agreement, information shall not be deemed Confidential Information if it is generally  available to and known by the public through no fault of the Seller or Principals.  If Seller or any  Principal is compelled to disclose any information by judicial or administrative process or by  other legal requirements, such Seller or Principal shall promptly notify the Buyer in writing and  shall disclose only that portion of such information which such Seller or Principal is advised by  its counsel in writing as legally required to be disclosed, provided that such Seller or Principal, if                                   22 

 

requested by Buyer, at the sole cost and expenses of Buyer, shall use reasonable efforts to obtain  an appropriate protective order or other reasonable assurance that confidential treatment will be  accorded such information.               (v)   The Restricted Parties acknowledge and agree that: (A) the purpose of  the foregoing covenants is to protect the goodwill, Trade Secrets and Confidential Information of  the Business; (B) because of the nature of the Business and because of the nature of the  Confidential Information to which each Restricted Party has access, Buyer and the Business may  suffer irreparable harm and it would be impractical and excessively difficult to determine the  actual damages of Buyer and the Business in the event a Restricted Party breached any of the  covenants of this Section 5.2(a); and (C) remedies at law (such as monetary damages) for any  breach of a Restricted Party’s obligations under this Section 5.2(a) would be inadequate.                (vi)  The terms of this Section 5.2(a) are severable. Therefore, with respect to  any provision of this Agreement finally determined by a court of competent jurisdiction to be  unenforceable, the Restricted Parties and Buyer hereby agree that such court shall have  jurisdiction to reform this Section 5.2(a) so that it is enforceable to the maximum extent permitted  by Applicable Laws, and the parties agree to abide by such determination of such court.  If any of  the covenants of this Section 5.2(a) are determined to be wholly or partially unenforceable in any  jurisdiction, such determination shall not be a bar to or in any way diminish Buyer’s right to  enforce any such covenant in any other jurisdiction.                 (vii) The Restricted Parties agree that the duration of the non-competition and  non-solicitation obligations under this Section 5.2(a) shall be extended by the period of time in  which any Restricted Party is in breach of those obligations.         (b)   Tax Matters.               (i)   The parties agree to furnish or cause to be furnished to each other, upon  request, as promptly as practicable, such information and assistance relating to the Business and  the Purchased Assets (including access to books and records) as is reasonably necessary for the  filing of all Tax Returns, the making of any election relating to Taxes, the preparation for any  audit by any Taxing authority, and the prosecution or defense of any claim, suit or proceeding  relating to any Tax.                 (ii)  All excise, sales, use, value added, registration, stamp, recording,  documentary, conveyancing, franchise, property, transfer, gains and similar Taxes, levies, charges  and fees (collectively, “Transfer Taxes”) incurred in connection with the transactions  contemplated by this Agreement shall be borne equally by Seller and Buyer.  Seller, Principals  and Buyer shall cooperate in providing each other with any appropriate manufacturing, research  and development, and resale exemption certifications and other similar documentation.  If Buyer  fails to provide Seller with any appropriate exemption certificates, the Buyer will be solely  responsible for any Transfer Taxes due as a result of failing to provide an appropriate exemption  certificate.  The party that is required by Applicable Laws to make the filings, reports, or returns  with respect to any applicable Transfer Taxes shall do so, and the other party shall cooperate with  respect thereto as necessary.  Notwithstanding the preceding sentence, Buyer will be solely  responsible for filing the required Maryland Bulk Sale Tax Return with the Comptroller of  Maryland and remitting with the return any tax owed; provided that, Seller shall immediately  upon request from Buyer, remit to Buyer one-half of any such taxes owed.  Buyer shall provide  Seller with satisfactory proof that the required Maryland Bulk Sale Tax Return has been timely  filed with the Comptroller of Maryland.                                   23 

 

                  (iii) Any agreement between Seller and any Affiliate regarding allocation or        payment of Taxes or amounts in lieu of Taxes shall be deemed terminated as of the Closing.               (c)   [INTENTIONALLY OMITTED].               (d)   [INTENTIONALLY OMITTED].               (e)   [INTENTIONALLY OMITTED].               (f)   Insurance.  Effective as of the Closing Date, Seller shall maintain or cause to be  maintained insurance for the benefit of Seller and Seller’s officers and directors and with respect to  Seller’s pre-closing operations (including product liability insurance and general liability and professional  liability insurance and umbrella or excess coverage) with coverage and limits consistent with insurance in  effect on the Closing Date and reasonably acceptable to Buyer.  Such insurance shall be maintained for a  period of five years following the Closing Date unless the Buyer requests, in writing, the Seller to  terminate such insurance.                (g)   Change in Name.  Following the Closing, at the written request of Buyer, Seller  shall file the applicable filings in a form reasonably satisfactory to Buyer to change its name to a name  that does not include “First Source Electronics” or variants thereof.                 (h)   Website.  The Seller shall cause Seller’s website of the Business as of the  Closing Date to include a link to a website designated by Buyer within 90 days of the Closing Date.                (i)   Consulting Restrictions.  Following the Closing, neither the Seller nor either of  the Principals shall contract with or enter into any arrangement with any person set forth on Disclosure  Schedule 5.3(a)(i) with respect to services related to Buyer’s and its affiliates’ businesses, including the  Business.          5.3   Employee Matters.               (a)   Buyer shall, or shall cause an Affiliate of Buyer to, offer employment effective  on the Closing, to all employees of Seller, as set forth in Disclosure Schedule 4.16, to the exclusion of any  such employees as set forth in Disclosure Schedule 5.3(a)(i), who worked for the Business immediately  prior to the Closing, including employees who are absent due to vacation, family leave, short-term  disability or other approved leave of absence (all such absent employees are listed in Disclosure Schedule  5.3(a)(ii) (the employees who accept such employment and commence employment on the day following  the Closing Date, the “Transferred Employees”) with (i) base salary or hourly wages which are no less  than the base salary or hourly wages set forth on Section 4.16 of the Disclosure Schedule, with such base  salary or hourly wages to be maintained for at least the twelve (12) month period following the Closing  Date as long as such Transferred Employees remain employees of Buyer as determined in the sole  discretion of Buyer and (ii) bonus opportunities that are commensurate with those offered to similarly- situated employees of Buyer, pro-rated for 2019 based on the Closing Date.  Notwithstanding the  foregoing, the Transferred Employees shall remain employees at will and have no rights to continuous  employment for any period of time.               (b)   Effective as of the Closing, the Transferred Employees shall cease active  participation in the Seller Plans.  Seller shall remain liable for all eligible claims for benefits under the  Seller Plans that are incurred by the Employees prior to the Closing.                                          24 

 

            (c)   Except with respect to Assumed Liabilities, Seller shall be solely responsible,  and Buyer shall have no obligations whatsoever for, any compensation, employee benefits or other  amounts payable to any current or former employee, officer, manager, director, independent contractor or  consultant of the Business, including, without limitation, hourly pay, commission, bonus or other  incentive compensation, salary, accrued vacation, paid time off, fringe, health plan continuation coverage,  pension or profit sharing benefits or severance pay for any period relating to the service with Seller at any  time on or prior to the Closing Date or which becomes payable as a result of the consummation of the  transactions contemplated by this Agreement and Seller shall pay all such amounts to all entitled persons  on or prior to the Closing Date.               (d)   This Section 5.3 shall be binding upon and inure solely to the benefit of each of  the parties to this Agreement, and nothing in this Section 5.3, express or implied, shall confer upon any  other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.3.   Nothing contained herein, express or implied, shall be construed to establish, amend or modify any  benefit plan, program agreement or arrangement. The parties hereto acknowledge and agree that the terms  set forth in this Section 5.3 shall not create any right in any Transferred Employee or any other Person to  any continued employment with Buyer or any of its Affiliates or compensation or benefits of any nature  or kind whatsoever.         5.4   Tail Policy.  At or prior to the Closing, Seller shall purchase and pay for a three (3) year  tail policy under each existing claims-made insurance policy of Seller providing that such coverage under  such policy shall extend for a period of three (3) years from the Closing for any claims arising from  events which occurred prior to the Closing.         5.5   Public Announcements.  Unless otherwise required by applicable Law, no party to this  Agreement shall make any initial public announcements in respect of this Agreement or the transaction  contemplated hereby or otherwise communicate with any news media without the prior written consent of  the other party (which consent shall not be unreasonably withheld or delayed), and the parties shall  cooperate as to the timing and consents of any such initial public announcement.          5.6   Guarantor’s Guarantee. The Guarantor absolutely, unconditionally and irrevocably  guarantees, for the benefit of Seller and Principals, Buyer’s obligations under Articles II, V and VIII of  this Agreement and Buyer’s obligations with respect to the Retention Bonus (as defined and set forth in  the Offer Letters), if, when and to the limited extent that Buyer has defaulted on any of such obligations.   Principals shall provide to the Guarantor (i) notice of the extent to which Buyer has defaulted under such  obligations and (ii) a demand for payment by the Guarantor, less the amount in respect thereof that Buyer  has paid to Seller or Principals with respect to such obligations through and including the date of such  demand.  The Guarantor shall, within 30 days of receipt of demand for payment from Principals, pay such  remaining amount by wire transfer of immediately available funds to an account or accounts designated  by Principals.  The Guarantor reserves the right to assert defenses that Buyer may have to payment or  performance of any obligations guaranteed hereunder. The Guarantor hereby represents and warrants to  Seller and Principals as follows:                     (a)   Authority; Execution and Delivery; Enforceability. The Guarantor has        full power and authority to enter into this Agreement and to consummate the transactions        contemplated hereby.  The execution, delivery and performance by the Guarantor of this        Agreement has been duly authorized by all requisite action and no other proceeding on the part of        the Guarantor is required to authorize the execution and delivery of this Agreement or the        performance of any of the transactions contemplated hereby.  This Agreement has been duly        executed and delivered by the Guarantor, and (assuming due execution and delivery by the other                                          25 

 

      parties hereto) this Agreement constitutes a valid and binding obligation of the Guarantor,        enforceable in accordance with its terms.                        (b)   No Conflicts. The execution and delivery by the Guarantor of this        Agreement does not, and the consummation of the transactions contemplated hereby and the        Guarantor’s compliance with the terms hereof will not, conflict with, breach or violate or result in        any material violation of or default (with or without notice or lapse of time, or both) under, or        give rise to a right of, or result in any, termination, cancellation or acceleration of any material        obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of        the properties or assets of the Guarantor under, any provision of (i) contract material to the ability        of the Guarantor to consummate the transactions contemplated hereby or any other contract to        which the Guarantor is a party or by which any of its properties or assets is bound or (ii) any        judgment or Applicable Law applicable to the Guarantor or its properties or assets          5.7   Accounts Receivable.  Seller, Principals and Buyer hereby agree, that if any of the  Accounts Receivable of the Seller included in Purchased Assets are not collected within 120 days of  Closing and Buyer is indemnified by Seller and Principals for such uncollected Accounts Receivable  pursuant to Article VIII below, then if such Accounts Receivable are  subsequently collected by the Buyer  following the Closing (“Collected AR”), such Collected AR shall be remitted to Seller in full within 15  Business Days following receipt of such Collected AR.  Buyer shall provide Seller and Principals  reasonable access to the necessary books and records to confirm the status of such Accounts Receivable.                                      ARTICLE VI                           [INTENTIONALLY OMITTED]                                    ARTICLE VII                           [INTENTIONALLY OMITTED]                                    ARTICLE VIII                                INDEMNIFICATION         8.1   Survival of Representations, Warranties and Agreements.  Subject to the limitations set  forth in Section 8.3 below, all representations, warranties, covenants and agreements of Buyer, Seller and  Principals in this Agreement and in any other agreements, documents or certificates executed or delivered  by Buyer, Seller or Principals pursuant to this Agreement (the “Additional Documents”) shall survive the  execution, delivery and performance of this Agreement and the Additional Documents.  This Section 8.1  shall not limit any covenant or agreement of the parties hereto that by its terms contemplates performance  after the Closing Date.         8.2   Indemnification.                 (a)   Subject to the limitations set forth in Section 8.3, Seller and Principals shall,  jointly and severally, indemnify and hold harmless Buyer and its Affiliates, Subsidiaries, officers,  directors, agents, employees, successors and representatives (each, a “Buyer Indemnified Party”) from  and against any and all losses, liabilities, damages, demands, lost profits, claims, suits, actions, judgments  or causes of action, costs and expenses (including interest, penalties, court costs, attorneys’ fees, any and  all expenses incurred in investigating, preparing or defending against any claim, commenced or  threatened), and any and all amounts paid in settlement of any claim (collectively, “Damages”), asserted  against, incurred or suffered by any Buyer Indemnified Party, directly or indirectly, as a result of or                                          26 

 

arising from any of the following (individually an “Indemnifiable Claim” and collectively “Indemnifiable  Claims” when used in the context of a Buyer Indemnified Party as the Indemnified Party):                     (i)   any inaccuracy in or breach of any of the representations or warranties        made by Seller and Principals in this Agreement or the Additional Documents; provided,        however, that if any such representation or warranty is qualified in any respect by materiality,        Material Adverse Effect or in all material respects or a variation thereof, for purposes of this        clause (i) (and for purposes of calculated Damages) such materiality, Material Adverse Effect or        in all material respects qualification or variation thereof will in all respect be ignored;                     (ii)  any breach or non-performance of any covenant, agreement or obligation        to be performed by Seller or Principals pursuant to this Agreement or the Additional Documents;                     (iii) the Indebtedness Amount as of the Closing Date;                     (iv)  any Excluded Asset or any Excluded Liability; or                     (v)   any of the matters described in Section 8.2(a) of the Disclosure Schedule.               (b)   Subject to the limitations set forth in Section 8.3, Buyer shall indemnify and hold  harmless Seller and Principals and their respective successors, representatives and assigns (each, a “Seller  Indemnified Party”), from and against any and all Damages asserted against, or incurred or suffered by  any Seller Indemnified Party, directly or indirectly, as a result of or arising from any of the following  (individually an “Indemnifiable Claim” and collectively “Indemnifiable Claims” when used in the context  of a Seller Indemnified Party as the Indemnified Party):                     (i)   any inaccuracy in or breach of any of the representations or warranties        made by Buyer in this Agreement or the Additional Documents; provided, however, that if any        such representation or warranty is qualified in any respect by materiality, Material Adverse Effect        or in all material respects or a variation thereof, for purposes of this clause (i) (and for purposes        of calculated Damages) such materiality, Material Adverse Effect or in all material respects        qualification or variation thereof will in all respect be ignored;                      (ii)  any breach or non-performance of any covenant, agreement or obligation        to be performed by Buyer pursuant to this Agreement or the Additional Documents; or                     (iii) any Assumed Liability.               (c)   The right of any Buyer Indemnified Party or any Seller Indemnified Party to  indemnification pursuant to this Article VIII will not be affected by any investigation conducted by, or, or  on behalf of any party, or any knowledge acquired (or capable of being acquired) at any time by any party  or any party’s representatives, whether before or after the execution and delivery of this Agreement or the  Closing.                (d)   Any amount paid as Damages under this Article VIII shall be treated as an  adjustment to the Purchase Price to the extent permitted under Applicable Laws.                                          27 

 

      8.3   Limitations on Indemnification.  The parties’ respective rights to indemnification under  this Article VIII are subject to the following limitations:               (a)   No Buyer Indemnified Party, on the one hand, or Seller Indemnified Party, on the  other hand, shall be entitled to indemnification hereunder with respect to an Indemnifiable Claim pursuant  to Sections 8.2(a)(i) or 8.2(b)(i), as applicable (or, if more than one such Indemnifiable Claim is asserted,  with respect to all such Indemnifiable Claims) unless the aggregate amount of Damages with respect to  such Indemnifiable Claim or Claims of all Buyer Indemnified Parties or Seller Indemnified Parties, as the  case may be, exceeds $250,000 (the “Threshold”), in which event such Buyer Indemnified Party or Seller  Indemnified Party, as the case may be, shall be entitled to indemnification hereunder for all Damages with  respect to all of its Indemnifiable Claims in excess of the Threshold, but subject to the Cap.  Furthermore,  the maximum aggregate liability of Seller and Principals with respect to all Indemnifiable Claims  pursuant to Section 8.2(a)(i) and the maximum aggregate liability of Buyer with respect to all  Indemnifiable Claims pursuant Section 8.2(b)(i) shall each be an amount equal to 10% of the Purchase  Price (the “Cap”); provided, however, that any Damages with respect to an Indemnifiable Claim of any  Buyer Indemnified Party arising from any breach or inaccuracy of any representation and warranty in  Sections 4.1 (Organization and Standing), 4.2 (Subsidiaries), 4.3 (Power and Authority), 4.4  (Capitalization), 4.8 (Taxes), the third sentence of 4.10(a) (Proprietary Rights), the first sentence of 4.11  (Title to Purchased Assets), 4.14 (Brokerage and Finder’s Fees), 4.15 (Employee Benefit Matters) or 4.18  (Accounts Receivable; Inventories) shall not be subject to or applied toward the Threshold or the Cap,  and such Buyer Indemnified Party shall be entitled to indemnification for the entire amount of said  Damages without regard to the Threshold or Cap.               (b)   The indemnification obligations of the parties with respect to any Indemnifiable  Claims pursuant to Section 8.2(a)(i) or Section 8.2(b)(i), as applicable, shall terminate on the date that is  18 months after the Closing Date, except that the following indemnification obligations shall terminate 30  days after the expiration of the statute of limitation applicable to the items contained therein: (A) those of  Seller and Principals with respect to any breach or inaccuracy of any representation or warranty set forth  in Sections 4.1 (Organization and Standing), 4.2 (Subsidiaries), 4.3 (Power and Authority), 4.4  (Capitalization), 4.8 (Taxes), the third sentence of 4.10(a) (Proprietary Rights), the first sentence of 4.11  (Title to Purchased Assets), 4.15 (Employee Benefit Matters) and 4.18 (Accounts Receivable;  Inventories); and (B) those of Buyer with respect to any breach or inaccuracy of any representation or  warranty set forth in Sections 3.1 (Organization and Standing) and 3.2 (Power and Authority); and               (c)   The foregoing provisions of this Section 8.3 notwithstanding, if, prior to the  termination of any obligation to indemnify, written notice of a claimed breach or other occurrence or  matter giving rise to a claim of indemnification is given by the party seeking indemnification (the  “Indemnified Party”) to the party from whom indemnification is sought (the “Indemnifying Party”), or a  suit or action based upon a claimed breach is commenced against the Indemnifying Party, the Indemnified  Party shall not be precluded from pursuing such claimed breach, occurrence, other matter, or suit or  action, or from recovering from the Indemnifying Party (whether through the courts or otherwise) on the  claim, suit or action, by reason of the termination otherwise provided for above.               (d)   Except with respect to those actually awarded and paid on account of a Third  Party Claim under Section 8.4, in no event shall any Indemnifying Party be liable to any Indemnified  Party for any (i) punitive or exemplary damages or (ii) incidental, consequential, special or indirect  damages, lost profits or lost business, loss of enterprise value, diminution of value of any business,  damage to reputation or loss to goodwill, whether based on contract, tort, strict liability, other law or  otherwise except, in the case of clause (ii), to the extent such damages are reasonably foreseeable in  connection with the event that gave rise thereto or the  matter for which indemnification is sought  hereunder.                                         28 

 

      8.4   Procedure for Indemnification with Respect to Third Party Claims.                 (a)   If the Indemnified Party determines to seek indemnification under this Article  VIII with respect to Indemnifiable Claims resulting from the assertion of liability by any third party  (including any Governmental Authority), it shall give written notice to the Indemnifying Party within 45  calendar days of the Indemnified Party’s becoming aware of any such Indemnifiable Claim (a “Claim  Notice”), which notice shall set forth such material information with respect to such Indemnifiable Claim  as is then reasonably available to the Indemnified Party.  If any such liability is asserted against the  Indemnified Party and the Indemnified Party notifies the Indemnifying Party of such liability, the  Indemnifying Party shall be entitled, if it so elects by written notice delivered to the Indemnified Party  within 20 days after receiving the Claim Notice, to assume the defense of such asserted liability with  counsel reasonably satisfactory to the Indemnified Party unless the Indemnifying Party fails to provide  reasonable assurance to the Indemnified Party of its financial capacity to assume such defense.  If the  Indemnifying Party elects to assume the defense of such asserted liability, the claims made by such third  party shall be conclusively established as being within the scope of and subject to the indemnification  provisions of this Agreement.  Notwithstanding the foregoing:  (i) the Indemnified Party shall have the  right to participate in the defense of such claim and to employ its own counsel in any such case, but the  fees and expenses of such counsel shall be payable by the Indemnified Party; provided that, if the named  Persons to a lawsuit or other legal action include both the Indemnifying Party and the Indemnified Party  and the Indemnified Party has been advised by counsel that a conflict of interest exists such that there  may be one or more legal defenses available to such Indemnified Party that are different from or  additional to those available to the Indemnifying Party, the Indemnifying Party shall not be permitted to  assume the defense and shall be responsible for the reasonable fees and expenses of one counsel to the  Indemnified Party in connection with such defense; (ii) the Indemnified Party shall not have any  obligation to give any Claim Notice concerning any assertion of liability by a third party unless such  assertion is in writing; and (iii) the rights of the Indemnified Party to be indemnified in respect of  Indemnifiable Claims resulting from the assertion of liability by third parties shall not be adversely  affected by its failure to give a Claim Notice pursuant to the foregoing provisions unless, and, if so, only  to the extent that, the Indemnifying Party is materially prejudiced by such failure.                 (b)   If the Indemnifying Party disputes its liability with respect to such Indemnifiable  Claim, it shall, within 20 days after receiving the Claim Notice with respect to such Indemnifiable Claim,  give written notice of such dispute to the Indemnifying Party in which event the parties will negotiate in  good faith to mutually agree to resolve such dispute.  If the parties are unable to resolve the Indemnifiable  Claim within 60 days after the Indemnifying Party delivers such notice, then either party shall be entitled  to pursue all available remedies to prosecute the Indemnifiable Claim.  Pending resolution of any such  dispute, the Indemnified Party shall have the right to defend, compromise or settle such Indemnifiable  Claim at the risk of the Indemnifying Party.               (c)   Notwithstanding anything in this Section 8.4 to the contrary, the Indemnifying  Party shall not, without the Indemnified Party’s prior written consent, which such consent shall not be  unreasonably withheld, settle or compromise any Indemnifiable Claim or consent to entry of any  judgment in respect of any Indemnifiable Claim unless such settlement, compromise or consent (A)  includes as an unconditional term the giving by the claimant or the plaintiff to the Indemnified Party (and  its Subsidiaries and Affiliates) of a release from all liability in respect of such Indemnifiable Claim and  (B) does not include a finding or admission by Buyer of any violation of Applicable Laws or any  violation of the rights of any Person.                                          29 

 

      8.5   Procedure for Indemnification with Respect to Non-Third Party Claims.                 (a)   If the Indemnified Party asserts the existence of an Indemnifiable Claim giving  rise to Damages (but excluding Indemnifiable Claims resulting from the assertion of liability by third  parties), it shall give written notice to the Indemnifying Party specifying, with reasonable detail, the  nature and amount of the Indemnifiable Claim asserted (also, a “Claim Notice”).  If the Indemnifying  Party, within 20 days after receiving such Claim Notice, has not given written notice to the Indemnified  Party announcing its intent to contest such assertion by the Indemnified Party, such assertion shall be  deemed accepted and the amount of Indemnifiable Claim shall be deemed a valid Indemnifiable Claim.               (b)   If the Indemnifying Party contests the assertion of an Indemnifiable Claim by  giving such written notice to the Indemnified Party within such 20-day period, then the parties shall  negotiate in good faith to resolve the Indemnifiable Claim.  If the parties are unable to resolve the  Indemnifiable Claim within 60 days after the Indemnifying Party delivers such notice, then either party  shall be entitled to pursue all available remedies to prosecute the Indemnifiable Claim.         8.6   Set-Off.  Following release of the Escrow Amount in accordance with the terms of the  Escrow Agreement, Buyer shall have the right to set-off any Milestone Payments payable to Seller or  Principals under this Agreement against the amount of any undisputed, fully resolved Indemnifiable  Claim.  If following the release of the Escrow Amount, a Claim Notice has been provided by Buyer prior  to the date of a Milestone Payment, but such Indemnifiable Claim remains in dispute, the amount of the  disputed Indemnifiable Claim shall be deducted from the Milestone Payment and delivered to the Escrow  Agent to be retained in the Escrow Account and shall be released upon final resolution of the applicable  Indemnifiable Claim. In the event the original Escrow Account has been terminated, the Parties will  coordinate to establish a new escrow account under substantially similar terms to retain such funds during  the resolution period. Notwithstanding the foregoing, any Damages payable to a Buyer Indemnified Party  pursuant to this Article 8 shall be satisfied first from the Escrow Account before Buyer exercises any right  to set off.                                      ARTICLE IX                                MISCELLANEOUS         9.1   Notices.  All notices, requests, demands, letters, waivers and other communications  required or permitted to be given under this Agreement shall be in writing and shall be deemed to have  been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid,  (c) sent by next-day or overnight mail or delivery or (d) sent by e-mail of a PDF document (with  confirmation of transmission):         if to Buyer:         Commercial Vehicle Group, Inc.        7800 Walton Parkway        New Albany, OH 43054        Attn: General Counsel                                                          30 

 

      if to Seller or Principals:          Kevin Popielarczyk        [**]        E-mail:  [**]                With a copy to:                Miles & Stockbridge, P.C.        100 Light Street        Baltimore, MD 21202        Attn: William M. Davidow, Jr.        Facsimile No.: 410-773-9016        E-mail:  wdavidow@milesstockbridge.com          or to such other Person or address as any party shall specify by notice in writing to the party entitled to  notice.  All such notices, requests, demands, letters, waivers and other communications shall be deemed  to have been received (w) if by personal delivery, on the day of such delivery, (x) if by certified or  registered mail, on the fifth Business Day after the mailing thereof (y) if by next-day or overnight mail or  delivery, on the day delivered or (z) if by e-mail if sent during normal business hours of the recipient, on  the date sent, and on the next Business Day if sent after normal business hours of the recipient.         9.2   Interpretation.  When a reference is made in this Agreement to an Article or Section, such  reference shall be to an Article or Section of this Agreement unless otherwise indicated.  The headings  and the table of contents contained in this Agreement are for reference purposes only and shall not affect  in any way the meaning or interpretation of this Agreement.  Whenever the words “include,” “includes,”  or “including” are used in this Agreement, they shall be deemed to be followed by the words “without  limitation.”  Whenever the context requires, words used in the singular shall be construed to mean or  include the plural and vice versa, and pronouns of any gender shall be deemed to include and designate  the masculine, feminine or neuter gender.         9.3   Counterparts.  This Agreement may be executed in counterparts, which together shall  constitute one and the same Agreement.  The parties may execute more than one copy of this Agreement,  each of which shall constitute an original.           9.4   Entire Agreement, Amendment and Waiver.  This Agreement (including the documents  and the instruments referred to herein) constitutes the entire agreement among the parties and supersedes  all prior agreements and understandings, agreements or representations by or among the parties, written  and oral, with respect to the subject matter hereof and thereof.  No amendment, supplement, modification,  waiver or termination of this Agreement shall be binding unless executed in writing by the party to be  bound thereby.  The failure, neglect, or delay of any party to enforce or exercise its rights under this  Agreement will not constitute a waiver or diminish such party’s right to strictly enforce the provisions of  this Agreement, except as expressly provided otherwise in this Agreement.  Nothing contained in this  Agreement prohibits Buyer from exercising or pursuing its statutory rights under relevant environmental  laws, and this Agreement in no way constitutes a waiver of those rights.         9.5   Third Party Beneficiaries.  Nothing in this Agreement, express or implied, is intended or  shall be construed to create any third party beneficiaries.                                          31 

 

      9.6   Governing Law, Consent to Jurisdiction, and Venue.               (a)   This Agreement and the construction thereof will be governed by the laws of the  State of Delaware, without giving effect to any choice of law provision or rule.                 (b)   The parties agree that any action arising under or otherwise related to this  Agreement will be brought only in United States District Court for the State of Delaware.  Each of the  parties hereto agrees that a final judgment in any Action shall be conclusive and may be enforced in other  jurisdictions by suit on the judgment or in any other manner provided by Applicable Laws.                 (c)   Each of the parties hereto irrevocably consents to the service of any summons  and complaint and any other process in any other Action relating to the transactions contemplated hereby,  on behalf of itself or its property, by the personal delivery of copies of such process to such party.   Nothing in this Section 9.6 shall affect the right of any party hereto to serve legal process in any other  manner permitted by Applicable Laws.         9.7   Specific Performance and Equitable Relief.  Seller and Principals acknowledge that the  Business is unique and recognize and affirm that in the event of a breach of this Agreement by Seller or  Principals, money damages may be inadequate and Buyer may have no adequate remedy at law.   Accordingly, Seller and Principals agree that Buyer shall have the right, in addition to any other rights  and remedies existing in its favor, to enforce its rights and the obligations of Seller and Principals  hereunder not only by an Action or Actions for Damages, but also by an Action or Actions for specific  performance, injunctive or other equitable relief, without the necessity of posting any bond or proving any  actual damage.           9.8   Assignment.  Neither this Agreement nor any of the rights, interests or obligations  hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise)  without the prior written consent of the other parties; provided, however, that Buyer may assign its rights,  interests and obligations hereunder to any Subsidiary or Affiliate or successor in interest of Buyer.   Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be  enforceable by the parties and their respective successors and assigns.         9.9   Severability.  Any provision of this Agreement which is prohibited or unenforceable  under Applicable Laws in any jurisdiction will, as to such jurisdiction, be ineffective, but only to the  extent of such prohibition or unenforceability, without invalidating the other provisions hereof and  without affecting the validity or unenforceability of such provision in any other jurisdiction.         9.10  Expenses.  Buyer shall be responsible for all costs, fees and expenses incurred by Buyer  in connection with this Agreement and the transactions contemplated hereby.  Seller and Principals shall  be responsible for all costs, fees and expenses incurred or payable by Seller or Principals in connection  with this Agreement and the transactions contemplated hereby.            9.11  Delivery by PDF.  This Agreement and any signed agreement or instrument entered into  in connection with this Agreement, and any amendments hereto or thereto, to the extent signed and  delivered by means of a PDF email, shall be treated in all manner and respects as an original agreement or  instrument and shall be considered to have the same binding legal effect as if it were the original signed  version thereof delivered in person.         9.12  WAIVER OF JURY TRIAL.  AS A SPECIFICALLY BARGAINED INDUCEMENT  FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (EACH PARTY HAVING  HAD OPPORTUNITY TO CONSULT COUNSEL), EACH PARTY EXPRESSLY WAIVES THE                                          32 

 

RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING  IN ANY WAY FROM THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN.                                  [Signature Page Follows]                                          33 

 

      IN WITNESS WHEREOF, Buyer, Seller and Principals have signed this Agreement as of the  date first written above.                                          BUYER:                                                                                  CVG FSE, LLC                                                                                                                           By: /s/ Patrick E. Miller                                                    Name: Patrick E. Miller                                                   Title: President                                                                                                  GUARANTOR:                                                                                  COMMERCIAL VEHICLE GROUP, INC.                                                                                                                           By: /s/ Patrick E. Miller                                                    Name: Patrick E. Miller                                                   Title: President & Chief Executive Officer                                                                                                                           SELLER:                                                                                  FIRST SOURCE ELECTRONICS, LLC                                                                                                                           By: /s/ Kevin Popielarczyk                                                   Name:  Kevin Popielarczyk                                            Title:  General Manager                                                                                  PRINCIPALS:                                                                                   /s/ Kevin Popielarczyk                                                   Kevin Popielarczyk                                               /s/ Richard Vuoto                                                        Richard Vuoto                           [Signature Page to Asset Purchase Agreement] 

 

                                     ANNEX A                                 DEFINED TERMS          “Accounts Receivable” means (i) all trade accounts receivable and other rights to payment from  customers of Seller arising from the operation of the Business and the full benefit of all security for such  accounts or rights to payment, (ii) all other accounts receivable or notes receivable of Seller arising from  the operation of the Business and the full benefit of all security for such accounts or notes receivable and  (iii) any claim, remedy or other right related to any of the foregoing.         “Affiliate” means any Person that, directly or indirectly through one or more intermediaries,  controls or is controlled by or is under common control with the Person specified.  For purposes of this  definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the  management and policies of such Person whether by Contract or otherwise and, in any event and without  limitation of the previous sentence, any Person owning 10% or more of the voting securities of another  Person shall be deemed to control that Person.  With respect to Seller and Principals, “Affiliate” includes  any current or former director, manager, officer, member or shareholder of any of the foregoing or any of  their Affiliates.           “Assumed Contracts” means all Contracts of Seller relating to the Business (other than any  Contract listed on Section 1.2(g) of the Disclosure Schedule).           “Business Day” means any day other than a Saturday, Sunday or any day on which banks located  in the State of Maryland are authorized or required to be closed for the conduct of regular banking  business.          “Closing Date Balance Sheet” means a balance sheet of the Business as of 11:59 p.m. Eastern  Time on the Closing Date prepared (i) from and in accordance with the books and records of Seller, (ii) in  accordance with GAAP and, to the extent in accordance with GAAP, consistent with past practices of  Seller in preparing the balance sheet included in the latest Annual Statements, (iii) as if it were a year-end  balance sheet (including typical year-end adjustments customarily made by Seller) and (iv) in a format  consistent with the balance sheet included in the latest Annual Statements.           “Code” means the United States Internal Revenue Code of 1986, as amended.         “Controlled Group Liability” means any and all liabilities under (i) Title IV of ERISA, (ii)  Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the continuation coverage  requirements of Section 601 et seq. of ERISA and Section 4980B of the Code and the portability and  nondiscrimination requirements of Section 701 et seq. of ERISA and Section 9801 et seq. of the Code, (v)  Section 4975 of the Code and (vi) corresponding or similar provisions of foreign laws or regulations.         “Data” means any data used or held for use in connection with the Business, including names,  addresses, social security numbers, passwords, personal identification numbers, account numbers, account  information, banking transactions and information, credit card data, customer information, supplier  information and financial information that Seller may have or has had in its possession or control relating  to any Person.         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the  regulations and rulings issued thereunder.          “ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or  business that is a member of a group described in Section 4001(b)(1) of ERISA that includes the first                                          35 

 

   entity, trade or business, or that is or was a member of the same “controlled group” as the first entity,  trade or business pursuant to Section 4001(a)(14) of ERISA.          “Escrow Agent” means JP Morgan Chase.         “Estimated Closing Indebtedness Amount” means the Indebtedness Amount set forth on the  Closing Certificate.          “GAAP” means generally accepted accounting principles as currently promulgated in the United  States of America applied on a consistent basis throughout the periods involved.          “Governmental Authority” means any domestic, foreign or multi-national federal,  commonwealth, state, provincial, regional, municipal or local governmental or administrative authority,  including any court, tribunal, agency, bureau, committee, board, regulatory body, administration,  commission or instrumentality constituted or appointed by any such authority.          “Indebtedness Amount” means the amount of, to the extent the following are secured by Liens on  the Purchased Assets or otherwise would prohibit or impair the transfer of the Purchased Assets, without  duplication: (i) all indebtedness or other obligations of Seller for borrowed money, (ii) all indebtedness of  Seller for the deferred purchase price for purchases of property or services, (iii) all lease obligations of  Seller, (iv) the aggregate face amount of all outstanding letters of credit issued on behalf of Seller; (v) all  obligations of Seller arising under acceptance facilities; (vi) all guaranties, endorsements and other  contingent obligations of Seller to purchase, to provide funds for payment, to supply funds to invest in  any other entity, or otherwise to assure a creditor against loss; (vii) all obligations of Seller under any  interest rate protection, foreign currency exchange, or other interest or exchange rate swap or hedging  agreement or arrangement, or other derivative product; (viii) all other obligations secured by a Lien upon  any Purchased Assets; (ix) all indebtedness referred to in clauses (i) through (viii) above of any Person  other than Seller that is guaranteed by Seller, and (x) accrued and unpaid interest on, and prepayment  premiums, penalties or similar contractual charges arising as a result of the discharge of, any such  foregoing obligation.          “Knowledge of Seller” means the knowledge of facts, matters or circumstances of the Principals  after due inquiry and diligence with respect to the matter at hand, or in the absence of such knowledge,  the knowledge that such Persons would have had after due inquiry and diligence with respect to the  matter at hand.          “Lien” means, with respect to any property or asset, any lien, charge, security interest,  encumbrance, restriction, conditional sale or other title retention agreement, condition, reservation, right  of first refusal or any other claim of any kind in respect of such property or asset.            “Ordinary Course of Business” means the ordinary course of business of Seller in conducting the  Business consistent with past custom and practice (including with respect to quantity and frequency).          “Organizational Documents” means the articles or certificate of incorporation, as applicable, and  the bylaws or code of regulations, as applicable, of a corporation and the articles of organization and the  operating agreement of a limited liability company.          “Person” means an individual, corporation, partnership, limited liability company, association,  trust or any other entity or organization, including a Governmental Authority.                                           36 

 

         “Plans” means and includes all employee benefit plans, programs, policies, practices, and other  arrangements providing benefits to any employee or former employee or beneficiary or dependent  thereof, or to present or former directors, consultants or agents, whether or not written, and whether  covering one Person or more than one Person, sponsored or maintained by Seller or any of its ERISA  Affiliates or to which Seller or any of its ERISA Affiliates contributes or is obligated to contribute or  under which any current or former employee, director or agent of Seller or any of its ERISA Affiliates is  entitled to any compensation or benefits (whether or not contingent) as a result of service to Seller or any  of its ERISA Affiliates.  Without limiting the generality of the foregoing, the term “Plans” includes all  employee welfare benefit plans within the meaning of Section 3(1) of ERISA, all employee pension  benefit plans within the meaning of Section 3(2) of ERISA, all employee stock option or stock purchase  plans, bonus or incentive plans or programs, severance pay or retention plans, policies, practices or  agreements, fringe benefits, change of control agreements and employment agreements.          “Proprietary Rights” means all rights, title and interest in the following: (i) all copyrights, in both  published and unpublished works (including data and documentation) whether registered or unregistered  and all other rights corresponding thereto, and mask works and registrations and applications therefor; (ii)  patents, patent applications and all reissues, divisions, continuations, continuations-in-part and  reexaminations of any of the foregoing; (iii) all trade names, fictitious business names, trade dress,  registered and unregistered trademarks, service marks, and domain names, URL addresses, design rights  (including any word, symbol, product configuration, icon, and logo) and all goodwill of the business  associated therewith; (iv) Trade Secrets; and (v) all rights to sue, recover damages, or otherwise claim for  past, present or future infringement or unauthorized use or disclosure or breach of any Proprietary Right.          “Registered Proprietary Rights” means any Seller Proprietary Rights registered in, or the subject  of any application to register in, a federal, provincial, local and foreign jurisdiction.          “Seller Permits” means all franchises, grants, authorizations, licenses, permits, easements,  variances, exemptions, consents, certificates, approvals and orders necessary or required by Applicable  Law to own, lease and operate Seller’s properties and to carry on the Business.         “Seller Proprietary Rights” means all Proprietary Rights owned by or purported to be owned by,  used by or licensed by Seller and used or held for use in the conduct of the Business.          “Subsidiary” means, with respect to any Person, any other Person, an amount of the voting  securities or other voting ownership or voting interests of which is sufficient to elect at least a majority of  its board of directors or other governing body (or, if there are no such voting securities or interests, 50%  or more of the equity interests of which) is owned directly or indirectly by such first Person.          “Tax” means (i) any federal, state, commonwealth, local or foreign income, gross receipts,  license, escheat, commercial activity, occupancy, payroll, employment, excise, severance, stamp,  occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise,  unincorporated business, profits, withholding, social security (or similar), unemployment, disability,  workers’ compensation, real property, personal property, ad valorem, sales, use, transfer, registration,  value added, alternative or add-on minimum, accumulated earnings, personal holding company,  estimated, or other Tax of any kind whatsoever, whether computed on a separate, consolidated or  combined basis, or in any other manner, including any interest, penalty, or addition thereto, whether  disputed or not; and (ii) any obligations to indemnify or otherwise assume or succeed to the Tax liability  of any other Person.                                           37 

 

         “Tax Return” means any return, declaration, report, claim for refund, or information return or  statement relating to Taxes, including any schedule or attachment thereto, and including any amendment  thereof.          “Trade Secrets” means all trade secrets as defined in the Uniform Trade Secrets Act or under  corresponding state statutory or common law.          “Working Capital Amount” means, in relation to the items presented in the financial statements  of the Business, the dollar amount of (i) current assets included in the Purchased Assets minus (ii) the  value of the current liabilities, in each case as such items would be reflected on a balance sheet of Seller  using, those general ledger accounts set forth in Exhibit 2.6.         Cross References to Defined Terms.  The following terms, as used herein, have the following  meanings:   Accountant ......................................................... 8 Indebtedness Adjustment ................................... 7  Action ............................................................... 14 Indemnifiable Claim ........................................ 26  Additional Documents ..................................... 25 Indemnifiable Claims ...................................... 26  Agreement .......................................................... 1 Indemnified Party ............................................ 28  Annual Statements ........................................... 11 Indemnifying Party .......................................... 28  Applicable Laws .............................................. 12 Inventory ............................................................ 1  Assignment and Assumption Agreement ........... 3 Latest Balance Sheet ........................................ 11  Assumed Liabilities ........................................... 3 Major Customer ............................................... 16  Business ............................................................. 1 Major Supplier ................................................. 16  Buyer .................................................................. 1 Material Adverse Effect ................................... 10  Buyer Group..................................................... 20 Milestone Event ................................................. 5  Buyer Indemnified Party .................................. 26 Milestone Payment ............................................ 5  Cap ................................................................... 27 Multiemployer Plan ......................................... 15  Claim Notice .............................................. 28, 29 Multiple Employer Plan ................................... 15  Closing ............................................................... 3 Non-Assignable Contracts ................................. 4  Closing Certificate ............................................. 7 Non-Competition Agreements ........................... 4  Closing Date....................................................... 3 Notice................................................................. 8  Closing Payment ................................................ 5 Order .................................................................. 9  Closing Statement .............................................. 7 Principals ........................................................... 1  Competitive Products and Services.................. 19 Purchase Price .................................................... 5  Confidential Information ................................. 20 Purchased Assets ............................................... 1  Contract ............................................................ 15 Qualified Plan .................................................. 14  Damages ........................................................... 26 Resolution Period .............................................. 8  Disclosure Schedule ........................................... 9 Restricted Parties ............................................. 19  Escrow Account ................................................. 5 Restricted Party ................................................ 19  Escrow Agreement ............................................. 4 Restricted Period .............................................. 19  Escrow Amount ................................................. 5 Seller .................................................................. 1  Excluded Assets ................................................. 2 Seller Indemnified Party .................................. 26  Excluded Liabilities ........................................... 3 Threshold ......................................................... 27  Final Closing Statement ..................................... 7 Transfer Taxes ................................................. 20                                                    38exhibit102firstamendment

                                                                     Execution Version                                                                             Exhibit 10.2             AMENDMENT NO. 1 TO THIRD AMENDED AND RESTATED LOAN AND SECURITY                                         AGREEMENT                     AMENDMENT NO. 1 (this “Amendment”), dated as September 18, 2019, to the Third        Amended and Restated Loan and Security Agreement dated as of April 12, 2017 (as amended,        supplemented, amended and restated or otherwise modified from time to time prior to this Amendment,        the “Existing Loan Agreement”; as amended by this Amendment, the “Loan Agreement”), among        Commercial Vehicle Group, Inc., a Delaware corporation (the “Company”), each other Borrower (as        defined therein), the financial institutions party thereto from time to time as Lenders (“Lenders”), and        Bank of America, N.A., as agent for the Lenders (in such capacity, “Agent”).                                       W I T N E S S E T H :                     WHEREAS, the parties hereto are parties to the Existing Loan Agreement;                     WHEREAS, the Borrowers and the Lenders wish to amend the Existing Loan Agreement        as described herein;                     WHEREAS, the Borrowers and the Lenders wish to instruct Agent to enter into certain        agreements as specified herein.                     NOW, THEREFORE, in consideration of the premises and of the mutual covenants        herein contained and for other good and valuable consideration, the receipt of which is hereby        acknowledged, the parties hereto, which include all Obligors as of the date hereof, agree as follows:               SECTION 1.  DEFINITIONS.  Unless otherwise defined herein, capitalized terms which are  defined in the Loan Agreement are used herein as therein defined.               SECTION 2.  AMENDMENTS.                       (a) With effect as of the Amendment No. 1 Effective Date, the Existing Loan Agreement        is hereby amended with the stricken text deleted (indicated textually in the same manner as the following        example: stricken text) and with the double-underlined text added (indicated textually in the same manner        as the following example: double-underlined text) as set forth in the pages of the Loan Agreement        attached as Exhibit A hereto.                SECTION 3.  CONDITIONS PRECEDENT. This Amendment shall become effective as of the  date (the “Amendment No. 1 Effective Date”) of the satisfaction or waiver of each of the conditions precedent set  forth in this Section 3.                      (a)   Execution and Delivery. Agent shall have received originals, facsimiles or copies              in .pdf format unless otherwise specified, each properly executed, of counterparts of this              Amendment duly executed by each Obligor, the Lenders, and Agent.                     (b)   Amendment Fee.  The Company shall have paid to Agent for the account of each              Lender an origination fee in an amount equal to 0.20% of the amount of the Aggregate              Commitment of such Lender in excess of such Lender’s Aggregate Commitment immediately              prior to the Amendment No. 1 Effective Date. 

 

                                                                                   2                     (c)   Solvency Certificate.  The Company shall have executed and delivered a              solvency certificate in form and substance satisfactory to Agent and the Lenders.                     (d)   Fees and Expenses.  The Company shall have paid to Agent all fees and expenses              of its counsel and other amounts to the extent reasonably detailed invoices therefor have been              received by the Company no later than 4:00 p.m., New York City time, on September 17, 2019.                     (e)   Legal Opinions.  Agent shall have received a favorable written opinion              (addressed to Agent and the Lenders and dated the Amendment No. 1 Effective Date) of Gibson,              Dunn & Crutcher LLP with respect to the Obligors in form and substance reasonably satisfactory              to Agent.  The Company hereby requests such counsel to deliver such opinions.                     (f)   No Default.  Both prior to and after giving effect to this Amendment, no Default              or Event of Default shall have occurred and be continuing on the Amendment No. 1 Effective              Date.                     (g)   Representations and Warranties.  As of the Amendment No. 1 Effective Date              (both prior to and after giving effect to this Amendment) all representations and warranties              contained in the Loan Agreement shall be true and correct in all material respects (and, with              respect to any representations and warranties that are qualified by materiality or reference to a              “Material Adverse Effect” or contain a similar materiality qualification, in all respects, and, with              respect to any representations and warranties that are made as of a specified date, shall be true              and correct in all material respects as of such date).                     (h)   No Contravention of Intercreditor Agreement.  Agent shall have received a              certification of the Company that the provisions of this Amendment do not and will not breach              any Subordinated Debt agreement, the Term Loan Credit Agreement or any other Term Loan              Document or any other agreements, instruments or documents executed and/or delivered in              connection with any of the foregoing and after giving effect to this Amendment, the Revolver              Commitments will constitute “ABL Facility Obligations” under the Intercreditor Agreement.         For the purpose of determining compliance with the conditions specified in this Section 3, each Lender        that has signed this Amendment shall be deemed to have accepted, and to be satisfied with, each        document or other matter required under this Section 4.                                  SECTION 4.  REPRESENTATIONS AND WARRANTIES.  In order to induce the Lenders  and Agent to enter into this Amendment, each Obligor hereby represents and warrants to the Lenders and Agent  that: (i) each Obligor is duly authorized to execute, deliver and perform this Amendment; (ii) the execution,  delivery and performance of the this Amendment have been duly authorized by all necessary action, and do not  (a) require any consent or approval of any holders of Equity Interests of any Obligor, other than those already  obtained; (b) contravene the Organic Documents of any Obligor; (c) violate or cause a default under any  Applicable Law, Material Contract or Restrictive Agreement, including the Term Loan Documents, except to the  extent such violation or default could not reasonably be expected to result in a Material Adverse Effect; or (d)  result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Obligor; and  (iii) each of this Amendment and the Loan Agreement is a legal, valid and binding obligation of each Obligor  party hereto and thereto, enforceable in accordance with its terms, except as enforceability may be limited by  bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.                SECTION 5.  CONTINUING EFFECT.  Except as expressly amended, waived or modified  hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their  respective terms.  This Amendment shall not constitute an amendment, waiver or modification of any provision of         2         

 

                                                                                   3   any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or  modification of any action on the part of the Company or the other Obligors that would require an amendment,  waiver or consent of Agent or the Lenders except as expressly stated herein, or be construed to indicate the  willingness of Agent or the Lenders to further amend, waive or modify any provision of any Loan Document  amended, waived or modified hereby for any other period, circumstance or event.  Except as expressly modified  by this Amendment, the Loan Agreement and the other Loan Documents are ratified and confirmed and are, and  shall continue to be, in full force and effect in accordance with their respective terms.  Except as expressly set  forth herein, each Lender and Agent reserves all of its rights, remedies, powers and privileges under the Loan  Agreement, the other Loan Documents, applicable law and/or equity.  Any reference to the “Loan Agreement” in  any Loan Document or any related documents shall be deemed to be a reference to the Loan Agreement as  amended by this Amendment and the term “Loan Documents” in the Loan Agreement and the other Loan  Documents shall include this Amendment.                 SECTION 6.  GOVERNING LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN  ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.               SECTION 7.  SUCCESSORS AND ASSIGNS.  This Amendment shall be binding upon and  inure to the benefit of the Company, the other Obligors, Agent, and the Lenders, and each of their respective  successors and assigns, and shall not inure to the benefit of any third parties.  The execution and delivery of this  Amendment by any Lender prior to the Amendment No. 1 Effective Date shall be binding upon its successors and  assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.               SECTION 8.  ENTIRE AGREEMENT.  This Amendment, the Loan Agreement and the other  Loan Documents represent the entire agreement of the Obligors, Agent, and the Lenders, as applicable, with  respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or  warranties by Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein  or in the Loan Agreement or the other Loan Documents.                 SECTION 9.  [Reserved].               SECTION 10. LOAN DOCUMENT.  This Amendment is a Loan Document executed pursuant  to the Loan Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and  applied in accordance with the terms and provisions of the Loan Agreement.               SECTION 11. COUNTERPARTS.  This Amendment may be executed by the parties hereto in  any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one  and the same instrument.  An executed signature page of this Amendment may be delivered by facsimile  transmission or electronic PDF of the relevant signature page hereof.               SECTION 12. HEADINGS.  Section headings used in this Amendment are for convenience of  reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into  consideration in interpreting, this Amendment.               SECTION 13. OBLIGOR ACKNOWLEDGMENTS                       13.1  Each Obligor hereby (i) expressly acknowledges the terms of the Loan        Agreement, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and        security agreements) to which it is a party, (iii) acknowledges, renews and extends its continued liability        under all such Loan Documents and agrees such Loan Documents remain in full force and effect,  (iv)        agrees that each Security Document secures all Obligations of the Obligors in accordance with the terms          3         

 

                                                                             4   thereof and (v) further confirms that each Loan Document to which it is a party is and shall continue to be  in full force and effect and the same are hereby ratified and confirmed in all respects.                 13.2  Each Obligor hereby reaffirms, as of the Amendment No. 1 Effective Date, (i)  the covenants and agreements contained in each Loan Document to which it is a party, including, in each  case, such covenants and agreements as in effect immediately after giving effect to this Agreement and  the transactions contemplated thereby, and (ii) its guarantee of payment of the Obligations pursuant to the  Guarantee and Collateral Agreement and its grant of Liens on the Collateral to secure the Obligations.                          [remainder of page intentionally left blank]    4   

 

         IN WITNESS WHEREOF, each party has signed this Amendment No. 1 to the Third Amended  and Restated Loan and Security Agreement as of the date first set forth above.    COMMERCIAL VEHICLE GROUP, INC.                BANK OF AMERICA, N.A.   CVG NATIONAL SEATING COMPANY LLC              As Agent and a Lender  CVG MONONA LLC                                  CVG MONONA WIRE LLC                             TRIM SYSTEMS, INC.                            By:   /s/ Brian Scawinski       TRIM SYSTEMS OPERATING CORP.                      Name:  Brian Scawinski  CABARRUS PLASTICS, INC.                           Title:    Portfolio Specialist  CVS HOLDINGS, INC.                              CVG SPRAGUE DEVICES LLC  MAYFLOWER VEHICLE SYSTEMS, LLC  CVG MANAGEMENT CORPORATION  CVG LOGISTICS, LLC  CVG ALABAMA, LLC  CVG CVS HOLDINGS LLC  CVG AR LLC        By:  /s/ Patrick Miller             Name:  Patrick Miller      Title:  President                                                                                                                                     [Signature Page to Amendment No. 1]    

 

                                                   JPMORGAN CHASE BANK, N.A., as                                      A Lender                                                                                                                   By:/s/ Brendan Korb ___________________________                                             Name: Brendan Korb                                            Title:  Vice President                                                                                2   

 

                                     EXHIBIT A                              Amendments to Loan Agreement                                                                             See attached.                                                                                                                                                                    NAI-1507796678v9  

 

                                                    CONFORMED COPY THROUGH                                  FIRST AMENDMENT, DATED AS OF SEPTEMBER, 18, 2019                                                                                                                    Exhibit A                      COMMERCIAL VEHICLE GROUP, INC., and                             EACH OTHER BORROWER,                                     as Borrowers      ______________________________________________________________________________     ______________________________________________________________________________                          THIRD AMENDED AND RESTATED                         LOAN AND SECURITY AGREEMENT                                Dated as of April 12, 2017                                     $90,000,000      ______________________________________________________________________________     ______________________________________________________________________________                         CERTAIN FINANCIAL INSTITUTIONS,                                     as Lenders,                                        and                              BANK OF AMERICA, N.A.,                                                                              as Agent                                                                                          NAI-1507796678v9  

 

                            TABLE OF CONTENTS                                                                                                                   Page     SECTION 1. ....................................................................................................... DEFINITIONS; RULES OF        CONSTRUCTION ........................................................................................................................... 2         1.1.  Definitions .......................................................................................................................... 2         1.2.  Accounting Terms ............................................................................................................. 43         1.3.  Uniform Commercial Code............................................................................................... 43         1.4.  Certain Matters of Construction ........................................................................................ 43         1.5.  Certifications ..................................................................................................................... 44         1.6.  Times of Day .................................................................................................................... 44         1.7.  Divisions ........................................................................................................................... 44   SECTION 2. ...................................................................................................................................... CREDIT        FACILITIES .................................................................................................................................. 45         2.1.  Revolver Commitments .................................................................................................... 45               2.1.1. Revolver Loans .................................................................................................... 45               2.1.2. Revolver Notes and Denominations .................................................................... 45               2.1.3. Use of Proceeds ................................................................................................... 45               2.1.4. Voluntary Reduction or Termination of Revolver Commitments ....................... 45               2.1.5. Overadvances ....................................................................................................... 46               2.1.6. Protective Advances ............................................................................................ 46               2.1.7. Increase in Revolver Commitments ..................................................................... 46         2.2.  [RESERVED] ................................................................................................................... 47         2.3.  Letter of Credit Facilities .................................................................................................. 47               2.3.1. Issuance of Letters of Credit ................................................................................ 47               2.3.2. Reimbursement; Participations ............................................................................ 48               2.3.3. Cash Collateral ..................................................................................................... 50               2.3.4. Resignation of Issuing Bank ................................................................................ 50     NAI-1507796678v9                     -i-      

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page     SECTION 3. ............................................................................................................ INTEREST, FEES AND        CHARGES ..................................................................................................................................... 50         3.1.  Interest .............................................................................................................................. 50               3.1.1. Rates and Payment of Interest ............................................................................. 50               3.1.2. Application of LIBOR to Outstanding Loans ...................................................... 51               3.1.3. Interest Periods .................................................................................................... 51               3.1.4. Interest Rate Not Ascertainable ........................................................................... 51         3.2.  Fees ................................................................................................................................... 52               3.2.1. Unused Line Fee .................................................................................................. 52               3.2.2. LC Facility Fees ................................................................................................... 53               3.2.3. Other Fees ............................................................................................................ 53         3.3.  Computation of Interest, Fees, Yield Protection ............................................................... 53         3.4.  Reimbursement Obligations ............................................................................................. 53         3.5.  Illegality ............................................................................................................................ 54         3.6.  Inability to Determine Rates ............................................................................................. 54         3.7.  Increased Costs; Capital Adequacy .................................................................................. 55               3.7.1. Increased Costs Generally ................................................................................... 55               3.7.2. Capital Requirements ........................................................................................... 55               3.7.3. Compensation ...................................................................................................... 56               3.7.4. LIBOR Loan Reserves ......................................................................................... 56         3.8.  Mitigation.......................................................................................................................... 56         3.9.  Funding Losses ................................................................................................................. 56         3.10. Maximum Interest ............................................................................................................. 56   SECTION 4. ......................................................................................................................................... LOAN        ADMINISTRATION ..................................................................................................................... 57     NAI-1507796678v9                    -ii-      

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page           4.1.  Manner of Borrowing and Funding Revolver Loans ........................................................ 57               4.1.1. Notice of Borrowing ............................................................................................ 57               4.1.2. Fundings by Lenders ............................................................................................ 57               4.1.3. Swingline Loans; Settlement ............................................................................... 58               4.1.4. Notices ................................................................................................................. 58         4.2.  Defaulting Lender ............................................................................................................. 59               4.2.1. Reallocation of Pro Rata Share; Amendments ..................................................... 59               4.2.2. Payments; Fees .................................................................................................... 59               4.2.3. Status; Cure .......................................................................................................... 59         4.3.  Number and Amount of LIBOR Loans; Determination of Rate ....................................... 59         4.4.  Borrower Agent ................................................................................................................ 60         4.5.  One Obligation .................................................................................................................. 60         4.6.  Effect of Termination ........................................................................................................ 60   SECTION        5. ................................................................................................................................... PAYMENTS        ....................................................................................................................................................... 61         5.1.  General Payment Provisions ............................................................................................. 61         5.2.  Repayment of Revolver Loans .......................................................................................... 61         5.3.  Repayment ........................................................................................................................ 61               5.3.1. Mandatory Prepayments ...................................................................................... 61         5.4.  Payment of Other Obligations .......................................................................................... 61         5.5.  Marshaling; Payments Set Aside ...................................................................................... 61         5.6.  Allocation of Payments ..................................................................................................... 62               5.6.1. Allocations Generally .......................................................................................... 62               5.6.2. Post-Default Allocation ....................................................................................... 62     NAI-1507796678v9                    -iii-     

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page                 5.6.3. Application of Amounts ....................................................................................... 63               5.6.4. Erroneous Application ......................................................................................... 63         5.7.  Application of Payments ................................................................................................... 63         5.8.  Loan Account; Account Stated ......................................................................................... 63               5.8.1. Loan Account ....................................................................................................... 63               5.8.2. Entries Binding .................................................................................................... 63         5.9.  Taxes ................................................................................................................................. 64               5.9.1. Payments Free of Taxes; Obligation to Withhold; Tax Payment ........................ 64               5.9.2. Payment of Other Taxes ...................................................................................... 64               5.9.3. Tax Indemnification ............................................................................................. 64               5.9.4. Evidence of Payments .......................................................................................... 65               5.9.5. Treatment of Certain Refunds .............................................................................. 65               5.9.6. Survival ................................................................................................................ 65         5.10. Lender Tax Information .................................................................................................... 66               5.10.1. Status of Lenders ................................................................................................. 66               5.10.2. Documentation ..................................................................................................... 66               5.10.3. Redelivery of Documentation .............................................................................. 67         5.11. Nature and Extent of Each Borrower’s Liability .............................................................. 67               5.11.1. Joint and Several Liability ................................................................................... 67               5.11.2. Waivers ................................................................................................................ 68               5.11.3. Extent of Liability; Contribution ......................................................................... 69               5.11.4. Joint Enterprise .................................................................................................... 69               5.11.5. Subordination ....................................................................................................... 70   SECTION 6. ............................................................................................................................ CONDITIONS        PRECEDENT ................................................................................................................................ 70    NAI-1507796678v9                    -iv-      

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page           6.1.  Conditions Precedent to Effective Date ............................................................................ 70         6.2.  Conditions Precedent to All Credit Extensions................................................................. 71   SECTION        7. .............................................................................................................................. COLLATERAL        ....................................................................................................................................................... 72         7.1.  Grant of Security Interest .................................................................................................. 72         7.2.  [RESERVED] ................................................................................................................... 74         7.3.  Lien on Deposit Accounts; Cash Collateral ...................................................................... 74               7.3.1. Deposit Accounts ................................................................................................. 74               7.3.2. Cash Collateral ..................................................................................................... 74         7.4.  Real Estate Collateral ........................................................................................................ 74               7.4.1. Negative Pledge on Real Estate ........................................................................... 74         7.5.  Other Collateral ................................................................................................................. 74               7.5.1. Commercial Tort Claims ..................................................................................... 74               7.5.2. Certain After-Acquired Collateral ....................................................................... 75         7.6.  No Assumption of Liability .............................................................................................. 75         7.7.  Further Assurances ........................................................................................................... 75         7.8.  Foreign Subsidiary Stock .................................................................................................. 76   SECTION 8. .......................................................................................................................... COLLATERAL        ADMINISTRATION ..................................................................................................................... 76         8.1.  Borrowing Base Certificates ............................................................................................. 76         8.2.  Administration of Accounts .............................................................................................. 76               8.2.1. Records and Schedules of Accounts .................................................................... 76               8.2.2. Taxes .................................................................................................................... 76               8.2.3. Account Verification ............................................................................................ 77               8.2.4. Maintenance of Dominion Account ..................................................................... 77    NAI-1507796678v9                    -v-       

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page                 8.2.5. Proceeds of Collateral .......................................................................................... 77         8.3.  Administration of Inventory ............................................................................................. 77               8.3.1. Records and Reports of Inventory ....................................................................... 77               8.3.2. Returns of Inventory ............................................................................................ 78               8.3.3. Acquisition, Sale and Maintenance...................................................................... 78         8.4.  Administration of Equipment ........................................................................................... 78               8.4.1. Records and Schedules of Equipment.................................................................. 78               8.4.2. Dispositions of Equipment ................................................................................... 78               8.4.3. Condition of Equipment ....................................................................................... 78         8.5.  Administration of Deposit Accounts ................................................................................ 78         8.6.  General Provisions ............................................................................................................ 78               8.6.1. Location of Inventory .......................................................................................... 78               8.6.2. Insurance of Collateral; Condemnation Proceeds ................................................ 79               8.6.3. Protection of Collateral ........................................................................................ 79               8.6.4. Defense of Title to Collateral ............................................................................... 79         8.7.  Power of Attorney ............................................................................................................. 79   SECTION 9. ...................................................................................................... REPRESENTATIONS AND        WARRANTIES ............................................................................................................................. 80         9.1.  General Representations and Warranties .......................................................................... 80               9.1.1. Organization and Qualification ............................................................................ 80               9.1.2. Power and Authority ............................................................................................ 80               9.1.3. Enforceability....................................................................................................... 81               9.1.4. Capital Structure .................................................................................................. 81               9.1.5. Title to Properties; Priority of Liens .................................................................... 81               9.1.6. Accounts .............................................................................................................. 81    NAI-1507796678v9                    -vi-      

 

                           TABLE OF CONTENTS                                   (continued)                                                                         Page                             9.1.7. Financial Statements ............................................................................................ 82              9.1.8. Surety Obligations ............................................................................................... 82              9.1.9. Taxes .................................................................................................................... 82              9.1.10. Reserved .............................................................................................................. 83              9.1.11. Intellectual Property ............................................................................................. 83              9.1.12. Governmental Approvals ..................................................................................... 83              9.1.13. Compliance with Laws ........................................................................................ 83              9.1.14. Compliance with Environmental Laws ................................................................ 83              9.1.15. Burdensome Contracts ......................................................................................... 84              9.1.16. Litigation .............................................................................................................. 84              9.1.17. No Defaults .......................................................................................................... 84              9.1.18. ERISA .................................................................................................................. 84              9.1.19. Trade Relations .................................................................................................... 85              9.1.20. Labor Relations .................................................................................................... 85              9.1.21. Reserved .............................................................................................................. 85              9.1.22. Not a Regulated Entity ......................................................................................... 85              9.1.23. Margin Stock ....................................................................................................... 85              9.1.24. OFAC ................................................................................................................... 85              9.1.25. Anti-Corruption Laws .......................................................................................... 85              9.1.26. Delivery of Term Loan Documents ..................................................................... 86              9.1.27. Insurance .............................................................................................................. 86              9.1.28. EEA Financial Institutions ................................................................................... 86              9.1.29. Use of Proceeds ................................................................................................... 86        9.2.  Complete Disclosure ......................................................................................................... 86    NAI-1507796678v9                    -vii-                  

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page                 9.2.1. Beneficial Ownership Disclosure ........................................................................ 86   SECTION 10. ...................................................................................... COVENANTS AND CONTINUING        AGREEMENTS ............................................................................................................................. 87         10.1. Affirmative Covenants ...................................................................................................... 87               10.1.1. Inspections; Appraisals ........................................................................................ 87               10.1.2. Financial and Other Information .......................................................................... 87               10.1.3. Notices ................................................................................................................. 90               10.1.4. Landlord and Storage Agreements....................................................................... 90               10.1.5. Compliance with Laws ........................................................................................ 90               10.1.6. Taxes .................................................................................................................... 90               10.1.7. Insurance .............................................................................................................. 91               10.1.8. Licenses ............................................................................................................... 91               10.1.9. Future Subsidiaries .............................................................................................. 91               10.1.10. Anti-Corruption Laws .......................................................................................... 91               10.1.11. Maintenance of Properties ................................................................................... 91               10.1.12. Further Assurances .............................................................................................. 92               10.1.13. Use of Proceeds ................................................................................................... 92               10.1.14. Intellectual Property ............................................................................................. 92               10.1.15. Post Closing Covenants ....................................................................................... 92         10.2. Negative Covenants .......................................................................................................... 93               10.2.1. Permitted Debt ..................................................................................................... 93               10.2.2. Permitted Liens .................................................................................................... 95               10.2.3. [RESERVED] ...................................................................................................... 97               10.2.4. Distributions; Upstream Payments ...................................................................... 97               10.2.5. [RESERVED] ...................................................................................................... 97    NAI-1507796678v9                    -viii-    

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page                 10.2.6. Restricted Investments ......................................................................................... 97               10.2.7. Disposition of Assets ........................................................................................... 97               10.2.8. [RESERVED] ...................................................................................................... 97               10.2.9. Restrictions on Payment of Certain Debt ............................................................. 97               10.2.10. Fundamental Changes .......................................................................................... 98               10.2.11. Subsidiaries .......................................................................................................... 98               10.2.12. Organic Documents ............................................................................................. 98               10.2.13. Tax Consolidation ................................................................................................ 98               10.2.14. Accounting Changes ............................................................................................ 98               10.2.15. Restrictive Agreements ........................................................................................ 98               10.2.16. Hedging Agreements ........................................................................................... 99               10.2.17. Conduct of Business ............................................................................................ 99               10.2.18. Affiliate Transactions .......................................................................................... 99               10.2.19. Plans ................................................................................................................... 100               10.2.20. [Reserved.] ......................................................................................................... 100               10.2.21. Amendments to Subordinated Debt or Term Loan Credit Agreement .............. 100         10.3. Financial Covenants ........................................................................................................ 100               10.3.1. Fixed Charge Coverage Ratio ............................................................................ 100   SECTION 11. ............................................................................. EVENTS OF DEFAULT; REMEDIES ON        DEFAULT ................................................................................................................................... 100         11.1. Events of Default ............................................................................................................ 100         11.2. Remedies upon Default ................................................................................................... 102         11.3. License ............................................................................................................................ 103         11.4. Setoff ............................................................................................................................... 103         11.5. Remedies Cumulative; No Waiver ................................................................................. 103    NAI-1507796678v9                    -ix-      

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page                 11.5.1. Cumulative Rights ............................................................................................. 103               11.5.2. Waivers .............................................................................................................. 104   SECTION        12. ......................................................................................................................................... AGENT        ..................................................................................................................................................... 104         12.1. Appointment, Authority and Duties of Agent ................................................................. 104               12.1.1. Appointment and Authority ............................................................................... 104               12.1.2. Duties ................................................................................................................. 104               12.1.3. Agent Professionals ........................................................................................... 105               12.1.4. Instructions of Required Lenders ....................................................................... 105         12.2. Agreements Regarding Collateral, Field Examination Reports and Borrower              Materials ......................................................................................................................... 105               12.2.1. Lien Releases; Care of Collateral ...................................................................... 105               12.2.2. Possession of Collateral ..................................................................................... 106               12.2.3. Reports ............................................................................................................... 106         12.3. Reliance By Agent .......................................................................................................... 106         12.4. Action Upon Default ....................................................................................................... 106         12.5. Ratable Sharing ............................................................................................................... 107         12.6. Indemnification of Agent Indemnitees ........................................................................... 107         12.7. Limitation on Responsibilities of Agent ......................................................................... 107         12.8. Successor Agent and Co-Agents ..................................................................................... 108               12.8.1. Resignation; Successor Agent ........................................................................... 108               12.8.2. Separate Collateral Agent .................................................................................. 108         12.9. Due Diligence and Non-Reliance ................................................................................... 109         12.10. Replacement of Certain Lenders ..................................................................................... 109         12.11. Remittance of Payments and Collections ....................................................................... 109    NAI-1507796678v9                    -x-       

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page                 12.11.1. Remittances Generally ....................................................................................... 109               12.11.2. Failure to Pay ..................................................................................................... 109               12.11.3. Recovery of Payments ....................................................................................... 110         12.12. Agent in its Individual Capacity ..................................................................................... 110         12.13. Agent Titles..................................................................................................................... 110         12.14. Secured Bank Product Providers .................................................................................... 110         12.15. No Third Party Beneficiaries .......................................................................................... 110         12.16. Agent May File Proofs of Claim ..................................................................................... 110   SECTION        13. ............................................................................................................................... [RESERVED]        ..................................................................................................................................................... 111         13.1. [RESERVED] ................................................................................................................. 111   SECTION 14. .......................................................... BENEFIT OF AGREEMENT; ASSIGNMENTS AND        PARTICIPATIONS ..................................................................................................................... 111         14.1. Successors and Assigns .................................................................................................. 111         14.2. Participations .................................................................................................................. 111               14.2.1. Permitted Participants; Effect ............................................................................ 111               14.2.2. Voting Rights ..................................................................................................... 112               14.2.3. Participant Register ............................................................................................ 112               14.2.4. Benefit of Set-Off .............................................................................................. 112         14.3. Assignments .................................................................................................................... 112               14.3.1. Permitted Assignments ...................................................................................... 112               14.3.2. Effect; Effective Date ........................................................................................ 113               14.3.3. Certain Assignees .............................................................................................. 113               14.3.4. Register .............................................................................................................. 113     NAI-1507796678v9                    -xi-      

 

                            TABLE OF CONTENTS                                    (continued)                                                                          Page     SECTION        15. ..................................................................................................................... MISCELLANEOUS        ..................................................................................................................................................... 113         15.1. Consents, Amendments and Waivers ............................................................................. 113               15.1.1. Amendment ........................................................................................................ 113               15.1.2. Limitations ......................................................................................................... 114               15.1.3. Payment for Consents ........................................................................................ 114               15.1.4. Technical Amendments ..................................................................................... 114         15.2. Indemnity ........................................................................................................................ 114         15.3. Waiver of Consequential Damages, etc .......................................................................... 115         15.4. Notices and Communications ......................................................................................... 115               15.4.1. Notice Address ................................................................................................... 115               15.4.2. Electronic Communications; Voice Mail ........................................................... 115               15.4.3. Platform ............................................................................................................. 115               15.4.4. Public Information ............................................................................................. 116               15.4.5. Non-Conforming Communications ................................................................... 116         15.5. Performance of Borrowers’ Obligations ......................................................................... 116         15.6. Credit Inquiries ............................................................................................................... 117         15.7. Severability ..................................................................................................................... 117         15.8. Cumulative Effect; Conflict of Terms ............................................................................ 117         15.9. Counterparts; Execution ................................................................................................. 117         15.10. Entire Agreement ............................................................................................................ 117         15.11. Relationship with Lenders .............................................................................................. 118         15.12. No Advisory or Fiduciary Responsibility ....................................................................... 118         15.13. Process Agent ................................................................................................................. 118     NAI-1507796678v9                    -xii-     

 

                           TABLE OF CONTENTS                                   (continued)                                                                         Page                       15.14. Confidentiality ................................................................................................................ 118        15.15. [Reserved] ....................................................................................................................... 119        15.16. GOVERNING LAW ....................................................................................................... 119        15.17. Consent to Forum; Bail-In of EEA Financial Institutions .............................................. 119              15.17.1. Forum ................................................................................................................. 119              15.17.2. Other Jurisdictions ............................................................................................. 120              15.17.3. Acknowledgement and Consent to Bail-In of EEA Financial Institutions ........ 120        15.18. Waivers by Borrowers .................................................................................................... 120        15.19. Patriot Act Notice ........................................................................................................... 121        15.20. Effect of Amendment and Restatement .......................................................................... 121        15.21. Intercreditor Agreement .................................................................................................. 121        15.22. NO ORAL AGREEMENT ............................................................................................. 122    NAI-1507796678v9                    -xiii-                 

 

                          LIST OF EXHIBITS AND SCHEDULES   Exhibit A-1 Tranche A Revolver Note  Exhibit A-2 Tranche B Revolver Note  Exhibit C   Assignment and Acceptance  Exhibit D   Assignment Notice  Exhibit E   Borrowing Base Certificate  Exhibit F   Compliance Certificate  Exhibit G   Notice of Borrowing  Exhibit H   Notice of Conversion/Continuation  Exhibit I   Form of Joinder  Exhibit J   Perfection Certificate    Schedule 1.1   Revolver Commitments of Lenders  Schedule 7.1   Commercial Tort Claims  Schedule 8.5   Deposit Accounts  Schedule 8.6.1 Locations of Collateral  Schedule 9.1.4 Names and Capital Structure  Schedule 9.1.11 Patents, Trademarks, Copyrights and Licenses  Schedule 9.1.14 Environmental Matters  Schedule 9.1.15 Burdensome Contracts  Schedule 9.1.16 Litigation  Schedule 9.1.18 Pension Plans  Schedule 9.1.20 Labor Contracts  Schedule 10.1.15 Post Closing Covenants  Schedule 10.2.1 Existing Debt  Schedule 10.2.2 Existing Liens  Schedule 10.2.6(I) Permitted Investments in Subsidiaries  Schedule 10.2.6(II Permitted Investments as of the Effective Date  Schedule 10.2.7 Permitted Asset Dispositions  Schedule 10.2.15 Restrictive Agreements  Schedule 10.2.18 Existing Affiliate Transactions  Schedule 11.1  Events not Constituting an Event of Default            NAI-1507796678v9  

 

          Third AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT         THIS THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is  dated as of April 12, 2017 (this “Agreement”), among COMMERCIAL VEHICLE GROUP, INC., a  Delaware corporation (the “Company”), each other Borrower (as herein defined) from time to time party  hereto (together, with the Company, collectively, “Borrowers”), the financial institutions party to this  Agreement from time to time as lenders (collectively, “Lenders”), and BANK OF AMERICA, N.A., a  national banking association, as agent for Lenders (“Agent”)                                   R E C I T A L S:         Borrowers have requested that Lenders provide a credit facility to Borrowers to finance their  mutual and collective business enterprise.  Lenders are willing to provide the credit facility on the terms  and conditions set forth in this Agreement.         WHEREAS, Borrowers, Agent and certain Lenders are party to that certain Second Amended and  Restated Loan and Security Agreement, dated as of November 15, 2013 (as amended, restated, amended  and restated, supplemented or otherwise modified prior to the date hereof, the “Second A&R Loan  Agreement”), which amended and restated that certain Amended and Restated Loan and Security  Agreement, dated as of April 26, 2011 (as amended, restated, amended and restated, supplemented or  otherwise modified prior to Second Restatement Effective Date, the “A&R Loan Agreement”), which  amended and restated that certain Loan and Security Agreement, dated as of the Original Closing Date (as  amended, restated, amended and restated, supplemented or otherwise modified prior to the Restatement  Effective Date, the “Original Loan Agreement”);         WHEREAS, Borrowers, Agent and Lenders desire to amend and restate the Second A&R Loan  Agreement, subject to the terms and conditions set forth herein;         WHEREAS, on each of the Restatement Effective Date and the Second Restatement Effective  Date, each Borrower and each other Obligor reaffirmed (i) its Obligations (as defined in the Original  Loan Agreement) arising under the Original Loan Agreement and the other Loan Documents (as defined  in the Original Loan Agreement) and (ii) its prior grant of security interests to secure any and all  Obligations (as defined in the Original Loan Agreement), in each case, as continued under the A&R Loan  Agreement and the other Loan Documents;         WHEREAS, on the date hereof, each Borrower and each other Obligor desires to reaffirm (i) its  Obligations (as defined in the Original Loan Agreement, A&R Loan Agreement and the Second A&R  Loan Agreement) arising under the Original Loan Agreement, A&R Loan Agreement and the Second  A&R Loan Agreement and the other Loan Documents (as defined in the Original Loan Agreement, A&R  Loan Agreement and the Second A&R Loan Agreement) and (ii) its prior grant of security interests to  secure any and all Obligations (as defined in the Original Loan Agreement, A&R Loan Agreement and  Second A&R Loan Agreement), in each case, as continued hereunder and under the other Loan  Documents.         NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as  follows:   SECTION 1.  DEFINITIONS; RULES OF CONSTRUCTION         1.1.  Definitions.  As  used  herein,  the  following  terms  have  the  meanings  set  forth  below:         ABL Facility First Lien Collateral: has the meaning provided in the Intercreditor Agreement.   NAI-1507796678v9  

 

        Accelerated Appraisal and Field Exam Period:  the period commencing with an Appraisal and  Field Exam Trigger Date and ending on the date upon which Availability is equal to or greater than  twenty percent (20%) of the Revolver Commitment for sixty (60) consecutive days.         Accelerated Financial Reporting Period: the period commencing with a Financial Reporting  Trigger Date and ending on the date upon which no Revolver Loans have been outstanding for sixty (60)  consecutive days.         Account: as defined in the UCC, including all rights to payment for goods sold or leased, or for  services rendered.         Account Debtor: a Person obligated under an Account, Chattel Paper or General Intangible.         Acquisition: (i) any acquisition (whether by purchase, lease, merger or otherwise) of all or  substantially all of any division, product line and/or business operated by any Person who is not a  Subsidiary and (ii) any acquisition of a majority of the outstanding Equity Interests of any Person.         Affiliate: with respect to any 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.   “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the  management or policies of a Person, whether through the ability to exercise voting power, by contract or  otherwise.  “Controlling” and “Controlled” have correlative meanings.         Agent Indemnitees: Agent and its officers, directors, employees, Affiliates, agents and attorneys.         Agent Professionals: attorneys, accountants, appraisers, auditors, business valuation experts,  environmental engineers or consultants, turnaround consultants, and other professionals and experts  retained by Agent.         Agreement: as defined in the preamble.         Aggregate Borrowing Base: on any date of determination, an amount equal to the sum of the  Tranche A Borrowing Base plus the Tranche B Borrowing Base minus the Availability Reserve         Allocable Amount: as defined in Section 5.11.3.         Amendment No. 1: Amendment No. 1, dated as of September 18, 2019, among Borrowers,  Lenders, Agent and the other parties thereto.          Amendment No. 1 Effective Date: September 18, 2019.         A&R Loan Agreement: the Amended and Restated Loan and Security Agreement, dated as of  April 26, 2011, by and among the Company, each other Borrower party thereto, the financial institutions  party thereto as lenders and Bank of America, N.A., as agent, as amended, restated, amended and restated,  modified or supplemented prior to the Second Restatement Effective Date.         Anti-Terrorism Law: any law relating to terrorism or money laundering, including the Patriot Act.         Applicable Law: all laws, rules, regulations and governmental guidelines having the force of law  and applicable to the Person, conduct, transaction, agreement or matter in question, including all  applicable statutory law, common law and equitable principles, and all provisions of constitutions,  treaties, statutes, rules, regulations, orders, ordinance, injunction, writ award or decrees of any  Governmental Authorities, in each case having the force of law.                                         2  NAI-1507796678v9  

 

        Applicable Margin: with respect to any Type of Loan, the margin set forth below, as determined  by the average daily Availability for the last Fiscal Quarter:                                                                                                             Tranche A                   Tranche B                      Average Daily       Base        Tranche A       Base        Tranche B  Level       Availability     Rate Loans     LIBOR        Rate Loans     LIBOR                                               Loans                       Loans   III       > $30,000,000       0.50%         1.50%         1.50%         2.50%    II       > $15,000,000           0.75%     1.75%         1.75%         2.75%             < $30,000,000    I        < $15,000,000       1.00%         2.00%         2.00%         3.00%                              Until June 30, 2017, margins shall be determined as if Level III were applicable.    Thereafter, margins shall be subject to increase or decrease by Agent on the first day of the calendar   month following each Fiscal Quarter end.  If Agent is unable to calculate average daily Availability for a   Fiscal Quarter due to Borrowers’ failure to deliver any Borrowing Base Certificate when required   hereunder, then, at the option of Required Lenders, margins shall be determined as if Level I were   applicable until the first day of the calendar month following its receipt.          Approved Fund: any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a  Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.         Appraisal and Field Exam Trigger Date: the date upon which Availability is less than twenty  percent (20%) of the  Revolver Commitments for any day on or after the Effective Date.         Asset Disposition: a sale, lease, license, consignment, transfer or other disposition of Property of  the Company or any Subsidiary, including a disposition of Property in connection with a sale-leaseback  transaction or synthetic lease.         Asset Review and Approval Conditions: with respect to any Acquisition or merger in respect of  which the Accounts and/or Inventory acquired therein or thereby are requested (whether such request  occurs prior to the consummation of the Acquisition, or after the date thereof)  to be included in the  Aggregate Borrowing Base, Agent shall have completed its review of such assets, including, without  limitation, field examinations, audits, appraisals and other due diligence as Agent shall in its Permitted  Discretion require; it being acknowledged and agreed that, (1) such additional assets, if any, to be  included in the Aggregate Borrowing Base may be subject to different advance rates or eligibility criteria  or may require the imposition of additional reserves with respect thereto as Agent shall in its Permitted  Discretion require in accordance with the definitions of Eligible Accounts, Eligible Inventory and  Reserves, and (2) prior to the inclusion of any additional assets in the Aggregate Borrowing Base, all  actions shall have been taken to ensure that Agent has a perfected and continuing first priority security  interest in and Lien on such assets subject to the Permitted Liens.         Assignment and Acceptance: an assignment agreement between a Lender and Eligible Assignee,  in substantially the form of Exhibit C.                                        3  NAI-1507796678v9  

 

        Availability: (i) the Aggregate Borrowing Base minus (ii) the principal balance of all Revolver  Loans minus (iii) the Availability Block.         Availability Block: an amount equal to the aggregate amount of Debt and Foreign Bank Product  Debt made available to any Foreign Subsidiary (whether or not such Debt is outstanding) by Bank of  America, N.A., JPMorgan Chase Bank, N.A. or any of their Affiliates.         Availability Reserve: the sum (without duplication) of (a) the Inventory Reserve; (b) the Rent and  Charges Reserve; (c) the LC Reserve; (d) the Bank Product Reserve; (e) the aggregate amount of  liabilities secured by Liens upon the ABL Facility First Lien Collateral that are senior to Agent’s Liens  (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (f) in the  Agent’s discretion, up to the maximum amount of the Permitted China Facility Debt and (g) such  additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion  may elect to impose from time to time.         Bail-In Action: 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: 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.         Bank of America: Bank of America, N.A., a national banking association, and its successors and  assigns.         Bank of America Indemnitees: Bank of America and its Related Parties.         Bank Product: any of the following products, services or facilities extended to any Obligor or any  controlled Affiliate of an Obligor by a Lender or any of its Affiliates: (a) Cash Management Services; (b)  products under Hedging Agreements; (c) commercial credit card and merchant card services, cash  management services and (d) other banking products or services as may be requested by any Obligor,  other than Letters of Credit; provided, however, that for any of the foregoing to be included as an  “Obligation” for purposes of a distribution under Section 5.6.2, the applicable Secured Party and Obligor  must have previously provided written notice to Agent of (i) the existence of such Bank Product, (ii) the  maximum dollar amount of obligations arising thereunder to be included as a Bank Product Reserve  (“Bank Product Amount”), and (iii) the methodology to be used by such parties in determining the  Secured Bank Product Obligations owing from time to time.  The Bank Product Amount may be changed  from time to time upon written notice to Agent by the Secured Party and Obligor.  No Bank Product  Amount may be established or increased at any time that a Default or Event of Default exists pursuant to  Section 11.1(a) or (j), or if a reserve in such amount would cause an Overadvance.          Bank Product Amount: as defined in the definition of Bank Product.         Bank Product Reserve: the aggregate amount of reserves established by Agent from time to time  in its discretion in respect of Secured Bank Product Obligations.         Bankruptcy Code: Title 11 of the United States Code, as amended from time to time or any  applicable bankruptcy, insolvency or other similar law now or hereafter in effect.         Base Rate: for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day;  (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBOR for a 30 day interest period as of such  day, plus 1.0%; provided further, that, if the Base Rate at such time shall be less than zero, such rate shall  be deemed to be zero for purposes of this Agreement.                                        4  NAI-1507796678v9  

 

        Base Rate Loan: any Loan that bears interest based on the Base Rate.         Beneficial Owner: with respect to any U.S. federal withholding Tax, the beneficial owner, for  U.S. federal income tax purposes, to whom such Tax relates.         Beneficial Ownership Certification: a certification regarding beneficial ownership as required by  the Beneficial Ownership Regulation.         Beneficial Ownership Regulation: 31 C.F.R. § 1010.230.         Board of Directors: the Board of Directors of the Company or any committee thereof duly  authorized to act on behalf of such Board of Directors.          Board of Governors: the Board of Governors of the Federal Reserve System.         Borrowed Money: with respect to any Obligor, without duplication, (a) all obligations of such  Obligor for borrowed money; (b) all obligations of such Obligor evidenced by notes, bonds, debentures,  credit documents or similar instruments, including obligations so incurred in connection with the  acquisition of Property, assets or businesses; (c) all Capital Leases; (d) all reimbursement obligations with  respect to letters of credit; and (e) Purchase Money Debt.         Borrower: each of the Company and any other Subsidiary acceptable to Agent that is a party to  this Agreement as a Borrower as of the Effective Date or becomes party to this Agreement as a Borrower  by executing a Borrower Joinder Agreement.         Borrower Agent: as defined in Section 4.4.         Borrower Joinder Agreement: an agreement substantially in the form of Exhibit I or other  agreement in form and substance reasonably satisfactory to Agent, the material terms of which shall  provide that a Subsidiary of the Company shall become a party to and become bound by the terms of this  Agreement and/or the other Loan Documents in the same capacity and to the same extent as a Borrower  hereunder, in each case, to the extent each relevant Loan Document is applicable to such Borrower.         Borrower Materials: Borrowing Base Certificates, Compliance Certificates and other information,  reports, financial statements and other materials delivered by Borrowers hereunder.         Borrowing: a group of Loans of one Type that are made on the same day or are converted into  Loans of one Type on the same day.         Borrowing Base Certificate: a certificate, substantially in the form of Exhibit E and otherwise in  form and substance reasonably satisfactory to Agent, by which Borrowers certify calculation of the  Tranche A Borrowing Base, Tranche B Borrowing Base and Aggregate Borrowing Base.         Business Day: (i) with respect to Base Rate Loans, any day other than a Saturday, Sunday or  other day on which commercial banks are authorized to close under the laws of, or are in fact closed in,  New York, New York, and (ii) with respect to a LIBOR Loan, any such day on which dealings in Dollar  deposits are conducted between banks in the London interbank Eurodollar market.         Capital Expenditures: all liabilities incurred, expenditures made or payments due (whether or not  made) by a Borrower or Subsidiary for the acquisition of any fixed assets, or any improvements,  replacements, substitutions or additions thereto with a useful life of more than one year, including the  principal portion of Capital Leases, provided, that “Capital Expenditures” shall not include:                                         5  NAI-1507796678v9  

 

              (a)   any such expenditures which constitute an Acquisition permitted by Section        10.2.6;               (b)   expenditures made in connection with the replacement, substitution, restoration        or repair of assets to the extent financed with (i) insurance proceeds paid on account of the loss of        or damage to the assets being replaced, substituted, restored or repaired, or (ii) awards of        compensation arising from the taking by eminent domain or condemnation of the assets being        replaced;               (c)   the purchase of plant, property or equipment to the extent financed with the        proceeds of Asset Dispositions (other than dispositions of inventory in the ordinary course of        business); and                (d)  any Capital Expenditures to the extent financed with the proceeds of (i) any sale        or issuance of Equity Interests by the Company, or (ii) any incurrence of Indebtedness        permissibly incurred hereunder.         Capital Lease: any lease that is required to be capitalized for financial reporting purposes in  accordance with GAAP.         Cash Collateral: cash, and any interest or other income earned thereon, that is delivered to Agent  to Cash Collateralize any Obligations.         Cash Collateral Account: a demand deposit, money market or other account established by Agent  at such financial institution as Agent may select in its Permitted Discretion, which account shall be  subject to Agent’s Liens for the benefit of Secured Parties.         Cash Collateralize: the delivery of cash to Agent, as security for the payment of Obligations, in an  amount equal to (a) with respect to LC Obligations, 103% of the aggregate of such LC Obligations, and  (b) with respect to any inchoate, contingent or other Obligations (including Obligations arising under  Bank Products), Agent’s good faith estimate of the amount due or to become due, including all fees and  other amounts relating to such Obligations.  Such deposits shall not bear interest other than any interest  earned on the investment of such deposits, which investments shall be made only in Cash Equivalents and  at the direction of Borrowers and at Borrowers’ risk and expense.  “Cash Collateralization” has a  correlative meaning.         Cash Dominion Trigger Date: the date upon which Availability is less than the greater of (i)  $6,250,000 and (ii) twelve and one-half percent (12.5%) of the Revolver Commitments for any day on or  after the Effective Date.         Cash Dominion Trigger Period: the period from and including the Cash Dominion Trigger Date  until the Business Day after Availability has been greater than or equal to the greater of  (i) $6,250,000  and (ii) twelve and one-half percent (12.5%) of the Revolver Commitments for sixty (60) consecutive  days; provided, that if a Cash Dominion Trigger Date shall have occurred more than two times in any  twelve (12) month period, such Cash Dominion Trigger Period shall be the period from such third Cash  Dominion Trigger Date until the first Business Day that (i) Availability has been greater than the greater  of (A) $6,250,000 and (B) twelve and one-half percent (12.5%) of the Revolver Commitments for sixty  (60) consecutive days and (ii) such Business Day is at least three hundred sixty-five (365) days after the  last day of the previous Cash Dominion Trigger Period.         Cash Equivalents: (i) marketable obligations issued or unconditionally guaranteed by, and backed  by the full faith and credit of, the United States government, maturing within 12 months of the date of  acquisition; (ii) certificates of deposit, time deposits and bankers’ acceptances maturing within 12 months  of the date of acquisition, and overnight bank deposits, in each case which are issued by a commercial                                        6  NAI-1507796678v9  

 

  bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by  S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a Lender) not subject  to offset rights; (iii) repurchase obligations with a term of not more than 30 days for underlying  investments of the types described in clauses (i) and (ii) entered into with any bank meeting the  qualifications specified in clause (ii); (iv) commercial paper rated A-1 (or better) by S&P or P-1 (or  better) by Moody’s, and maturing within nine months of the date of acquisition; (v) shares of any money  market fund that has substantially all of its assets invested continuously in the types of investments  referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either  Moody’s or S&P; and (vi) in the case of any Foreign Subsidiary, (A) investments of the type and (to the  extent applicable) maturity described in clauses (i) through (v) above of (or maintained with) a  comparable foreign obligor, which investments or obligors (or the parent thereof) have ratings described  in clause (ii) or (iii) above, if applicable, or equivalent ratings from comparable foreign rating agencies or  (B) investments of the type and maturity (to the extent applicable) described in clauses (i) through (v)  above of (or maintained with) a foreign obligors (or the parent thereof), which investments or obligors (or  the parents thereof) are not rated as provided in such clauses or in subclause (A) of this clause (vi) but  which are, in the reasonable judgment of the Company, comparable in investment quality to such  investments and obligors (or the parents of such obligors).         Cash Management Services: any services provided from time to time by any Lender or any of its  Affiliates to any Borrower or Subsidiary in connection with operating, collections, payroll, trust, or other  depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds  transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and  stop payment services.         CERCLA: the Comprehensive Environmental Response Compensation and Liability Act (42  U.S.C. § 9601 et seq.).         CFC: a “controlled foreign corporation” as defined in Section 957 of the Code.         Change in Law: the occurrence, after the date hereof, of (a) the adoption, taking effect or phasing  in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the  administration, interpretation or application thereof; or (c) the making, issuance or application of any  request, guideline, requirement or directive (whether or not having the force of law) by any Governmental  Authority; provided, however, that “Change in Law” shall include, regardless of the date enacted, adopted  or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd-Frank  Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank  for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or  any other Governmental Authority.         Change of Control: the occurrence of any of the following events: (a) any “person” (as such term  is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined  in the Rules 13d-3 and 13d-5 under the Exchange Act, except for purposes of this clause (a) such person  shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire,  whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of  more than 35% of the total voting power of the Voting Stock of the Company; (b) the merger or  consolidation of the Company with or into another Person or the merger of another Person with or into  the Company, or the sale of all or substantially all the assets of the Company (determined on a  consolidated basis) to another Person other than a transaction following which (i) in the case of a merger  or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the  Company immediately prior to such transaction (or other securities into which such securities are  converted as part of such merger or consolidation transaction) own  directly or indirectly at least a  majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation  transaction immediately after such transaction and substantially the same proportion as before the                                        7  NAI-1507796678v9  

 

  transaction and (ii) in the case of a sale of assets transaction, each transferee becomes an obligor in  respect of the Obligations and a Subsidiary of the transferor of such assets; or (c) a “change of control”  under the Term Loan Credit Agreement or any similar definition or concept in any Refinancing Debt of  any of the foregoing.         Claims: all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings,  interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and  Extraordinary Expenses) at any time (including after Full Payment of the Obligations, resignation or  replacement of Agent, or replacement of any Lender) incurred by or asserted against any Indemnitee in  any way relating to (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or transactions  relating thereto, (b) any action taken or omitted to be taken by any Indemnitee in connection with any  Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d)  exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any  Obligor to perform or observe any terms of any Loan Document, in each case including all costs and  expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency  Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.         Code: the Internal Revenue Code of 1986.         Collateral: all Property described in Section 7.1, all Property described in any Security  Documents as security for any Obligations, and all other Property that now or hereafter secures (or is  intended to secure) any Obligations.         Commitment Termination Date: the earliest to occur of (a) the Revolver Termination Date; (b)  the date on which Borrowers terminate the Revolver Commitments pursuant to Section 2.1.4; or (c) the  date on which the Revolver Commitments are terminated pursuant to Section 11.2.         Commodity Exchange Act: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended  from time to time and any successor statute.         Company: as defined in the preamble to this Agreement.         Compliance Certificate: a certificate, in the form of Exhibit F or such other certificate, in form  and substance satisfactory to Agent, by which Borrowers certify compliance with Section 10.3 and  provide the calculations for the financial convents set forth therein.         Connection Income Taxes: Other Connection Taxes that are imposed on or measured by net  income (however denominated), or are franchise or branch profits Taxes.         Consolidated Net Income: as of any date for the applicable period ending on such date with  respect to the Company and the Subsidiaries on a consolidated basis, net income (or loss) (excluding,  without duplication, (i) extraordinary items, (ii) the income (or loss) of any Person accrued prior to the  date it becomes a Subsidiary or is merged into or consolidated with the Company or any Subsidiary  (except to the extent required for any calculation of EBITDA on a Pro Forma Basis), (iii) any out of  period restoration (or diminution) of income of any contingent reserve, and related tax effect in  accordance with GAAP, and (iv) the cumulative effect of a change in accounting principles during such  period) as determined in accordance with GAAP.         Contingent Obligation: any obligation of a Person arising from a guaranty, indemnity or other  assurance of payment or performance of any Debt, Foreign Bank Product Debt, lease, dividend or other  obligation (“primary obligations”) of another obligor (“primary obligor”) in any manner, whether directly  or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or  sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar  payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to                                        8  NAI-1507796678v9  

 

  purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of  any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of  the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the  primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of  any primary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be  deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum  amount for which such Person may be liable under the instrument evidencing the Contingent Obligation)  or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.         Copyright Security Agreement: each copyright security agreement pursuant to which an Obligor  grants to Agent, for the benefit of Secured Parties, a Lien on such Obligor’s interests in its Copyrights, as  security for the Obligations, as amended, restated, supplemented or otherwise modified from time to time.         Copyrights: as defined in the definition of “Intellectual Property”.         CWA: the Clean Water Act (33 U.S.C. §§ 1251 et seq.).         Debt: as applied to any Person, without duplication, (a) all obligations of such Person for  borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of  Property or services, but excluding trade payables and accrued obligations incurred and being paid in the  Ordinary Course of Business; (c) all Contingent Obligations; (d) all obligations of such Person evidenced  by bonds, debentures, notes, credit documents or similar instruments, including obligations so incurred in  connection with the acquisition of Property, assets or businesses; (e) all obligations of such Person under  conditional sale or other title retention agreements or incurred as financings relating to Property  purchased by such Person; (f) the principal balance of any synthetic lease, tax retention operating lease,  off-balance sheet loan, or similar off-balance sheet financing, (g) all Capital Leases; (h) all Debt of others  secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be  secured by) any Lien on Property owned or acquired by such Person, whether or not the obligations  secured thereby have been assumed; (i) all reimbursement obligations in connection with letters of credit  issued for the account of such Person; and (j) in the case of a Borrower, the Obligations.  The Debt of a  Person shall include any recourse Debt of any partnership in which such Person is a general partner or  joint venturer to the extent such Person is liable therefor as a result of such Person’s ownership interest in  or other relationship with such entity, except to the extent that terms of such Debt provide that such  Person is liable therefor.         Default: an event or condition that, with the lapse of time or giving of notice, would constitute an  Event of Default.         Default Rate: for any Obligation (including, to the extent permitted by law, interest not paid when  due), 2% plus the interest rate otherwise applicable thereto (other than to Defaulting Lenders).         Defaulting Lender: any Lender that (a) has failed to comply with its funding obligations  hereunder, and such failure is not cured within two Business Days; (b) has notified Agent or any  Borrower that such Lender does not intend to comply with its funding obligations hereunder or under any  other credit facility, or has made a public statement to that effect; (c) has failed, within three Business  Days following request by Agent or any Borrower, to confirm in a manner satisfactory to Agent and  Borrowers that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct  or indirect parent company that has, become the subject of an Insolvency Proceeding (including  reorganization, liquidation, or appointment of a receiver, custodian, administrator or similar Person by the  Federal Deposit Insurance Corporation or any other regulatory authority) or Bail-In Action; provided,  however, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s  ownership of an equity interest in such Lender or parent company unless the ownership provides  immunity for such Lender from jurisdiction of courts within the United States or from enforcement of                                         9  NAI-1507796678v9  

 

  judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to  repudiate or otherwise to reject such Lender’s agreements.         Deposit Account Control Agreements: the deposit account control agreements to be executed by  the applicable Obligor, Agent, the Term Loan Agent and each institution maintaining a Deposit Account  (other than payroll, trust, tax withholding, employee benefits and petty cash Deposit Accounts) for each  Obligor, in favor of Agent, for the benefit of Secured Parties as security for the Obligations, and in favor  of the Term Loan Agent, for the benefit of the Secured Parties (as such term is defined in the Term Loan  Credit Agreement) as security for the Obligations (as such term is defined in the Term Loan Credit  Agreement).          Designated Jurisdiction: any country or territory that is the subject of any Sanction.         Distribution: any declaration or payment of a distribution, interest or dividend on any Equity  Interest (other than payment-in-kind) or any purchase, redemption, or other acquisition or retirement for  value of any Equity Interest; provided, that in no event shall a “Distribution” include (i) cashless exercise  of options, (ii) retirement of fractional shares, (iii) repurchases of Equity Interests deemed to occur in  connection with the surrender of shares of Equity Interests to satisfy tax withholding obligations or (iv)  the cashless exercise of warrants.         Dollars and $: lawful money of the United States.         Dollar Equivalent: when used in reference to Euro means the amount, at Agent’s spot rate, of  Dollars which would be required to purchase such amount of Euro, or the amount of Euro that could be  purchased for a particular amount in Dollars.         Domain Names: as defined in the definition of “Intellectual Property”.         Domestic Subsidiary: any direct or indirect Subsidiary of the Company that is organized under  the laws of the United States or any state, protectorate or territory of the United States.         Dominion Account: a special account established by Borrowers at Bank of America or another  bank acceptable to Agent, over which Agent has control (as defined in the UCC).         EBITDA: determined on a consolidated basis for the Company and Subsidiaries, the sum of:               (i)   Consolidated Net Income, calculated before or plus, as the case may be, without        duplication:                                         (a)   interest expense,                                         (b)   provision for income taxes,                                         (c)   depreciation and amortization expense,                                         (d)   gains or losses arising from the sale of capital assets,                                         (e)   gains arising from the write-up of assets,                                         (f)   any extraordinary gains,                                         (g)   non-cash charges and expenses (other than those which represent a reserve              for or actual cash item in such period or any future period),                                                             10  NAI-1507796678v9  

 

                    (h)   reasonable and customary fees, expenses, premiums and other charges in              connection with the issuance or repayment of Debt, the issuance of Equity Interests, any              refinancing  transaction,  amendment  or  other  modification  of  any  debt instrument,  the              making of any Investment, or any non-ordinary course asset sale, in each case whether or              not consummated,                                         (i)   costs and expenses in connection with the termination of the Obligors’              existing credit facility, the redemption of the Second Lien Notes, and the execution of the              Loan Documents and ABL Loan Documents,                                         (j)   severance costs and expenses to the extent paid in cash in an amount not              to exceed (i) $1,500,000 in the Fiscal Year ending December 31, 2016, (ii) $4,000,000 in              the Fiscal Year ending December 31, 2017 and (iii) $2,000,000 in the aggregate in any              subsequent Fiscal Year,                                         (k)   any non-cash losses resulting from mark to market accounting of Hedging              Agreements,                                         (l)   the amount of any restructuring charge or reserve, integration cost or other              business optimization expense, retention, non-recurring charges or expenses, recruiting,              relocation and signing bonuses and expenses, systems establishment costs, costs associated              with office and facilities opening, closing and consolidating, transaction fees and expenses              in an amount for any four consecutive fiscal quarter period not to exceed $3,000,000,                                         (m)   in connection with the preparation, negotiation, approval, execution and              delivery  of  this  Agreement,  any  Loan  Document,  the  Term Loan  Agreement  and  the              transactions relating hereto and thereto, including all transaction fees, costs, charges and              expenses incurred within 120 days following the Effective Date,                                         (n)   the  amount of any cash  payments  in connection with the  settlement or              payment  of  any judgment  arising  in  connection  with  certain litigation  matters  pending              against  the  Company,  along  with  associated  legal  fees,  costs  and  expenses  paid  in              connection with such litigation, in amount not to exceed $3,000,000 in the aggregate, and                                         (o)   the amount of “run rate” cost savings projected by the Company in good              faith  to  be  realized  as  a  result  of  specified  actions  taken,  committed  to  be  taken  or              reasonably expected to be taken (which cost savings shall be added to EBITDA until fully              realized and calculated on a pro forma basis as though such cost savings had been realized              on the first day of the relevant period), net of the amount of actual benefits realized during              such  period  from  such  actions; provided that  (A)  such  cost  savings  are reasonably              identifiable  and  quantifiable  in  the  good  faith  judgment  of  the  Company,  (B)  no  cost              savings shall be added pursuant to this clause (B) to the extent duplicative of any expenses              or charges relating to such cost savings that are included in clause (A) above (it being              understood and agreed that “run rate” shall mean the full recurring benefit that is associated              with any action taken), (C) such actions have been taken, are committed to be taken or are              reasonably expected to be taken within 12 months after the end of the relevant period, and              (D) such cost savings do not exceed in any four consecutive fiscal quarter period 10.0% of              EBITDA (prior to giving effect to this clause (o)), minus                                   (ii)  non-cash gains  (including  those  resulting  from  mark  to  market  accounting  of        Hedging Agreements), minus                                                        11  NAI-1507796678v9  

 

              (iii)  cash payments made in such period to the extent such payments relate to a non-       cash loss, charge or expense in any prior period which was added back in determining EBITDA.          Effective Date: the date each of the conditions set forth in Section 6.1 is satisfied.         EEA Financial Institution: (a) any credit institution or investment firm established in an EEA  Member Country that is subject to the supervision of an EEA Resolution Authority; (b) any entity  established in an EEA Member Country that is a parent of an institution described in clause (a) above; or  (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution  described in the foregoing clauses and is subject to consolidated supervision with its parent.         EEA Member Country: any of the member states of the European Union, Iceland, Liechtenstein  and Norway.         EEA Resolution Authority: any public administrative authority or any Person entrusted with  public administrative authority of an EEA Member Country (including any delegee) having responsibility  for the resolution of any EEA Financial Institution.         Eligible Account: an Account owing to a Borrower that arises in the Ordinary Course of Business  from the sale of goods, is payable in Dollars and is deemed by Agent, in its Permitted Discretion, to be an  Eligible Account.  Without limiting the foregoing, no Account shall be an Eligible Account if (a) it is  unpaid for more than 60 days after the original due date, or more than 90 days after the original invoice  date,  (or, in the case of  Accounts owing to a Borrower by  Volvo or Mack Truck not otherwise excluded,  unpaid for more than 90 days after the original due date or more than 120 days after the original invoice  date, up to an aggregate amount of $5,000,000 at any time, for the portion of such Accounts which are  unpaid for more than 90 days after the original invoice date, to the extent the portion of such Accounts  does not remain unpaid for more than 120 days after the original invoice date); (b) 25% or more of the  Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause; (c) when  aggregated with other Accounts owing by the Account Debtor, it exceeds (i) 35% of the aggregate  Eligible Accounts, in the case of Accounts owing by Volvo/Mack Truck/Prevost or (ii) 20% of the  aggregate Eligible Accounts, in the case of Accounts owing by any other Account Debtors; (d) it does not  conform with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise  subject to offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback,  credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an Insolvency Proceeding  has been commenced by or against the Account Debtor (provided, that so long as an order exists  permitting payment of trade creditors specifically with respect to such Account Debtor and such Account  Debtor has obtained adequate post-petition financing to pay such Accounts, the Accounts of such  Account Debtor shall not be deemed ineligible under the provisions of this clause to the extent the order  permitting such financing allows the payment of the applicable Account; or the Account Debtor has  suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or  is subject to Sanctions or any specially designated nationals list maintained by OFAC; or Borrower is not  able to bring suit or enforce remedies against the Account Debtor through judicial process; (g) the  Account Debtor is organized or has its principal offices or assets outside the United States or Canada  (provided that, notwithstanding anything in this clause (g) to the contrary, Eligible Accounts may include  Accounts not otherwise excluded in an aggregate not to exceed at any time $2,000,000 owing to a  Borrower by Kenworth/Paccar, Volvo, Caterpillar or such other Account Debtor as approved by the  Required Lenders in writing); (h) it is owing by a Government Authority, unless the Account Debtor is  the United States or any department, agency or instrumentality thereof and the Account has been assigned  to Agent in compliance with the Assignment of Claims Act; (i) it is not subject to a duly perfected, first  priority Lien in favor of Agent, or is subject to any other Lien other than the Liens described in clauses  (c), (d), (f), (g), and (l) of Section 10.2.2; (j) the goods giving rise to it have not been delivered to and  accepted by the Account Debtor, the services giving rise to it have not been accepted by the Account  Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an                                        12  NAI-1507796678v9  

 

  Instrument, promissory note or bill of exchange of any kind, or has been reduced to judgment; (l) its  payment has been extended, the Account Debtor has made a partial payment, or it arises from a sale on a  cash-on-delivery basis; (m) it arises from a sale to an Affiliate, from a sale on a bill-and-hold, guaranteed  sale, sale or return, sale on approval, consignment, or other repurchase or return basis, or from a sale to a  Person for personal, family or household purposes; (n) it represents a progress billing or retainage; (o) it  includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof;  (p) is an account receivable owned by an Excluded Receivables Subsidiary or which the Company or its  Subsidiaries has agreed to transfer to an Excluded Receivables Subsidiary; or (q) it is an Account relating  to the sale of tooling or equivalent product.  In calculating delinquent portions of Accounts under clauses  (a) and (b), credit balances more than 90 days old will be excluded.         Eligible Assignee: (a) a Lender, Affiliate of a Lender or Approved Fund; (b) an assignee  approved by Borrower Agent (so long as no Event of Default has occurred and is continuing and which  approval shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is  made within five Business Days after notice of the proposed assignment) and Agent; or (c) during an  Event of Default, any Person acceptable to Agent in its discretion.  No Defaulting Lender or any of its  Subsidiaries nor any Person who, upon becoming a Lender hereunder, would constitute a Defaulting  Lender or a Subsidiary of a Defaulting Lender shall be an Eligible Assignee.         Eligible Finished Goods Inventory:  Eligible Inventory constituting finished goods.         Eligible Inventory: Inventory owned by a Borrower that Agent, in its Permitted Discretion, deems  to be Eligible Inventory.  Without limiting the foregoing, no Inventory shall be Eligible Inventory unless  it (a) is finished goods, raw materials, or work-in-process (provided that such finished goods, raw  materials or work-in-process shall not include any packaging or shipping materials, labels, samples,  display items, bags, replacement parts or manufacturing supplies); (b) is not held on consignment, nor  subject to any deposit or downpayment; (c) is in new and saleable condition and is not damaged,  defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and  does not constitute returned or repossessed goods; (e) meets all material standards imposed by any  Governmental Authority, has not been acquired from an entity subject to Sanctions or any specially  designed nationals list maintained by OFAC, and does not constitute hazardous materials under any  Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s  duly perfected, first priority Lien, and no other Lien other than Liens described in clauses (c), (d), (f), (g)  and (v) of Section 10.2.2; (h) is within the continental United States or Canada, is not in transit except  between locations of Borrowers, and is not consigned to any Person; (i) is not subject to any warehouse  receipt or negotiable Document except to the extent Agent’s security interest in such warehouse receipt or  negotiable Document is perfected; (j) is not subject to any License or other arrangement that restricts such  Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien  Waiver; and (k) is not located on leased premises or in the possession of a warehouseman, processor,  repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has  delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established.         Eligible Raw Materials Inventory: Eligible Inventory constituting raw materials.         Eligible Work-in-Process Inventory: Eligible Inventory constituting work-in- process.         Enforcement Action: any action to enforce any Obligations or Loan Documents or to realize upon  any Collateral (whether by judicial action, self-help, notification of Account Debtors, exercise of setoff or  recoupment, or otherwise).         Environmental Laws: all Applicable Laws (including all programs, local policies, permits and  guidance promulgated by regulatory agencies), relating to public health (with respect to exposure to  hazardous substances or wastes, but excluding occupational safety and health, to the extent regulated by                                         13  NAI-1507796678v9  

 

  OSHA) or the protection or pollution of the environment, including CERCLA, RCRA and CWA or to the  conditions of the workplace, or any emission or substance capable of causing harm to any living organism  or the environment.         Environmental Notice: a notice from any Governmental Authority or other Person of any possible  noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or  liability under any Environmental Law, or with respect to any Environmental Release, environmental  pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or  request for correction, remediation or otherwise.         Environmental Release: a release as defined in CERCLA or under any other Environmental Law.         Equity Interest: the interest of any (a) shareholder in a corporation, company, or beneficial  interests in a trust or other equity ownership interest of a Person and any warrants, options, or other rights  entitling the holder thereof to purchase or acquire any such equity interest; (b) partner in a partnership  (whether general, limited, limited liability or joint venture); (c) member in a limited liability company; or  (d) other Person having any other form of equity security or ownership interest.         ERISA: the Employee Retirement Income Security Act of 1974.         ERISA Affiliate: any trade or business (whether or not incorporated) under common control with  an Obligor within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the  Code for purposes of provisions relating to Section 412 of the Code).         ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any  Obligor or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in  which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of  operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial  withdrawal by any Obligor or ERISA Affiliate from a Multiemployer Plan or notification that a  Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a  Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of  proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) the failure to make a  required contribution to any Pension Plan that would result in the imposition of a lien or other  encumbrance under Section 430 of the Code or Section 303 or 4068 of ERISA, or the arising of such a  lien or encumbrance, the failure to satisfy the minimum funding standard under Section 412 of the Code  or Section 302 of ERISA, whether or not waived, or any Obligor or ERISA Affiliate requests a minimum  funding waiver; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the  termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or  (g) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not  delinquent under Section 4007 of ERISA, upon any Obligor or ERISA Affiliate.         EU Bail-In Legislation Schedule: the EU Bail-In Legislation Schedule published by the Loan  Market Association, as in effect from time to time.         Euro or €: the single currency of the European Union as constituted by the Treaty on European  Union and as referred to in the legislative measures of the European Union for the introduction of,  changeover to or operation of the Euro in one or more member states.         Event of Default: as defined in Section 11.1.         Exchange Act: the U.S. Securities Exchange Act of 1934, as amended.         Excluded Collateral: as defined in Section 7.1.                                         14  NAI-1507796678v9  

 

        Excluded Receivables Subsidiary: any Subsidiary created and operated for the sole purpose of  collecting and selling accounts receivable and assets related thereto pursuant to any Qualified Receivables  Transaction; provided that such Subsidiary may engage in necessary corporate governance, accounting  and other similar incidental transactions required in connection with maintaining its existence.         Excluded Subsidiary: (a) each Excluded Receivables Subsidiary; (b) each Immaterial Subsidiary;  (c) each Foreign Holding Company; (d) each Domestic Subsidiary that is owned directly or indirectly by  any Foreign Subsidiary that is a CFC or Foreign Holding Company; (e) each Foreign Subsidiary; and (f)  each non-wholly-owned Subsidiary.         Excluded Swap Obligation: with respect to an Obligor, each Swap Obligation as to which, and  only to the extent that, such Obligor’s guaranty of or grant of a Lien as security for such Swap Obligation  is or becomes illegal under the Commodity Exchange Act because the Obligor does not constitute an  “eligible contract participant” as defined in the act (determined after giving effect to any keepwell,  support or other agreement for the benefit of such Obligor and all guarantees of Swap Obligations by  other Obligors) when such guaranty or grant of Lien becomes effective with respect to the Swap  Obligation.  If a Hedging Agreement governs more than one Swap Obligation, only the Swap  Obligation(s) or portions thereof described in the foregoing sentence shall be Excluded Swap  Obligation(s) for the applicable Obligor.         Excluded Taxes: any of the following Taxes imposed on or with respect to a Recipient or required  to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by a  Recipient’s net income (however denominated), franchise Taxes and branch profits Taxes (i) as a result of  such Recipient being organized under the laws of, or having its principal office or applicable Lending  Office located in, the jurisdiction imposing such Tax, or (ii) constituting Other Connection Taxes; (b)  U.S. federal withholding Taxes imposed on amounts payable to or for the account of a Lender with  respect to its interest in a Loan or Revolver Commitment pursuant to a law in effect when the Lender  acquires such interest (except pursuant to an assignment at the request of the Borrower Agent) or changes  its Lending Office, unless the Taxes were payable to its assignor immediately prior to such assignment or  to the Lender immediately prior to its change in Lending Office; (c) Taxes attributable to a Recipient’s  failure to comply with Section 5.10; and (d) U.S. federal withholding Taxes imposed pursuant to FATCA.  In no event shall “Excluded Taxes” include any withholding imposed on amounts paid by or on behalf of  a foreign Obligor to a Recipient that has complied with Section 5.10.2.          Extraordinary Expenses: all costs, expenses or advances that Agent or any Lender may incur  during a Default or an Event of Default, or during the pendency of an Insolvency Proceeding of an  Obligor, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal,  insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or  realization upon any Collateral; (b) subject to Section 15.2, any action, arbitration or other proceeding  (whether instituted by or against Agent, any Lender, any Obligor, any representative of creditors of an  Obligor or any other Person) in any way relating to any Collateral (including the validity, perfection,  priority or avoidability of Agent’s Liens with respect to any Collateral), Loan Documents, Letters of  Credit or Obligations, including any lender liability or other Claims; (c) the exercise, protection or  enforcement of any rights or remedies of Agent or any Lender in, or the monitoring of, any Insolvency  Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral; (e)  any Enforcement Action; (f) negotiation and documentation of any modification, waiver, workout,  restructuring or forbearance with respect to any Loan Documents or Obligations; and (g) Protective  Advances.  Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance  costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ fees and  commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and  salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and  travel expenses.                                         15  NAI-1507796678v9  

 

        FATCA: Sections 1471 through 1474 of the Code (including any amended or successor version if  substantively comparable and not materially more onerous to comply with), any current or future  regulations or official interpretations thereof and any agreements entered into pursuant to Section  1471(b)(1) of the Code, and any law, regulation, rule, promulgation or official agreement implementing  an official governmental agreement or intergovernmental agreement with respect to the foregoing.         FCPA: as defined in Section 9.1.25.         Federal Funds Rate: (a) the weighted average of interest rates on overnight federal funds  transactions with members of the Federal Reserve System on the applicable day (or the preceding  Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of  New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the  average rate (rounded up to the nearest 1/100 of 1%) charged to Bank of America on the applicable day  on such transactions, as determined by Agent; provided, that in no event shall such rate be less than zero.         Fee Letter: the Fee Letter, dated as of April 26, 2011, between Agent and the Company executed  in connection with the transactions contemplated by this Agreement.         Financial Covenant Trigger Date: the date upon which Availability is less than the greater of (i)  $5,000,000 and (ii) ten percent (10%) of the Revolver Commitments for any day on or after the Effective  Date.         Financial Covenant Trigger Period: the period from and including the Financial Covenant Trigger  Date until the Business Day after Availability has been greater than or equal to the greater of (i)  $5,000,000 and (ii) ten percent (10%) of the Revolver Commitments for sixty (60) consecutive days.         Financial Reporting Trigger Date: the first date upon which the outstanding balance of Revolver  Loans is greater than zero for any day on or after the Effective Date.         Fiscal Month: each fiscal month of the Company and Subsidiaries for accounting and tax  purposes.         Fiscal Quarter: each period of three Fiscal Months, commencing on the first day of a Fiscal Year.         Fiscal Year: the fiscal year of the Company and Subsidiaries for accounting and tax purposes,  ending on or about December 31 of each year.         Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for Borrowers and  their Subsidiaries as of the last day of the period consisting of the most recent four Fiscal Quarters of (a)  EBITDA minus Capital Expenditures and net cash taxes paid (not less than $0) for such period, to (b)  Fixed Charges for such period.         Fixed Charges: the sum of (i) interest expense (other than payment-in-kind or amortization of fees  and costs), (ii) all scheduled principal payments (as such may have been reduced by prior prepayments)  and all voluntary prepayments made on Borrowed Money (other than any Refinancing Debt in respect  thereof), and (iii) cash Distributions made by the Company.         FLSA: the Fair Labor Standards Act of 1938, as amended from time to time.         Foreign Bank Product Debt: Debt and other obligations of a Foreign Subsidiary relating to Bank  Products.                                          16  NAI-1507796678v9  

 

        Foreign Holding Company: any Subsidiary of the Company all or substantially all of the assets of  which consist of Equity Interests of one or more Foreign Subsidiaries that are CFCs (or are treated as  consisting of such assets for U.S. federal income tax purposes).         Foreign Lender: any Lender that is not a U.S. Person.         Foreign Plan: any employee benefit plan or arrangement (a) maintained or contributed to by any  Obligor or Subsidiary that is not subject to the laws of the United States; or (b) mandated by a  government other than the United States for employees of any Obligor or Subsidiary.         Foreign Subsidiary: any Subsidiary that is not a Domestic Subsidiary.         Fronting Exposure: a Defaulting Lender’s interest in LC Obligations, Swingline Loans and  Protective Advances, except to the extent Cash Collateralized by the Defaulting Lender or allocated to  other Lenders hereunder.         Full Payment: with respect to any Obligations (other than contingent obligations not then due and  owing or for which no claim has been made), (a) the full cash payment thereof, including any interest,  fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the  proceeding); (b) if such Obligations are LC Obligations or are otherwise contingent and asserted or likely  to be asserted, Cash Collateralization thereof (or delivery of a standby letter of credit reasonably  acceptable to Agent in its discretion, in the amount of required Cash Collateral); and (c) a satisfaction or  release of any Claims of Obligors against Agent, Lenders and Issuing Bank arising on or before the  payment date.  No Loans shall be deemed to have been paid in full until all Revolver Commitments  related to such Loans have expired or been terminated.         GAAP: generally accepted accounting principles in effect in the United States from time to time.         Governmental Approvals: all authorizations, consents, approvals, licenses and exemptions of,  registrations and filings with, and required reports to, all Governmental Authorities.         Governmental Authority: any federal, state, municipal, local, foreign or other governmental  department, agency, authority, body, commission, board, bureau, court, instrumentality, political  subdivision, local authority, council, regulatory body, central bank, or other entity or officer exercising  executive, legislative, judicial, taxing, regulatory or administrative powers or functions or pertaining to  any government or court, in each case whether associated with the United States, a state, district or  territory thereof, for any governmental, judicial, investigative, regulatory or self-regulatory authority  (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national  bodies such as the European Union or European Central Bank).         Guarantor: any Person who guarantees payment or performance of any Obligations         Guarantor Payment: as defined in Section 5.11.3.         Guaranty: each guaranty agreement executed by a Guarantor in favor of Agent.         Hedging Agreement: any “swap agreement” as defined in Section 101(53B)(A) of the Bankruptcy  Code.         Immaterial Subsidiary: any Subsidiary of the Company (a) the assets of which Subsidiary   constitute less than or equal to 2.5% of the Total Assets of the Company and its Subsidiaries on a  consolidated basis and collectively with all Immaterial Subsidiaries, less than or equal to 7.5% of the  Total Assets of the Company and its Subsidiaries on a consolidated basis, and (b) the revenues of which   Subsidiary account for less than or equal to 2.5% of the total revenues of the Company and its                                        17  NAI-1507796678v9  

 

  Subsidiaries on a consolidated basis and collectively with all Immaterial Subsidiaries, less than or equal  to 7.5% of the total revenues of the Company and its Subsidiaries on a consolidated basis.         Incremental Term Loan: means an “Incremental Term Loan” as such term is defined in the Term  Loan Credit Agreement as in effect as of the date hereof.           Indemnified Taxes: (a) Taxes, other than Excluded Taxes, imposed on or relating to any payment  of an Obligation; and (b) to the extent not otherwise described in clause (a), Other Taxes.         Indemnitees: Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of  America Indemnitees.         Indenture: the Indenture, dated as of April 26, 2011, between the Company and U.S. Bank  National Association, as Trustee and Collateral Agent, with respect to the Company’s Second Lien Notes,  or any Refinancing Debt in respect thereof.         Insolvency Proceeding: any case or proceeding commenced by or against a Person under any  state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief  under the Bankruptcy Code or any other insolvency, debtor relief or debt adjustment law; (b) the  appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian or similar  officer for such Person or any part of its Property; or (c) a general assignment or trust mortgage for the  benefit of creditors.         Intellectual Property: all intellectual and similar Property of a Person, including the following:               (a)   any patent, and any divisions, inventions, continuations (including, but not  limited to, continuations-in-parts) and improvements thereof, as well as any application for a patent  made now or hereafter, together with all causes of action arising prior to or after the date hereof  for infringement of any of the foregoing (collectively, “Patents”);                (b)   any United States or foreign copyright rights to any works of authorship or  other copyrightable subject matter, including any registrations of any copyrights in the United  States Copyright Office or any foreign equivalent office, as well as any application for a copyright  registration  now  or  hereafter  made  with  the  United  States  Copyright  Office  or  any  foreign  equivalent office, together with all causes of action arising prior to or after the date hereof for  infringement of any of the foregoing (collectively, “Copyrights”);               (c)   all  Internet  domain  names  and  associated  uniform  resource  locator  addresses (collectively, “Domain Names”);               (d)   all  computer  programs,  object  code,  source  code  and  supporting  documentation, including, without limitation, “software” as such term is defined in the Uniform  Commercial Code as in effect on the date hereof in the State of New York and computer programs  that may be construed as included in the definition of “goods” in the Uniform Commercial Code  as in effect on the date hereof in the State of New York, and all media that may contain Software  or recorded data of any kind (collectively, “Software”);               (e)   any  trade  secrets  or  other  proprietary  and  confidential  information,  including  unpatented  inventions,  invention  disclosures,  engineering  or  other  technical  data,  financial data, procedures, know-how, designs, personal information, supplier lists, customer lists,  business, production or marketing plans, formulae, methods (whether or not patentable), processes,                                         18  NAI-1507796678v9  

 

  compositions, schematics, ideas, algorithms, techniques, analyses, proposals, source code, object  code and data collections (collectively, “Trade Secrets”); and               (f)   all right, title and interest in and to any trademarks, service marks and trade  names, including any registration or application for registration of any trademarks and service  marks,  which  are  registered  or  filed  in  the  United  States  Patent  and  Trademark  Office  or  the  equivalent thereof in any state of the United States or any equivalent foreign office or agency, as  well  as  any  unregistered  trademarks  and  service  marks  and  any  trade dress  including  logos,  designs, fictitious business names and other business identifiers used by such Person or any other  indicia of origin, and all causes of action arising prior to or after the date hereof for infringement  of any of the foregoing or unfair competition regarding the same (collectively, “Trademarks”).         Intellectual Property Claim: any claim or assertion (whether in writing, by suit or otherwise) that  a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment,  Intellectual Property or other Property violates another Person’s Intellectual Property.         Intercreditor Agreement: the Intercreditor Agreement, dated as of April 12, 2017, among the  Agent, Borrowers and the Term Loan Agent.         Interest Period: as defined in Section 3.1.3.         Inventory: as defined in the UCC, including all goods intended for sale, lease, display or  demonstration; all work in process; and all raw materials, and other materials and supplies of any kind  that are or could be used in connection with the manufacture, printing, packing, shipping, advertising,  sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but  excluding Equipment).         Inventory Reserve: reserves established by Agent to reflect factors that may negatively impact the  Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance,  change in composition or mix, markdowns and vendor chargebacks.         Investment: any Acquisition; any acquisition of record or beneficial ownership of any Equity  Interests of a Person; or any loan, advance or capital contribution to or other investment in any other  Person.         IRS: the United States Internal Revenue Service.         Issuing Bank: Bank of America or an Affiliate of Bank of America.         Issuing Bank Indemnitees: Issuing Bank and its officers, directors, employees, Affiliates, agents  and attorneys.         Junior Debt:  as defined in Section 10.2.9.         LC Application: an application by Borrower Agent to Issuing Bank for issuance of a Letter of  Credit, in form and substance reasonably satisfactory to Issuing Bank.         LC Conditions: the following conditions necessary for issuance of a  Letter of Credit: (a) each of  the conditions set forth in Section 6; (b) after giving effect to such issuance, total  LC Obligations do not  exceed the Letter of Credit Subline, no Overadvance exists and, if no Revolver Loans are outstanding, the  LC Obligations do not exceed the Aggregate Borrowing Base (without giving effect to the LC Reserve for  purposes of this calculation); (c) the expiration date of such Letter of Credit is (i) no more than 365 days  from issuance, in the case of standby Letters of Credit, (ii) no more than 120 days from issuance, in the                                        19  NAI-1507796678v9  

 

  case of documentary Letters of Credit, and (iii) at least 10 Business Days prior to the Revolver  Termination Date (except, in each case, for Letters of Credit which include an automatic renewal  provision); (d) the Letter of Credit and payments thereunder are denominated in Dollars; (e) the purpose  and form of the proposed Letter of Credit is reasonably satisfactory to Agent and Issuing Bank in their  discretion; and (f) prior to or upon giving effect to the issuance of such Letter of Credit, no Default or  Event of Default exists or would exist.         LC Documents: all documents, instruments and agreements (including LC Requests and LC  Applications) delivered by Borrowers or any other Person to Issuing Bank or Agent in connection with  issuance, amendment or renewal of, or payment under, any Letter of Credit.         LC Obligations: the sum (without duplication) of (a) all amounts owing by Borrowers for any  drawings under Letters of Credit; (b) the Stated Amount of all outstanding Letters of Credit; and (c) all  fees and other amounts due and owing with respect to Letters of Credit.         LC Request: a request for issuance of a Letter of Credit, to be provided by Borrower Agent to  Issuing Bank, in form satisfactory to Agent and Issuing Bank.         LC Reserve: the aggregate of all LC Obligations, other than (a) those that have been Cash  Collateralized; (b) if no Event of Default exists, those constituting charges or other amounts owing to the  Issuing Bank; and (c) all fees owing with respect to Letters of Credit.         Lender Indemnitees: Lenders and Secured Bank Product Providers, and their respective officers,  directors, employees, Affiliates, agents and attorneys.         Lenders: as defined in the preamble to this Agreement, including Agent in its capacity as a  provider of Swingline Loans and any other Person who hereafter becomes a “Lender” pursuant to an  Assignment and Acceptance.         Lending Office: the office designated as such by the applicable Lender at the time it becomes  party to this Agreement or thereafter by notice to Agent and Borrower Agent.         Letter of Credit: any standby or documentary letter of credit issued by Issuing Bank for the  account of a Borrower, or any indemnity, guarantee, exposure transmittal memorandum or similar form of  credit support issued by Agent or Issuing Bank for the benefit of a Borrower.         Letter of Credit Subline: $10,000,000.         LIBOR: the per annum rate of interest (rounded up to the nearest 1/100th of 1%) determined by  Agent at or about 11:00 a.m. (London time) two Business Days prior to an interest period, for a term  equivalent to such period, equal to the London Interbank Offered Rate, or comparable or successor rate  approved by Agent, as published on the applicable Reuters screen page (or other commercially available  source designated by Agent from time to time); provided, that any comparable or successor rate shall be  applied by Agent, if administratively feasible, in a manner consistent with market practice; provided  further, that in no event shall LIBOR be less than zero.         LIBOR Loan: a Revolver Loan that bears interest based on LIBOR.         LIBOR Screen Rate: the LIBOR quote on the applicable screen page the Administrative Agent  designates to determine LIBOR (or such other commercially available source providing such quotations  as may be designated by the Administrative Agent from time to time).                                          20  NAI-1507796678v9  

 

        LIBOR Successor Rate: any evolving or then existing convention or proposed replacement rate  for LIBOR for similar U.S. dollar denominated syndicated credit facilities for such alternative  benchmarks.         LIBOR Successor Rate Conforming Changes: with respect to any proposed LIBOR Successor  Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of  determining rates and making payments of interest and other administrative matters as may be  appropriate, in the discretion of the Administrative Agent and in consultation with the Borrower, to reflect  the adoption of such LIBOR Successor Rate and to permit the administration thereof by the  Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative  Agent determines that adoption of any portion of such market practice is not administratively feasible or  that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner  of administration as the Administrative Agent reasonably determines in consultation with the Borrower).           License: with respect to any Obligor, all of such Obligor’s right, title, and interest in and to any  and all licensing agreements or similar arrangements relating to its owned Intellectual Property and any  license or agreement under which an Obligor is authorized to use Intellectual Property in connection with  (a) any manufacture, marketing, distribution or disposition of Collateral, (b) any use of Property or (c)  any other conduct of its business, and all income, Royalties, damages, claims, and payments now or  hereafter due or payable under and with respect thereto, including, without limitation, damages and  payments for past and future breaches thereof, and  all rights to sue for past, present, and future breaches  thereof.         Licensor: any Person from whom an Obligor obtains the right to use any Intellectual Property.         Lien: any Person’s interest in Property securing an obligation owed to, or a claim by, such  Person, whether such interest is based on common law, statute or contract, including liens (statutory or  other), mortgages, collateral assignments, deposit arrangements, charges, preferences, priorities or other  security arrangements of any kind or nature whatsoever (including any agreement to give any of the  foregoing any conditional sale or retention of title agreement, any financing or similar agreement),  security interests, pledges, hypothecations, statutory trusts, reservations, exceptions, encroachments,  easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and  encumbrances affecting Property; provided, however, that non-exclusive licenses of Intellectual Property  in the Ordinary Course of Business are not Liens.         Lien Waiver: an agreement, in form and substance reasonably satisfactory to Agent, by which (a)  for any Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on  the Collateral, and agrees to permit Agent to enter upon the premises and remove the Collateral or to use  the premises to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman,  processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it  may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as  agent for Agent, and agrees to deliver the Collateral to Agent promptly following request; (c) for any  Collateral held by a repairman, mechanic or bailee, such Person acknowledges Agent’s Lien, waives or  subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to Agent  promptly following  request; and (d) for any Collateral subject to a Licensor’s Intellectual Property rights,  the Licensor grants to Agent the right, vis-à-vis such Licensor, to enforce Agent’s Liens with respect to  the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or  not a default exists under any applicable License.         Loan: a Revolver Loan.         Loan Account: the loan account established by each Lender on its books pursuant to Section 5.8.                                         21  NAI-1507796678v9  

 

        Loan Documents: this Agreement, Other Agreements and Security Documents.         Loan Year: each 12 calendar month period commencing on the Original Closing Date and on  each anniversary of the Original Closing Date.         Margin Stock: as defined in Regulation U of the Board of Governors.         Material Adverse Effect: the effect of any event or circumstance that, taken alone or in  conjunction with other events or circumstances, has or could be reasonably expected to have a material  adverse effect on (a) the business, operations, Properties or financial condition of the  Obligors, taken as a  whole; (b) the enforceability of the Loan Documents, or on the validity or priority of Agent’s Liens on the  Collateral; (c) the ability of the Obligors, taken as a whole, to perform any obligations under the Loan  Documents, including repayment of any Obligations; or (d) the ability of Agent or any Lender to enforce  or collect any Obligations or to realize upon any Collateral.         Material Contract: any agreement or arrangement to which an Obligor is party (other than the  Loan Documents) for which breach, termination, nonperformance or failure to renew could reasonably be  expected to have a Material Adverse Effect.         Moody’s: Moody’s Investors Service, Inc., and its successors.         Multiemployer Plan: any employee benefit plan of the type described in Section 4001(a)(3) of  ERISA, to which any Obligor or ERISA Affiliate makes or is obligated to make contributions, or during  the preceding five plan years, has made or been obligated to make contributions.         Net Proceeds: with respect to an Asset Disposition, proceeds (including, when received, any  deferred or escrowed payments) received by an Obligor in cash from such Asset Disposition, net of (a)  reasonable and customary costs and expenses actually incurred in connection therewith, including legal  fees and sales commissions; (b) amounts applied to repayment of Debt secured by a Permitted Lien on  Collateral sold; (c) transfer or similar taxes and the Company’s good faith estimate of income taxes paid  or payable in connection with such sale; (d) reserves for indemnities or purchase price adjustments, until  such reserves are no longer needed; and (e) the Company’s good faith estimate of payments required to be  made with respect to unassumed liabilities relating to the assets sold (provided that, to the extent such  cash proceeds are not so used within 180 days of such Asset Disposition, such cash proceeds shall  constitute Net Proceeds).         NOLV Percentage: the net orderly liquidation value of Borrowers’ Inventory, expressed as a  percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time,  net of all liquidation expenses, as determined from the most recent appraisal of Borrowers’ Inventory  performed by an appraiser and on terms satisfactory to Agent.         Notes: each Revolver Note.         Notice of Borrowing: a Notice of Borrowing to be provided by Borrower Agent to request a  Borrowing of Revolver Loans, in substantially the form  attached hereto as Exhibit G or otherwise in  form reasonably satisfactory to Agent.         Notice of Conversion/Continuation: a Notice of Conversion/Continuation to be provided by  Borrower Agent to request a conversion or continuation of any Loans as LIBOR Loans, in substantially  the form attached hereto as Exhibit H or otherwise in form reasonably satisfactory to Agent.         Obligations: all (a) principal of and premium, if any on the Loans, (b) LC Obligations and other  obligations of Obligors with respect to Letters of Credit, (c) interest, expenses, fees and other sums  payable by Obligors under Loan Documents, (d) obligations of Obligors under any indemnity for Claims,                                        22  NAI-1507796678v9  

 

  (e) Extraordinary Expenses, (f) Secured Bank Product Obligations and (g) other Debts, obligations and  liabilities of any kind owing by Obligors pursuant to the Loan Documents, whether now existing or  hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency  Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan,  guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to  become due, primary or secondary, or joint or several; provided that Obligations of an Obligor shall not  include any Excluded Swap Obligations.         Obligor: each Borrower, Guarantor or other Person that is liable for payment of any Obligations  or that has granted a Lien in favor of Agent on its assets to secure any Obligations.         OFAC: Office of Foreign Assets Control of the U.S. Treasury Department.         Ordinary Course of Business: the ordinary course of business of any Borrower or Subsidiary  undertaken in good faith.         Organic Documents: with respect to any Person, as applicable, its charter, certificate or articles of  incorporation, bylaws, articles of organization, articles of association, memorandum, limited liability  agreement, operating agreement, members agreement, shareholders agreement, partnership agreement,  certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or  instrument governing the formation or operation of such Person.         Original Closing Date: January 7, 2009.         Original Loan Agreement: the Loan and Security Agreement, dated as of January 7, 2009, by and  among the Company, each other Borrower party thereto, the financial institutions party thereto as lenders  and Bank of America, N.A., as agent, as amended, modified or supplemented prior to the Restatement  Effective Date.         OSHA: the Occupational Safety and Health Act of 1970.         Other Agreement: each Note, LC Document, Fee Letter, Lien Waiver, Intercreditor Agreement,  Borrowing Base Certificate, Compliance Certificate, Borrower Materials, or other note, document,  instrument or agreement (other than this Agreement or any Security Document), now or hereafter  delivered by an Obligor or other Person (providing that an Obligor is also party to thereto) to Agent or a  Lender in connection with any transactions relating hereto.         Other Connection Taxes: Taxes imposed on a Recipient due to a present or former connection  between it and the taxing jurisdiction (other than connections arising from the Recipient having executed,  delivered, become party to, performed obligations or received payments under, received or perfected a  Lien or engaged in any other transaction pursuant to, enforced, or sold or assigned an interest in, any  Loan or Loan Document).         Other Taxes: all present or future stamp, court, documentary, intangible, recording, filing or  similar Taxes that arise from any payment made under, from the execution, delivery, performance,  enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to,  any Loan Document, except Other Connection Taxes imposed with respect to an assignment (other than  an assignment made pursuant to a request of the Borrowers).         Overadvance: as defined in Section 2.1.5.         Overadvance Loan: a Base Rate Loan made when an Overadvance exists or is caused by the  funding thereof.                                         23  NAI-1507796678v9  

 

        Participant: as defined in Section 14.2.         Patent Security Agreement: each patent security agreement pursuant to which an Obligor grants  to Agent, for the benefit of Secured Parties, a Lien on such Obligor’s interests in its Patents, as security  for the Obligations, as amended, restated, supplemented or otherwise modified from time to time.         Patents: as defined in the definition of “Intellectual Property”.         Patriot Act: the Uniting and Strengthening America by Providing Appropriate Tools Required to  Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as amended.         Payment Item: each check, draft or other item of payment payable to a Borrower, including those  constituting proceeds of any Collateral.         PBGC: the Pension Benefit Guaranty Corporation.         Pension Plan: any employee pension benefit plan (as such term is defined in Section 3(2) of  ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or  maintained by any Obligor or ERISA Affiliate or to which the Obligor or ERISA Affiliate contributes or  has an obligation to contribute, or in the case of a multiple employer or other plan described in Section  4064(a) of ERISA, has made contributions at any time during the preceding five plan years.         Pensions Regulator:  the body corporate called the Pensions Regulator established under Part I of  the Pension Act.         Perfection Certificate:  a certificate (or supplement thereto) in substantially the form of Exhibit J.         Permitted Acquisition: any Acquisition as to which all of the following conditions are satisfied or  waived:                (a)   such Acquisition is an acquisition of all or substantially all of the assets or  of all of the outstanding Equity Interests of another Person, involving a line or lines of business or  a distribution channel which is related, similar or complementary to, or supportive of the lines of  business  or  distribution  channels  in  which  Borrowers  and  their  Subsidiaries,  considered  as  an  entirety, are engaged on the Effective Date;                (b)   such  Acquisition  is  not  actively  opposed  by  the  Board  of  Directors  (or  similar  governing body)  of  the  selling  Person  or  the  Person  whose  equity  interests  are  to  be  acquired;                (c)   either (i) Availability,  on  a  Pro  Forma  Basis  after  giving  effect  to  such  Acquisition,  for  each  of  the  30  days  prior  to  and  including  the  date  such  Acquisition  is  consummated, is at least the greater of (1) $12,500,000 and (2) twenty-five percent (25%) of the  Revolver Commitments or (ii) (1) the Fixed Charge Coverage Ratio, on a Pro Forma Basis, is at  least 1.00 to 1.00 and (2) Availability, on a Pro Forma Basis after giving effect to such Acquisition,  for each of the 30 days prior to and including the date such Acquisition is consummated, is at least  the greater of (A) $7,500,000 and (B) fifteen percent (15%) of the Revolver Commitments;                (d)   as soon as available, but not less than ten (10) days prior to the closing of  such Acquisition (or such shorter time period as  Agent may otherwise agree), the Company shall  submit to Agent (i) notice of such Acquisition together with a reasonably detailed description of  the business or assets to be acquired, (ii) copies of all available business and financial information                                        24  NAI-1507796678v9  

 

  as reasonably requested by Agent relating to such Acquisition, (iii) pro forma financial statements,  (iv) audited financial statements for the acquired business or distribution channel for the most  recent  fiscal  year,  unless  the  same  are  unavailable,  and  the  most  recent  unaudited  financial  statements for the acquired business or distribution channel, (v) a certificate of the chief financial  officer of Borrower Agent certifying that such pro forma financial statements, on a combined basis,  present fairly in all material respects the financial condition of Borrowers and their Subsidiaries  on a consolidated basis as of the date thereof after giving effect to such Acquisition, and which  shall include a representation and warranty as to compliance with each of the other criteria for a  “Permitted Acquisition” and (vi) at least five days prior to the date of such Acquisition (or such  shorter time period as Agent may otherwise agree), the Company shall deliver drafts of the related  purchase  agreement,  together  with  lien  release  letters  and  other  documents  as  Agent  may  reasonably require to evidence the termination of Liens (other than Permitted Liens) and any other  information  as  Agent  may  reasonably  request,  with  final,  executed  copies  of  such  purchase  agreement and other related documents to be delivered no later than five days after the closing of  such Acquisition;                (e)   if the Person so  acquired is  intended to  be a Borrower and/or the assets  acquired  in  such  Acquisition  are  intended  to  be  included  in  the  Aggregate  Borrowing  Base  immediately upon the consummation of the Acquisition (rather than at a later date upon request),  then prior to such Acquisition (1) Agent shall have been provided with such information as it shall  reasonably  request  to  complete  its  evaluation  of  any  such  Person  (including  all  information  necessary  to  comply  with  the  Patriot  Act)  and  such  Collateral  and  (2)  the  Asset  Review  and  Approval Conditions shall have been satisfied;                (f)   the Purchase Consideration paid by or on behalf of the Company and the  other  Subsidiaries  for  any  such  Acquisition  of  an  entity  that  does  not  become  a  Guarantor  (including by way of merger), when aggregated with the Purchase Consideration paid by or on  behalf of the Company and the Subsidiaries for all other Acquisitions made by the Company and  the Subsidiaries of entities that have not become Guarantors (including by way of merger), shall  not exceed $15,000,000; and                (g)   within  the  time  periods  specified  in Section  10.1.9,  Agent  shall  have  a  perfected and continuing first priority security interest in and Lien on all ABL Facility First Lien  Collateral, and subject to the Intercreditor Agreement, a perfected security interest in and Lien on  all other assets that are the subject of such Acquisition (subject, in each case, to Permitted Liens).           Notwithstanding the foregoing, no assets acquired pursuant to a Permitted Acquisition shall be  included in the Aggregate Borrowing Base unless (i) Agent shall have been provided with such  information as it shall reasonably request to complete its evaluation of any Person (including all  information necessary to comply with the Patriot Act) and (ii) the Asset Review and Approval Conditions  shall have been satisfied.          Permitted Asset Disposition:                (a)   a sale of Inventory in the Ordinary Course of Business;                (b)   a disposition of Property for fair market value (as reasonably determined in  good faith by the Company); provided that (i) no Default or Event of Default has occurred and is  continuing or would result therefrom, (ii) immediately after giving effect thereto, Availability is  greater than $1.0, and (iii) if the disposition involved the disposition of Eligible Accounts and/or                                        25  NAI-1507796678v9  

 

  Eligible  Inventory,  the  Company  shall  have  delivered  to  Agent  a  Borrowing  Base  Certificate,  prepared on a Pro Forma Basis, giving effect to the subject disposition;                (c)   a  disposition  of  Inventory  that  is  obsolete,  unmerchantable  or  otherwise  unsaleable  in  the  Ordinary  Course  of  Business  and  dispositions  of accounts  receivable  in  connection with the collection or compromise thereof in the Ordinary Course of Business (which,  for the avoidance of doubt, shall exclude receivable financing or factoring);                (d)   termination  of  a  lease,  sublease,  license,  sublicense,  use  agreement  or  similar agreement of real or personal Property which could not reasonably be expected to have a  Material Adverse Effect;                (e)   the  leasing  (including  subleasing)  or  non-exclusive  licensing  (including  sublicensing) of Intellectual Property, personal Property or real Property in the Ordinary Course  of Business or the abandonment of Intellectual Property in the Ordinary Course of Business as  permitted by Section 10.1.4;                (f)   dispositions  of  obsolete,  uneconomical,  negligible,  worn-out  or  surplus  property;                (g)   sales of Cash Equivalents and marketable securities;                (h)   sales, transfers, leases, exchanges and dispositions (i) among the Obligors,  (ii) from non-Obligors to the Obligors, (iii) among non-Obligors, or (iv) to the extent constituting  an Investment permitted hereunder, from Obligors to non-Obligor Subsidiaries;                (i)   (i)  granting  of  Permitted  Liens;  (ii)  Distributions  permitted  to  be  made  pursuant to Section 10.2.4; (iii) dividends, distributions and purchases of Equity Interests excluded  from  the  definition  of “Distributions”  pursuant  to  the  proviso  therein;  and  (iv)  Investments  otherwise permitted hereunder (other than Investments made pursuant to clause (s) of the definition  of “Restricted Investment”);                (j)   mergers,  consolidations,  amalgamations,  liquidations  and dissolutions  to  the extent permitted by Section 10.2.10;                (k)   termination of any Hedging Agreement;                (l)   any disposition of Real Estate to a Governmental Authority as a result of  casualty or condemnation of such Real Estate;                (m)   issuances of Equity Interests to qualifying directors of Foreign Subsidiaries  or to Persons (other than the Company or a Subsidiary) required by Applicable Law to hold shares  in a Subsidiary;               (n)   the capitalization or forgiveness of Debt owed to it by other Obligors or  Subsidiaries if such capitalization or forgiveness is required in order to comply with so-called “thin  capitalization” rules;                (o)   the cancellation, forgiveness, set off or acceptance of prepayments of Debt  owed to a Borrower to the extent not otherwise prohibited by the terms of this Agreement;                                          26  NAI-1507796678v9  

 

              (p)   dispositions in connection with the settlement of claims or disputes and the  settlement, release or surrender of tort or other litigation claims;                (q)   dispositions set forth on Schedule 10.2.7;                (r)   sale  of  accounts  receivable  and  related  rights  or  assets  pursuant  to  any  Qualified Receivables Transactions and preliminary intercompany transfers of accounts receivable  and related rights or assets in connection therewith;                (s)   dispositions approved in writing by Agent and Required Lenders;                (t)   any Permitted Sale-Leaseback; and               (u)   the sale or issuance of common Equity Interests of any Subsidiary to the  Company or any other Subsidiary (provided that in the case of such issuance of common Equity  Interests of a Subsidiary that is not a wholly owned Subsidiary, Equity Interests of such Subsidiary  may  be  also  issued  to  other  owners  thereof  to  the  extent  such  issuance  is  not  dilutive  to  the  ownership of the Borrowers).          Permitted China Facility Debt: up to the equivalent of $5,000,000 of unsecured Debt incurred by  CVG Vehicle Components (Shanghai) Co., Ltd.         Permitted Contingent Obligations:  Contingent Obligations:               (a)   arising from endorsements of Payment Items for collection or deposit in the  Ordinary Course of Business;                (b)   arising from Hedging Agreements permitted hereunder;                (c)   incurred in the Ordinary Course of Business with respect to surety, appeal  or performance bonds, or other similar obligations;                (d)   arising  from  customary  indemnification  obligations  in  favor  of  (i)  purchasers of Equity Interests or in connection with Permitted Asset Dispositions and (ii) sellers  in connection with Acquisitions permitted hereunder;                (e)   arising under the Loan Documents or the Term Loan Documents; or                (f)   in an aggregate amount of $5,000,000 or less at any time.         Permitted Discretion: Agent’s reasonable credit judgment (from the perspective of an asset-based  lender), exercised in good faith, based upon its consideration of any factor that it reasonably believes to  be relevant, including, without limitation, any factor that it believes (a) could adversely affect the  quantity, mix or value of Collateral (including any Applicable Law that may inhibit collection of an  Account), the enforceability or priority of Agent’s Liens, or the amount in liquidation of any Collateral;  (b) suggests that any collateral report or financial information delivered by any Obligor is incomplete,  inaccurate or misleading in any material respect; (c) increases the likelihood of any Insolvency  Proceeding involving an Obligor, or (d) creates or could result in a Default or Event of Default.  In  exercising such judgment, Agent may consider any factors that could increase the credit risk of lending to  Borrowers on the security of the Collateral.  In exercising its Permitted Discretion with respect to  modifying eligibility criteria for Eligible Accounts and Eligible Inventory, Agent will use commercially                                         27  NAI-1507796678v9  

 

  reasonable efforts to notify Borrower Agent prior to modifying the criteria provided in the definitions  thereof on the Original Closing Date or thereafter.         Permitted Investment: an Investment (including any Permitted Acquisition); provided, that either  (i) Availability, on a Pro Forma Basis after giving effect to such Investment, for each of the 30 days prior  to and including the date such Investment is consummated, is at least the greater of (1) $12,500,000 and  (2) twenty-five percent (25%) of the Revolver Commitments or (ii) (1) the Fixed Charge Coverage Ratio,  on a Pro Forma Basis, is at least 1.00 to 1.00 and (2) Availability, on a Pro Forma Basis after giving effect  to such Investment, for each of the 30 days prior to and including the date of such Investment, is at least  the greater of (A) $7,500,000 and (B) fifteen percent (15%) of the Revolver Commitments.         Permitted Lien: as defined in Section 10.2.2.         Permitted Purchase Money Debt: Purchase Money Debt of Borrowers and Subsidiaries that is  unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not at any  time exceed the greater of (i) $15,000,000 and (ii) 3.0% of Total Assets (prior to giving effect to any  acquisition or Investment made or intended to be made using the proceeds of such Purchase Money  Debt).         Permitted Ratio Debt: means Debt of the Borrowers, or any of them; provided that:                (a)   such  Debt  is  either  (i)  senior  unsecured  or  (ii)  subordinated  in right  of  payment to the Obligations,                (b)   such Debt does not mature prior to the date that is ninety-one (91) days after  the Revolver Termination Date at the time such Debt is incurred,               (c)   such  Debt  has  no  scheduled  amortization  or  scheduled  payments  of  principal and is not subject to mandatory redemption, repurchase, prepayment or sinking fund  obligation  (other  than  customary  offers  to  repurchase  upon  a  change  of  control,  asset  sale  or  casualty event and customary acceleration rights after an event of default) prior to the date that is  ninety-one (91) days after the Revolver Termination Date at the time such Debt is incurred,               (d)   immediately  after  giving  effect  thereto  and  to  the  use  of  the  proceeds  thereof, (i) no Default or Event of Default shall exist or result therefrom and (ii) the Fixed Charge  Coverage Ratio after giving effect to the incurrence of such Debt on a Pro Forma Basis is greater  than 1.00 to 1.00, and               (e)   such Debt is issued on market terms for the type of Debt issued and for  issuers having a similar credit profile and in any event with covenants that are not more restrictive  (taken as a whole) with respect to the Company and the Subsidiaries than the covenants in this  Agreement as reasonably determined by the Company in good faith; provided that a certificate of  the Company as to the satisfaction of the conditions described in clause (e) above delivered to  Agent  at  least  five  (5)  Business  Days  prior  to  the  incurrence  of  such  Debt,  together  with  a  reasonably detailed description of the material covenants of the Debt proposed to be issued or  drafts of documentation relating thereto, stating that the Company has reasonably determined in  good faith that the terms of such Debt satisfy the foregoing requirements, shall be conclusive unless  the Agent notifies the Company within three (3) Business Days of the receipt of such certificate  that it disagrees with such determination (including a reasonably detailed description of the basis  upon which it disagrees).                                         28  NAI-1507796678v9  

 

        Permitted Sale-Leaseback: Asset Dispositions by Borrowers or Subsidiaries of fixed or capital  assets pursuant to sale-leaseback transactions where the sale is for cash consideration in an amount not  less than the fair value of such fixed or capital asset (as reasonably determined in good faith by the  Company).         Person: any individual, corporation, limited liability company, partnership, joint venture, joint  stock company, land trust, business trust, unincorporated organization, Governmental Authority or other  entity.         Plan: any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established  by an Obligor or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of  ERISA, an ERISA Affiliate.         Platform: as defined in Section 15.4.3.         Pledge Agreement: collectively, the amended and restated pledge agreement, dated as of the  Effective Date, among the Company and each other Domestic Subsidiary party thereto, as pledgors and  Bank of America, N.A., as pledgee, and each other pledge agreement executed by an Obligor in favor of  Agent, as amended, restated, supplemented or otherwise modified from time to time.         Preferred Stock: as applied to the Equity Interests of any Person, the Equity Interests of any class  or classes (however designated) which are preferred as to the payment of dividends or distributions, or as  to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person,  over Equity Interests of any other class of such Person.         Prime Rate: the rate of interest announced by Bank of America from time to time as its prime  rate.  Such rate is set by Bank of America on the basis of various factors, including its costs and desired  return, general economic conditions and other factors, and is used as a reference point for pricing some  loans, which may be priced at, above or below such rate.  Any change in such rate publicly announced by  Bank of America shall take effect at the opening of business on the day specified in the announcement.         Pro Forma Basis: relative to a Specified Transaction, means that such Specified Transaction and  the following transactions in connection therewith shall be deemed to have occurred as of the first day of  the applicable period of measurement:  (a) income statement items (whether positive or negative)  attributable to the property or Person subject to such Specified Transaction, (i) in the case of an  Acquisition or permitted Investment described in the definition of “Specified Transaction”, shall be  included and (ii) in the case of a disposition of all or substantially all of the assets of or all of the Equity  Interests of any Subsidiary of a Borrower or any division or product line of a Borrower or any of its  Subsidiaries, shall be excluded, (b) any retirement of Debt, and (c) any Debt incurred or assumed by a  Borrower or any of its Subsidiaries in connection therewith and if such Debt has a floating or formula  rate, shall have an implied rate of interest for the applicable period for purposes of this definition  determined by utilizing the rate which is or would be in effect with respect to such Debt as at the relevant  date of determination.         Pro Rata: with respect to any Lender, (a) with respect to the Tranche A Revolver Loans, a  percentage (carried out to the ninth decimal place) determined (i) while Tranche A Revolver  Commitments are outstanding, by dividing the amount of such Lender’s Tranche A Revolver  Commitment by the aggregate amount of all Tranche A Revolver Commitments; and (ii) at any other  time, by dividing the amount of such Lender’s Tranche A Revolver Loans and LC Obligations by the  aggregate amount of all outstanding Tranche A Revolver Loans and LC Obligations, (b) with respect to  the Tranche B Revolver Loans, a percentage (carried out to the ninth decimal place) determined (i) while  Tranche B Revolver Commitments are outstanding, by dividing the amount of such Lender’s Tranche B  Revolver Commitment by the aggregate amount of all Tranche B Revolver Commitments; and (ii) at any                                         29  NAI-1507796678v9  

 

  other time, by dividing the amount of such Lender’s Tranche B Revolver Loans by the aggregate amount  of all outstanding Tranche B Revolver Loans and (c) with respect to all Loans, a percentage (carried out  to the ninth decimal place) determined (i) while Revolver Commitments are outstanding, by dividing the  amount of such Lender’s Revolver Commitment by the aggregate amount of all Revolver Commitments;  and (ii) at any other time, by dividing the amount of such Lender’s Loans and LC Obligations by the  aggregate amount of all outstanding Loans and LC Obligations.         Properly Contested: with respect to any obligation of an Obligor, (i) the obligation is subject to a  bona fide dispute regarding amount or the Obligor’s liability to pay; (ii) the obligation is being properly  contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (iii)  appropriate reserves have been established in accordance with GAAP; (iv) the failure to pay could not  reasonably be expected to have a Material Adverse Effect, nor result in forfeiture or sale of any assets of  the Obligor; (v) no Lien is imposed on assets of the Obligor, unless bonded and stayed to the reasonable  satisfaction of Agent; and (v) if the obligation results from entry of a judgment or other order, such  judgment or order is stayed pending appeal or other judicial review.         Property: any interest in any kind of property or asset, whether real, personal or mixed, or  tangible or intangible.         Protective Advance: as defined in Section 2.1.6.         Purchase Consideration: the aggregate, without duplication, of (i) cash paid or payable by the  Company and its Subsidiaries, directly or indirectly to the sellers (including the repayment of any Debt or  other obligations and payments with respect to consulting, non-compete or other agreements as a result of  such Acquisition) in connection with any Acquisition, (ii) the  Debt assumed or incurred by the Company  and its Subsidiaries, whether in favor of the seller or any other Person, and whether fixed or contingent,  including without limitation earn-outs and/or other contingent payments and other seller notes in  connection with any Acquisition, and (iii) any other consideration given or obligation incurred by the  Company or any Subsidiary in connection with any Acquisition in favor of the seller or any Affiliate of  the seller; provided, however, Equity Interests of the Company issued in connection with any Acquisition  shall be excluded from the determination of “Purchase Consideration”.         Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of the purchase  price of fixed assets; (b) Debt (other than the Obligations) incurred within 90 days before or after  acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any  renewals, extensions, refinancings or replacements thereof in an aggregate principal amount that does not  exceed the principal amount of the Debt being renewed, extended, refinanced or replaced (except by the  amount of any accrued interest, payment in kind interest, reasonable closing costs, expenses, fees and  premium paid in connection with such renewal, extension, refinancing or replacement).         Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only the fixed  assets acquired with such Debt (and proceeds thereof) and constituting a Capital Lease or a purchase  money security interest under the UCC; provided, that, individual financings of equipment provided by  one lender may be cross-collateralized to other financings of equipment provided by such lender.         Qualified ECP: an Obligor with 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 that constitutes an “eligible contract participant” under the Commodity Exchange Act 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 such act.         Qualified Receivables Transaction: any transaction or series of transactions designated in writing  by the Agent to be a “Qualified Receivables Transaction” and which is entered into by the Borrowers or                                         30  NAI-1507796678v9  

 

  their Subsidiaries, as applicable, pursuant to which the Borrowers or their Subsidiaries, as applicable, may  sell, convey or otherwise transfer to (i) any Excluded Receivables Subsidiary or (ii) any other Person (in  the case of a transfer by an Excluded Receivables Subsidiary), or may grant a security interest in, any  accounts receivable (whether now existing or arising in the future) of the Company, and any assets related  thereto, including all collateral securing such accounts receivable, all contracts and all guarantees or other  obligations in respect of such accounts receivable, and proceeds of such accounts receivable and other  assets that are customarily transferred, or in respect of which security interests are customarily granted, in  connection with asset securitization transactions involving accounts receivable; provided that such  transaction shall not involve any recourse to any Borrower or any Subsidiary (other than recourse only to  the Excluded Receivables Subsidiary or, solely with respect to Standard Securitization Undertakings, any  other Subsidiary) for any reason other than repurchases of non-eligible accounts receivable.         RCRA: the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).         Real Estate: collectively, all right, title and interest (whether as owner, lessor or lessee) in and to  any and all parcels of or interests in real Property owned in fee or leased by any Obligor, whether by  lease, license, easement or other means, together with, in each case, all easements, hereditaments and  appurtenances relating thereto, all buildings, structures, parking areas or other improvements thereon and  appurtenant fixtures incidental to the ownership, lease or operation thereof.         Recipient: Agent, Issuing Bank, any Lender or any other recipient of a payment to be made by an  Obligor under a Loan Document or on account of an Obligation.         Refinancing Conditions: the following conditions for Refinancing Debt:               (a)   it is in an aggregate principal amount that does not exceed the principal  amount of the Debt being extended, renewed, refinanced or replaced (except by the amount of any  accrued interest, payment in kind interest, reasonable closing costs, expenses, fees and premium  paid in connection with such extension, renewal, refinancing or replacement);                (b)   it has a final stated maturity no sooner than, and a Weighted Average Life  to Maturity no less than, the Debt being extended, renewed, refinanced or replaced;                (c)   the Debt, and/or the Liens securing the Debt, as applicable, is subordinated  to  the  Obligations  at  least  to  the  same  extent  as  the  Debt,  or  the  Liens  securing  the  Debt,  as  applicable, being extended, renewed, refinanced or replaced;                (d)   such Debt is issued on market terms for the type of Debt issued and for  issuers having a similar credit profile and in any event with covenants that are not more restrictive  (taken as a whole) with respect to the Company and the Subsidiaries than the covenants in this  Agreement as reasonably determined by the Company in good faith; provided that a certificate of  the Company as to the satisfaction of the conditions described in clause (d) above delivered to  Agent  at  least  five  (5)  Business  Days  prior to  the  incurrence  of  such  Debt,  together  with  a  reasonably detailed description of the material covenants of the Debt proposed to be issued or  drafts of documentation relating thereto, stating that the Company has reasonably determined in  good faith that the terms of such Debt satisfy the foregoing requirements, shall be conclusive unless  the Agent notifies the Company within three (3) Business Days of the receipt of such certificate  that it disagrees with such determination (including a reasonably detailed description of the basis  upon which it disagrees);                                          31  NAI-1507796678v9  

 

              (e)   the Debt is not secured by any property or assets other than the property or  assets that were collateral (and then only with the same priority) for the Debt being extended,  renewed or refinanced at the time of such extension, renewal or refinancing;                (f)   the obligor or obligors under any such Refinancing Debt are the same as the  obligor(s) under the Debt being extended, renewed, refinanced or replaced on such Debt; and                (g)   upon giving effect to it, no Default or Event of Default exists.         Refinancing Debt: Borrowed Money that is the result of an extension, renewal or refinancing of  the Term Loan Indebtedness or Debt permitted under Section 10.2.1(b), (d), (f), or (x), in each case, so  long as each Refinancing Condition is satisfied and, in the case of the Term Loan Indebtedness, is  permitted by and in accordance with the Intercreditor Agreement.         Reimbursement Date: as defined in Section 2.3.2.         Related Parties: with respect to any Person, such Person’s Affiliates and the partners, directors,  officers, employees, agents, sub-agents, trustees, attorneys and advisors of such Person and of such  Person’s Affiliates.         Rent and Charges Reserve: the aggregate of (a) all past due rent and other amounts owing by an  Obligor to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder,  broker or other Person who possesses any Collateral or could assert a Lien on any Collateral; and (b) a  reserve at least equal to three months rent and other charges that could be payable to any such Person,  unless it has executed a Lien Waiver.         Report: as defined in Section 12.2.3.         Reportable Event: any of the events set forth in Section 4043(c) of ERISA, other than events for  which the 30 day notice period has been waived.         Required Lenders: two or more unaffiliated Secured Parties holding more than 50% of (a) the  aggregate outstanding Revolver Commitments; or (b) after termination of the Revolver Commitments, the  aggregate outstanding Loans and LC Obligations or, upon Full Payment of all Loans and LC Obligations,  the aggregate remaining Obligations; provided, however, that Commitments, Loans and other Obligations  held by a Defaulting Lender and its Affiliates shall be disregarded in making such calculation, but any  related Fronting Exposure shall be deemed held as a Loan or LC Obligation by the Lender that funded the  applicable Loan or issued the applicable Letter of Credit.         Restatement Effective Date: April 26, 2011.         Restricted Investment: any Investment by a Borrower or Subsidiary, other than:               (a)   Investments in Subsidiaries to the extent existing on the Effective Date and  other Investments existing on the Effective Date and set forth on Schedule 10.2.6(I);                (b)   Cash  Equivalents; provided, however,  that,  to  the  extent  such  Cash  Equivalents constitute Collateral, such Cash Equivalents are subject to Agent’s Lien and control,  pursuant to documentation in form and substance reasonably satisfactory to Agent;                 (c)   Investments  consisting of lease, utility  and other similar deposits  or any  other deposit permitted under Section 10.2.2 in the Ordinary Course of Business;                                          32  NAI-1507796678v9  

 

              (d)   prepayments and deposits to suppliers in the Ordinary Course of Business;                (e)   Hedging Agreements to the extent permitted by Section 10.2.16;                (f)   Investments (i) by an Obligor in any other Obligor, or (ii) by Subsidiaries  that are non-Obligors into Obligors or other non-Obligors;                (g)   the establishment of wholly owned Subsidiaries subject to compliance with  Section 10.1.9 (to the extent applicable); provided that any Subsidiary established in reliance on  this clause (g) may be less than wholly owned solely to the extent necessary due to any issuance  of Equity Interests to qualifying directors of Foreign Subsidiaries or to Persons (other than the  Company or a Subsidiary) required by Applicable Law to hold shares in such Subsidiary;                (h)   Investments  in  securities  or  other  assets  of  trade  creditors,  customers  or  other Persons in  the Ordinary Course of Business  that are received in  settlement  of bona fide  disputes or pursuant to any plan of reorganization or liquidation or similar arrangement upon the  bankruptcy or insolvency of such trade creditors or customers;                (i)   guarantees, Contingent Obligations and other Investments permitted under  Section 10.2.1;                (j)   Investments to the extent such Investments reflect an increase in the value  of Investments otherwise permitted under Section 10.2.6 hereof;                (k)   the capitalization or forgiveness of Debt owed to it by other Obligors or  Subsidiaries if such capitalization or forgiveness is required in order to comply with so-called “thin  capitalization” rules;                (l)   the cancellation, forgiveness, set off or acceptance of prepayments of Debt  owed to the Company to the extent not otherwise prohibited by the terms of this Agreement;                (m)   loans and advances to an officer or employee for salary, travel expenses,  commissions and similar items in the Ordinary Course of Business, not to exceed, in the aggregate,  $4,000,000 at any time outstanding;                (n)   prepaid  expenses  and  extensions  of  trade  credit  made  in  the  Ordinary  Course of Business;                (o)   deposits with financial institutions permitted hereunder;                (p)   Investments in an Excluded Receivables Subsidiary in connection with a  sale of receivables to such Excluded Receivables Subsidiary pursuant to a Qualified Receivables  Transaction;                 (q)   Investments  arising  in  connection  with  Permitted  Asset  Dispositions  permitted hereunder (other than Permitted Asset Dispositions made pursuant to clause (i)(iv) of  the definition of “Permitted Asset Disposition”);               (r)   Investments set forth on Schedule 10.2.6(II);                (s)   Permitted Investments; and                                        33  NAI-1507796678v9  

 

              (t)   any  intermediate  Investment  necessary  to  facilitate  the  ultimate  consummation of an Investment otherwise permitted hereby.         Restrictive Agreement: an agreement (other than a Loan Document) that conditions or restricts  the right of any Borrower, Subsidiary or other Obligor to incur or repay Borrowed Money, to grant Liens  on any assets, to declare or make Distributions, to modify, extend or renew any agreement evidencing  Borrowed Money, or to repay any intercompany Debt.         Revolver Commitment: for any Lender, its Tranche A Revolver Commitment or Tranche B  Revolver Commitment.  “Revolver Commitments” means the aggregate amount of such commitments of  all Lenders.         Revolver Loan: a Tranche A Revolver Loan, a Tranche B Revolver Loan, any Swingline Loan,  Overadvance Loan or Protective Advance.         Revolver Notes: collectively, the Tranche A Revolver Notes and the Tranche B Revolver Notes.         Revolver Termination Date: April 12, 2022.         Revolver Usage: (a) the aggregate amount of outstanding Revolver Loans; plus (b) the aggregate  Stated Amount of outstanding Letters of Credit, except to the extent Cash Collateralized by Borrowers.          Revolving Facility Exposure: for any Lender at any time, the sum of (i) the principal amount of  all Revolver Loans made to Borrowers by such Lender and outstanding at such time, and (ii) such  Lender’s share of the LC Outstandings at such time.         Royalties: all royalties, fees, expense reimbursement and other amounts payable by a Borrower  under a License.         S&P: Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies,  Inc. and any successor thereto.         Sanction: any sanction administered or enforced by the U.S. Government (including OFAC), the  United Nations Security Council, European Union, Her Majesty’s Treasury or other sanctions authority.          Scheduled Unavailability Date: a specific date after which LIBOR or the LIBOR Screen Rate  shall no longer be made available, or used for determining the interest rate of loans.         Second A&R Loan Agreement: as defined in the preamble.         Second Lien Notes: the 7.875% Senior Secured Notes due April 15, 2019, issued by the Company  under the Indenture, in the aggregate amount of $250,000,000 (plus all interest paid in kind).         Second Restatement Effective Date: November 15, 2013.          Secured Bank Product Obligations: Debt, obligations and other liabilities with respect to Bank  Products owing by a Borrower or a controlled Affiliate of a Borrower to a Secured Bank Product  Provider; provided, that Secured Bank Product Obligations of an Obligor shall not include any Excluded  Swap Obligations.         Secured Bank Product Provider: (a) Bank of America or any of its Affiliates; and (b) any other  Lender or Affiliate of a Lender that is providing a Bank Product, provided such provider delivers written  notice to Agent, in form and substance satisfactory to Agent that has been consented to in writing by  Borrower Agent, within 10 days following the later of the Effective Date or creation of the Bank Product,                                        34  NAI-1507796678v9  

 

  (i) describing the Bank Product and setting forth the maximum amount to be secured by the Collateral,  and (ii) agreeing to be bound by Section 12.14.         Secured Parties: Agent, Issuing Bank, Lenders and Secured Bank Product Providers.         Security Documents: this Agreement (in respect of the grants of security made pursuant to  Section 7), the Pledge Agreements, Guaranties, Copyright Security Agreements, Patent Security  Agreements, Trademark Security Agreements, Deposit Account Control Agreements, Perfection  Certificates and all other documents, instruments and agreements now or hereafter securing (or given with  the intent to secure) any Obligations.         Senior Officer: the chairman of the board, president, chief executive officer, managing director,  treasurer, controller, director of finance, chief financial officer or finance officer of a Borrower, any other  officer or employee of an Obligor so designated by any of the foregoing officers in a notice to the Agent  or any other officer or employee of any Obligor designated in or pursuant to an agreement between an  Obligor and the Agent.         Settlement Report: a report delivered by Agent to Lenders summarizing the Revolver Loans and  participations in LC Obligations outstanding as of a given settlement date, allocated to Lenders on a Pro  Rata basis in accordance with their Revolver Commitments.         Software: as defined in the definition of “Intellectual Property”.         Solvent: as to any Person, such Person (a) owns Property whose fair saleable value is greater than  the amount required to pay all of its debts (including contingent, subordinated, unmatured and  unliquidated liabilities); (b) owns Property whose present fair saleable value (as defined below) is greater  than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated  liabilities) of such Person as they become absolute and matured; (c) is able to generally pay all of its debts  as they mature; (d) has capital that is not unreasonably small for its business and is sufficient to carry on  its business and transactions and all business and transactions in which it is about to engage; (e) is not  “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by  way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan  Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or  defraud either present or future creditors of such Person or any of its Affiliates.  “Fair saleable value”  means the amount that could be obtained for assets within a reasonable time, either through collection or  through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who  is willing (but under no compulsion) to purchase on a going concern basis.         Specified Obligor: an Obligor that is not then an “eligible contract participant” under the  Commodity Exchange Act (determined prior to giving effect to Section 5.11).         Specified Transaction: (a) any disposition of all or substantially all the assets of or all the Equity  Interests of any Subsidiary or of any division or product line of a Borrower or any of its Subsidiaries, (b)  any Acquisition permitted hereunder, (c) any proposed incurrence of Debt or (d) the proposed making of  a Distribution, in each case, to the extent permitted hereunder.         Standard Securitization Undertakings: those representations, warranties, covenants and  indemnities entered into by the Company or any Excluded Receivables Subsidiary which are determined  in good faith by the Company to be customary in securitization transactions involving accounts  receivables.         Stated Amount: the stated amount of a Letter of Credit, including any automatic increase  provided by the terms of the Letter of Credit or related LC Documents, whether or not then effective.                                         35  NAI-1507796678v9  

 

        Subordinated Debt: Debt incurred by a Borrower that is expressly subordinate and junior in right  of payment to Full Payment of all Obligations pursuant to a customary subordination agreement in form  and substance reasonably satisfactory to Agent.         Subsidiary: any entity at least 50% of whose voting securities or Equity Interests is owned by the  Company (including indirect ownership by the Company through other entities in which the Company  directly or indirectly owns 50% of the voting securities or Equity Interests).         Swap Obligations: with respect to an Obligor, any obligation to pay or perform under a Hedging  Agreement that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange  Act.         Swingline Loan: any Borrowing of Base Rate Loans that are Tranche A Revolver Loans funded  with Agent’s funds, until such Borrowing is settled among Tranche A Lenders pursuant to Section 4.1.3.         Taxes: all present or future taxes, levies, imposts, duties, deductions, withholdings (including  backup withholding), assessments, fees or other charges imposed by any Governmental Authority,  including any interest, additions to tax or penalties applicable thereto.         Term Loan Agent: means Bank of America, as administrative agent and any successor  administrative agent under the Term Loan Credit Agreement.         Term Loan Credit Agreement: means that certain Term Loan and Security Agreement dated as of  the date hereof by and among the Company, the other loan parties thereto, the Term Loan Agent and the  Term Loan Lenders, as the same may be amended, restated, amended and restated, replaced, modified or  supplemented from time to time, including, without limitation, amendments, amendment and  restatements, modifications, supplements, restatements and/or replacements thereof giving effect to  increases, renewals, extensions, refundings, deferrals, restructurings, replacements or refinancings of, or  additions to, the arrangements provided in such documents, in each case in accordance with the terms  thereof and the terms of this Agreement and the Intercreditor Agreement.         Term Loan Documents: means, collectively, the Term Loan Credit Agreement and each “Other  Document” as defined therein, as the same may be amended, restated, amended and restated, replaced  modified or supplemented from time to time, including, without limitation, amendments, amendment and  restatements, modifications, supplements, restatements and/or replacements thereof giving effect to  increases, renewals, extensions, refundings, deferrals, restructurings, replacements or refinancings of, or  additions to, the arrangements provided in such documents, in each case in accordance with the terms  thereof and the terms of this Agreement and the Intercreditor Agreement.         Term Loan First Lien Collateral: has the meaning provided in the Intercreditor Agreement.          Term Loan Incremental Cap: shall mean the “Incremental Cap” as such term is defined in the  Term Loan Credit Agreement, as in effect as of the date hereof.           Term Loan Indebtedness: shall have the meaning set forth in the Intercreditor Agreement.          Term Loan Lenders: means each of the lenders from time to time party under the Term Loan  Credit Agreement.          Term Loans: has the meaning pursuant to the Term Loan Credit Agreement.          Total Assets: as of any date of determination, the total assets on a consolidated basis of the  Company and the Subsidiaries as at the end of the most recently ended Fiscal Quarter for which financial                                         36  NAI-1507796678v9  

 

  statements have been delivered pursuant to Section 10.1.2(b) as shown on such financial statements in  accordance with GAAP.         Trademark Security Agreement: each trademark security agreement pursuant to which an Obligor  grants to Agent, for the benefit of Secured Parties, a Lien on such Obligor’s interests in Trademarks, as  security for the Obligations, as amended, restated, supplemented or otherwise modified from time to time.         Trademarks: as defined in the definition of “Intellectual Property”.         Trade Secrets: as defined in the definition of “Intellectual Property”.         Tranche A Accounts Formula Amount: 85% of the Value of Eligible Accounts.         Tranche A Borrowing Base: on any date of determination, an amount equal to the lesser of (a)     the aggregate amount of Tranche A Revolver Commitments, minus the LC Reserve; or (b) the sum of     the Tranche A Accounts Formula Amount, plus the Tranche A Inventory Formula Amount.         Tranche A Increased Amount Date: as defined in Section 2.1.7.        Tranche A Inventory Formula Amount: the sum of (A) the lesser of (1) 65% of the Value of     Eligible Finished Goods Inventory and (2) 85% of the NOLV Percentage of the Eligible Finished     Goods Inventory; plus (B) the lesser of (1) 65% of the Value of Eligible Raw Materials Inventory and     (2) 85% of the NOLV Percentage of Eligible Raw Materials Inventory; plus (C) the lesser of (i) 50%     of the Value of Work-In-Progress Inventory and (ii) 85% of the NOLV Percentage of Work-In-    Progress Inventory.         Tranche A Revolver Commitment: for any Lender, its obligation to make Tranche A Revolver     Loans and to participate in LC Obligations up to the maximum principal amount shown on Schedule     1.1 (subject to any increase permitted pursuant to Section 2.1.7), or as hereafter determined pursuant     to each Assignment and Acceptance to which it is a party. “Tranche A Revolver Commitments”     means the aggregate amount of such commitments of all Tranche A Revolver Lenders.         Tranche A Revolver Lenders: as of any date of determination, Lenders having a Tranche A     Revolver Commitment or holding a Tranche A Revolver Loan.         Tranche A Revolver Loan: a loan made pursuant to Section 2.1.1(a), and any Swingline Loan,     Overadvance Loan or Protective Advance that consists of Tranche A Revolver Loans in accordance     with Section 2.1.6.                                         37  NAI-1507796678v9  

 

        Tranche A Revolver Note: a promissory note to be executed by Borrowers in favor of a Lender     in the form of Exhibit A-1, which shall be in the amount of such Lender’s Tranche A Revolver     Commitment and shall evidence the Tranche A Revolver Loans made by such Lender.         Tranche B Accounts Formula Amount: the Percentage Factor times the Value of Eligible     Accounts.  The “Percentage Factor” for purposes of this definition shall initially be 5% and shall be     reduced by 1/24th on the first Business Day following the end of the twelfth full calendar month after     the Amendment No. 1 Effective Date and on the first Business Day following the end of every     succeeding calendar month thereafter.         Tranche B Borrowing Base: on any date of determination, an amount equal to the lesser of (a)     the aggregate amount of Tranche B Revolver Commitments; or (b) the sum of the Tranche B     Accounts Formula Amount plus the Tranche B Inventory Formula Amount.         Tranche B Inventory Formula Amount: the sum of (i) the Percentage Factor times (A) the lesser     of (1) 65% of the Value of Eligible Finished Goods Inventory and (2) 85% of the NOLV Percentage     of the Eligible Finished Goods Inventory; plus (ii) the Percentage Factor times (B) the lesser of (1)     65% of the Value of Eligible Raw Materials Inventory and (2) 85% of the NOLV Percentage of     Eligible Raw Materials Inventory; plus (iii) the Percentage Factor times (C) the lesser of (i) 50% of     the Value of Work-In-Progress Inventory and (ii) 85% of the NOLV Percentage of Work-In-Progress     Inventory.  The “Percentage Factor” for purposes of this definition shall initially be 10% and shall be     reduced by 1/24th on the first Business Day following the end of the twelfth full calendar month after     the Amendment No. 1 Effective Date and on the first Business Day following the end of every     succeeding calendar month thereafter.         Tranche B Maximum Amount: as of any date of determination, an amount equal to the lesser of     (i) the Tranche B Revolver Commitments of all Tranche B Revolver Lenders on such date and (ii) the     Aggregate Borrowing Base on such date minus the Tranche A Borrowing Base on such date.         Tranche B Revolver Commitment: for any Lender, its obligation to make Tranche B Revolver     Loans up to the maximum principal amount shown on Schedule 1.1, or as hereafter determined                                         38  NAI-1507796678v9  

 

    pursuant to each Assignment and Acceptance to which it is a party. “Tranche B Revolver     Commitments” means the aggregate amount of such commitments of all Tranche B Revolver Lenders.      For the avoidance of doubt, the Tranche B Revolver Commitment of each Lender will be reduced by     1/24th on the first Business Day following the end of the twelfth full calendar month after the     Amendment No. 1 Effective Date and on the first Business Day following the end of every succeeding     calendar month thereafter.         Tranche B Revolver Lenders: as of any date of determination, Lenders having a Tranche B     Revolver Commitment or holding a Tranche B Revolver Loan.         Tranche B Revolver Loan: a loan made pursuant to Section 2.1.1(b), and any Protective     Advance that consists of Tranche B Revolver Loans in accordance with Section 2.1.6.         Tranche B Revolver Note: a promissory note to be executed by Borrowers in favor of a Lender     in the form of Exhibit A-2, which shall be in the amount of such Lender’s Tranche B Revolver     Commitment and shall evidence the Tranche B Revolver Loans made by such Lender.         Transferee: any actual or potential Eligible Assignee, Participant or other Person acquiring an  interest in any Obligations.         Type: any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same interest option  and, in the case of LIBOR Loans, the same Interest Period.         UCC: the Uniform Commercial Code as in effect in the State of New York or, when the laws of  any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code  as in effect in such jurisdiction.         Unfunded Pension Liability: the excess of a Pension Plan’s benefit liabilities under Section  4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance  with the assumptions used for funding the Pension Plan pursuant to the Code, ERISA or the Pension  Protection Act of 2006 for the applicable plan year.         Unpaid Sum: any sum due and payable but unpaid by a Borrower under this Agreement.         Upstream Payment: a pro rata Distribution by a Subsidiary of a Borrower to such Subsidiary’s  direct equity holders.         Unused Balance: as defined in Section 3.2.1.         U.S. Person: “United States Person” as defined in Section 7701(a)(30) of the Code.         U.S. Tax Compliance Certificate: as defined in Section 5.10.2(b)(iii).                                          39  NAI-1507796678v9  

 

        Value: (a) for Inventory, its value determined on the basis of the lower of cost or market,  calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany  profit among Borrowers and their Affiliates; and (b) for an Account, its face amount, net of any returns,  rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise  or other taxes) that have been or could be claimed by the Account Debtor or any other Person.         Voting Stock: for any Person, all classes of Equity Interests of such Person then outstanding and  normally entitled (without regard to the occurrence of any contingency) to vote in the election of  directors, managers or trustees thereof.         Weighted Average Life to Maturity: when applied to any Debt at any date, the number of years  (and/or portion thereof) obtained by dividing: (a) the sum of the products obtained by multiplying (i) the  amount of each then remaining installment, sinking fund, serial maturity or other required payments of  principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to  the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the  then outstanding principal amount of such Debt.         Write-Down and Conversion Powers: the write-down and conversion powers of the applicable  EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA  Member Country, which powers are described in the EU Bail-In Legislation Schedule.         1.2.  Accounting Terms.           Under the Loan Documents (except as otherwise specified herein or therein), all accounting  terms shall be interpreted, all accounting determinations shall be made, and all financial statements  shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent  audited financial statements of Borrowers delivered to Agent before the Effective Date and using  the same inventory valuation method as used in such financial statements, except for any change  required or permitted by GAAP if Borrowers’ certified public accountants concur in such change,  the change is disclosed to Agent and Section 10.3 is amended in a manner satisfactory to Required  Lenders to take into account the effects of the change.         Notwithstanding  anything  to  the  contrary  contained  herein,  financial  ratios  and  other  financial calculations pursuant to this Agreement shall, following any Specified Transaction, be  calculated on a Pro Forma Basis.         If at any time any change in GAAP would affect the computation of any financial ratio or  requirement set forth in any Loan Document, and either Borrower Agent or the Required Lenders  shall so request, Agent, Lenders and Borrower Agent shall negotiate in good faith to amend such  ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject  to  the  approval  of  the  Required  Lenders);  provided  that,  until  so  amended,  (i)  such  ratio  or  requirement shall continue to be computed in accordance with GAAP prior to such change therein  and (ii) Borrower Agent shall provide to Agent and Lenders as reasonably requested hereunder a  reconciliation  between  calculations  of  such  ratio  or  requirement  made  before  and  after  giving  effect to such change in GAAP.  It is agreed that a change in GAAP contemplated above shall  include  the  International  Financial  Reporting  Standards,  or  certain  of  the  standards  contained  therein, becoming the required methodology of financial reporting.  Notwithstanding the foregoing  the implementation following the Effective Date of any changes in GAAP that would require a  lease to be capitalized shall be disregarded for purposes of any financial ratio or limitation in this  Agreement.                                         40  NAI-1507796678v9  

 

        1.3.  Uniform Commercial Code.           As used herein, the following terms are defined in accordance with the UCC in effect in  the State of New York from time to time:  “Chattel Paper,” “Commercial Tort Claim,” “Deposit  Account,”  “Document,”  “Equipment,”  “General  Intangibles,”  “Goods,”  “Instrument,”  “Inventory,” “Investment Property,” “Letter-of-Credit Right” and “Supporting Obligation.”         1.4.  Certain Matters of Construction.           The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this  Agreement as a whole and not to any particular section, paragraph or subdivision.  Any pronoun  used shall be deemed to cover all genders.  In the computation of periods of time from a specified  date to a later specified date, “from” means “from and including,” and “to” and “until” each mean  “to  but  excluding.”   The  terms  “including”  and  “include”  shall  mean  “including,  without  limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem  generis shall  not  be  applicable  to  limit  any  provision.   Section  titles  appear  as  a  matter  of  convenience only and shall not affect the interpretation of any Loan Document.  All references to  (a) laws or statutes include all related rules, regulations, interpretations, supplements, amendments  and successor provisions; (b) any document, instrument or agreement include any amendments,  amendments  and  restatements,  refinancings,  replacements,  waivers  and  other  modifications,  extensions or renewals (to the extent permitted by the Loan Documents); (c) any section mean,  unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules  mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are  hereby incorporated by reference; (e) any Person include successors and assigns; (f) time of day  mean times of day at Agent’s notice address under Section 15.3.1; or (g) discretion of Agent,  Issuing Bank or any Lender mean the sole and absolute discretion of such Person.  All calculations  of Value, fundings of Loans, issuances of Letters of Credit and payments of Obligations shall be  in Dollars.  Unless the context otherwise requires, all determinations (including calculations of  Tranche  A  Borrowing  Base,  Tranche  B  Borrowing  Base  and  Aggregate  Borrowing  Base  and  financial covenants) made from time to time under the Loan Documents shall be made in light of  the circumstances existing at such time.  Tranche A Borrowing Base, Tranche B Borrowing Base  and  Aggregate  Borrowing  Base  calculations  shall  be  consistent  with  historical  methods  of  valuation and calculation, and otherwise satisfactory to Agent (and not necessarily calculated in  accordance with GAAP).  Borrowers shall have the burden of establishing any alleged negligence,  misconduct  or  lack  of  good  faith  by  Agent,  Issuing  Bank  or  any  Lender  under  any  Loan  Documents.  No provision of any Loan Documents shall be construed against any party by reason  of such party having, or being deemed to have, drafted the provision.  Whenever the phrase “to the  best  of  Borrowers’  knowledge”  or  words  of  similar  import  are  used  in  any  Loan  Documents,  including  references  to  “knowledge  of  any  Obligor”,  it  means  actual  knowledge  of a  Senior  Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good  faith  and  diligent  performance  of  his  or  her  duties,  including  reasonably  specific  inquiries  of  employees or agents and a good faith attempt to ascertain the matter to which such phrase relates.         1.5.  Certifications.           All certifications to be made hereunder by an officer or representative of an Obligor shall  be made by such person in his or her capacity solely as an officer or a representative of such  Obligor, on such Obligor’s behalf and not in such person’s individual capacity.                                         41  NAI-1507796678v9  

 

        1.6.  Times of Day.           Unless  otherwise specified, all references  herein to  times of day shall be references  to  Central time (daylight or standard, as applicable).         1.7.  Divisions.           For all purposes under the Loan Documents, in connection with any division or plan of  division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a)  if any  asset, right,  obligation or liability of any  Person becomes the asset,  right,  obligation or  liability of a different Person, then it shall be deemed to have been transferred from the original  Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person  shall be deemed to have been organized on the first date of its existence by the holders of its Equity  Interests at such time.   SECTION 2.  CREDIT FACILITIES         2.1.  Revolver Commitments.                 2.1.1. Revolver Loans.                 (a)   Each Tranche A Revolver Lender agrees, severally on a Pro Rata basis up  to its Tranche A Revolver Commitment, on the terms set forth herein, to make Tranche A Revolver  Loans to Borrowers from time to time through the Commitment Termination Date, provided that  no Tranche A Revolver Loan (other than any Protective Advances or Overadvances or Tranche A  Revolver Loans deemed to have been made pursuant to Section 2.3.2 and except as set forth in  Section 4.1.3(b)) shall be made pursuant to this Section 2.1.1(a) at any time when the outstanding  principal amount of the Tranche B Revolver Loans is less than the Tranche B Maximum Amount.  Tranche A Revolver Loans may be repaid and reborrowed as provided herein. In no event shall  Tranche A Revolver Lenders have any obligation to honor a request for a Tranche A Revolver  Loan if (x) the unpaid balance of Tranche A Revolver Loans outstanding at such time (including  the requested Loan) plus the aggregate outstanding principal amount of Swingline Loans plus the  LC Outstandings at such time would exceed an amount equal to the Aggregate Borrowing Base  minus the Tranche B Borrowing Base or (y) the sum of the unpaid balance of Tranche A Revolver  Loans  outstanding  at  such time (including the requested  Loan) plus  the aggregate outstanding  principal  amount  of  Swingline  Loans  plus  the  LC  Outstandings  at  such  time  plus  the  unpaid  balance  of  Tranche  B  Revolver  Loans  outstanding  at  such  time  would  exceed  the  Aggregate  Borrowing Base.               (b)   Each Tranche B Revolver Lender agrees, severally on a Pro Rata basis up  to its Tranche B Revolver Commitment, on the terms set forth herein, to make Tranche B Revolver  Loans to Borrowers from time to time through the Commitment Termination Date. Tranche B  Revolver Loans may be repaid and reborrowed as provided herein; provided that, prior to repaying  any Tranche B Revolver Loan, except to the extent provided in the last sentence of Section 2.1.5,  all outstanding Tranche A Revolver Loans shall have been repaid in full and all outstanding LC  Obligations shall have been Cash Collateralized. In no event shall Tranche B Revolver Lenders  have any obligation to honor a request for a Tranche B Revolver Loan if (x) the unpaid balance of  Tranche B Revolver Loans outstanding at such  time (including the requested Loan) would exceed  an amount equal to the Aggregate Borrowing Base minus the Tranche A Borrowing Base or (y)  the sum of the unpaid balance of Tranche B Revolver Loans outstanding at such time (including                                        42  NAI-1507796678v9  

 

  the requested Loan) plus the unpaid balance of Tranche A Revolver Loans outstanding at such  time would exceed the Aggregate Borrowing Base.               2.1.2. Revolver Notes and Denominations.                 The Revolver Loans made by each Lender and interest accruing thereon shall be  evidenced  by  the  records  of  Agent  and  such  Lender.   Promptly  following  the  request  of  any  Tranche A Revolver Lender, Borrowers shall deliver a Tranche A Revolver Note to such Lender.  Promptly following the  request  of any  Tranche  B Revolver  Lender,  Borrowers shall deliver  a  Tranche B Revolver Note to such Lender.  Borrowings by a Borrower shall be denominated only  in Dollars.               2.1.3. Use of Proceeds.                 The proceeds of Revolver Loans shall be used by Borrowers solely (a) to satisfy  existing Debt under the Second A&R Loan Agreement and the Indenture; (b) to pay fees and  transaction expenses associated with the closing of this credit facility; (c) to pay Obligations in  accordance with this Agreement; and (d) for working capital and other lawful corporate purposes  of Borrowers (including Capital Expenditures and the financing of Investments and Acquisitions  permitted hereunder). Borrowers shall not, directly or indirectly, use any Letter of Credit or Loan  proceeds,  nor  use,  lend,  contribute  or  otherwise  make  available  any  Letter  of  Credit  or  Loan  proceeds to any Subsidiary, joint venture partner or other Person, (i) to fund any activities of or  business with any Person, or in any Designated Jurisdiction, that, at the time of issuance of the  Letter of Credit or funding of the Loan, is the subject of any Sanction; or (ii) in any manner that  would result in a violation of a Sanction by any Person (including any Secured Party or other  individual or entity participating in any transaction); or (iii) for any purpose that would breach the  U.S.  Foreign  Corrupt  Practices  Act  of  1977,  UK  Bribery  Act  2010  or  similar  law  in  any  jurisdiction.                2.1.4. Voluntary Reduction or Termination of Revolver Commitments.                 (a)   The Revolver Commitments shall terminate on the Revolver Termination  Date, unless sooner terminated in accordance with this Agreement.  Upon at least 10 Business  Days prior written notice to Agent at any time after the first Loan Year, Borrowers may, at their  option, terminate the Tranche A Revolver Commitments, the Tranche B Revolver Commitments  and this credit facility.  Any notice of termination given by Borrowers shall be irrevocable (unless  given in connection with refinancing the Obligations).  On the Commitment Termination Date,  Borrowers shall make Full Payment of all Obligations.               (b)   Borrowers may  permanently  reduce  either  the  Tranche  A  Revolver  Commitments or the Tranche B Revolver Commitments, in each case, on a Pro Rata basis for each  Lender, upon at least 10 Business Days prior written notice to Agent, which notice shall specify  the amount of the reduction and shall be irrevocable once given (unless given in connection with  refinancing the Obligations).  Each reduction shall be in a minimum amount of $10,000,000 in the  case of the Tranche A Revolver Commitments and $2,000,000 in the case of Tranche B Revolver  Commitments, and in each case, an increment of $1,000,000 in excess thereof; provided, that in  no event shall such permanent reduction reduce the Revolver Commitments, in the aggregate, to  an amount less than $20,000,000 (other than in connection with refinancing the Obligations).                                         43  NAI-1507796678v9  

 

              2.1.5. Overadvances.   If  the  aggregate  Revolver  Loans  exceed  the  Aggregate  Borrowing Base (“Overadvance”) at any time, the excess amount shall be payable by Borrowers  on  demand by  Agent,  but  all  such  Revolver  Loans  shall  nevertheless  constitute  Obligations  secured  by  the  Collateral  and  entitled  to  all  benefits  of  the  Loan  Documents.   Any  payments  received by Agent with respect to an Overadvance shall be applied first to all outstanding Tranche  A Revolver Loans and then to all outstanding Tranche B Revolver Loans. Unless its authority has  been revoked in writing by Required Lenders, Agent may require Tranche B Revolver Lenders  and, if the outstanding principal amount of Tranche B Revolver Loans is greater than the Tranche  B Maximum Amount, Tranche A Revolver Lenders to honor requests for Overadvance Loans and  to forbear from requiring Borrowers to cure an Overadvance, (a) when no other Event of Default  is known to Agent, as long as (i) the Overadvance does not continue for more than 30 consecutive  days (and no Overadvance may exist for at least five consecutive days thereafter before further  Overadvance  Loans  are  required),  and  (ii)  the  Overadvance,  when combined  with  all  other  Overadvances and Protective Advances,  as applicable, is not known by Agent to exceed 10% of  the Aggregate Borrowing Base; and (b) regardless of whether an Event of Default exists, if Agent  discovers an Overadvance not previously known by it to exist, as long as from the date of such  discovery the Overadvance (i) is not increased by more than 5% of the Aggregate Borrowing Base,  and (ii) does not continue for more than 30 consecutive days.  In no event shall Overadvance Loans  be made that would cause (i) the outstanding Tranche A Revolver Loans and LC Obligations of  any  Tranche  A  Revolver  Lender  to  exceed  its  Tranche  A  Revolver  Commitment,  (ii)  the  outstanding Tranche B Revolver Loans of any Tranche B Revolver Lender to exceed its Tranche  B Revolver Commitment or (iii) the outstanding Tranche A Revolver Loans, Tranche B Revolver  Loans and LC Obligations to exceed the aggregate Revolver Commitments. Any funding of an  Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by Agent or  Lenders of the Event of Default caused thereby. In no event shall any Borrower or other Obligor  be deemed a beneficiary of this Section nor authorized to enforce any of its terms. Notwithstanding  anything to the contrary set forth in this Section 2.1.5, if the aggregate Tranche B Revolver Loans  exceed at any time (A) the Aggregate Borrowing Base minus Tranche A Borrowing Base or (B)  the Tranche B Maximum Amount, the excess amount, on a Pro Rata basis for each Tranche B  Revolver Lender, shall be automatically converted into an outstanding principal amount of the  Tranche A Revolver Loan, on a Pro Rata basis for each Tranche A Revolver Lender.               2.1.6. Protective Advances.  Agent shall be authorized, in its discretion, at any  time that any conditions in Section 6 are not  satisfied, to  make Base Rate  Loans  (“Protective  Advances”), up to an aggregate amount, when combined with all other Protective Advances and  Overadvances outstanding at any time, not to exceed 10% of the Aggregate Borrowing Base; in  each case,  (1) if Agent deems such Loans necessary or desirable to preserve or protect Collateral,  or  to  enhance  the  collectability  or  repayment  of  Obligations  or  (2)  to  pay  any  other  amounts  chargeable to Obligors under any Loan Documents, including costs, fees and expenses.  Each  Lender  shall  participate  in  each  Protective  Advance  on  a  Pro  Rata  basis provided that  such  Revolver Loans shall be Tranche A Revolver Loans unless the outstanding principal amount of  Tranche B Revolver Loans is less than the Tranche B Maximum Amount, in which case up to an  amount equal to the Tranche B Maximum Amount minus the outstanding principal amount of  Tranche B Revolver Loans of such Revolver Loans shall be Tranche B Revolver Loans, and the  remaining amount of such Revolver Loans shall be Tranche A Revolver Loans; provided further  that, (i) the aggregate amount of outstanding Protective Advances constituting Tranche A Revolver  Loans plus the outstanding principal amount of Tranche A Revolver Loans and LC Obligations of  any Lender shall not exceed its Tranche A Revolver Commitment, (ii) the aggregate amount of  outstanding  Protective  Advances  constituting  Tranche  B  Revolver  Loans  plus  the  outstanding                                        44  NAI-1507796678v9  

 

  principal amount of Tranche B Revolver Loans  of any  Lender shall not  exceed its Tranche B  Revolver Commitment and (iii) the outstanding principal amount of all Revolver Loans and LC  Obligations shall not exceed the aggregate Revolver Commitments. Each Tranche A Revolver  Lender or Tranche B Revolver Lender, as applicable, shall participate in each Protective Advance  on a Pro Rata basis. Required Lenders may at any time revoke Agent’s authority to make further  Protective Advances by written notice to Agent. Absent such revocation, Agent’s determination  that funding of a Protective Advance is appropriate shall be conclusive.               2.1.7. Increase in Tranche A Revolver Commitments.               Borrowers may request an increase in Tranche A Revolver Commitments from time  to time upon notice to Agent, as long as (a) the requested increase is in a minimum amount of  $10,000,000 and is  offered on the same terms  as existing Tranche A Revolver Commitments,  except for a closing fee specified by Borrowers, (b) increases under this Section do not exceed  $20,000,000 in the aggregate and no more than three (3) increases are made,  (c) the requested  increase does not breach any Subordinated Debt agreement, the Term Loan Credit Agreement or  any  other  Term  Loan Document or  any other agreements,  instruments  or documents  executed  and/or delivered in connection with any of the foregoing and (d) after giving effect to the requested  increase,  the  Revolver  Commitments  will  constitute “ABL  Facility  Obligations” under  the  Intercreditor Agreement (or any similar agreement with respect to any Refinancing Debt).  Agent  shall promptly notify Lenders of the requested increase and, within 10 Business Days thereafter,  each Lender shall notify Agent if and to what extent such Lender commits to increase its Revolver  Commitment; provided that Borrowers agree that no Lender shall have any obligation to commit  to such increase.  Any Lender not responding within such period shall be deemed to have declined  an increase.  If Lenders fail to commit to the full requested increase, Eligible Assignees may issue  additional  Tranche  A  Revolver  Commitments  and  become  Lenders  hereunder.   Agent  may  allocate, in its discretion with the consent of the Borrowers (such consent not to be unreasonably  withheld), the increased Tranche A Revolver Commitments among committing Lenders and, if  necessary, Eligible Assignees.  Provided the conditions set forth in Section 6.2 are satisfied, total  Revolver  Commitments  shall  be  increased  by  the  requested  amount  (or  such  lesser  amount  committed by Lenders and Eligible Assignees) on a date agreed upon by Agent and Borrower  Agent, but no later than 60 days following Borrowers’ increase request.  Agent, Borrowers, and  new and existing Lenders shall execute and deliver such documents and agreements as Agent and  Borrower deem appropriate to evidence the increase in and allocations of Tranche A Revolver  Commitments.  On the effective date of an increase, the Revolver Usage and other exposures under  the Tranche A Revolver Commitments shall be reallocated among Lenders, and settled by Agent  if necessary, in accordance with Lenders’ adjusted shares of such Commitments.         2.2.  [Reserved].         2.3.  Letter of Credit Facilities.                 2.3.1. Issuance of Letters of Credit.  Issuing Bank agrees to issue Letters of Credit  from time to time until 10 Business Days prior to the Revolver Termination Date (or until the  Commitment Termination Date, if earlier), on the terms set forth herein, including the following:               (a)   Each Borrower acknowledges that Issuing Bank’s willingness to issue any  Letter of Credit is conditioned upon Issuing Bank’s receipt of a LC Application with respect to the  requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may                                         45  NAI-1507796678v9  

 

  customarily require for issuance of a letter of credit of similar type and amount.  Issuing Bank shall  have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and  a LC Application at least three Business Days (or such shorter time as agreed to by Issuing Bank)  prior to the requested date of issuance; (ii) each LC Condition is satisfied or waived; and (iii) if a  Defaulting Lender exists, such Lender or Borrowers have entered into arrangements satisfactory  to Agent and Issuing Bank to eliminate any Fronting Exposure associated with such Defaulting  Lender.  If Issuing Bank receives written notice from a Lender at least five Business Days before  issuance of a Letter of Credit that any LC Condition has not been satisfied or waived, Issuing Bank  shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is  withdrawn in writing by that Lender or until Required Lenders have waived such condition in  accordance with this Agreement.  Prior to receipt of any such notice, Issuing Bank shall not be  deemed to have knowledge of any failure of LC Conditions.               (b)   Letters  of  Credit  may  be  requested  by  a  Borrower only  (i)  to  support  obligations of such Borrower or a Subsidiary thereof incurred in the Ordinary Course of Business;  or (ii) for other purposes as Agent may approve from time to time in writing.  The renewal or  extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except  that delivery of a new LC Application shall be required at the discretion of Issuing Bank.               (c)   Borrowers assume all risks of the acts, omissions or misuses of any Letter  of Credit by the beneficiary.  In connection with issuance of any Letter of Credit, none of Agent,  Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity,  condition, packing, value or delivery of any goods purported to be represented by any Documents;  any differences or variation in the character, quality, quantity, condition, packing, value or delivery  of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy,  genuineness or legal effect of any Documents or of any endorsements thereon; the time, place,  manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure  to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions,  delay, default or fraud by any shipper or other Person in connection with any goods, shipment or  delivery; any breach of contract between a shipper or vendor and a Borrower; errors, omissions,  interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex,  telecopy,  e-mail,  telephone  or  otherwise;  errors  in  interpretation  of  technical  terms;  the  misapplication  by  a  beneficiary  of  any  Letter  of  Credit  or  the  proceeds  thereof;  or  any  consequences  arising  from  causes  beyond  the  control  of Issuing  Bank,  Agent  or  any  Lender,  including any act or omission of a Governmental Authority.  The rights and remedies of Issuing  Bank under the Loan Documents shall be cumulative.  Issuing Bank shall be fully subrogated to  the rights and remedies of each beneficiary whose claims against Borrowers are discharged with  proceeds of any Letter of Credit.               (d)   In  connection  with  its  administration  of  and  enforcement  of  rights  or  remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and  shall  be  fully  protected  in  acting,  upon  any  certification,  documentation  or  communication  in  whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been  signed, sent or made by a proper Person.  Issuing Bank may consult with and employ legal counsel,  accountants and other experts to advise it concerning its obligations, rights and remedies, and shall  be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon,  any  advice  given  by  such  experts.   Issuing  Bank  may  employ  agents  and  attorneys-in-fact  in  connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable  for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.                                        46  NAI-1507796678v9  

 

              2.3.2. Reimbursement; Participations.                 (a)   If Issuing Bank honors any request for payment under a Letter of Credit,  Borrowers shall pay to Issuing Bank, within one Business Day of notice of such payment by the  Issuing Bank (“Reimbursement Date”), the amount paid by Issuing Bank under such Letter of  Credit, together with interest at the interest rate for Base Rate Loans from the date such Letter of  Credit is honored until payment by Borrowers.  The obligation of Borrowers to reimburse Issuing  Bank for any payment made under a Letter of Credit shall be absolute, unconditional, irrevocable,  and joint and several, and shall be paid without regard to any lack of validity or enforceability of  any Letter of Credit or the existence of any claim, setoff, defense or other right that Borrowers  may have at any time against the beneficiary.  Whether or not Borrower Agent submits a Notice  of Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate Loans that  are Tranche A Revolver Loans in an amount necessary to pay all amounts due and owing to Issuing  Bank on any Reimbursement Date and each Tranche A Revolver Lender agrees to fund its Pro  Rata share of such Borrowing whether or not the Revolver Commitments have terminated, an  Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied or waived.               (b)   Upon issuance of a Letter of Credit, each Lender shall be deemed to have  irrevocably and unconditionally purchased from Issuing Bank, without recourse or warranty, an  undivided Pro Rata interest and participation in all LC Obligations relating to the Letter of Credit;  provided that, for the avoidance of doubt, no Lender shall be required to purchase in excess of its  Revolver  Commitment.   If  Issuing  Bank  makes  any  payment  under  a  Letter  of  Credit  and  Borrowers do not  reimburse such payment on the Reimbursement Date,  Agent  shall promptly  notify Tranche A Revolver Lenders and each Tranche A Revolver Lender shall promptly (within  one Business Day) and unconditionally pay to Agent, for the benefit of Issuing Bank, Tranche A  Revolver  Lender’s  Pro  Rata  share  of  such  payment.   Upon  request  by  a  Tranche  A  Revolver  Lender, Issuing  Bank  shall  furnish  copies  of  any  Letters  of  Credit  and  LC  Documents  in  its  possession at such time.               (c)   The obligation of each Tranche A Revolver Lender to make payments to  Agent for the account of Issuing Bank in connection with Issuing Bank’s payment under a Letter  of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff,  qualification or exception whatsoever, and shall be made in accordance with this Agreement under  all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents;  any draft, certificate or other document presented under a Letter of Credit having been determined  to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue  or  inaccurate  in  any  respect; any  waiver  by  Issuing  Bank  of  a  requirement  that  exists  for  its  protection (and not a Borrower’s protection) or that does not materially prejudice a Borrower; any  honor of an electronic demand for payment even if a draft is required; any payment of an item  presented after a Letter of Credit’s expiration date if authorized by the UCC or applicable customs  or practices; or any setoff or defense that any Obligor may have with respect to any Obligations.   Issuing Bank does not assume any responsibility for any failure or delay in performance or any  breach by any Borrower or other Person of any obligations under any LC Documents.  Issuing  Bank does not make to Lenders any express or implied warranty, representation or guaranty with  respect to the Collateral, LC Documents or any Obligor.  Issuing Bank shall not be responsible to  any Lender for any recitals, statements, information, representations or warranties contained in, or  for the execution, validity, genuineness, effectiveness or enforceability of any LC Documents; the  validity, genuineness, enforceability, collectability, value or sufficiency of any Collateral or the                                         47  NAI-1507796678v9  

 

  perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations,  business, creditworthiness or legal status of any Obligor.               (d)   No Issuing Bank Indemnitee shall be liable to any Lender or other Person  for any action taken or omitted to be taken in connection with any LC Documents except as a result  of its actual gross negligence or willful misconduct.  Issuing Bank shall not have any liability to  any  Lender  if  Issuing  Bank  refrains  from  any  taking  action  under  any  Letter  of  Credit  or  LC  Documents until it receives written instructions from Required Lenders.               2.3.3. Cash Collateral.                 If any LC Obligations, whether or not then due or payable, shall for any reason be  outstanding at any time (a) that an Event of Default exists, (b) that, with respect to LC Obligations,  Availability is less than zero, (c) after the Commitment Termination Date, or (d) on five Business  Days prior to the Revolver Termination Date, then Borrowers shall, at Issuing Bank’s or Agent’s  request,  Cash  Collateralize  the Stated Amount  of  all  outstanding  Letters  of  Credit  and  pay  to  Issuing Bank the amount of all other LC Obligations.  Borrowers shall, promptly upon demand by  Issuing  Bank  or  Agent  from  time  to  time,  Cash  Collateralize  the Fronting  Exposure of  any  Defaulting  Lender.   If  Borrowers  fail  to  provide  any  Cash  Collateral  as  required  hereunder,  Lenders may (and shall upon direction of Agent) advance, as  Tranche A Revolver  Loans,  the  amount  of  the  Cash  Collateral  required  (whether  or  not  the  Revolver  Commitments  have  terminated,  an  Overadvance  exists  or  the  conditions  in Section  6 are  satisfied)  or  waived.   If  Borrowers are required to provide any amount of Cash Collateral hereunder as a result of the  occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be  returned to Borrowers promptly after all Events of Default have been cured or waived.               2.3.4. Resignation of Issuing Bank.  Issuing Bank may resign at any time upon 15  Business  Days  prior  written  notice  to  Agent  and  Borrowers.   From  the  effective  date  of  such  resignation, Issuing Bank shall have no obligation to issue, amend, renew, extend or otherwise  modify any Letter of Credit, but shall continue to have all rights and other obligations of an Issuing  Bank  hereunder  relating  to  any  Letter  of  Credit  issued  by  it  prior  to  such  date.   Agent  shall  promptly appoint a replacement Issuing Bank, which, as long as no Event of Default has occurred  and is continuing, shall be reasonably acceptable to Borrowers.   SECTION 3.  INTEREST, FEES AND CHARGES         3.1.  Interest.                 3.1.1. Rates and Payment of Interest.                 (a)   The Loans shall bear interest (i) if a Base Rate Loan, at the Base Rate in  effect from time to time, plus the Applicable Margin, (ii) if a LIBOR Loan, at LIBOR for the  applicable Interest Period, plus the Applicable Margin; and (iii) if any other overdue Obligation  (including, to the extent permitted by law, interest not paid when due), at the Base Rate in effect  from time to time, plus the Applicable Margin for Tranche A Base Rate Loans.  Interest shall  accrue from the date the Loan is advanced or the Obligation is incurred or payable, until paid by  Borrowers.  If a Loan is repaid on the same day made, one day’s interest shall accrue.               (b)   During an Insolvency Proceeding with respect to any Borrower, or during  any other Event of Default if Required Lenders in their discretion so elect, Obligations shall bear                                        48  NAI-1507796678v9  

 

  interest at the Default Rate (whether before or after any judgment).  Each Borrower acknowledges  that the cost and expense to Agent and Lenders due to an Event of Default are difficult to ascertain  and that the Default Rate is a fair and reasonable estimate to compensate Agent and Lenders for  this.               (c)   Interest  shall  accrue  from  the  date  a  Loan  is  advanced  or  Obligation  is  incurred or payable, until repaid by Borrowers.  Interest accrued on the Loans shall be due and  payable in arrears, (i) on the first day of each Fiscal Month; (ii) on any date of prepayment, with  respect to the principal amount of Loans being prepaid; and (iii) on the Commitment Termination  Date.  Interest accrued on any other Obligations shall be due and payable as provided in the Loan  Documents  and,  if  no  payment  date  is  specified,  shall  be  due  and  payable on  demand.   Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on  demand.               3.1.2. Application of LIBOR to Outstanding Loans.                 (a)   Borrowers may on any Business Day, subject to delivery of a Notice of  Conversion/Continuation, elect to convert any portion of the Base Rate Loans to, or to continue  any LIBOR Loan at the end of its Interest Period as, a LIBOR Loan.  During any Event of Default,  Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made,  converted or continued as a LIBOR Loan.               (b)   Whenever Borrowers desire to convert or continue Loans as LIBOR Loans,  Borrower Agent, as applicable, they shall give Agent a Notice of Conversion/Continuation, no  later than 11:00 a.m. at least three Business Days before the requested conversion or continuation  date.  Promptly after receiving any such notice, Agent shall notify each Lender thereof.  Subject  to Section 3.5 and Section 3.6, each Notice of Conversion/Continuation shall be irrevocable, and  shall specify the amount of Loans to be converted or continued, the conversion or continuation  date  (which  shall  be  a  Business  Day),  whether  such  Loans  are  Tranche  A  Revolver  Loans  or  Tranche B Revolver Loans and the duration of the Interest Period (which shall be deemed to be 30  days if not specified).  If, upon the expiration of any Interest Period in respect of any LIBOR  Loans, Borrowers shall have failed to deliver a Notice of Conversion/Continuation, they shall be  deemed to have elected to convert such Loans into Base Rate Loans. Agent does not warrant or  accept responsibility for, nor shall it have any liability with respect to, administration, submission  or any other matter related to any rate described in the definition of LIBOR.                3.1.3. Interest Periods.  In connection with the making, conversion or continuation  of any LIBOR Loans, Borrowers shall select an interest period (“Interest Period”) to apply, which  interest period shall be 30, 60 or 90 days; provided, however, that:               (a)   the Interest Period shall begin on the date the Loan is made or continued as,  or converted into, a LIBOR Loan, and shall expire on the numerically corresponding day in the  calendar month at its end;               (b)   if any Interest Period begins on a day for which there is no corresponding  day in the calendar month at its end or if such corresponding day falls after the last Business Day  of such month, then the Interest Period shall expire on the last Business Day of such month; and  if any Interest Period would otherwise expire on a day that is not a Business Day, the period shall  expire on the next Business Day; and                                         49  NAI-1507796678v9  

 

              (c)   no Interest Period shall extend beyond the Revolver Termination Date.               3.1.4. Interest Rate Not Ascertainable.  Subject to the provisions of Section 3.6,  if, due to any circumstance affecting the London interbank market, Agent determines that adequate  and fair means do not exist for ascertaining LIBOR on any applicable date or any Interest Period  is not available on the basis provided herein, then Agent shall immediately notify Borrowers of  such determination.  Until Agent notifies Borrowers that such circumstance no longer exists, the  obligation of Lenders to make affected LIBOR Loans shall be suspended and no further Loans  may be converted into or continued as such LIBOR Loans.  Upon receipt of such notice, Borrower  Agent may revoke any pending request for a Borrowing of, conversion to or continuation of a  LIBOR Loan or, failing that, will be deemed to have submitted a request for a Base Rate Loan         3.2.  Fees.                 3.2.1. Unused Line Fee.  Borrowers shall pay to Agent, for the Pro Rata benefit of  Tranche A Revolver Lenders (other than any Defaulting Lender for so long as such Defaulting  Lender has not funded its Pro Rata share of a Tranche A Revolver Loan), a fee equal to 0.250%  per annum times the amount by which the Tranche A Revolver Commitments (other than Tranche  A Revolver Commitments of a Defaulting Lender for so long as such Defaulting Lender has not  funded its Pro Rata share of a Tranche A Revolver Loan) exceed the average daily balance of  Tranche A Revolver Loans and Stated Amount of Letters of Credit during any Fiscal Quarter. In  addition, Borrowers shall pay to Agent, for the Pro Rata benefit of Tranche B Revolver Lenders  (other than any Defaulting Lender for so long as such Defaulting Lender has not funded its Pro  Rata share of a Tranche B Revolver Loan), a fee equal to 0.250% per annum times the amount by  which the Tranche B Revolver Commitments (other than Tranche B Revolver Commitments of a  Defaulting Lender for so long as such Defaulting Lender has not funded its Pro Rata share of a  Tranche B Revolver Loan) exceed the average daily balance of Tranche B Revolver Loans during  any Fiscal Quarter. Each such fee shall be payable in arrears, on the first day of each Fiscal Quarter  and on the Commitment Termination Date                3.2.2. LC Facility Fees.  Borrowers shall pay (a) to Agent, for the Pro Rata benefit  of Lenders with Tranche A Revolver Commitments, a fee equal to the Applicable Margin in effect  for LIBOR Loans times the average daily Stated Amount of Letters of Credit, which fee shall be  payable quarterly in arrears, on the first day of each Fiscal Quarter; (b) to Issuing Bank, for its own  account, a fronting fee equal to .125% per annum on the Stated Amount of each Letter of Credit,  which fee shall be payable quarterly in arrears, on the first day of each Fiscal Quarter; and (c) to  Issuing  Bank,  for  its  own  account,  all  customary   and  reasonable  charges  associated  with  the  issuance, amending, negotiating, payment, processing, transfer and administration of Letters of  Credit,  which  charges  shall  be  paid  as  and  when  incurred;  provided  that,  for  the  purposes  of  calculating the fees in clauses (a) and (b) of this Section 3.2.2, Stated Amount shall not include  any automatic increase provided by the terms of the Letter of Credit or related LC Documents.   During an Event of Default, the fee payable under clause (a) shall be increased by 2% per annum  as provided in Section 3.1.1(b).               3.2.3. Other Fees.  Borrowers shall pay to Agent the fees described in the Fee  Letter.         3.3.  Computation  of  Interest,  Fees,  Yield  Protection.   All  interest  in  respect  of  LIBOR Loans, as well as fees and other charges calculated on a per annum basis shall be computed                                         50  NAI-1507796678v9  

 

  for the actual days elapsed, based on a year of 360 days.  Fees, interest and charges in respect of  Base Rate Loans shall be calculated for the actual days elapsed, based on a year of 365 days (or  366 days as applicable) and shall be payable in Dollars.  Each determination by Agent of any  interest,  fees  or interest  rate hereunder shall be final, conclusive and binding for all purposes,  absent manifest error.  All fees shall be fully earned when due and shall not be subject to rebate,  refund or proration.  All fees payable under Section 3.2 are compensation for services and are not,  and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of  money.  A certificate setting forth amounts payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9  or 5.9, submitted to Borrower Agent by Agent or the affected Lender, as applicable, shall be final,  conclusive  and  binding  for  all  purposes,  absent  manifest  error,  and Borrowers  shall  pay  such  amounts to the appropriate party within 10 Business Days following receipt of the certificate.         3.4.  Reimbursement Obligations.  Borrowers shall reimburse Agent and the Lenders  for  all  Extraordinary  Expenses promptly  upon written request (including  documentation  reasonably supporting such request).  Borrowers shall also reimburse Agent for all (a) reasonable  out-of-pocket legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred  by  it  in  connection  with  negotiation  and  preparation  of  any  Loan  Documents,  including  any  amendment or other modification thereof; (b) legal, accounting, appraisal, consulting and other  fees,  costs  and  expenses  in  connection  with   administration  of  and  actions  relating  to  any  Collateral, Loan Documents and transactions contemplated thereby, including any actions taken  to  perfect or  maintain  priority  of  Agent’s  Liens  on  any  Collateral,  to  maintain  any  insurance  required hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b), all  fees, costs and expenses in connection with each inspection, audit or appraisal with respect to any  Obligor  or  Collateral,  whether  prepared  by  Agent’s  personnel  or  a  third  party.   Borrowers  acknowledge  that  counsel  may  provide  Agent  with  a  benefit  (such  as  a  discount,  credit  or  accommodation for other matters) based on counsel’s overall relationship with Agent, including  fees paid hereunder.  If, for any reason (including inaccurate reporting in any Borrower Materials  or any Report), it is determined that a higher Applicable Margin should have applied to a period  than was actually applied, then the proper margin shall be applied retroactively and within two (2)  Business Days of written notice from Agent the Borrowers shall pay to  Agent, for the ratable  benefit of Lenders, an amount equal to the difference between the amount of interest and fees that  would have accrued using the proper margin and the amount actually paid.  If, for any reason  (including inaccurate reporting in any Borrower Materials or any Report), it is determined that a  lower Applicable Margin should have applied to a period than was actually applied, then the proper  margin shall be applied retroactively (such retroactivity not to exceed 90 days from the date of  such determination) and Agent shall establish a credit for Borrowers in an amount equal to the  difference  between  the  amount  of  interest  and  fees  that  would  have  accrued  using  the  proper  margin and the amount actually paid for such period to Lenders; provided that nonpayment of such  amount by Borrowers as a result of any such inaccuracy shall not constitute a Default or Event of  Default (whether retroactive or otherwise), and no such amount shall be deemed overdue (and no  amount shall accrue interest at the applicable Default Rate), at any time prior to the third (3rd)  Business Day following written notice thereof from Agent.  All amounts payable by Borrowers  under this Section shall be due and payable promptly following demand therefor.         3.5.  Illegality.  If any Lender determines that any Applicable Law has made it unlawful,  or that any Governmental Authority has asserted that it is unlawful, for any Lender to perform any  of its obligations hereunder, to make, maintain, fund or charge applicable interest or fees with  respect to any Loan or Letter of Credit, or to determine or charge interest based on LIBOR, or any  Governmental  Authority  has  imposed  material  restrictions  on  the  authority  of  such  Lender  to                                        51  NAI-1507796678v9  

 

  purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice  thereof by such Lender to Agent, any obligation of such Lender to perform such obligations, to  make, maintain or fund the Loan or participate in the Letter of Credit (or to charge interest or fees  with respect thereto), or to continue or convert Loans as LIBOR Loans, shall be suspended until  such Lender notifies Agent that the circumstances giving rise to such determination no longer  exist.   Upon  delivery  of  such  notice,  Borrowers  shall  prepay  the  applicable  Loan,  Cash  Collateralize  the  applicable  LC  Obligations  or,  if  applicable,  convert  LIBOR  Loan(s)  of  such  Lender to Base Rate Loan(s), either on the last day of the Interest Period therefor, if such Lender  may lawfully continue to maintain the LIBOR Loan to such day, or immediately, if such Lender  may  not  lawfully  continue  to  maintain  the  LIBOR  Loan.   Upon  any  such  prepayment  or  conversion, Borrowers shall also pay accrued interest on the amount so prepaid or converted.         3.6.  Inability to Determine Rates.  If, due to any circumstance affecting the London  interbank market, Agent determines, or the Borrower Agent or the Required Lenders notify the  Administrative Agent (with, in the case of the Required Lenders, a written copy to the Borrower  Agent) that the Borrower Agent or the Required Lenders, as applicable, have determined, that:                     (A)   adequate and reasonable means do not exist for ascertaining                    LIBOR for any requested Interest Period, because the LIBOR Screen Rate                    is not available or published on a current basis and such circumstances are                    unlikely to be temporary; or                      (B)   the administrator of the LIBOR Screen Rate or a Governmental                    Authority having jurisdiction over the Administrative Agent has made a                    public statement identifying a specific date after which LIBOR or the                    LIBOR Screen Rate shall no longer be made available, or used for                    determining the interest rate of loans (the “Scheduled Unavailability                    Date”), or                     (C)   syndicated loans currently being executed, or that include language                    similar to that contained in this Section, are being executed or amended                    (as applicable) to incorporate or adopt a new benchmark interest rate to                    replace LIBOR,                then, reasonably promptly after such determination by the Administrative Agent or   receipt by the Administrative Agent of such notice , as applicable, the Administrative Agent and the   Borrower may amend this Agreement to replace LIBOR with an alternate benchmark rate (including any   mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due   consideration to any LIBOR Successor Rate, together with any proposed LIBOR Successor Rate   Conforming Changes and any such amendment shall become effective at 5:00 p.m. (New York time) on   the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all   Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have                                         52  NAI-1507796678v9  

 

  delivered to the Administrative Agent written notice that such Required Lenders do not accept such   amendment.                 (b)   If no LIBOR Successor Rate has been determined and the circumstances  under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the  Administrative Agent will promptly so notify the Borrower Agent and each Lender.  Thereafter,  (x) the obligation of the Lenders to make or maintain LIBOR Loans shall be suspended, (to the  extent of the affected LIBOR Loans or Interest Periods), and (y) the LIBOR component shall no  longer be utilized in determining the Base Rate.  Upon receipt of such notice, the Borrowers may  revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Loans (to  the extent of the affected LIBOR Loans or Interest Periods) or, failing that, will be deemed to have  converted such request into a request for a Borrowing of Base Rate Loans (subject to the foregoing  clause (y)) in the amount specified therein.               (c)   Notwithstanding anything else herein, any definition of LIBOR Successor  Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes  of this Agreement.         3.7.  Increased Costs; Capital Adequacy.               3.7.1. Increased Costs Generally.  If any Change in Law shall:               (a)   impose modify or deem applicable any reserve, liquidity, 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 LIBOR) or Issuing Bank;               (b)   subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes  described in clauses (b), (c) or (d) of the definition of Excluded Taxes, or (iii) Connection Income  Taxes) with respect to any Loan, Letter of Credit, Commitment or other obligations, or its deposits,  reserves, other liabilities or capital attributable thereto; or               (c)   impose on any Lender or Issuing Bank or the London interbank market any  other  condition,  cost  or  expense  affecting  any Loan,  Loan  Document,  Letter  of  Credit  or  participation in LC Obligations or Commitment;               and the result thereof shall be to increase the cost to a Lender of making or maintaining   any LIBOR Loan (or of maintaining its obligation to make any such Loan), or converting to or continuing   any interest option for a Loan, or to increase the cost to such Lender or Issuing Bank 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 Lender or   Issuing Bank hereunder (whether of principal, interest or any other amount) then, within 10 Business   Days of receiving the request from such Lender or Issuing Bank, Borrowers will pay to such Lender or                                         53  NAI-1507796678v9  

 

  Issuing Bank, as applicable, such additional amount or amounts as will compensate such Lender or   Issuing Bank, as applicable, for such additional costs incurred or reduction suffered.               3.7.2. Capital Requirements.   If any  Lender or  Issuing Bank determines  that a  Change in Law affecting such Lender or Issuing Bank or any Lending Office of such Lender or  such  Lender’s  or  Issuing  Bank’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, Issuing  Bank’s or holding company’s capital as a consequence of this Agreement, or such Lender’s or  Issuing  Bank’s  Commitments,  Loans,  Letters  of  Credit  or  participations  in  LC  Obligations or  Loans, to a level below that which such Lender, Issuing Bank or holding company could have  achieved but for such Change in Law (taking into consideration such Lender’s, Issuing Bank’s and  holding company’s policies with respect to capital adequacy), then within 10 Business Days of  receiving the request from such Lender or Issuing Bank, Borrowers will pay to such Lender or  Issuing Bank, as the case may be, such additional amount or amounts as will compensate it or its  holding company for any such reduction suffered.               3.7.3. Compensation.  Failure or delay on the part of any Lender or Issuing Bank  to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand  such compensation, but Borrowers shall not be required to compensate a Lender or Issuing Bank  for any increased costs incurred or reductions suffered more than nine months prior to the date that  Lender or Issuing Bank notifies Borrower Agent of the Change in Law giving rise to such increased  costs  or  reductions  and  of  such  Lender’s  or  Issuing  Bank’s  intention  to  claim  compensation  therefor (except that, if the Change in Law giving rise to such increased costs or reductions is  retroactive, then the nine-month period referred to above shall be extended to include the period  of retroactive effect thereof).               3.7.4. LIBOR Loan Reserves.  If any Lender is required to maintain reserves with  respect to liabilities or assets consisting of or including Eurocurrency funds or deposits, Borrowers  shall pay additional interest to such Lender on each LIBOR Loan equal to the costs of such reserves  allocated to the Loan by the Lender (as determined by it in good faith, which determination shall  be conclusive).  The additional interest shall be due and payable on each interest payment date for  the Loan; provided, however, that if the Lender notifies Borrowers (with a copy to Agent) of the  additional interest less than 10 days prior to the interest payment date, then such interest shall be  payable 10 days after Borrowers’ receipt of the notice.         3.8.  Mitigation.   If  any  Lender  gives  a  notice  under Section  3.5 or  requests  compensation under Section 3.7, or if Borrowers are required to pay any Indemnified Taxes or  additional amounts with respect to a Lender under Section 5.9, then at the request of Borrower  Agent, such Lender shall use reasonable efforts to designate a different Lending Office 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 (a) would eliminate the need for such  notice or reduce amounts payable or to be withheld in the future, as applicable; and (b) would not  subject Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous  to it or unlawful.  Borrowers shall promptly following request therefor pay all reasonable costs  and expenses incurred by any Lender in connection with any such designation or assignment.         3.9.  Funding  Losses.   If  for  any  reason  (a)  any  Borrowing  of,  or  conversion  to  or  continuation  of,  a LIBOR  Loan  does  not  occur  on  the  date  specified  therefor  in  a  Notice  of                                         54  NAI-1507796678v9  

 

  Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment  or conversion of a LIBOR Loan occurs on a day other than the end of its Interest Period, or (c)  Borrowers fail to repay a LIBOR  Loan when required hereunder, then Borrowers shall pay to  Agent  its  customary  administrative  charge  and  to  each  Lender  all  losses  and  expenses  that  it  sustains as a consequence thereof, including loss of anticipated profits and any loss or expense  arising from liquidation or redeployment of funds or from fees payable to terminate deposits of  matching funds.  Lenders shall not be required to purchase Dollar deposits in the London interbank  market or any other offshore Dollar market to fund any LIBOR Loan, but the provisions hereof  shall be deemed to apply as if each Lender had purchased such deposits to fund its LIBOR Loans.         3.10. Maximum Interest.  Notwithstanding anything to the contrary contained in any  Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed  the maximum rate of non-usurious interest permitted by Applicable Law (“maximum rate”).  If  Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess  interest shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal,  refunded to Borrowers.  In determining whether the interest contracted for, charged or received by  Agent  or  a  Lender  exceeds  the  maximum  rate,  such  Person  may,  to  the  extent  permitted  by  Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium  rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize,  prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the  contemplated term of the Obligations hereunder.   SECTION 4.  LOAN ADMINISTRATION         4.1.  Manner of Borrowing and Funding Revolver Loans.                 4.1.1. Notice of Borrowing.                 (a)   Whenever Borrowers desire funding of a Borrowing of Revolver Loans,  Borrower Agent shall give Agent a Notice of Borrowing.  Such notice must be received by Agent  no later than 12:00 noon Chicago time (i) on the Business Day of the requested funding date, in  the case of Base Rate Loans, and (ii) at least three Business Days prior to the requested funding  date, in the case of LIBOR Loans.  Notices received after 12:00 noon Chicago time shall be deemed  received  on  the  next  Business  Day.   Subject  to Section  3.5 and Section  3.6,  each  Notice  of  Borrowing  shall  be  irrevocable  and  shall  specify  (A)  the  amount  of  the  Borrowing,  (B)  the  requested funding date (which must be a Business Day), (C) whether the Borrowing is of Tranche  A Revolver Loans or Tranche B Revolver Loans; provided that such Borrowing shall be Tranche  A Revolver Loans unless the outstanding principal amount of Tranche B Revolver Loans is less  than the Tranche B Maximum Amount, in which case up to an amount equal to the Tranche B  Maximum  Amount minus the outstanding principal amount of Tranche B Revolver Loans of  such Borrowing shall be Tranche B Revolver Loans, and the remaining amount (if any) of such  Borrowing shall be Tranche A Revolver Loans, (D) whether the Borrowing is to be made as Base  Rate Loans or LIBOR Loans, and (E) in the case of LIBOR Loans, the duration of the applicable  Interest Period (which shall be deemed to be 30 days if not specified).                (b)   Unless payment is otherwise timely made by Borrowers, the becoming due  of  any  Obligations  (whether  principal,  interest,  fees  or  other  charges,  including  Extraordinary  Expenses,  LC  Obligations,  Cash  Collateral and Secured Bank  Product Obligations)  shall  be  deemed to be a request for Base Rate Loans, on the due date, in the amount due; provided that                                         55  NAI-1507796678v9  

 

  such  request  for  Revolver  Loans  shall  be  a  request  for  Tranche  A  Revolver  Loans  unless  the  outstanding principal amount of Tranche B Revolver Loans is less than the Tranche B Maximum  Amount, in which case up to an amount equal to the Tranche B Maximum Amount minus the  outstanding principal amount of Tranche B Revolver Loans of such Revolver Loans shall be a  request for Tranche B Revolver Loans, and the remaining amount (if any) of such Revolver Loans  shall be a request for Tranche A Revolver Loans.  The proceeds of such Revolver Loans shall be  disbursed as direct payment of the relevant Obligation.  In addition, Agent may, at its option,  charge such Obligations against Borrower Agent’s primary disbursement account maintained with  Agent or any of its Affiliates.               (c)   If Borrowers establish a controlled disbursement account with Agent or any  Affiliate of Agent, then the presentation for payment of any check or other item of payment drawn  on such account at a time when there are insufficient funds to cover it shall be deemed to be a  request for Base Rate Loans on the date of such presentation, in the amount of the check and items  presented  for  payment, provided that  such  request  for  Revolver  Loans  shall  be  a  request  for  Tranche A Revolver Loans unless the outstanding principal amount of Tranche B Revolver Loans  is less than the Tranche B Maximum Amount, in which case up to an amount equal to the Tranche  B Maximum Amount minus the outstanding principal amount of Tranche B Revolver Loans of  such Revolver Loans shall be a request for Tranche B Revolver Loans, and the remaining amount  (if any) of such Revolver Loans shall be a request for Tranche A Revolver Loans.  The proceeds  of such Revolver Loans may be disbursed directly to the controlled disbursement account or other  appropriate account.               4.1.2. Fundings by Lenders.  Each Tranche A Revolver Lender shall timely honor  its Tranche A Revolver Commitment by funding its Pro Rata share of each Borrowing of Tranche  A Revolver Loans that is properly requested hereunder. Each Tranche B Revolver Lender shall  timely   honor its  Tranche  B  Revolver  Commitment  by  funding  its  Pro  Rata  share  of  each  Borrowing  of  Tranche   B  Revolver  Loans  that  is  properly  requested  hereunder.   Except  for  Borrowings to be made as Swingline Loans, Agent shall endeavor to notify Lenders of each Notice  of Borrowing (or deemed request for a Borrowing) by 1:00 p.m. Chicago time on the proposed  funding date for Base Rate Loans or by 3:00 p.m. Chicago time, at least two Business Days before  any proposed funding of LIBOR Loans.  Each Lender shall fund to Agent such Lender’s Pro Rata  share of the Borrowing to the account specified by Agent in immediately available funds not later  than 2:00 p.m. Chicago time on the requested funding date unless Agent’s notice is received after  the  times  provided  above,  in  which  event  Lender  shall  fund  its  Pro Rata  share  by  11:00  a.m.  Chicago time on the next Business Day.  Subject to its receipt of such amounts from Lenders,  Agent shall disburse the proceeds of the Revolver Loans as directed by Borrower Agent.  Unless  Agent shall have received (in sufficient time to act) written notice from a Lender that it does not  intend to fund its Pro Rata share of a Borrowing, Agent may assume that such Lender has deposited  or promptly will deposit its share with Agent, and Agent may disburse a corresponding amount to  Borrowers.  If a Lender’s share of any Borrowing or of any settlement pursuant to Section 4.1.3(b)  is not received by Agent, then Borrowers agree to repay to Agent on demand the amount of such  share, together with interest thereon from the date disbursed until repaid, at the rate applicable to  the Borrowing.               4.1.3. Swingline Loans; Settlement.                 (a)   Agent  may,  but  shall  not  be  obligated  to,  advance  Swingline  Loans  to  Borrowers, up to an aggregate outstanding amount equal to 10% of the Revolver Commitments at                                        56  NAI-1507796678v9  

 

  such time, unless the funding is specifically required to be made by all Lenders hereunder.  Each  Swingline Loan shall constitute a Revolver Loan, for all purposes, except that payments thereon  shall be made to Agent for its own account until Lenders have funded their participations therein  as provided below.  The obligation of Borrowers to repay Swingline Loans shall be evidenced by  the records of Agent and need not be evidenced by any promissory note.               (b)   To facilitate administration of the Revolver Loans, Lenders and Agent agree  (which agreement is solely among them, and not for the benefit of or enforceable by any Borrower)  that settlement among them with respect to Swingline Loans and other Revolver Loans may take  place on a date determined from time to time by Agent, which shall occur at least once each week.   On  each  settlement  date,  settlement  shall  be  made  with  each  Lender  in  accordance  with  the  Settlement Report delivered by Agent to Lenders, provided that Swingline Loans shall be settled  as  Tranche  A  Revolver  Loans.  Between  settlement  dates,  Agent  may  in  its  discretion  apply  payments on Revolver Loans to Swingline Loans, regardless of any designation by Borrower or  any provision herein to the contrary.  Each Lender’s obligation to make settlements with Agent is  absolute and unconditional, without offset, counterclaim or other defense, and whether or not the  Revolver Commitments have terminated, an Overadvance exists or the conditions in Section 6 are  satisfied or waived.  If, due to an Insolvency Proceeding with respect to a Borrower or otherwise,  any  Swingline  Loan  may  not  be  settled  among  Lenders  hereunder,  then  (i)  each  Tranche  B  Revolver Lender shall be deemed to have purchased from Agent a Pro Rata participation in each  unpaid Swingline Loan (in an aggregate principal amount not to exceed the aggregate amount of  the  Tranche  B  Revolver  Commitments  minus  the  outstanding  principal  amount  of  Tranche  B  Revolver Loans) and (ii) each Tranche A Revolver Lender shall be deemed to have purchased  from Agent a Pro Rata participation in each unpaid Swingline Loan to the extent not participated  to the Tranche B Revolver Lenders pursuant to the foregoing clause (i) and, in each case, such  Lenders shall transfer the amount of such participation to Agent, in immediately available funds,  within one Business Day after Agent’s request therefor.               4.1.4. Notices.  Each  Borrower  authorizes  Agent  and  Lenders  (and  Agent  and  Lenders hereby agree) to extend, convert or continue Loans, effect selections of interest rates, and  transfer funds to or on behalf of Borrowers based on telephonic or e-mailed instructions to Agent.   Borrowers shall confirm each such request by prompt delivery to Agent of a Notice of Borrowing  or Notice of Conversion/Continuation, if applicable, but if it differs materially from the action  taken by Agent or Lenders, the records of Agent and Lenders shall govern.  Neither Agent nor any  Lender shall have any liability for any loss suffered by a Borrower as a result of Agent or any  Lender acting upon its understanding of telephonic or e-mailed instructions from a person believed  in good faith by Agent or any Lender to be a person authorized to give such instructions on a  Borrower’s behalf.         4.2.  Defaulting Lender.  Notwithstanding anything herein to the contrary:               4.2.1. Reallocation of Pro Rata Share; Amendments.  For purposes of determining  Lenders’ obligations or rights to fund, participate in or receive collections with respect to Loans  and  Letters  of  Credit  (including  existing  Swingline  Loans,  Protective  Advances  and  LC  Obligations), Agent shall reallocate Pro Rata shares by excluding the Commitments and Loans of  a Defaulting Lender from the calculation of such shares (provided that, no Tranche A Revolver  Lender shall be reallocated any such amounts or be required to fund any amounts pursuant to such  reallocation  that  would  cause  the  sum  of  its  outstanding  Tranche  A  Revolver  Loans  and  its  participations in outstanding Letters of Credit to exceed its Tranche A Revolver Commitment, and                                        57  NAI-1507796678v9  

 

  no Tranche B Revolver Lender shall be reallocated any such amounts or be required to fund any  amounts pursuant to such reallocation that would cause the sum of its Tranche B Revolver Loans  to exceed its Tranche B Revolver Commitment).  A Defaulting Lender shall have no right to vote  on any amendment, waiver or other modification of a Loan Document until all of its defaulted  obligations have been cured.                 4.2.2. Payments; Fees.  Agent shall receive and retain any amounts payable to a  Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have  assigned to Agent such amounts until all Obligations owing to Agent, non-Defaulting Lenders and  other Secured Parties have been paid in full.  Agent shall use such amounts to cover the Defaulting  Lender’s  defaulted  obligations,  to  Cash  Collateralize  such  Lender’s  Fronting  Exposure,  to  readvance the amounts to Borrowers or to repay Obligations.  A Lender shall not be entitled to  receive any fees accruing hereunder during the period in which it is a Defaulting Lender, and the  unfunded portion of its Commitment shall be disregarded for purposes of calculating the unused  line fee under Section 3.2.1.  If any LC Obligations owing to a Defaulted Lender are reallocated  to other Tranche A Revolving Lenders, fees attributable to such LC Obligations under Section  3.2.2 shall be paid to such Tranche A Revolving Lenders.  Agent shall be paid all fees attributable  to LC Obligations that are not reallocated or cash collateralized.               4.2.3. Status;  Cure.   Agent  may  determine  in  its  discretion  that  a  Lender  constitutes  a  Defaulting  Lender  and  the  effective  date  of  such  status  shall  be  conclusive  and  binding on all parties, absent manifest error.  Borrowers, Agent and Issuing Bank may agree in  writing that a Lender has ceased to be a Defaulting Lender, whereupon Pro Rata shares shall be  reallocated  without  exclusion  of  the  reinstated  Lender’s  Commitments  and  Loans,  and  the  Revolver Usage and other exposures under the Revolver Commitments shall be reallocated among  Lenders  and  settled  by  Agent  (with appropriate  payments  by  the  reinstated  Lender,  including  payment of any breakage costs for reallocated LIBOR Loans) in accordance with the readjusted  Pro Rata shares.  Unless expressly agreed by Borrowers, Agent and Issuing Bank, as expressly  provided  herein  with  respect  to  Bail-In  Actions  and  related  matters,  no  reallocation  of  Commitments and Loans to non-Defaulting Lenders or reinstatement of a Defaulting Lender shall  constitute a waiver or release of claims against such Lender.  The failure of any Lender to fund a  Loan,  to  make  a  payment  in  respect  of  LC  Obligations  or  otherwise  to  perform  obligations  hereunder shall not relieve any other Lender of its obligations under any Loan Document, and no  Lender shall be responsible for default by another Lender.  For the avoidance of doubt, Lenders  and Agent agree that, solely for purposes of determining a Defaulting Lender’s right to vote on  matters relating to the Loan Documents and to share in payments, fees and Collateral proceeds  thereunder,  a  Defaulting  Lender  shall  not  be  deemed  to  be  a  “Lender”  until  all  its  defaulted  obligations have been cured         4.3.  Number  and  Amount  of  LIBOR  Loans;  Determination  of  Rate.   Each  Borrowing of LIBOR Loans when made shall be in a minimum amount of $1,000,000, plus any  increment of $100,000 in excess thereof.  No more than six Borrowings of LIBOR Loans may be  outstanding at any time (or to the extent there has been an increase in the Revolver Commitments  pursuant  to Section  2.1.7,  nine  Borrowings),  and  all  LIBOR  Loans  denominated  in the  same  currency  and  having  the  same  length  and  beginning  date  of  their  Interest  Periods  shall  be  aggregated together and considered one Borrowing for this purpose.  Upon determining LIBOR  for any Interest Period requested by Borrowers, Agent shall promptly notify Borrowers thereof by  telephone or electronically and, if requested by Borrowers, shall confirm any telephonic notice in  writing.                                        58  NAI-1507796678v9  

 

        4.4.  Borrower  Agent.  Each  Borrower  hereby  designates  the  Company  (“Borrower  Agent”) as  its  representative and agent  for all purposes  under the  Loan  Documents,  including  requests  for  Loans  and  Letters  of  Credit,  designation  of  interest  rates,  delivery  or  receipt  of  communications, preparation and delivery of Borrower Materials or Reports, receipt and payment  of Obligations, requests for waivers,  amendments  or other accommodations,  actions  under the  Loan Documents (including in respect of compliance with covenants), and all other dealings with  Agent, Issuing Bank or any Lender.  Borrower Agent hereby accepts such appointment.  Agent  and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice  or communication (including any Notice of Borrowing) delivered by Borrower Agent on behalf of  any  Borrower.   Agent  and  Lenders  may  give  any  notice  or  communication  with  a  Borrower  hereunder to  Borrower  Agent  on behalf of such Borrower.  Each of Agent,  Issuing Bank and  Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for any or  all  purposes  under  the  Loan  Documents.   Each  Borrower  agrees  that  any  notice,  election,  communication, representation, agreement or undertaking made on its behalf by Borrower Agent  shall be binding upon and enforceable against it, as though made by such Borrower.         4.5.  One Obligation.  The Loans, LC Obligations and other Obligations constitute one  general obligation of Borrowers (unless otherwise expressly provided in any Loan Document) and  are secured by Agent’s Lien on all Collateral; provided, however, that Agent and each Lender shall  be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the  extent of any Obligations jointly or severally owed by such Borrower.         4.6.  Effect of Termination.  On the effective date of the termination of the Revolver  Commitments,  all  Obligations  shall  be  immediately  due  and  payable, and  any  Lender  may  terminate  its  and  its  Affiliates’  Bank  Products.  Until  Full  Payment  of  the  Obligations,  all  undertakings of Borrowers contained in the Loan Documents shall continue, and Agent shall retain  its  Liens  in  the  Collateral  and  all  of  its  rights  and  remedies  under  the  Loan  Documents.   Notwithstanding Full Payment of the Obligations, in the event Agent has incurred any damages as  a result of the dishonor or return of Payment Items applied to Obligations, Agent’s Liens shall not  be terminated until Agent receives (a) a written agreement, executed by Borrowers indemnifying  Agent and Lenders from any such damages; or (b) such Cash Collateral as Agent, in its Permitted  Discretion, deems necessary to protect against any such damages.  Sections 2.3, 3.4, 3.6, 3.7, 3.9,  5.5, 5.9, 5.10, 12, 15.2 and this Section, and the obligation of each Obligor and Lender with respect  to each indemnity or waiver given by it in any Loan Document, shall survive Full Payment of the  Obligations and any release relating to this credit facility.  Upon Full Payment of the Obligations,  except as set forth above, all Liens of the Agent securing the Obligations shall be automatically  released and terminated.  Agent shall, upon reasonable request by the Borrowers, execute and/or  file such instruments, releases, UCC-3 filings and other documents as requested by the Borrowers  to evidence such release, all at the sole expense of the Borrowers.   SECTION 5.  PAYMENTS         5.1.  General  Payment  Provisions.   All  payments  of  Obligations  shall  be  made  in  Dollars,   without  offset,  counterclaim  or  defense  of  any  kind,  free and  clear of  (and  without  deduction for) any Taxes, and in immediately available funds, not later than 12:00 noon Chicago  time on the due date.  Any payment after such time shall be deemed made on the next Business  Day.  Any payment of a LIBOR Loan prior to the end of its Interest Period shall be accompanied  by all amounts due under Section 3.9.  Any prepayment of Revolver Loans shall be applied first  to Base Rate Loans and then to LIBOR Loans.                                        59  NAI-1507796678v9  

 

        5.2.  Repayment of Revolver Loans. Revolver Loans shall be due and payable in full  on the Revolver Termination Date, unless payment is sooner required hereunder.  Revolver Loans  may be prepaid from time to time, without penalty or premium, provided that, except to the extent  provided in the last sentence of Section 2.1.5, no prepayments of Tranche B Revolver Loans may  be  made  unless  all  outstanding  Tranche  A  Revolver  Loans  have  been  repaid  in  full  and  all  outstanding  LC  Obligations  have  been  Cash  Collateralized.  Subject  to Section  2.1.5,  if  an  Overadvance exists at any time, Borrowers shall, on the sooner of Agent’s demand or the first  Business  Day  after  any  Borrower  has  knowledge  thereof,  repay  Revolver  Loans  or  Cash  Collateralize Letters of Credit in an amount sufficient to reduce Revolver Usage to the Aggregate  Borrowing Base. If any Asset Disposition includes the disposition of Eligible Accounts or Eligible  Inventory or any other ABL Facility First Lien Collateral, Net Proceeds equal to the greater of (a)  the  net  book  value  of  such  Accounts  and  Inventory,  or  (b)  the  reduction  in  the  Aggregate  Borrowing Base, upon giving effect to such disposition, shall be applied to prepay the Revolver  Loans.  Notwithstanding anything  herein to the contrary, if an Overadvance exists, Borrowers  shall repay the outstanding Revolver Loans pursuant to the terms of Section 2.1.5.         5.3.  Repayment.                 5.3.1. Mandatory Prepayments.                 (a)   Within five Business Days of the receipt of any proceeds of insurance or  condemnation awards paid in respect of any ABL Facility First Lien Collateral, Borrowers shall  prepay Revolver Loans                     (A)   first, to all principal amounts owing to Agent on Swingline Loans                    and Protective Advances;                     (B)   second, to all principal amounts owing to Tranche A Revolver                    Lenders on Tranche A Revolver Loans; and                     (C)   third, to all principal amounts owing to Tranche B Revolver                    Lenders on Tranche B Revolver Loans.               Amounts shall be applied to each category of Obligations set forth above until Full              Payment thereof and then to the next category. If amounts are insufficient to satisfy              a category, they shall be applied on a pro rata basis among the Obligations in the              category;               (b)   On the Commitment Termination Date, Borrowers shall prepay all Revolver  Loans (unless sooner repaid hereunder).         5.4.  Payment  of  Other  Obligations.  Obligations  other  than  Loans,  including LC  Obligations  and Extraordinary  Expenses,  shall  be  paid  by  Borrowers  as  provided  in  the  Loan  Documents or, if no payment date is specified, on demand.         5.5.  Marshaling; Payments Set Aside.  None of Agent or Lenders shall be under any  obligation to marshal any assets in favor of any Obligor or against any Obligations.  If any payment  by or on behalf of Borrowers is made to Agent, Issuing Bank or any Lender, or Agent, Issuing  Bank or any Lender exercises a right of setoff, and such payment or the proceeds of such setoff or  any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or                                        60  NAI-1507796678v9  

 

  required (including pursuant to any settlement entered into by Agent, Issuing Bank or such Lender  in its discretion) to be repaid to a trustee, receiver or any other Person, then to the extent of such  recovery, the Obligation originally intended to be satisfied, and all Liens, rights and remedies  relating thereto, shall be revived and continued in full force and effect as if such payment had not  been made or such setoff had not occurred.         5.6.  Allocation of Payments.                 5.6.1. Allocations Generally.  Absent an Event of Default, monies to be applied to  Obligations from payments by Obligors shall be allocated as follows:               (a)   if a specific payment of principal, interest, fees or other sum payable under  the Loan Documents, according to the instruction of Borrower Agent;               (b)   if a mandatory prepayment, according to Section 5.3.1; and               (c)   if any other amount, applied to the Obligations at the discretion of Agent.               5.6.2. Post-Default Allocation.  During an Event of Default, monies to be applied  to the Obligations, whether arising from payments by Obligors, realization on Collateral, setoff or  otherwise, shall be allocated as follows:               (a)   first,  to  all fees,  indemnification, costs  and  expenses,  including  Extraordinary Expenses, owing to Agent;               (b)   second,  to  all  amounts  owing  to  Agent  on  Swingline  Loans,  Protective  Advances, and Loans and participations that a Defaulting Lender has failed to settle or fund;               (c)   third, to all amounts owing to Issuing Bank on LC Obligations;               (d)   fourth, to all Obligations (other than Secured Bank Product Obligations)  constituting fees, indemnification, costs or expenses on Tranche A Revolver Loans and Tranche  A Revolver Commitments               (e)   fifth,  to  all  Obligations  constituting  interest  (other  than  Secured  Bank  Product Obligations) on Tranche A Revolver Loans;               (f)   sixth, to Cash Collateralize all LC Obligations;               (g)   seventh,  to  all  other  Tranche  A  Revolver Loans,  and  to Secured Bank  Product Obligations arising under Hedge Agreements (including Cash Collateralization thereof)  up to the amount of Reserves existing therefor;               (h)   eighth, to all Obligations constituting fees on Tranche B Revolver Loans  and Tranche A Revolver Commitments;               (i)   ninth, to all Obligations constituting interest on Tranche B Revolver Loans;               (j)   tenth, to all Tranche B Revolver Loans;                (k)   eleventh, to all other Secured Bank Product Obligations;                                        61  NAI-1507796678v9  

 

              (l)   twelfth, all remaining Obligations; and               (m)   last, to the Borrower.               5.6.3. Application of Amounts.  Amounts shall be applied to  each category of  Obligations set forth in Section 5.6.2 until Full Payment thereof and then to the next category.  If  amounts are insufficient to satisfy a category, they shall be applied on a pro rata basis among the  Obligations in the category.  Monies and proceeds obtained from an Obligor shall not be applied  to  its  Excluded  Swap  Obligations,  but  appropriate  adjustments  shall  be  made  with  respect  to  amounts  obtained  from  other  Obligors  to  preserve  the  allocations  in  any  applicable  category.   Agent shall have no obligation to calculate the amount of any Secured Bank Product Obligation  and may request a reasonably detailed calculation thereof from a Secured Bank Product Provider.  If the provider fails to deliver such calculation within five Business Days following request by  Agent, Agent may assume such amount is zero.  The allocations set forth in Section 5.6.2 are  solely to determine the rights and priorities of Agent and Lenders as among themselves, and may  be changed by agreement among them without the consent of any Obligor.  Section 5.6.2 is not  for the benefit of or enforceable by any Borrower.               5.6.4. Erroneous  Application.   Agent  shall  not  be  liable  for  any  application  of  amounts made by it in good faith and, if any such application is subsequently determined to have  been made in error, the sole recourse of any Lender or other Person to which such amount should  have been made shall be to recover the amount from the Person that actually received it (and, if  such amount was received by any Lender, such Lender hereby agrees to return it).         5.7.  Application of Payments.  During a Cash Dominion Trigger Period, the ledger  balance in the main Dominion Account as of the end of a Business Day shall be applied to the  Obligations at the beginning of the next Business Day.  If, as a result of such application, a credit  balance exists,  the  balance  shall  not  accrue  interest  in  favor  of  Borrowers  and  shall  be  made  available to Borrowers as long as no Default or Event of Default exists.  Each Borrower irrevocably  waives the right to direct the application of any payments or Collateral proceeds, and agrees that  Agent shall have the continuing, exclusive right to apply and reapply same against the Obligations,  in such manner as Agent deems advisable, subject to the proviso in Section 5.6.2 and provided  that  such  amounts  shall  not  be  applied  in  repayment  of  Tranche  B  Revolver  Loans  unless  all  outstanding Tranche A Revolver Loans have been repaid in full and all outstanding LC Obligations  have been Cash Collateralized.         5.8.  Loan Account; Account Stated.                 5.8.1. Loan  Account.   Agent  shall  maintain  in accordance  with  its  usual  and  customary practices an account or accounts (“Loan Account”) evidencing the Debt of Borrowers  resulting from each Loan or issuance of a Letter of Credit from time to time.  Any failure of Agent  to record anything in the Loan Account, or any error in doing so, shall not limit or otherwise affect  the obligation of Borrowers to pay any amount owing hereunder.  Agent may maintain a single  Loan Account in the name of each relevant Borrower for the account of the Obligations.  Each  Borrower confirms that such arrangement shall have no effect on the joint and several character of  its liability with each other Borrower for the Obligations.               5.8.2. Entries  Binding.   Entries  made  in  the  Loan  Accounts  shall  constitute  presumptive evidence of the information contained therein.  If any information contained in the                                         62  NAI-1507796678v9  

 

  Loan  Accounts  are  provided  to  or  inspected  by  any  Person,  then  such  information  shall  be  conclusive and binding on such Person for all purposes absent manifest error, except to the extent  such  Person  notifies  Agent  in  writing  within  30  days  after  receipt  or  inspection  that  specific  information is subject to dispute.         5.9.  Taxes.                 5.9.1. Payments Free of Taxes; Obligation to Withhold; Tax Payment.               (a)   All payments of Obligations by Obligors shall be made without deduction  or  withholding  for  any  Taxes,  except  as  required  by  Applicable  Law.   If  Applicable  Law  (as  determined by Agent in its discretion) requires the deduction or withholding of any Tax from any  such payment by Agent or an Obligor, then Agent or such Obligor shall be entitled to make such  deduction or withholding based on information and documentation provided pursuant to Section  5.10.               (b)   If Agent or any Obligor is required by the Code to withhold or deduct Taxes,  including  backup  withholding  and  withholding  taxes,  from  any  payment,  then  (i)  Agent  shall  withhold or make such  deductions  as  are determined by  Agent  to  be required based upon the  information and documentation it has received pursuant to Section 5.10 below, (ii) Agent shall  pay the full amount that it determines is to be withheld or deducted to the relevant Governmental  Authority pursuant to the Code, and (iii) to the extent the withholding or deduction is made on  account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as  necessary so that the Recipient receives an amount equal to the sum it would have received had no  such withholding or deduction been made.               (c)   If Agent or any Obligor is required by any Applicable Law other than the  Code to withhold or deduct Taxes from any payment, then (i) Agent or such Obligor shall withhold  or make such deductions as are determined by Agent or such Obligor to be required based upon  the information and documentation it has received pursuant to Section 5.10 below, (ii) Agent or  such Obligor, to the extent required by Applicable Law, shall timely pay the full amount to be  withheld  or  deducted  to  the  relevant  Governmental  Authority,  and  (iii)  to  the  extent  the  withholding  or  deduction  is  made  on  account  of  Indemnified  Taxes,  the  sum  payable  by  the  applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal  to the sum it would have received had no such withholding or deduction been made.               5.9.2. Payment of Other Taxes.  Without limiting the foregoing, Borrowers shall  timely  pay  to  the  relevant  Governmental  Authority  in  accordance  with  Applicable  Law,  or  at  Agent’s option, timely reimburse Agent for payment of, any Other Taxes.                 5.9.3. Tax Indemnification               (a)   Each Borrower shall indemnify and hold harmless, on a joint and several  basis, each Recipient against any Indemnified Taxes (including those imposed or asserted on or  attributable to amounts payable under this Section) payable or paid by a Recipient or required to  be withheld or deducted from a payment to a Recipient, and any penalties, interest and reasonable  expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were  correctly or legally imposed or asserted by the relevant Governmental Authority.  Each Borrower  shall indemnify and hold harmless Agent against any amount that a Lender or Issuing Bank fails  for any reason to pay indefeasibly to Agent as required pursuant to this Section.  Each Borrower                                        63  NAI-1507796678v9  

 

  shall make payment within 10 days after demand for any amount or liability payable under this  Section.  A certificate as to the amount of such payment or liability delivered to Borrowers by a  Lender or Issuing Bank (with a copy to Agent), or by Agent on its own behalf or on behalf of any  Recipient, shall be conclusive absent manifest error.                 (b)   Each  Lender  and  Issuing  Bank  shall  indemnify  and  hold  harmless,  on  a  several basis, (i) Agent against any Indemnified Taxes attributable to such Lender or Issuing Bank  (but only to the extent Borrowers have not already paid or reimbursed Agent therefor and without  limiting Borrowers’ obligation to do so), (ii) Agent and Obligors, as applicable, against any Taxes  attributable to such Lender’s failure to maintain a Participant register as required hereunder, and  (iii) Agent and Obligors, as applicable, against any Excluded Taxes attributable to such Lender or  Issuing Bank, in each case, that are payable or paid by Agent or an Obligor in connection with any  Obligations, and any reasonable expenses arising therefrom or with respect thereto, whether or not  such  Indemnified  Taxes  were  correctly  or  legally  imposed  or  asserted  by  the  relevant  Governmental Authority.  Each Lender and Issuing Bank shall make payment within 10 days after  demand for any amount or liability payable under this Section.  A certificate as to the amount of  such payment or liability delivered to any Lender or Issuing Bank by Agent shall be conclusive  absent manifest error.               5.9.4. Evidence of Payments.  If Agent or an Obligor pays any Taxes pursuant to  this Section, then upon request, Agent shall deliver to Borrower Agent or Borrower Agent shall  deliver  to  Agent,  respectively,  a  copy  of  a  receipt  issued  by  the  appropriate  Governmental  Authority evidencing the payment, a copy of any return required by Applicable Law to report the  payment, or other evidence of payment reasonably satisfactory to Agent or Borrower Agent, as  applicable.               5.9.5. Treatment of Certain Refunds.  Unless required by Applicable Law, at no  time shall Agent have any obligation to file for or otherwise pursue on behalf of a Lender or Issuing  Bank, nor have any obligation to pay to any Lender or Issuing Bank, any refund of Taxes withheld  or deducted from funds paid for the account of a Lender or Issuing Bank.  If a Recipient determines  in its discretion that it has received a refund of any Taxes as to which it has been indemnified by  Borrowers  or  with  respect  to  which  a  Borrower  has  paid  additional  amounts  pursuant  to  this  Section, it shall pay Borrowers an amount equal to such refund (but only to the extent of indemnity  payments made, or additional amounts paid, by Borrowers with respect to the Taxes giving rise to  such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and  without interest (other than any interest paid by the relevant Governmental Authority with respect  to such refund), provided that Borrowers agree, upon request by the Recipient, to repay the amount  paid  over  to  Borrowers  (plus  any  penalties,  interest  or  other  charges  imposed  by  the  relevant  Governmental Authority) to the Recipient if the Recipient is required to repay such refund to the  Governmental Authority.  Notwithstanding anything herein to the contrary, no Recipient shall be  required to pay any amount to Borrowers if such payment would place the Recipient in a less  favorable net after-Tax position than it would have been in if the Tax subject to indemnification  and giving rise to such refund had not been deducted, withheld or otherwise imposed and the  indemnification payments or additional amounts with respect to such Tax had never been paid.  In  no event shall Agent or any Recipient be required to make its tax returns (or any other information  relating to its taxes that it deems confidential) available to any Obligor or other Person.               5.9.6. Survival.  Each party’s obligations under Sections 5.9 and 5.10 shall survive  the resignation or replacement of Agent or any assignment of rights by or replacement of a Lender                                        64  NAI-1507796678v9  

 

  or Issuing Bank, the termination of the Commitments, and the repayment, satisfaction, discharge  or Full Payment of any Obligations.         5.10. Lender Tax Information.                 5.10.1. Status of Lenders.  Any Lender that is entitled to an exemption from or  reduction of withholding Tax with respect to payments of Obligations shall deliver to Borrowers  and Agent properly completed and executed documentation reasonably requested by Borrowers or  Agent as will permit such payments to be made without or at a reduced rate of withholding.  In  addition, any Lender, if reasonably requested by Borrowers or Agent, shall deliver such other  documentation prescribed by Applicable Law or reasonably requested by Borrowers or Agent to  enable them to determine whether such Lender is subject to backup withholding or information  reporting  requirements.   Notwithstanding  the  foregoing,  such  documentation  (other  than  documentation  described  in Sections  5.10.2(a),  (b) and (d))  shall  not  be  required  if  a  Lender  reasonably believes delivery of the documentation would subject it to any material unreimbursed  cost or expense or would materially prejudice its legal or commercial position.               5.10.2. Documentation.  Without limiting the foregoing, if any Borrower is a U.S.  Person,                (a)   Any Lender that is a U.S. Person shall deliver to Borrowers and Agent on  or prior to the date on which such Lender becomes a Lender hereunder (and from time to time  thereafter upon reasonable request of Borrowers or Agent), executed copies of IRS Form W-9,  certifying that such Lender is exempt from U.S. federal backup withholding Tax;               (b)   Any Foreign Lender shall, to the extent it is legally entitled to do so, deliver  to Borrowers and 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 hereunder (and from time to  time thereafter upon reasonable request of Borrowers or Agent), whichever of the following is  applicable:                (i)  in the case of a Foreign Lender claiming the benefits of an income tax treaty  to which the United States is a party, (x) with respect to payments of interest under any Loan  Document, executed copies of IRS Form W-8BEN or W-8BEN-E establishing an exemption from  or reduction of U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty,  and (y) with respect to other payments under the Loan Documents, IRS Form W-8BEN or W- 8BEN-E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to  the “business profits” or “other income” article of such tax treaty;               (ii)  executed originals of IRS 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, (x) a certificate in form satisfactory to Agent  to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A)  of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B)  of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code  (“U.S. Tax Compliance Certificate”), and (y) executed originals of IRS Form W-8BEN or W- 8BEN-E; or               (iv)  to the extent a Foreign Lender is not the beneficial owner, executed copies                                        65  NAI-1507796678v9  

 

  of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E  (as applicable), a U.S. Tax Compliance Certificate in form satisfactory to Agent, IRS Form W-9,  and/or other certification documents from each beneficial owner, as applicable; provided that if  the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign  Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax  Compliance Certificate on behalf of each such direct and indirect partner;               (c)   any Foreign Lender shall, to the extent it is legally entitled to do so, deliver  to Borrowers and 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 hereunder (and from time to  time thereafter upon the reasonable request of Borrowers or Agent), executed copies of any other  form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S.  federal withholding Tax, duly completed, together with such supplementary documentation as may  be prescribed by Applicable Law to permit Borrowers or Agent to determine the withholding or  deduction required to be made; and               (d)   if payment of an Obligation to a Lender would be subject to U.S. federal  withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable  reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the  Code), such Lender shall deliver to Borrowers and Agent at the time(s) prescribed by law and  otherwise  as  reasonably  requested  by  Borrowers  or  Agent  such  documentation  prescribed  by  Applicable  Law  (including  Section  1471(b)(3)(C)(i)  of  the  Code)  and  such  additional  documentation  reasonably  requested  by  Borrowers  or  Agent  as  may  be  necessary  for  them  to  comply with their obligations under FATCA and to determine that such Lender has complied with  its  obligations  under  FATCA  or  to  determine  the  amount  to  deduct  and  withhold  from  such  payment.  Solely for purposes of this clause (d), “FATCA” shall include any amendments made to  FATCA after the date hereof.               5.10.3. Redelivery  of  Documentation.  If  any  form  or  certification  previously  delivered by a Lender pursuant to this Section expires or becomes obsolete or inaccurate in any  respect, such Lender shall promptly update the form or certification or notify Borrowers and Agent  in writing of its inability to do so.         5.11. Nature and Extent of Each Borrower’s Liability.                 5.11.1. Joint  and  Several  Liability.  Each  Borrower  agrees  that  it  is  jointly  and  severally liable for and absolutely and unconditionally guarantees to Agent and Lenders the prompt  payment  and  performance  of,  all  Obligations  and  all  agreements  under  the  Loan  Documents,  except  its  Excluded  Swap  Obligations.   Each  Borrower  agrees  that  its  guaranty  obligations  hereunder constitute a continuing guaranty of payment and not of collection, that such obligations  shall not be discharged until Full Payment of the Obligations and that to the extent permitted by  Applicable  Law,  such  obligations  are  absolute  and  unconditional,  irrespective  of  (a)  the  genuineness, validity, regularity, enforceability, subordination or any future modification of, or  change in, any Obligations or Loan Document, or any other document, instrument or agreement to  which any Obligor is or may become a party or be bound; (b) the absence of any action to enforce  this Agreement (including this Section) or any other Loan Document, or any waiver, consent or  indulgence of any kind by Agent or any Lender with respect thereto; (c) the existence, value or  condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for  the Obligations or any action, or the absence of any action, by Agent or any Lender in respect                                        66  NAI-1507796678v9  

 

  thereof (including the release of any security or guaranty); (d) the insolvency of any Obligor; (e)  any election by Agent or any Lender in an Insolvency Proceeding for the application of Section  1111(b)(2)  of  the  Bankruptcy  Code  (or  the  equivalent in  any  applicable  jurisdiction);  (f)  any  borrowing or grant of a Lien by any other Borrower, as debtor-in-possession under Section 364 of  the  Bankruptcy  Code  or  otherwise  (or  the  equivalent  in  any  applicable  jurisdiction);  (g)  the  disallowance of any claims of Agent or any Lender against any Obligor for the repayment of any  Obligations under Section 502 of the Bankruptcy Code or otherwise (or the equivalent in any  applicable jurisdiction); or (h) any other action or circumstances that might otherwise constitute a  legal  or  equitable  discharge  or  defense  of  a  surety  or  guarantor,  except  Full  Payment  of  all  Obligations.               5.11.2. Waivers.                 (a)   To  the  extent  permitted  by  Applicable  Law,  each  Borrower  expressly  waives all rights that it may have now or in the future under any statute, at common law, in equity  or otherwise, to compel Agent or Lenders to marshal assets or to proceed against any Obligor,  other  Person  or  security  for  the  payment  or  performance  of  any  Obligations  before,  or  as  a  condition to, proceeding against such Borrower.  To the extent permitted by Applicable Law, each  Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor other  than Full Payment of all Obligations and waives, to the maximum extent permitted by Applicable  Law, any right to revoke any guaranty of Obligations as long as it is a Borrower.  It is agreed  among  each  Borrower,  Agent  and  Lenders  that  the  provisions  of  this Section  5.11 are  of  the  essence of the transaction contemplated by the Loan Documents and that, but for such provisions,  Agent and Lenders would decline to make Loans and issue Letters of Credit.  Each Borrower  acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion  of its business, and can be expected to benefit such business.               (b)   Agent and Lenders may, in their discretion, pursue such rights and remedies  as they deem appropriate, including realization upon Collateral by judicial foreclosure or non- judicial sale or enforcement, without affecting any rights and remedies under this Section 5.11.  If,  in taking any action in connection with the exercise of any rights or remedies, Agent or any Lender  shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against  any Borrower or other Person, whether because of any Applicable Laws pertaining to “election of  remedies” or otherwise, each Borrower consents to such action and waives to the extent permitted  by Applicable Law any claim based upon it, even if the action may result in loss of any rights of  subrogation that any Borrower might otherwise have had.  Any election of remedies that results in  denial or impairment of the right of Agent or any Lender to seek a deficiency judgment against  any  Borrower  shall  not  impair  any  other  Borrower’s  obligation  to  pay  the  full  amount  of  the  Obligations.  Each Borrower waives to  the extent permitted by Applicable  Law all rights  and  defenses arising out of an election of remedies, such as non-judicial foreclosure with respect to  any security for the Obligations, even though that election of remedies destroys such Borrower’s  rights of subrogation against any other Person.  Agent may bid Obligations, in whole or part, at  any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need  not be paid by Agent but shall be credited against the Obligations.  The amount of the successful  bid  at  any  such  sale,  whether  Agent  or  any  other  Person  is  the  successful  bidder,  shall  be  conclusively deemed to be the fair market value of the Collateral, and the difference between such  bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the  amount of the Obligations guaranteed under this Section 5.11, notwithstanding that any present or                                         67  NAI-1507796678v9  

 

  future law or court decision may have the effect of reducing the amount of any deficiency claim  to which Agent or any Lender might otherwise be entitled but for such bidding at any such sale.               5.11.3. Extent of Liability; Contribution.                 (a)   Notwithstanding anything herein to the contrary, each Borrower’s liability  under this Section 5.11 shall not exceed the greater of (i) all amounts for which such Borrower is  primarily liable, as described in clause (c) below, and (ii) such Borrower’s Allocable Amount.               (b)   If  any  Borrower  makes  a  payment  under  this Section  5.11 of  any  Obligations  (other  than  amounts  for  which  such  Borrower  is  primarily  liable)  (a  “Guarantor  Payment”) that, taking into account all other Guarantor Payments previously or concurrently made  by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each  Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same  proportion that such Borrower’s Allocable Amount bore to the total Allocable Amounts of all  Borrowers,  then  such  Borrower  shall  be  entitled  to  receive  contribution  and  indemnification  payments from, and to be reimbursed by, each other Borrower for the amount of such excess, pro  rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor  Payment.  The “Allocable Amount” for any Borrower shall be the maximum amount that could  then be recovered from such Borrower under this Section 5.11 without rendering such payment  voidable  under  Section  548  of  the  Bankruptcy  Code  or under  any  applicable  state  fraudulent  transfer or conveyance act, or similar statute or common law.               (c)   Section  5.11.3(a) shall not limit  the  liability  of  any  Borrower  to  pay or  guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other  Borrower and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC  Obligations  relating to Letters of Credit issued to support its business, Secured Bank Product  Obligations  incurred to  support its  business, and all accrued interest,  fees,  expenses  and other  related Obligations with respect thereto, for which such Borrower shall be primarily liable for all  purposes  hereunder.   Agent  and  Lenders  shall  have  the  right,  at  any  time  in  their  Permitted  Discretion, to  condition  Loans  and  Letters of Credit upon a separate calculation  of borrowing  availability for each Borrower and to restrict the disbursement and use of Loans and Letters of  Credit to a Borrower based on that calculation.               (d)   Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien  as  security  for  a  Swap  Obligation  becomes  effective  hereby  jointly  and  severally,  absolutely,  unconditionally and irrevocably undertakes to provide funds or other support to each Specified  Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from  time to time to honor all of its obligations under the Loan Documents in respect of such Swap  Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby  incurred without rendering such Qualified ECP’s obligations and undertakings under this Section  5.11 voidable under any applicable fraudulent transfer or conveyance act).  The obligations and  undertakings of each Qualified ECP under this Section shall remain in full force and effect until  Full Payment of all Obligations.  Each Obligor intends this Section to constitute, and this Section  shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support or other  agreement” for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.               5.11.4. Joint  Enterprise.   Each Borrower  has  requested  that  Agent  and  Lenders  make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’                                         68  NAI-1507796678v9  

 

  business  most  efficiently  and  economically.   Borrowers’  business  is  a  mutual  and  collective  enterprise.  Borrowers believe that consolidation of their credit facility will enhance the borrowing  power of each Borrower and ease the administration of their relationship with Lenders, all to the  mutual advantage of Borrowers.  Borrowers acknowledge and agree that Agent’s and Lenders’  willingness to extend credit to Borrowers and to administer the Collateral on a combined basis, as  set forth herein, is done solely as an accommodation to Borrowers and at Borrowers’ request.               5.11.5. Subordination.  Each Borrower hereby subordinates any claims, including  any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution,  indemnification or set  off, that it may have at  any time against any other Obligor, howsoever  arising, to the Full Payment of all Obligations, subject to Section 10.2.9.   SECTION 6.  CONDITIONS PRECEDENT         6.1.  Conditions  Precedent  to  Effective  Date.   This  Agreement  shall  not  become  effective until the date on which each of the following conditions is satisfied or waived in writing  by Agent and the Lenders:               (a)   This Agreement shall be executed by each Obligor party hereto, Agent and  Lenders, and counterparts hereof as so executed shall have been delivered to Agent;               (b)   The  Pledge  Agreement,  amendments  to  each  of  the  Copyright  Security  Agreement, Patent  Security Agreement, Trademark Security Agreement,  and Deposit  Account  Control Agreements, in each case, shall be executed by each applicable Obligor and Agent, and  counterparts thereof as so executed shall have been delivered to Agent;               (c)   Agent shall have entered into an Intercreditor Agreement with Borrowers  and Term Loan Agent in form and substance reasonably satisfactory to Agent;               (d)   Agent shall have received certificates, in form and substance reasonably  satisfactory to it, from a knowledgeable Senior Officer of Obligors certifying that, after giving  effect  to  the  initial  Loans  and  transactions  hereunder  occurring  on  the  Effective  Date,  (i)  the  Obligors (taken as a whole) are Solvent; (ii) no Default or Event of Default exists; and (iii) the  representations and warranties set forth in Section 9 are true and correct in all material respects as  of the Effective Date, except to the extent such representations and warranties are made on and as  of a specified date (and not required to be brought down to the Effective Date), in which case the  same shall continue on the Effective Date to be true and correct as of the applicable specified date  (or, in the event such representations and warranties are qualified by materiality or material adverse  effect or language of similar import, such representations shall be true and correct in all respects  as of the Effective Date);               (e)   Agent shall have received a certificate of a duly authorized officer of each  Obligor, certifying (i) that  attached  copies of such Obligor’s Organic Documents  are true and  complete, and in full force and effect, without amendment except as shown; (ii) that an attached  copy  of  resolutions  authorizing  execution  and  delivery  of  the  Loan  Documents  is  true  and  complete, and that such resolutions are in full force and effect, were duly adopted, have not been  amended, modified or revoked, and constitute all resolutions adopted with respect to this credit  facility; and (iii) that the charter documents of each Obligor have not been amended or modified  since  the  Second Restatement  Effective Date,  or  if  any  such  charter  documents  have  been  so  amended or modified, Agent shall have received copies of the charter documents of each Obligor,                                        69  NAI-1507796678v9  

 

  certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of  organization;               (f)   Agent shall have received good standing certificates, as applicable, for each  Obligor, issued by the Secretary of State or other appropriate official of such Obligor’s jurisdiction  of organization and each jurisdiction where such Obligor’s conduct of business or ownership of  Property necessitates qualification;               (g)   Agent  shall  have  received  final  executed  copies  of  the  Term  Loan  Documents, and all related agreements, documents and instruments as in effect on the Effective  Date  all  of  which  shall  be  reasonably  satisfactory  in  form  and  substance  to  Agent  and  the  transactions contemplated by such documentation shall be consummated prior or in simultaneously  therewith the making of the initial Advance;                (h)   Agent shall have received evidence that (substantially contemporaneously  with the Effective Date) the Indenture has been discharged in accordance with its terms accordance  with the terms of the Indenture;                 (i)   Agent shall have received a written opinion of (x) Gibson, Dunn & Crutcher  LLP, (ii) Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. and (iii) Ahlers & Cooney,  P.C., all such opinions to be in form and substance reasonably satisfactory to Agent;                (j)   Agent  shall  have  received  a  completed  Perfection  Certificate  dated  the  Effective  Date  and  signed  by  a  Senior  Officer  of  the  Company,  together  with  all  attachments  contemplated thereby; and               (k)   Borrowers have paid all reasonable and documented out-of-pocket fees and  expenses of Agent and of legal counsel to Agent that have been invoiced on or prior to the Effective  Date in connection with the preparation, negotiation, execution and delivery of this Agreement.          6.2.  Conditions  Precedent  to  All  Credit  Extensions.   Agent,  Issuing  Bank  and  Lenders shall not be required to fund any Loans or arrange for issuance of any Letters of Credit  unless the following conditions are satisfied:               (a)   No Default or Event of Default shall exist at the time of, or result from, such  funding, issuance or grant;               (b)   The representations and warranties of each Obligor in the Loan Documents  shall be true and correct in all material respects on the date of, and upon giving effect to, such  funding, issuance or grant (except for representations and warranties that expressly relate to an  earlier date, and, in each such case, shall be true and correct in all material respects as of such  earlier date);               (c)   All conditions precedent in any other Loan Document shall be satisfied or  waived; and               (d)   With respect to issuance of a Letter of Credit, the LC Conditions shall be  satisfied.                                          70  NAI-1507796678v9  

 

              Each request (or deemed request) by Borrowers for funding of a Loan, issuance of a   Letter of Credit or grant of an accommodation shall constitute a representation by Borrowers that the   foregoing conditions are satisfied or waived on the date of such request and on the date of such funding,   issuance or grant.     SECTION 7.  COLLATERAL         7.1.  Grant of Security Interest.  To secure the prompt payment and performance of all  Obligations,  each  Borrower and  Guarantor  hereby  grants  to  Agent  for  the  benefit  of  Secured  Parties (in such capacity, a collateral agent), a continuing security interest in and Lien upon all  Property  of  such  Borrower,  including  all  of  the  following  Property,  whether  now  owned  or  hereafter acquired, and wherever located:               (a)   all Accounts;               (b)   all Chattel Paper, including electronic chattel paper;               (c)   all Commercial Tort Claims listed on Schedule 7.1 (as amended from time  to time);               (d)   all Deposit Accounts;               (e)   all Documents;               (f)   all  General  Intangibles,  including  Intellectual  Property  (excluding  applications  filed  in  the  United  States  Patent  and  Trademark  Office  to  register  trademarks  or  service marks on the basis of any Obligor’s “intent to use” such trademarks or service marks unless  and until the filing of a “Statement of Use” or “Amendment to Allege Use” has been filed and  accepted, whereupon such applications shall be automatically subject to the Lien granted herein  and deemed included in the Collateral and contracts that prohibit the granting of security interests  or encumbrances);               (g)   all Goods, including Inventory, Equipment and fixtures;               (h)   all Instruments;               (i)   all Investment Property;               (j)   all Licenses;                (k)   all Letter-of-Credit Rights;               (l)   all Supporting Obligations;               (m)   all monies, whether or not in the possession or under the control of Agent,  a Lender, or a bailee or Affiliate of Agent or a Lender, including any Cash Collateral;                                          71  NAI-1507796678v9  

 

              (n)   all accessions to, substitutions for, and all replacements, products, and cash  and  non-cash  proceeds  of  the  foregoing,  including  proceeds  of  and  unearned  premiums  with  respect to insurance policies, and claims against any Person for loss, damage or destruction of any  Collateral; and               (o)   all books and records (including customer lists, files, correspondence, tapes,  computer programs, print-outs and computer records) pertaining to the foregoing.               Notwithstanding the foregoing, in no event shall any of the following Property be subject   to the grant of security pursuant to this Section 7.1 or otherwise constitute Collateral: (i) all motor   vehicles and other assets subject to a certificate of title the perfection of a security interest in which is   excluded from the UCC in the relevant jurisdiction; (ii) any General Intangible or other rights arising   under contracts, Instruments, licenses, license agreements (including Licenses) or other documents, and   any joint venture or minority Equity Interests, in each case, to the extent (and only to the extent) that the   grant of a security interest would (x) constitute a violation of a restriction (so long as such restriction is   not entered into in contemplation of the grant by a Grantor of a security interest pursuant to this   Agreement or, in the case of the Acquisition of any such Property after the date hereof, in contemplation   of such Acquisition) in favor of a third party on such grant, unless and until any required consents shall   have been obtained, (y) give any other party the right to terminate its obligations thereunder, or (z) violate   any law, provided, however, that (1) any portion of any such General Intangible or other right or Equity   Interests shall cease to be excluded pursuant to this clause (ii) at the time and to the extent that the grant   of a security interest therein does not result in any of the consequences specified above and (2) the   limitation set forth in this clause (ii) above shall not affect, limit, restrict or impair the grant by a Grantor   of a security interest pursuant to this Agreement in any such General Intangible or other right or Equity   Interests, to the extent that an otherwise applicable prohibition or restriction on such grant is rendered   ineffective by any applicable law, including the New York UCC, (iii) Property (and proceeds thereof)   owned by any Obligor on the date hereof or hereafter acquired that is subject to a Lien securing a   purchase money obligation or Capital Lease permitted to be incurred pursuant to this Agreement, for so   long as the contract or other agreement in which such Lien is granted (or the documentation providing for   such purchase money obligation or Capital Lease) validly prohibits the creation of any other Lien on such   Property (and, in the case of Property hereafter acquired, so long as such prohibition was not entered into                                        72  NAI-1507796678v9  

 

  in contemplation of such acquisition); (iv) applications filed in the United States Patent and Trademark   Office to register trademarks or service marks on the basis of any Obligor’s “intent to use” such   trademarks or service marks unless and until the filing of a “Statement of Use” or “Amendment to Allege   Use” has been filed and accepted, whereupon such applications shall be automatically subject to the Lien   granted herein and deemed included in the Collateral; (v) any property or assets to the extent that such   grant of a security interest is prohibited by any Applicable Law or requires a consent not obtained of any   Governmental Authority pursuant to such Applicable Law; (vi) more than 65% of the Equity Interests of   any Foreign Subsidiary or any Foreign Holding Company which represent Voting Stock to the extent a   greater percentage would result in adverse tax consequences to the Company; (vii) all tax, payroll,   employee benefit, fiduciary and trust accounts; (viii) accounts receivable and any assets related thereto   owned by an Excluded Receivables Subsidiary or which the Company or its Subsidiaries have agreed to   transfer to an Excluded Receivables Subsidiary; (ix) de minimus Equity Interests of any indirect Foreign   Subsidiary or other foreign Person directly held by a Borrower or any Guarantor solely for the benefit of   any Person other than any Borrower or any Guarantor; (x) cash collateral that is the subject of a deposit or   pledge constituting a Permitted Lien, but only to the extent the agreements governing such deposit or   pledge prohibit the existence of a Lien therein in favor of the Agent; (xi) Margin Stock; (xii) any interest   in Real Estate; or (xiii) Property in circumstances where the Agent and the Company reasonably agree   that the cost of obtaining or perfecting a security interest in such Property is excessive in relation to the   benefit to the Lenders of the security to be afforded thereby (clauses (i) through (xiii) collectively, the   “Excluded Collateral”). Furthermore, any assets or Property constituting “Excluded Collateral” are   expressly excluded from each term used in the definition of Collateral (and any component definition   thereof); provided, that in no event shall any Collateral that is also Eligible Inventory be considered   “Excluded Collateral” for any purpose.         7.2.  [RESERVED].           7.3.  Lien on Deposit Accounts; Cash Collateral.                 7.3.1. Deposit Accounts.  To further secure the prompt payment and performance  of all Obligations, each Borrower hereby grants to Agent, for the benefit of Secured Parties, a  continuing security interest in and Lien upon all amounts credited to any Deposit Account of such                                        73  NAI-1507796678v9  

 

  Borrower that otherwise constitutes Collateral hereunder, including any sums in any blocked or  lockbox account into which sums are swept.  Each Borrower hereby authorizes and directs each  bank or other depository that maintains an account for such Borrower to deliver to Agent, during  any Cash Dominion Trigger Period (if so requested by Agent), on a daily basis, all balances in any  Deposit Account (other than payroll, tax, petty cash, employee benefit and trust deposit accounts)  maintained by such Borrower, for application to the Obligations, without inquiry into the authority  and right of Agent to make such request.               7.3.2. Cash  Collateral.   Any  Cash  Collateral  shall  be  invested,  at  Borrower  Agent’s election, in Cash Equivalents, and Agent shall have no responsibility for any investment  or loss.  Each  Borrower hereby  grants  to  Agent, for the benefit  of Secured Parties,  a security  interest in all Cash Collateral held from time to time and all proceeds thereof, as security for the  Obligations,  whether  such  Cash  Collateral  is held  in  a  Cash  Collateral  Account  or  elsewhere.   Agent  may  apply  Cash  Collateral  in  Deposit  Accounts  to  the  payment  of  any  Obligations  in  accordance  with  the  provisions  of Section  5.6,  as  they  become  due  and  payable.   Each  Cash  Collateral Account and all Cash Collateral shall be under the sole dominion and control of Agent.   No Borrower or other Person claiming through or on behalf of any Borrower shall have any right  to any Cash Collateral, until Full Payment of all Obligations or such amounts are due to be returned  to the Borrowers in accordance with the terms of this Agreement.         7.4.  Real Estate Collateral.                 7.4.1. Negative  Pledge  on  Real  Estate.   The  Borrowers  will  not,  and  will  not  permit any of their Subsidiaries to, enter into or suffer to exist any agreement  granting, creating  or assuming any Lien upon any of its Real Estate, other than in respect of Permitted Liens.         7.5.  Other Collateral.                 7.5.1. Commercial  Tort  Claims.   Concurrently  with  the  delivery  of  each  Compliance Certificate pursuant to Section 10.1.2(c), Borrowers shall notify Agent in writing of  any  Commercial  Tort  Claim  (other  than,  as  long  as  no  Default  or  Event  of  Default  exists,  a  Commercial Tort Claim for less than $1,000,000) that is held by any Borrower to the extent Agent  was not previously notified about the existence of such Commercial Tort Claim and, upon Agent’s  request, shall promptly take such actions as Agent deems appropriate to confer upon Agent (for  the benefit of Secured Parties) a duly perfected, first priority Lien (subject to Permitted Liens)  upon such claim.               7.5.2. Certain After-Acquired Collateral.  Concurrently with the delivery of each   Compliance Certificate pursuant to Section 10.1.2(c), Borrowers shall promptly notify Agent in  writing if, after the Effective Date, any Borrower obtains any interest in any Collateral consisting  of Chattel Paper, Documents, Instruments, Investment Property or Letter-of-Credit Rights to the  extent Agent was not previously notified about the existence of such Collateral, and, upon Agent’s  request,  shall  promptly  take such  actions  as  Agent  deems  appropriate  to  effect  Agent’s  duly  perfected, first priority (subject to Permitted Liens) Lien upon such Collateral (which is not yet  subject to a Lien in favor of Agent), including using commercially reasonable efforts to obtain  Lien Waivers; provided, that Borrowers shall notify Agent of the opening of any new Deposit  Accounts and enter into control agreements within the time period and as required pursuant to  Section 8.2.4 and Section 8.5.  Concurrently with the delivery of each Compliance Certificate  pursuant  to Section  10.1.2(c),  Borrower  Agent  shall  notify  Agent  of  any  registrations  or                                         74  NAI-1507796678v9  

 

  applications for registration of Intellectual Property (whether by application with the United States  Patent and Trademark Office, the United States Copyright Office, or any equivalent thereof in any  state  of  the  United  States  or  foreign  jurisdiction,  or  acquisition  of  an  Intellectual  Property  application or registration by purchase or assignment, or where a registration of a Trademark is  issued hereafter to any Obligor resulting from a pending intent to use trademark application, or  where registration of any Intellectual Property is issued hereafter to any Obligor as a result of any  application now or hereafter pending to the extent a security interest is such application has not  already  been  granted  to  or  recorded  on  behalf  of  the  Agent  (collectively,  “After-Acquired  Intellectual Property”)) since the last day of the previous Fiscal Quarter to the extent Agent was  not previously notified about the existence of such Intellectual Property, including the owner of  such Intellectual Property and a detailed description thereof. At the time of notification of After- Acquired Intellectual Property, each relevant Obligor shall deliver to the Agent, at such Obligor’s  expense, a Patent Security Agreement, Trademark Security Agreement and/or Copyright Security  Agreement, as applicable, covering such After-Acquired Intellectual Property, for recording with  the United States Patent and Trademark Office or United States Copyright Office, as applicable.   If  any  Inventory  constituting  Collateral  (other  than  (i)  Property  in  transit  among  locations  of  Borrowers, (ii) Inventory out for processing, and (iii) Property out for repair or refurbishment or  Property in the possession of employees in the Ordinary Course of Business), is in the possession  of a third party, at Agent’s request, Borrowers shall use commercially reasonable efforts to obtain  an  acknowledgment  that  such  third  party  holds  the  Collateral  for  the  benefit  of  Agent.  Agent  acknowledges that, as of the Effective Date, no actions are required to have been taken pursuant  to this Section 7.5.2.         7.6.  No Assumption of Liability.  The Lien on Collateral granted hereunder is given  as security only and shall not subject Agent or any Lender to, or in any way modify, any obligation  or liability of Borrowers relating to any Collateral.  In no event shall the grant of any Lien under  any Loan Document secure an Excluded Swap Obligation of the granting Obligor.         7.7.  Further Assurances.  All Liens granted to Agent under the Loan Documents are  for the benefit of Secured Parties.  Promptly following written request, Borrowers shall deliver  such instruments, collateral assignments, or other documents or agreements, and shall take such  actions, as Agent deems appropriate under Applicable Law to evidence or perfect its Lien on any  Collateral,  or  otherwise  to  give  effect  to  the  intent  of  this  Agreement.   Each  Borrower  and  Guarantor authorizes Agent to file any financing statement that indicates the Collateral as “all  assets” or “all personal property” of such Borrower or Guarantor, as applicable, or words to similar  effect.  Anything contained herein or in any other Loan Document to the contrary notwithstanding,  the Obligors shall not be required (i) to execute and deliver any document or instrument governed  by any law other than the laws of the United States or a political subdivision thereof, (ii) with  respect to any interests in Intellectual Property of the Obligors, to file or record in favor of the  Agent any agreement, notice or instrument with any office other than the United States Patent and  Trademark  Office,  the  United  States  Copyright  Office,  or  any  applicable  office  of  a  political  subdivision of the United States, and (iii) to grant or perfect any Lien in any interests in the Real  Estate or in any aircraft.         7.8.  Foreign Subsidiary Stock.  The Collateral shall include only 65% of the Voting  Stock of any Foreign Subsidiary to the extent such Voting Stock secures any Obligation.                                          75  NAI-1507796678v9  

 

  SECTION 8.  COLLATERAL ADMINISTRATION         8.1.  Borrowing Base Certificates.  By the 20th day after the last day of each prior Fiscal  Month, Borrowers shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a  Borrowing Base Certificate prepared as of the close of business on the last day of the previous  month.  If  at  any  time,  Availability  is  less  than  $10,000,000  on  each  day  for  five  consecutive  Business Days, until such time as Availability has been greater than $10,000,000 on each day for  more than 30 consecutive days, by the third Business Day of each week thereafter, Borrowers shall  deliver  an  additional  report,  in  form  and  substance  reasonably  acceptable  to  Agent,  reflecting  Borrowers’ updated gross accounts receivable, prepared as of the close of business on the last day  of  the  prior  week.   All  calculations  of  Availability  in  any  Borrowing  Base  Certificate  shall  originally be made by Borrower Agent and certified by a Senior Officer, provided that Agent may  from time to time review and adjust any such calculation in its Permitted Discretion (a) to reflect  its reasonable estimate of declines in value of any Collateral, due to collections received in the  Dominion Account or otherwise; (b) to adjust advance rates to reflect changes in dilution, quality,  mix and other factors affecting Collateral; and (c) to the extent the calculation is not made in  accordance with this Agreement or does not accurately reflect the Availability Reserve.         8.2.  Administration of Accounts.                 8.2.1. Records and Schedules of Accounts.  Each Borrower shall keep accurate  and complete records of its Accounts, including all payments and collections thereon, and shall  submit to Agent sales, collection, reconciliation and other reports in form reasonably satisfactory  to Agent, on such periodic basis as Agent may reasonably request.  Each Borrower shall also  provide to Agent, on or before the 20th day after the last day of each prior Fiscal Month, a detailed  aged trial balance of all Accounts as of the end of the preceding Fiscal Month, specifying each  Account’s Account Debtor name and address, amount, invoice date and due date.  With respect to  any item delivered pursuant to this Section 8.2.1, each Borrower shall also provide to Agent such  additional documentation showing any discount, allowance, credit, authorized return or dispute,  and including such proof of delivery, copies of invoices and invoice registers, copies of related  documents, repayment histories, status reports and other information on such periodic basis as  Agent may request.  If Accounts in an aggregate face amount of $1,000,000 or more cease to be  Eligible Accounts and any Revolving Loans are outstanding, Borrowers shall notify Agent of such  occurrence  promptly  (and  in  any  event  within  one  Business  Day)  after  any  Borrower  has  knowledge thereof.               8.2.2. Taxes.  If an Account of any Borrower includes a charge for any Taxes then  due, Agent is authorized, in its discretion, to pay the amount thereof to the proper taxing authority  for the account of such Borrower and to charge Borrowers therefor; provided, however, that neither  Agent nor Lenders shall be liable for any Taxes that may be due from Borrowers or with respect  to any Collateral.               8.2.3. Account Verification.  Whether or not a Default or Event of Default exists,  Agent  shall  have  the  right  at  any  time,  in  the  name  of Agent,  any  designee  of  Agent  or  any  Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowers  by  mail,  telephone  or  otherwise.   Borrowers  shall  cooperate  fully  with  Agent  in  an  effort  to  facilitate and promptly conclude any such verification process.                                          76  NAI-1507796678v9  

 

              8.2.4. Maintenance of Dominion Account.  Borrowers shall maintain Dominion  Accounts pursuant to lockbox or other arrangements reasonably acceptable to Agent.  Borrowers  shall obtain an agreement (in form  and substance reasonably satisfactory to Agent) from each  lockbox servicer and Dominion Account bank, establishing Agent’s control over and Lien in the  lockbox or Dominion Account, which may be exercised by Agent during any Cash Dominion  Trigger  Period, requiring  immediate  deposit  of  all  remittances  received  in  the  lockbox  to  a  Dominion Account, and waiving or subordinating offset rights of such servicer or bank, except for  customary  administrative  charges.   If  a  Dominion  Account  is  not  maintained  with  Bank  of  America, Agent may, during any Cash Dominion Trigger Period, require immediate transfer of all  funds  in  such  account  to  a  Dominion  Account  maintained  with  Bank  of  America, provided,  however, that Borrowers may maintain a balance of no more than $500,000 at any time in its  master disbursement account.  Agent and Lenders assume no responsibility to Borrowers for any  lockbox arrangement or Dominion Account, including any claim of accord and satisfaction or  release with respect to any Payment Items accepted by any bank.               8.2.5. Proceeds of Collateral.  Borrowers shall request in writing and otherwise  take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral  are made directly to a Dominion Account (or a lockbox relating to a Dominion Account).  If any  Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold  same in trust for Agent and promptly (not later than the next Business Day) deposit same into a  Dominion Account.  Notwithstanding anything to the contrary contained herein, the Obligors shall  be entitled to maintain amounts of cash and Cash Equivalents in petty cash (in an aggregate amount  for all such accounts not to exceed $500,000), trust, tax, employee benefit and payroll accounts  which are not Dominion Accounts.         8.3.  Administration of Inventory.                 8.3.1. Records and Reports of Inventory.  Each Borrower shall keep accurate and  complete records of its Inventory, including costs and daily withdrawals and additions, and shall  submit  to  Agent  inventory  and  reconciliation  reports  in  form  satisfactory  to  Agent,  on  such  periodic basis as Agent may reasonably request.  Each Borrower shall conduct a physical inventory  in time and manner consistent with such Borrower’s past practices (and on a more frequent basis  if requested by Agent when an Event of Default exists) and periodic cycle counts consistent with  historical practices, and shall provide to Agent a report based on each such inventory and count  promptly  upon  completion  thereof,  together  with  such  supporting  information  as  Agent  may  request.  Agent may participate in and observe each physical count, provided that Agent shall be  reimbursed for its participation only in connection with inspections in accordance with Section  10.1.1.               8.3.2. Returns of Inventory.  No Borrower shall return any Inventory to a supplier,  vendor  or  other  Person,  whether  for  cash,  credit  or  otherwise,  unless  (a)  such  return  is  in  the  Ordinary Course of Business; (b) no Overadvance exists or would result therefrom; (c) to the extent  that any Revolving Loans are outstanding, Agent is promptly notified if the aggregate Value of all  Inventory returned in any Fiscal Month exceeds $2,000,000; and (d) any net cash payment for such  proceeds received by a Borrower for a return is promptly remitted to Agent for application to the  Obligations without a corresponding commitment reduction.               8.3.3. Acquisition, Sale and Maintenance.  Each Borrower shall take all steps to  assure that all Inventory is produced in accordance with Applicable Law, including the FLSA, in                                        77  NAI-1507796678v9  

 

  each case except to the extent failure to comply with any Applicable Law could not reasonably be  expected  to  result  in  a  Material  Adverse  Effect.   No  Borrower  shall  sell  any  Inventory  on  consignment or approval or any other basis under which the customer may return or require a  Borrower to repurchase such Inventory, except in the Ordinary Course of Business.  Borrowers  shall use, store and maintain all Inventory with reasonable care and caution, in accordance with  applicable standards of any insurance and in conformity in all material respects with all Applicable  Law and shall make current rent payments (within applicable grace periods provided for in leases)  at all location where any material portion of the Collateral is located.         8.4.  Administration of Equipment.                 8.4.1. Records and Schedules of Equipment.  Each Borrower shall keep accurate  and complete records of its Equipment, including kind, quantity, cost, acquisitions and dispositions  thereof.               8.4.2. Dispositions  of  Equipment.   No  Borrower  shall  sell,  lease  or  otherwise  dispose of any Equipment, without the prior written consent of Agent, other than in connection  with a Permitted Asset Disposition.               8.4.3. Condition  of  Equipment.   The  Equipment  is  in  satisfactory  operating  condition and repair, and all necessary replacements and repairs have been made so that the value  and operating efficiency of the Equipment is preserved at all times, reasonable wear, tear, casualty  and condemnation  excepted.           8.5.  Administration  of  Deposit  Accounts.  Schedule  8.5 sets  forth  all  Deposit  Accounts maintained by Borrowers, including all Dominion Accounts as of the Effective Date.   Each Borrower shall take all actions necessary to establish Agent’s control of each such Deposit  Account  (other  than  an  account  exclusively  used  for  payroll,  payroll  taxes,  taxes,  employee  benefits, fiduciary or trust accounts or an account containing not more than $10,000 at any time  (other  than  petty  cash  accounts  in  an  aggregate  amount  for  all  such  accounts  not  to  exceed  $200,000)).  Each Borrower shall be the sole account holder of each Deposit Account and shall  not allow any other Person (other than (i) Agent, (ii) Term Loan Agent on a second priority basis,  and (iii) the depositary bank maintaining the account for the applicable Borrower) to have control  over a Deposit Account or any Property deposited therein.  Each Borrower shall promptly notify  Agent of any opening or closing of a Deposit Account.         8.6.  General Provisions.                 8.6.1. Location  of  Inventory.   All  Inventory  constituting  Collateral,  other  than  Inventory (i) in  transit, (ii)  Inventory out  for processing, or (iii) out  for repair, refurbishment,  processing, or in the possession of employees in the Ordinary Course of Business, shall at all times  be kept by Borrowers at the business locations set forth in Schedule 8.6.1 (as amended from time  to time) except that Borrowers may (a) make sales or other dispositions of Inventory in accordance  with Section  10.2.7, (b)  move  Inventory  to  any  location  in  the  United  States,  and  (c)  move  Inventory in the Ordinary Course of Business.               8.6.2. Insurance of Collateral; Condemnation Proceeds.                 (a)   Each Borrower shall maintain insurance with respect to the Collateral and  the Properties and businesses of the Company and its Subsidiaries, in each case, with financially                                        78  NAI-1507796678v9  

 

  sound and reputable insurance companies insurance on all such property and against all such risks  as is consistent and in accordance with industry practice for companies similarly situated owning  similar properties and engaged in similar businesses as the Borrowers. From time to time upon  Agent’s reasonable request, Borrowers shall promptly deliver to Agent the certified copies of its  insurance policies.  Unless Agent shall agree otherwise, each policy shall include endorsements  reasonably satisfactory to Agent (i) showing Agent as additional insured or lender loss payee; (ii)   to the extent available requiring 30 days prior written notice to Agent in the event of cancellation  of the policy for any reason whatsoever; and (iii) to the extent available specifying that the interest  of Agent shall not be impaired or invalidated by any act or neglect of any Borrower or the owner  of  the  Property,  nor  by  the  occupation  of  the  premises  for  purposes  more  hazardous  than  are  permitted by the policy.  If any Borrower fails to provide and pay for any insurance required by  this Section, Agent may, at its option, but shall not be required to, procure the insurance and charge  Borrowers therefor.  While no Event of Default exists, Borrowers may settle, adjust or compromise  any insurance claim,  as  long as  the proceeds  are delivered to  Agent  to  the extent required by  Section 5.3.1(a).  If an Event of Default exists, only Agent shall be authorized to settle, adjust and  compromise such claims, in any case subject to the Intercreditor Agreement.               (b)   Any  proceeds  of  insurance  (other than  proceeds  from  workers’  compensation or D&O insurance or business interruption insurance) relating to any Collateral and  any awards arising from condemnation of any Collateral shall be applied to the extent required by,  and otherwise in accordance with, Section 5.3.1(a).               8.6.3. Protection of Collateral.  All expenses of protecting, storing, warehousing,  insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any  Collateral (including any sale thereof), and all other payments required to be made by Agent to  any Person to realize upon any Collateral, shall be borne and paid by Borrowers.  Agent shall not  be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage  thereto (except for reasonable care in its custody while Collateral is in Agent’s actual possession),  for any diminution in the value thereof, or for any act or default of any warehouseman, carrier,  forwarding agency or other Person whatsoever, but the same shall be at Borrowers’ sole risk.               8.6.4. Defense of Title to Collateral.  Each Borrower shall at all times defend its  title to Collateral and Agent’s Liens therein against all Persons, claims and demands whatsoever,  except Permitted Liens and other claims or demands permitted to exist hereunder.         8.7.  Power of Attorney.  Each Borrower hereby irrevocably constitutes and appoints  Agent (and all Persons designated by Agent) as such Borrower’s true and lawful attorney (and  agent-in-fact) for the purposes provided in this Section 8.7.  Agent, or Agent’s designee, may,  without notice and in either its or a Borrower’s name, but at the cost and expense of Borrowers:               (a)   Endorse  a  Borrower’s  name  on  any  Payment  Item  or  other  proceeds  of  Collateral  (including  proceeds  of  insurance)  that  come  into  Agent’s  possession  or  control  in  accordance with the terms of the Loan Documents; and               (b)   During  an  Event  of  Default,  (i)  notify  any  Account  Debtors  of  the  assignment of their Accounts, demand and enforce payment of Accounts by legal proceedings or  otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle,  adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal  proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other                                         79  NAI-1507796678v9  

 

  Collateral upon such terms, for such amounts and at such times as Agent deems advisable; (iv)  collect,  liquidate  and  receive  balances  in  Deposit  Accounts  or  investment  accounts,  and  take  control, in any manner, of proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to  a  proof  of  claim  or  other  document  in  a  bankruptcy  of  an  Account  Debtor,  or  to  any  notice,  assignment or satisfaction of Lien or similar document including, without limitation, in respect of  any assignment of  Intellectual Property;  (vi) receive, open and dispose of mail  addressed to  a  Borrower, and notify postal authorities to deliver any such mail to an address designated by Agent;  (vii)  endorse  any  Chattel  Paper,  Document,  Instrument,  bill  of  lading,  or  other  document  or  agreement  relating  to  any  Accounts,  Inventory  or  other  Collateral;  (viii)  use  a  Borrower’s  stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) to  the extent a Borrower has rights sufficient to allow Agent to do so, use information contained in  any data processing, electronic or information systems relating to Collateral; (x) make and adjust  claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain  payment under any letter of credit, banker’s acceptance or other instrument for which a Borrower  is  a  beneficiary;  and  (xii)  take  all  other  actions  as  Agent  deems  appropriate  to  fulfill  any  Borrower’s obligations under the Loan Documents.   SECTION 9.  REPRESENTATIONS AND WARRANTIES         9.1.  General Representations and Warranties.  To induce Agent and Lenders to enter  into  this  Agreement  and  to  make  available  the  Revolver  Commitments,  Loans  and  Letters  of  Credit, each Borrower represents and warrants that:               9.1.1. Organization and Qualification.  Each Obligor is duly organized, validly  existing and in good standing (if applicable) under the laws of the jurisdiction of its organization.   Each Obligor is duly qualified, authorized to do business and in good standing (if applicable) as a  foreign  corporation  or  company  in  each  jurisdiction  where  failure  to  be  so  qualified  could  reasonably  be  expected  to  have  a  Material  Adverse  Effect.   No  Obligor  is  an  EEA  Financial  Institution.                9.1.2. Power and Authority.  Each Obligor is duly authorized to execute, deliver  and  perform  its  Loan  Documents.   The  execution,  delivery  and  performance  of  the  Loan  Documents have been duly authorized by all necessary action, and do not (a) require any consent  or approval of any holders of Equity Interests of any Obligor, other than those already obtained;  (b) contravene the Organic Documents of any Obligor; (c) violate or cause a default under any  Applicable  Law,  Material  Contract  or  Restrictive  Agreement,  including  the  Term  Loan  Documents, except to the extent such violation or default could not reasonably be expected to  result in a Material Adverse Effect; or (d) result in or require the imposition of any Lien (other  than Permitted Liens) on any Property of any Obligor.               9.1.3. Enforceability.   Each  Loan  Document  is  a  legal,  valid  and  binding  obligation  of  each  Obligor  party  thereto,  enforceable  in  accordance  with  its  terms,  except  as  enforceability  may  be  limited  by  (i)  bankruptcy,  insolvency  or  similar  laws  affecting  the  enforcement of creditors’ rights generally and (ii) with respect to enforceability against Foreign  Subsidiaries or under foreign laws, the effect of foreign laws, rules and regulation as they relate to  pledges,  if  any,  of  Equity  Interests  in  Foreign  Subsidiaries  and  intercompany  Debt  owed  by  Foreign Subsidiaries.                                          80  NAI-1507796678v9  

 

              9.1.4. Capital Structure.  Schedule 9.1.4 shows, for each Obligor, its name, its  jurisdiction of organization, its authorized and issued Equity Interests, (except in the case of the  Company) the holders of its Equity Interests, and (to the extent an Obligor is a party thereto) all  agreements binding on such holders with respect to their Equity Interests as of the Effective Date.   Except as disclosed on Schedule 9.1.4, in the five years preceding the Effective Date, no Obligor  has acquired any substantial assets outside the Ordinary Course of Business from any other Person  nor been the surviving entity in a merger or combination. Each Borrower has good title to its Equity  Interests in its Subsidiaries, subject only to Agent’s Lien and other Permitted Liens, and all such  Equity Interests  are  duly  issued,  (and  in  the  case  of  any  Subsidiary  that  is  a  United  States  corporation) fully paid and non-assessable to the extent applicable. Except as set forth on Schedule  9.1.4, as of the Effective Date, there are no outstanding purchase options, warrants, subscription  rights,  agreements  to  issue or sell, convertible interests, phantom rights  or powers of  attorney  relating to Equity Interests of any Subsidiary.               9.1.5. Title to Properties; Priority of Liens.  Each Borrower and Subsidiary has  good and marketable title to (or valid leasehold interests in) all of its material Real Estate, and  good  and  marketable  title  to  all  of  its  material  personal  Property,  including  all  such  Property  reflected in any financial statements delivered to Agent or Lenders, in each case free of Liens  except Permitted Liens and minor defects in title that do not interfere with its ability to conduct its  business as currently conducted or to utilize such Property for its intended purposes.  To the extent  required by the Loan Documents, all Liens of Agent in the Collateral are duly perfected, valid and  enforceable first priority Liens  (subject to the terms of the Intercreditor Agreement), subject only  to Permitted Liens and minor defects in title that do not interfere with its ability to conduct its  business as currently conducted or to utilize such Property for its intended purposes (provided,  however, that for registered United States copyrights, the security interest will be perfected upon  filing, to the extent perfection of a security interest can be accomplished by such a filing, of the  Copyright  Security  Agreement  with  the  United  States  Copyright  Office)  and  such  perfected  security interest is to such extent enforceable as such against any and all creditors of and purchasers  from Obligors in the United States.               9.1.6. Accounts.  Agent  may rely, in  determining which Accounts are Eligible  Accounts,  on  all  statements  and  representations  made  by  Borrowers  with  respect  thereto.   Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in  a Borrowing Base Certificate, that:               (a)   it is genuine and in all respects what it purports to be, and is not evidenced  by a judgment;               (b)   it arises out of a completed, bona fide sale and delivery of goods in the  Ordinary Course of Business, and substantially in accordance with any purchase order, contract or  other document relating thereto;               (c)   it is for a sum certain, maturing as stated in the invoice covering such sale,  a copy of which has been furnished or is available to Agent on request;               (d)   it is absolutely owing by the Account Debtor, without contingency in any  respect;                                          81  NAI-1507796678v9  

 

              (e)   no  purchase  order,  agreement,  document  or  Applicable  Law  restricts  assignment  of  the  Account  to  Agent  (regardless  of  whether,  under  the  UCC,  the  restriction is  ineffective),  and  the  applicable  Borrower  is  the  sole  payee  or  remittance  party  shown  on  the  invoice;               (f)   no  extension,  compromise,  settlement,  modification,  credit,  deduction  or  return has been authorized with respect to the Account, except discounts or allowances granted in  the Ordinary Course of  Business  for prompt  payment that are  reflected in Borrowers’ records  related thereto and in the reports submitted to Agent hereunder; and               (g)   to the best of Borrowers’ knowledge, (i) there are no facts or circumstances  that are reasonably likely to impair the enforceability or collectability of such Account; (ii) the  Account  Debtor  had  the  capacity  to  contract  when  the  Account  arose,  continues  to  meet  the  applicable Borrower’s customary credit standards, is Solvent, is not contemplating or subject to an  Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there  are  no  proceedings  or  actions  threatened  or  pending  against  any  Account  Debtor  that  could  reasonably  be  expected  to  have  a material  adverse  effect  on  the  Account  Debtor’s  financial  condition.               9.1.7. Financial  Statements.   The  consolidated  balance  sheets,  and  related  statements of income, cash flow and shareholder’s equity, of Borrowers and Subsidiaries that have  been and are hereafter delivered to Agent and Lenders, are prepared in accordance with GAAP,  and  fairly  present  in  all  material  respects  the  financial  positions  and  results  of  operations  of  Borrowers and Subsidiaries at the dates and for the periods indicated, subject to, in the case of  monthly or quarterly balance sheets and related statements, the absence of footnotes and year end  audit adjustments.  All projections delivered by the Obligors to Agent and Lenders have been  prepared in good faith, based on reasonable assumptions in light of the circumstances at such time,  it being acknowledged, and agreed by Lenders, however, that projections as to future events are  not  viewed  as  facts  and  that  the  actual  results  during  the  period  or  periods  covered  by  said  projections may differ from the projected results and that the differences may be material.  Since  December 31, 2016,  there has been no change in the condition (financial or otherwise) of the  Obligors, taken as a whole, that could reasonably be expected to have a Material Adverse Effect.   The Obligors and their Subsidiaries, taken as a whole, are Solvent.               9.1.8. Surety Obligations.  No Borrower or Subsidiary is obligated as surety or  indemnitor under any bond or other contract that assures payment or performance of any obligation  of any Person, except as permitted hereunder.               9.1.9. Taxes.  Each Borrower and Subsidiary has filed all federal, state, national,  regional,  provincial  and  material  local  tax  returns  and  other  material  reports  and  all  other  tax  returns  and  reports  and  all  state  and foreign  income  reports  and  declarations  required  by  any  jurisdiction to which any of them is subject that it is required by law to file, and has paid, or made  provision for the payment of, all material Taxes upon it, its income and its Properties that are due  and payable, except to the extent being Properly Contested.  The provision for Taxes on the books  of each Borrower and Subsidiary is adequate for all years not closed by applicable statutes, and  for its current Fiscal Year.               9.1.10. Reserved.                                         82  NAI-1507796678v9  

 

              9.1.11. Intellectual Property.  Each Obligor owns or otherwise has the lawful right  to use all Intellectual Property used in the conduct of its business except to the extent that any  failure  to  own  or  have  such  rights  to  use  any  Intellectual  Property  would  not  reasonably  be  expected  to  result  in  a  Material  Adverse  Effect.   There  is  no  pending  or,  to  any  Borrower’s  knowledge, threatened  Intellectual Property Claim  with  respect  to  any Obligor or any of their  Property that could reasonably be expected to have a Material Adverse Effect.   All Intellectual  Property registered or applied for with the United States Patent and Trademark Office or the United  States Copyright Office, or an equivalent thereof in any state of the United States or any foreign  jurisdiction, that is owned by any Obligor as of the Effective Date is shown on Schedule 9.1.11.               9.1.12. Governmental  Approvals.   Each  Borrower  and  Subsidiary  has,  is  in  compliance with, and is in good standing with respect to, all Governmental Approvals necessary  to conduct its business and to own, lease and operate its Properties, except to the extent the failure  to have such Governmental Approval, to be in compliance therewith or otherwise to be in good  standing in respect thereof would not reasonably be expected to result in a Material Adverse Effect.   All necessary import, export or other licenses, permits or certificates for the import or handling of  any goods or other Collateral have been procured and are in effect, and Borrowers and Subsidiaries  have complied with all foreign and domestic laws with respect to the shipment and importation of  any goods or Collateral, except where the failure to possess any such effective  license, permit or  certificate, or any noncompliance therewith, could not reasonably be expected to have a Material  Adverse Effect.               9.1.13. Compliance with Laws.  Each Borrower and Subsidiary has duly complied,  and  its  Properties  and  business  operations  are  in  compliance,  in  all  material  respects  with  all  Applicable Law, except where noncompliance could not reasonably be expected to have a Material  Adverse Effect.  There have been no citations, notices or orders of material noncompliance issued  to any Borrower or Subsidiary under any Applicable Law which could reasonably be expected to  have a Material Adverse Effect.  No Inventory has been produced in violation of the FLSA.               9.1.14. Compliance with Environmental Laws.  Except as disclosed on Schedule  9.1.14,  as  of  the  Effective  Date,  no  Obligor’s  past  or  present  operations,  Real  Estate  or  other  Properties are subject to any federal, state or local investigation to determine whether any remedial  action of a material nature is needed to address any environmental pollution, hazardous material  or  environmental  clean-up.   No  Obligor  has  received  any  Environmental  Notice  which  would  reasonably  be  expected to  result  in  a  material  liability  to  Borrowers.   No  Obligor  has  any  contingent  liability  with  respect  to  any  Environmental  Release,  environmental  pollution  or  hazardous material on any Real Estate now or previously owned, leased or operated by it where  such liability could reasonably be expected to result in a Material Adverse Effect.               9.1.15. Burdensome Contracts.  No Borrower or Subsidiary is a party or subject to  any contract, agreement or charter restriction that could reasonably be expected to have a Material  Adverse Effect.  No Borrower or Subsidiary is party or subject to any Restrictive Agreement,  except as shown on Schedule 9.1.15 as of the date hereof or as otherwise permitted pursuant to  Section 10.2.15.  No such Restrictive Agreement prohibits the execution, delivery or performance  of any Loan Document by an Obligor.                 9.1.16. Litigation.  Except as shown on Schedule 9.1.16, there are no proceedings  or investigations pending or, to any Borrower’s knowledge, threatened against any Borrower or  Subsidiary, or any of their businesses, operations, Properties, prospects or conditions, that (a) relate                                        83  NAI-1507796678v9  

 

  to any Loan Documents or transactions contemplated thereby; or (b) could reasonably be expected  to have a Material Adverse Effect.                 9.1.17. No  Defaults.   No  event  or  circumstance  has  occurred  or  exists  that  constitutes a Default or Event of Default.  No Obligor is in default, and no event or circumstance  has occurred or exists that with the passage of time or giving of notice would constitute a default  (after giving effect to any cure or grace period and waivers or amendments thereof), under any  Material Contract or any Restrictive Agreement that (in the case of any Restrictive Agreement)  could reasonably be expected to have a Material Adverse Effect.  As of the date hereof, there is no  basis  upon  which  any  party  (other  than  a  Borrower  or  Subsidiary)  could  terminate  a  Material  Contract prior to its scheduled termination date.               9.1.18. ERISA.                 (a)   Each  Plan  is  in  compliance  in  all  material  respects  with  the  applicable  provisions of ERISA, the Code, and other federal and state laws.  Each Plan that is intended to  qualify under Section 401(a) of the Code has received a favorable determination letter or prototype  opinion from the IRS or an application for such a letter is currently being processed by the IRS  with  respect  thereto  and,  to  the  knowledge  of  Borrowers,  nothing  has  occurred  which  would  reasonably be expected to prevent, or cause the loss of, such qualification.  Each Obligor and  ERISA Affiliate has made all required contributions to each Plan subject to Section 412 of the  Code, and no application for a funding waiver or an extension of any amortization period pursuant  to Section 412 of the Code has been made with respect to any Plan.               (b)   There are no pending or, to the knowledge of Borrowers, threatened claims,  actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could  reasonably  be  expected  to  have  a  Material  Adverse  Effect.   There  has  been  no  prohibited  transaction  or  violation  of  the  fiduciary  responsibility  rules  with  respect  to  any  Plan  that  has  resulted in or could reasonably be expected to have a Material Adverse Effect.               (c)   (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no  Pension Plan has any Unfunded Pension Liability that could reasonably be expected to have a  Material Adverse Effect; (iii) no Obligor or ERISA Affiliate has incurred, or reasonably expects  to  incur,  any  liability  under  Title  IV  of  ERISA  with  respect  to  any  Pension  Plan  (other  than  premiums  due  and  not  delinquent  under  Section  4007  of  ERISA);  (iv)  no  Obligor  or  ERISA  Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred  which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under  Section 4201 or 4243 of ERISA with  respect  to a Multiemployer Plan; and (v) no Obligor or  ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of  ERISA.               (d)   Except  as  disclosed  on Schedule  9.1.18 or  as  could  not  reasonably  be  expected to have a Material Adverse Effect, with respect to any Foreign Plan, (i) all employer and  employee contributions required by law or by the terms of the Foreign Plan have been made, or, if  applicable, accrued, in accordance with normal accounting practices; (ii) the fair market value of  the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded  through insurance, or the book reserve established for any Foreign Plan, together with any accrued  contributions, is sufficient to procure or provide for the accrued benefit obligations with respect to  all current and former participants in such Foreign Plan according to the actuarial assumptions and                                         84  NAI-1507796678v9  

 

  valuations  most  recently  used  to  account  for  such  obligations  in  accordance  with  applicable  generally accepted accounting principles; and (iii) it has been registered as required and has been  maintained in good standing with applicable regulatory authorities.               9.1.19. Trade Relations.  There exists no actual or threatened termination, limitation  or  modification  of  any  business  relationship  between  any  Borrower  or  Subsidiary  and  any  customer or supplier, or any group of customers or suppliers, that could reasonably be expected to  result in a Material Adverse Effect.               9.1.20. Labor  Relations.   Except  as  described  on Schedule  9.1.20,  as  of  the  Effective Date no Obligor is party to or bound by any collective bargaining agreement, or material  management agreement or consulting agreement.  Except as described on Schedule 9.1.20, as of  the date hereof there are no material grievances, disputes or controversies with any union or other  organization  of any  Obligor’s  employees,  or,  to  any  Borrower’s  knowledge,  any  asserted  or  threatened strikes, work stoppages or demands for collective bargaining.               9.1.21. Reserved.                 9.1.22. Not a Regulated Entity.  No Obligor is (a) an “investment company” or a  “person directly or indirectly controlled by or acting on behalf of an investment company” within  the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal  Power Act, the Interstate Commerce Act, any public utilities code or any other Applicable Law  regarding its authority to incur Debt.               9.1.23. Margin Stock.  No Borrower or Subsidiary is engaged, principally or as one  of its important activities, in the business of extending credit for the purpose of purchasing or  carrying any Margin Stock.  No Loan proceeds or Letters of Credit will be used by Borrowers to  purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin  Stock or for any related purpose governed by Regulations T, U or X of the Board of Governors,  except to the extent in compliance with Regulations T, U or X of the Board of Governors.               9.1.24. OFAC.  No Borrower or Subsidiary, nor to the knowledge of any Borrower  or  Subsidiary,  any  director,  officer,  employee,  agent,  affiliate  or  representative  thereof,  is  an  individual or entity that is currently the subject or target of any Sanction or is located, organized  or resident in a Designated Jurisdiction.               9.1.25. Anti-Corruption  Laws.   The  Company  and  each  Subsidiary  and  their  respective directors, officers and employees and, to the knowledge of the Company, the agents of  the Company and the Subsidiaries, are in compliance with the Foreign Corrupt Practices Act of  1977, as amended, and the rules and regulations thereunder (the “FCPA”) and any other applicable  anti-corruption law in all material respects. The Obligors have instituted and maintain policies and  procedures designed to promote and achieve continued compliance with such laws.                9.1.26. Delivery of Term Loan Documents.  Agent has received complete copies of  the Term Loan Credit Agreement and each “Security Document” (as such term, or any analogous  term, is defined in the Term Loan Credit Agreement) and all material amendments thereto, other  than  such  documents  as  are  the  subject  of  a  customary  confidentiality  undertaking  (it  being  understood that if any information is withheld in reliance on the foregoing exception, the Company  shall advise the Agent of such fact and the Company or any of the Obligors shall, following a  reasonable request from the Agent or a Lender, use commercially reasonable efforts to furnish the                                        85  NAI-1507796678v9  

 

  relevant  information  by  alternative  means  that  would  not  violate  the  relevant  obligation  of  confidentiality, including by requesting consent from the applicable counterparty to disclose such  information). None of such documents and agreements has been amended or supplemented, nor  have  any  of  the  provisions  thereof  been  waived,  except  in  accordance  with  the  Intercreditor  Agreement.               9.1.27. Insurance.   The  Properties  and  businesses  of  the  Company  and  the  Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates  of the Company, in such amounts, with such deductibles and covering such risks as are customarily  carried by companies engaged in similar businesses and owning similar properties in localities  where the Company or the applicable Subsidiary operate. All such insurance policies are in full  force and effect, all premiums have been duly paid and none of the Company or the Subsidiaries  has received a written notice of violation or cancelation thereof.               9.1.28. EEA Financial Institutions.  No Borrower is an EEA Financial Institution.               9.1.29. Use  of  Proceeds.   The  proceeds  of  the  Loans  shall  be  used  only  in  accordance with Section 2.1.3.         9.2.  Complete Disclosure.  No Loan Document (as amended, restated, amended and  restated, supplemented, modified or updated as provided for herein) (including, without limitation,  any financial statements delivered to Agent or Lenders at any time), other than (i) projections,  budgets,  estimates  and  other  forward  looking  statements,  and  (ii)  information  of  a  general  economic or general industry nature, contained, when delivered to Agent or Lenders and taken as  a whole, any untrue statement of a material fact, nor fails to disclose any material fact necessary  to  make  the  statements  contained  therein  not  materially  misleading  in  light  of  all  of  the  circumstances under which such statements are made (after giving effect to all supplements and  updates thereto).  There is no fact or circumstance that any Obligor has failed to disclose to Agent  in writing that could reasonably be expected to have a Material Adverse Effect.               9.2.1. Beneficial Ownership Disclosure. As of the Amendment No. 1 Effective  Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership  Certification (if any) provided on or prior to the Amendment No. 1 Effective Date to any Lender  in connection with this Agreement is true and correct in all respects.   SECTION 10.  COVENANTS AND CONTINUING AGREEMENTS         10.1. Affirmative  Covenants.   As  long  as  any  Revolver  Commitments or  Revolver  Loans remain outstanding (other than contingent obligations or Letters of Credit collateralized in  a  manner  reasonably  acceptable  to  Issuing  Bank),  each  Borrower  shall,  and  shall  cause  each  Subsidiary to:               10.1.1. Inspections; Appraisals.                 (a)   Permit Agent from time to time, subject (except when an Event of Default  exists) to reasonable prior notice and normal business hours, to visit and inspect the Properties of  any Borrower or Subsidiary, inspect, audit and make extracts from any Borrower’s or Subsidiary’s  books and records (other than information which is subject to attorney-client privilege or would  result in a breach of a confidentiality obligation of the Obligors to any other Person), and discuss  with its officers, employees, agents, advisors and independent accountants such Borrower’s or                                        86  NAI-1507796678v9  

 

  Subsidiary’s business, financial condition, assets, prospects and results of operations.  Lenders  may  participate  in  any  such  visit  or  inspection,  at  their  own  expense; provided, however,  the  Obligors shall, absent a continuing Event of Default, be given the opportunity to be present at any  communications with their accountants.  Neither Agent nor any Lender shall have any duty to any  Borrower to make any inspection, nor to share any results of any inspection, appraisal or report  with  any  Borrower.   Borrowers  acknowledge  that  all  inspections,  appraisals  and  reports  are  prepared by Agent and Lenders for their purposes, and Borrowers shall not be entitled to rely upon  them.  Agent may allow Borrower Agent to receive copies of any appraisals.               (b)   Reimburse Agent for all reasonable charges, costs and expenses of Agent  in connection with (i) examinations of any Obligor’s books and records or any other financial or  Collateral  matters  as  Agent  deems  appropriate,  if  the  date  of  determination  is  not  during  an  Accelerated Appraisal and Field Exam Period, up to one time per Loan Year and, if the date of  determination is during an Accelerated Appraisal and Field Exam Period, up to two times per Loan  Year, and (ii) appraisals of Inventory, if the date of determination is not during an Accelerated  Appraisal and Field Exam Period, up to one time per calendar year and, if the date of determination  is during an Accelerated Appraisal and Field Exam Period, up to two times per calendar year;  provided, however, that if an examination or appraisal is initiated during an Event of Default, all  charges, costs and expenses therefor shall be reimbursed by Borrowers without regard to such  limits. Subject to and without limiting the foregoing, Borrowers specifically agree to pay Agent’s  then standard charges for each day that an employee of Agent or its Affiliates is engaged in any  examination activities, and shall pay the standard charges of Agent’s internal appraisal group.  This  Section 10.1.1 shall not be construed to limit Agent’s right to conduct examinations or to obtain  appraisals at any time in its discretion, nor to use third parties for such purposes.               10.1.2. Financial  and  Other  Information.   Keep  adequate  records  and  books  of  account with respect to its business activities, in which proper entries are made in accordance with  GAAP  in  all  material  respects  reflecting  all  financial  transactions;  and  furnish  to  Agent  and  Lenders:               (a)   as soon as available, and in any event within 90 days after the close of each  Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income,  cash flow and shareholders’ equity for such Fiscal Year, on a consolidated basis for Borrowers  and Subsidiaries, which consolidated statements shall be audited and certified (without any “going  concern” or like qualification or exception or any qualification or exception as to the scope of such  audit, other than any such qualification or exception that is expressly solely with respect to, or  expressly resulting solely from, (x) an upcoming maturity date under any Debt occurring within  one year from the time such report is delivered or (y) any potential inability to satisfy the financial  covenants set forth in Section 10.3 on a future date or in a future period) by any independent  certified public accountants of nationally recognized standing selected by Borrowers, and shall set  forth in comparative form corresponding figures for the preceding Fiscal Year;               (b)   (i) if the applicable fiscal period end is not during an Accelerated Financial  Reporting Period, as soon as available, and in any event within 45 days after the end of each Fiscal  Quarter (but within 60 days after the last Fiscal Quarter in a Fiscal Year), unaudited balance sheets  as of the end of such Fiscal Quarter and the related statements of income and cash flow for such  Fiscal  Quarter  and  for  the  portion  of  the  Fiscal  Year  then  elapsed,  on  consolidated  basis  for  Borrowers  and  Subsidiaries,  setting  forth  in  comparative  form  corresponding  figures  for  the  preceding Fiscal Year and certified by a Senior Officer of the Company as prepared in accordance                                        87  NAI-1507796678v9  

 

  with  GAAP  and  fairly  presenting  in  all  material  respects  the  financial  position  and  results  of  operations for such Fiscal Quarter and period, subject to normal  year-end adjustments and the  absence of footnotes; and (ii) if the applicable fiscal period end is during an Accelerated Financial  Reporting Period, as soon as available, and in any event within 30 days after the end of each Fiscal  Month (but within 45 days after the last Fiscal Month in a Fiscal Quarter and 60 days after the last  Fiscal Month in a Fiscal Year), unaudited balance sheets as of the end of such Fiscal Month and  the related statements of income and cash flow for such Fiscal Month and for the portion of the  Fiscal Year then elapsed, on consolidated basis for Borrowers and Subsidiaries, setting forth in  comparative form corresponding figures for the preceding Fiscal Year and certified by a Senior  Officer of the Company as prepared in accordance with GAAP and fairly presenting in all material  respects the financial position and results of operations for such Fiscal Month and period, subject  to normal year-end adjustments and the absence of footnotes;               (c)   concurrently with delivery of financial statements under clauses (a) and (b)  above, or more frequently if requested by Agent while an Event of Default exists a Compliance  Certificate executed by a Senior Officer of the Company.               (d)   concurrently with delivery of financial statements under clause (a) above,  copies of all management letters (if any) and other material reports submitted to Borrowers by  their accountants in connection with such financial statements;               (e)   concurrently with delivery of financial statements under clause (b) above,  at the end of any Fiscal Quarter, a written report satisfactory in form and scope to Agent, as to all  Hedging Agreements entered into by any Borrower or Guarantor, including, without limitation,  detailed  calculations  with  respect  to  the  conversion  values  of  all  currency  exchange  Hedging  Agreements and such other items as Agent, in its sole discretion, may from time to time request;               (f)   (i) not later than 30 days after the end of each Fiscal Year, projections of  Company’s consolidated balance sheets, results of operations, cash flow, and Availability for the  next Fiscal Year, quarter by quarter; and (ii) promptly upon availability, copies of the Company’s  five-year strategic plan and any updates thereto;               (g)   promptly following Agent’s request, a summary listing of each Borrower’s  trade payables, and a detailed trade payable aging, all in form satisfactory to Agent;               (h)   promptly after the sending or filing thereof, copies of any proxy statements,  financial statements or reports that the Company has made generally available to its shareholders;  copies of any regular, periodic and special reports or registration statements or prospectuses that  any  Borrower files  with the Securities and Exchange Commission  or any  other Governmental  Authority, or any securities exchange; and copies of any press releases or other statements made  available  by  a  Borrower  to  the  public  concerning  material  changes  to  or  developments  in  the  business of such Borrower;               (i)   promptly after the sending or filing thereof, copies of any annual report to  be filed in connection with any Pension Plan, and promptly following Agent’s request, after the  sending or filing thereof, copies of any annual report to be filed in connection with each other Plan  or Foreign Plan;                                           88  NAI-1507796678v9  

 

              (j)   to the extent not already provided, copies of all notices sent to the Term  Lenders pursuant to the Term Loan Documents in respect of any default or other material event  thereunder;                (k)   concurrently with delivery of financial statements under clause (a) above, a  supplemental or updated Perfection Certificate;                (l)   promptly following any request therefor, information and documentation  reasonably requested by the Administrative Agent or any Lender for purposes of compliance with  applicable “know your customer” and anti-money laundering rules and regulations, including the  USA PATRIOT Act and the Beneficial Ownership Regulation; and               (m)   such  other  reports  and  information  (financial  or  otherwise,  including,  without  limitation,  consolidating  balance  sheets,  related  statements  of  income,  cash  flow  and  shareholder’s equity, but excluding any information subject to the attorney-client privilege or other  confidentiality arrangements with third parties) promptly following Agent’s request therefor from  time to time in connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s  financial condition or business.               Subject to the next succeeding sentence, information delivered pursuant to this Section   10.1.2 to Agent may be made available by Agent to Lenders by posting such information on the Platform.    Information delivered pursuant to this Section 10.1.2 may also be delivered by electronic communication   pursuant to procedures approved by Agent pursuant to Section 15.3 hereto.  Information required to be   delivered pursuant to this Section 10.1.2 (to the extent not made available as set forth above) shall be   deemed to have been delivered to Agent on the date on which such information has been posted on (i)   Company’s website on the Internet at http://www.cvgrp.com or (ii) are made available via EDGAR, or   any successor system of the SEC, on the Company’s Annual Report on Form 10-K, Quarterly Report on   Form 10-Q, or 8-K, as applicable.  Information required to be delivered pursuant to this Section 10.1.2   shall be in a format which is suitable for transmission.               Unless (i) expressly marked by Borrowers as “PUBLIC” or (ii) copies of the Company’s   public filings with the SEC, any notice or other communication delivered pursuant to this Section 10.1.2,   or otherwise pursuant to this Agreement, shall be deemed to contain material non-public information.               10.1.3. Notices.   Notify  Agent  (for  further  distribution  to  Lenders)  in  writing,  promptly after a Borrower’s obtaining knowledge thereof, of any of the following that affects an  Obligor:   (a)  the  threat  or  commencement  of  any  proceeding  or  investigation,  whether  or  not  covered by insurance, that could reasonably be expected to have a Material Adverse Effect; (b)  any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor  contract that could reasonably be expected to have a Material Adverse Effect; (c) any default under                                         89  NAI-1507796678v9  

 

  or termination of a Material Contract, the Term Loan Credit Agreement or any other Term Loan  Document, any Subordinated Debt, or any contract that relates to Debt (other than intercompany  Debt) in any aggregate amount of $5,000,000 or more; (d) the existence of any Default or Event  of  Default;  (e)  any  judgment  in  an  amount  exceeding  $2,500,000;  (f)  the  assertion  of  any  Intellectual Property Claim, that could reasonably be expected to have a Material Adverse Effect;  (g) any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA,  or any Environmental Laws), that could reasonably be expected to have a Material Adverse Effect;  (h) any Environmental Release by an Obligor or on any Property owned, leased or occupied by an  Obligor that could reasonably be expected to have a Material Adverse Effect; or receipt of any  Environmental Notice that could reasonably be expected to have a Material Adverse Effect or  materially impact the value of any Property of such Borrower; (i) the occurrence of any ERISA  Event that could reasonably be expected to have a Material Adverse Effect, either individually or  in the aggregate; (j) the discharge of or any withdrawal or resignation by Borrowers’ independent  accountants;  or  (k)  any  change  in  the  information  provided  in  the  Beneficial  Ownership  Certification (if any) delivered pursuant to the terms hereof that would result in a change to the list  of beneficial owners identified in such certification.               10.1.4. Landlord  and  Storage  Agreements.   Promptly  following  request  Agent’s  request  therefor,  provide  Agent  with  copies  of  all  agreements  between  an  Obligor  and  any  landlord, warehouseman, processor, shipper, bailee or other Person that  owns any premises  at  which any material Collateral may be kept or that otherwise may possess or handle any material  Collateral.               10.1.5. Compliance  with  Laws.   Comply  with  all  Applicable  Laws,  including  ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Law (in all material respects), and  laws  regarding  collection  and  payment  of  Taxes,  and  maintain  all  Governmental  Approvals  necessary to the ownership of its Properties or conduct of its business, unless failure to comply  (other than failure to comply with Anti-Terrorism Law Laws, which shall not be subject to the  “Material  Adverse  Effect”  qualification  in  this  sentence)  or  maintain  could  not  reasonably  be  expected to have a Material Adverse Effect.  Without limiting the generality of the foregoing, if  any Environmental Release occurs at or on any Properties of the Company or any Subsidiary, it  shall  act  promptly  and  diligently  to  investigate  and  report  to  Agent  and  all  appropriate  Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such  Environmental Release, whether or not directed to do so by any Governmental Authority, if, as  required by Environmental Law or necessary to preserve the value as a whole of such Properties.               10.1.6. Taxes.   Pay  and  discharge  all  Taxes  on  or  prior  to  the  date  which  they  become delinquent or penalties attach, unless such Taxes are being Properly Contested.               10.1.7. Insurance.  In addition to the insurance required hereunder with respect to  Collateral, maintain insurance, with financially sound and reputable insurance companies, with  respect to the Properties and business of Borrowers and Subsidiaries of such type, in such amounts,  and with such coverages and deductibles as required pursuant to Section 8.6.2.               10.1.8. Licenses.  Keep each License materially affecting any Collateral (including  the manufacture, distribution or disposition of Inventory) in full force and effect except (i) to the  extent not otherwise required herein, (ii) for any Permitted Asset Disposition or (iii) to the extent  any failure to so maintain such License would not reasonably be expected to result in a Material  Adverse Effect.                                        90  NAI-1507796678v9  

 

              10.1.9. Future Subsidiaries.  (a) Notify Agent within five Business Days (or such  later date as agreed to by Agent) of any Person becoming a Subsidiary and cause such Subsidiary  (other than an Excluded Subsidiary) within 30 days of such notice being delivered to Agent (or  such longer period as the Agent may reasonably agree) to guaranty the Obligations and to execute  and  deliver  such  documents  (including  with  respect  to  any  and  all  applicable  “know  your  customer” requirements, which information shall be delivered to Agent and the Lenders prior to  such Subsidiary being joined as a party hereto), instruments and agreements and to take such other  actions as Agent shall require to evidence and perfect a Lien in favor of Agent (for the benefit of  Secured Parties) on all assets (other than Excluded Assets) of such Person, including delivery of a  Perfection Certificate, and such legal opinions, each in form and substance reasonably satisfactory  to Agent, as it shall deem appropriate. If at any time any Subsidiary that is an Excluded Subsidiary  as  of  the  Effective  Date,  shall  cease  to  be  an  Excluded  Subsidiary,  such  Subsidiary  shall  be  required, no later than 30 days after the delivery of the financial statements pursuant to Section  10.1.2(b) hereof reflecting such occurrence, to guaranty the Obligations in accordance with this  Section 10.1.               (b)   Upon the acquisition of any property (other than Excluded Collateral) by a   Borrower, which property, in the reasonable judgment of the Agent, is not already subject to a perfected   Lien in favor of the Agent for the benefit of the Secured Parties (and where such a perfected Lien would   be required in accordance with the terms of this Agreement or the other Security Documents), the   Borrowers shall, in each case at the Borrowers’ expense, execute and deliver any and all further   instruments and documents and take all such other action as the Agent in its reasonable judgment may   deem necessary or desirable in obtaining the full benefits of, or in perfecting and preserving Liens over,   such property (including, without limitation, supplements to the Security Documents and other security   agreements), in each case, subject to the terms and conditions otherwise set forth in the Loan Documents   with respect to any class of Collateral               10.1.10.    Anti-Corruption Laws.  Maintain in effect policies and procedures  designed to promote compliance by the Borrower, the Subsidiaries, and their respective directors,  officers, employees, and agents with the FCPA and any other applicable anti-corruption laws.                10.1.11.    Maintenance of Properties.  (a) Maintain, preserve and protect all of  its material properties and equipment necessary in the operation of its business in good working  order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and  renewals  and  replacements  thereof  except  where  the  failure  to  do  so  could  not  reasonably  be  expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry  in the operation and maintenance of its facilities.               10.1.12.    Further Assurances.  Promptly upon request by the Agent, or any  Lender through the Agent, (a) correct any material defect or error that may be discovered in any  Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do,  execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all                                        91  NAI-1507796678v9  

 

  such  further  acts,  certificates,  assurances  and  other  instruments  as  the  Agent,  or  any  Lender  through  the  Agent,  may  reasonably  require  from  time  to  time  in  order  to  (i)  carry  out  more  effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable  law, subject the Company’s or any Subsidiaries’ properties, assets, rights or interests to the Liens  now or hereafter intended to be covered by this Agreement or the other Security Documents, (iii)  perfect and maintain the validity, effectiveness and priority of this Agreement and any of the other  Security Documents and any of the Liens intended to be created thereunder and (iv) assure, convey,  grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the  rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan  Document  or  under  any other  instrument  executed  in  connection  with  any  Loan  Document  to  which the Company or Subsidiary is or is to be a party.               10.1.13.    Use of Proceeds.  Use the proceeds of the Loans only in accordance  with Section 2.1.3.               10.1.14.    Intellectual Property.                 (a)   Process all documents reasonably required to maintain all registrations and  applications for registration of all of each Obligor’s Intellectual Property, including but not limited  to (a) the prompt filing of affidavits of use and applications for renewals of registration in the  United States Patent and Trademark Office for all of its material registered Trademarks, (b) the  timely payment of all fees and disbursements in connection therewith as well as any post-issuance  fees due in connection with Patents, and (c) refraining from the abandonment of any filing of  affidavit of use or any application of renewal prior to the exhaustion of all administrative and  judicial  remedies  without  prior  written  consent  of  the  Agent  (other  than  with  respect  to  registrations and applications deemed by such Obligor in its reasonable business judgment to be  no longer prudent to pursue).               (b)   Diligently  prosecute  all  applications  for  registrations  of  Intellectual  Property listed on Schedule 9.1.11, in  each  case for such Obligor,  and  not  abandon any  such  application prior to exhaustion of all administrative and judicial remedies, absent written consent  of the Agent (other than applications that are deemed by such Obligor in its reasonable business  judgment to be no longer prudent to pursue).               10.1.15.    Post Closing Covenants.  Notwithstanding the conditions precedent  set forth in Section 6.1, Borrower Agent has informed Agent and the Lenders that certain items  required to be delivered to Agent or otherwise satisfied as conditions precedent to the effectiveness  of this Agreement will not be delivered to Agent as of the date hereof. As an accommodation to  Borrowers, Agent and the Lenders have agreed to make the Revolving Loans and Letters of Credit  available under this  Agreement notwithstanding  that such conditions  to  closing have not  been  satisfied  (but  subject  to  the  other  conditions  set  forth herein).   In  consideration  of  such  accommodation, Borrowers hereby agree to take, and cause each Subsidiary to take, each of the  actions described on Schedule 10.1.15 attached hereto, in each case in the manner and by the dates  set forth thereon, or such later dates as may be agreed to by Agent, in its sole discretion.          10.2. Negative Covenants.  As long as any Revolver Commitments or Obligations are  outstanding  (other  than  contingent  obligations  or  Letters  of  Credit  collateralized  in  a  manner  reasonably  acceptable  to  the  Issuing  Bank),  each  Borrower  shall  not,  and  shall  cause  each  Subsidiary not to:                                         92  NAI-1507796678v9  

 

              10.2.1. Permitted Debt.  Create, incur, guarantee or suffer to exist any Debt, except:               (a)   the Obligations;               (b)   Subordinated Debt;               (c)   Permitted Purchase Money Debt;               (d)   Borrowed  Money  and other  Debt  (other  than  the  Obligations  and  Subordinated Debt), but only to the extent identified on Schedule 10.2.1;               (e)   Secured Bank  Product Obligations,  together  with  all  other  obligations  arising in connection with Bank Products entered into in the ordinary course of business,               (f)   Permitted Contingent Obligations;               (g)   Refinancing Debt as long as each Refinancing Condition is satisfied;               (h)   Debt under any Hedging Agreement to the extent such Hedging Agreement  is permitted by this Agreement;               (i)   (i) intercompany Debt to the extent permitted by Section 10.2.6, and (ii)  intercompany Debt owed to an Obligor by an Excluded Receivables Subsidiary in connection with  a sale of receivables to such Excluded Receivables Subsidiary pursuant to a Qualified Receivables  Transaction;               (j)   Debt  in respect  of  workers’  compensation  claims,  self-insurance  obligations,  performance  bonds,  export  or  import  indemnitees  or  similar  instruments,  customs  bonds, governmental contracts, leases, surety appeal or similar bonds and completion guarantees  provided by an Obligor or Subsidiary in the Ordinary Course of its Business;               (k)   Debt in respect of taxes, assessments or governmental charges to the extent  that payment thereof shall not at the time be required to be made in accordance with Section 10.1.6;               (l)   Debt  consisting  of  incentive,  non-compete,  consulting,  deferred  compensation, or other similar arrangements entered in the Ordinary Course of Business;               (m)   Debt in respect of netting services and overdraft protections or other cash  management services in connection with deposit accounts and securities accounts, in each case in  the Ordinary Course of Business;               (n)   Debt  incurred by Subsidiaries that are not  Obligors in  an amount not  to  exceed, at any time outstanding, the greater of (i) $25,000,000 and (ii) measured at the time of  incurrence thereof, 10.0% of the portion of Total Assets attributable to all Subsidiaries that are not  Obligors (prior to giving effect to any acquisition or Investment made or intended to be made using  the proceeds of such Debt), and so long as no Default or Event of Default exists or would result  therefrom;               (o)   [reserved];                                         93  NAI-1507796678v9  

 

              (p)   Contingent  Obligations  in  respect  of  Debt  otherwise  permitted  under  Section 10.2.1 or in respect of obligations not constituting Debt that are permitted hereunder, in  each case, subject, if applicable, to Section 10.2.6;               (q)   Contingent  Obligations  of  the  Company  and  its  Subsidiaries  incurred  in  connection with the guaranty of Debt extended to a Foreign Subsidiary by Bank of America, N.A.  or  its  Affiliates  in  an  amount  not  to  exceed  $10,000,000  in  the  aggregate  at  any  time  unless  otherwise approved by Agent in writing;               (r)   Contingent Obligations of an Obligor in respect of Debt of another Obligor  otherwise permitted under this Section 10.2.1 or in respect of other obligations of another Obligor  permitted hereunder;               (s)   Debt incurred in connection with the financing of insurance premiums in  the Ordinary Course of Business;               (t)   without  duplication  of  any  other  Debt,  non-cash  accruals  of  interest,  accretion or amortization of original issue discount and payment-in-kind interest with respect to  Debt permitted hereunder;               (u)   Debt  constituting  any  earn-out  obligation  or  other  post-closing  balance  sheet adjustment prior to such time as it becomes a liability on the balance sheet of such Person in  accordance with GAAP or that exists on the balance sheet of such Person on a non-interest bearing  basis and is paid within thirty days of the date such obligation becomes a liability on the balance  sheet;               (v)   Debt incurred by any Excluded Receivables Subsidiary in connection with  any Qualified Receivables Transaction provided that the Debt is non-recourse to any Person other  than the Excluded Receivables Subsidiary;                (w)   Debt  incurred  pursuant  to  the  Term  Loan  Documents  in  an  aggregate  principal amount not to exceed $175,000,000, plus the principal amount of each Incremental Term  Loan in an aggregate amount not to exceed the Term Loan Incremental Cap (in each case, plus  accrued interest), including any Refinancing Debt thereof, as permitted and in accordance with the  terms of the Intercreditor Agreement;                (x)   Debt incurred or assumed in connection with a Permitted Acquisition, so  long as (i) the Fixed Charge Coverage Ratio is not less than 1.00 to 1.00 on a Pro Forma Basis and  (ii) no Default or Event of Default exists or would result therefrom;                (y)   additional  Debt  in  an  aggregate  principal  amount  not  to  exceed  $35,000,000; and               (z)   Permitted Ratio Debt.                 10.2.2. Permitted Liens.  Create or suffer to exist any Lien upon any of its Property,  except the following (collectively, “Permitted Liens”):               (a)   Liens created pursuant to any Loan Document;                                         94  NAI-1507796678v9  

 

              (b)   Purchase Money Liens securing Permitted Purchase Money Debt;               (c)   Liens for Taxes not yet delinquent or being Properly Contested;               (d)   contractual Liens and Liens imposed by law (other than Liens for Taxes or  imposed under ERISA) such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s,  suppliers’,  repairmen’s  and  mechanics’  Liens  and  other  similar  Liens arising  in  the  Ordinary  Course of Business, but only if (i) payment of the obligations secured thereby is not yet delinquent  or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the  Property or materially impair operation of the business of any Obligor;               (e)   Liens  incurred  or  deposits  made  in  the  Ordinary  Course  of  Business  to  secure  the  performance  of  tenders,  bids,  leases,  contracts  (except  those  relating  to  Borrowed  Money), surety, stay customs and appeal bonds, statutory obligations and other similar obligations,  or arising as a result of progress payments under government contracts;               (f)   Liens arising in the Ordinary Course of Business that are subject to Lien  Waivers;               (g)   Liens arising by virtue of a judgment or judicial order to the extent such  judgment does not constitute an Event of Default;               (h)   easements, rights-of-way, survey exceptions, title exceptions, restrictions,  covenants or other agreements of record, minor defects or other irregularities in title and other  similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and  do not materially interfere with the Ordinary Course of Business;               (i)   municipal and zoning ordinances, building and other land use laws imposed  by  any  governmental  authority  which  are  not  violated  in  any  material  respect  by  existing  improvements or the present use of Property, or in the case of any Real Estate subject to a mortgage  in favor of the Term Loan Agent, encumbrances disclosed in the title insurance policy issued to  the Term Loan Agent;               (j)   leases,  subleases,  licenses,  sublicenses  granted  to  others  in  the  Ordinary  Course of Business;               (k)   any interest or title of a lessor or sublessor, licensor or sublicensor under  any lease or license not prohibited by this Agreement or the other Security Documents, including  any interest of a bailor;               (l)   normal and customary rights of setoff upon deposits or securities in favor  of depository institutions or brokerages, and Liens of a collecting bank on payment items in the  course  of  collection,  bankers’  Liens  securing  amounts  owing  to  such  bank  with  respect  to  overdrafts,  cash  management  and  operating  account  arrangements,  including  those  involving  pooled accounts and netting arrangements; provided that in no case shall such Liens secure (either  directly or indirectly) the repayment of any Debt (other than on account of such overdrafts, netting  or cash management);               (m)   Liens on amounts payable under insurance policies, and deposits arising in  the Ordinary Course of Business, in connection with the financing of insurance premiums;                                        95  NAI-1507796678v9  

 

              (n)   Liens arising out of conditional sale, title retention, consignment or similar  arrangements for the sale of goods entered into by such Person in the Ordinary Course of Business  in accordance with the past practices of such Person;               (o)   Liens on property or assets acquired pursuant to a Permitted Acquisition, or  on property or assets of a Subsidiary in existence at the time such Subsidiary or property is acquired  pursuant to a Permitted Acquisition; provided that (x) any Debt that is secured by such Liens is  permitted hereunder and (y) such Liens are not incurred in connection with, or in contemplation  or anticipation of, such Permitted Acquisition and do not attach to any other property or assets of  the Company or any Subsidiaries other than the property and assets subject to such Liens at the  time of such Permitted Acquisition, together with any extensions, renewals and replacements of  the foregoing, so long as the Debt secured by such Liens is permitted hereunder and such extension,  renewal or replacement does not encumber any additional assets or properties of the Company or  any Subsidiaries;               (p)   security given to a public or private utility or any Governmental Authority  as required in the Ordinary Course of Business;               (q)   the  filing  of  financing  statements  solely  as  a  precautionary  measure  in  connection with operating leases or consignments;               (r)   Liens with  respect  to  obligations  that  do  not  in  the  aggregate  exceed  $1,000,000 at any time outstanding;               (s)   the replacement, extension or renewal of any Permitted Lien; provided, that  such Lien shall at no time be extended to cover any assets or property other than such assets or  property subject thereto on the date such Lien was incurred;               (t)   Liens  granted  by  Subsidiaries  that  are  not  Obligors  securing  (i)  Debt  permitted to be incurred pursuant to Section 10.2.1(n), (q), (x) or (y) or (ii) any obligations not  constituting Debt that are permitted hereunder;               (u)   existing Liens shown on Schedule 10.2.2;               (v)   Liens  granted  to  the  Term  Loan  Agent  pursuant  to  the  Term  Loan  Documents  and  any  Refinancing  Debt  thereof,  provided  that  the  Agent,  for  the  benefit  of  the  Lenders,  has  a  first priority  Lien  (subject  to  Permitted  Liens)  on  the  ABL  Facility  First  Lien  Collateral  and  a  second  priority  Lien  on  the  Term  Loan  First  Lien  Collateral  as  set  forth  and  governed by the Intercreditor Agreement;                (w)   Liens with respect to those Accounts and related rights and assets subject to  purchase pursuant to any Qualified Receivables Transaction; and               (x)   Liens securing obligations in an aggregate principal amount not to exceed  $10,000,000; provided, that, in the event such Liens are granted in Collateral such Liens are junior  in priority to the Liens granted to the Agent.               10.2.3. [RESERVED].                                            96  NAI-1507796678v9  

 

              10.2.4. Distributions; Upstream Payments.  Make or declare any Distributions other  than:               (a)   Upstream Payments;               (b)   dispositions by Obligors and Subsidiaries permitted hereunder;               (c)   any Distribution, so long as either (a) Availability, on a Pro Forma Basis  after giving effect to such transaction, for each of the 30 days prior to and including the date such  transaction is consummated, is at least the greater of (1) $12,500,000 and (2) twenty-five percent  (25%) of the Revolver Commitments or (b) (1) the Fixed Charge Coverage Ratio, on a Pro Forma  Basis, is at least 1.00 to 1.00 and (2) Availability, on a Pro Forma Basis after giving effect to such  transaction,  for  each  of  the  30  days  prior  to  and  including  the  date such transaction is  consummated,  is  at  least  the  greater  of  (A)  $7,500,000  and  (B)  fifteen  percent  (15%)  of  the  Revolver Commitments.               10.2.5. [RESERVED].               10.2.6. Restricted Investments.  Make any Restricted Investment other than, so long  as no Default or Event of Default exists or would result therefrom, Permitted Acquisitions.               10.2.7. Disposition of Assets.  Make any Asset Disposition, except Permitted Asset  Dispositions.               10.2.8. [RESERVED].                 10.2.9. Restrictions on Payment of Certain Debt.  Make any payments (whether  voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with  respect  to  (A)  any  unsecured  Borrowed  Money  or  Subordinated  Debt  (the  foregoing,  “Junior  Debt”), except (i) any scheduled payment, or other contractually required payment, as and when  due and payable in accordance with the terms of the definitive documentation governing such  Junior Debt (including any applicable subordination agreements), (ii) in connection with, and to  the extent permitted hereby, any Refinancing Debt in connection with such Junior Debt and (iii)  any other payments in respect of the Junior Debt so long as immediately before and after giving  effect to any such payment, no Default or Event of Default shall have occurred and be continuing  and either (a) Availability, on a Pro Forma Basis after giving effect to such prepayment, for each  of the 30 days prior to and including the date such prepayment is made, is at least the greater of  (x) $12,500,000 and (y) twenty-five percent (25%) of the Revolver Commitments or (b) (1) the  Fixed Charge Coverage Ratio, on a Pro Forma Basis, is at least 1.00 to 1.00 and (2) Availability,  on a Pro Forma Basis after giving effect to such prepayment, for each of the 30 days prior to and  including the date such prepayment is made, is at least the greater of (x) $7,500,000 and (y) fifteen  percent (15%) of the Revolver Commitments and (B) the Term Loans, other than (i) any scheduled  payments as and when due and payable in accordance with the Term Loan Credit Agreement and  reimbursement for fees and expenses, (ii) mandatory repayments as required by Section 5.3.1 of  the Term Loan Credit Agreement and (iii) other payments in respect of the Term Loans, in each  case,  provided  such  payments  are  made  in  accordance  with  the  terms of  the  Intercreditor  Agreement; and provided however, that in the case of clause (B)(iii), (a) Availability, on a Pro  Forma Basis after giving effect to such prepayment, for each of the 30 days prior to and including  the date such prepayment is made, is at least the greater of (x) $12,500,000 and (y) twenty-five  percent (25%) of the Revolver Commitments or (b) (1) the Fixed Charge Coverage Ratio, on a Pro                                        97  NAI-1507796678v9  

 

  Forma Basis, is at least 1.00 to 1.00 and (2) Availability, on a Pro Forma Basis after giving effect  to such prepayment, for each of the 30 days prior to and including the date such prepayment is  made,  is  at  least  the  greater  of  (x)  $7,500,000  and  (y)  fifteen  percent  (15%)  of  the  Revolver  Commitments. Notwithstanding the foregoing, Term Loan Indebtedness may only be refinanced  in accordance with the terms of the Intercreditor Agreement.               10.2.10. Fundamental  Changes.   (a)  Merge,  combine  or  consolidate  with  any  Person, or liquidate, wind up its affairs or dissolve itself (unless, in the case of any liquidation,  winding up or dissolution, the assets of such entity are transferred to its corporate parent), in each  case  whether  in  a  single  transaction  or  in  a  series  of  related  transactions,  except  for  mergers,  consolidations, amalgamations or combinations of (i) a wholly-owned Domestic Subsidiary (or  National Seating Company) with another wholly-owned Domestic Subsidiary (provided that if any  such Subsidiary is an Obligor, the Obligor will be the surviving company) or into a Borrower, (ii)  a Borrower with and into a Borrower, so long as, in the case of the Company, the Company is the  surviving entity, or (iii) a non-Obligor Subsidiary with and into an Obligor or another non-Obligor  Subsidiary, provided that if the transaction involves an Obligor, the Obligor will be the surviving  company; or (b) in the case of any Obligor, unless 30 days’ advance written notice is given to  Agent, (i) change its name as reflected in its Organic Documents, (ii) change its tax, charter or  other  organizational  identification  number,  or  (iii)  change  its  form  or  state  of  jurisdiction  of  organization.               10.2.11.    Subsidiaries.  Form or acquire any Subsidiary, except in accordance  with Sections 10.1.9 or 10.2.6 and except for any Excluded Receivables Subsidiary, or permit any  existing Subsidiary to issue any additional Equity Interests except pursuant to clause (m) or (u) of  the definition of Permitted Asset Disposition.               10.2.12.    Organic Documents.  Amend, modify or otherwise change any of its  Organic Documents as in effect on the Effective Date to the extent such amendment, modification  or change could reasonably be expected to result in a Material Adverse Effect.               10.2.13.    Tax Consolidation.  File or consent to the filing of any consolidated  income tax return with any Person other than Borrowers and Subsidiaries.               10.2.14.    Accounting  Changes.   Make  any  material  change  in  accounting  treatment or reporting practices, except as permitted by GAAP and in accordance with Section  1.2; or change its Fiscal Year without consent of Agent.               10.2.15.    Restrictive  Agreements.   Become  a  party  to  any  Restrictive  Agreement, except:               (a)   Restrictive Agreements relating to Debt permitted hereunder, as long as the  restrictions apply only to collateral for such Debt;                (b)   Restrictive Agreements constituting customary restrictions on assignment,  encumbrances or subletting in leases and other contracts;                (c)   Restrictive Agreements constituting customary restrictions and conditions  contained in any agreement relating to the sale of any Property permitted under Section 10.2.7  pending the consummation of such sale;                                          98  NAI-1507796678v9  

 

              (d)   Restrictive  Agreements  in effect  at  the  time  such  Subsidiary  becomes  a  Subsidiary of a Borrower, so long as such agreement was not entered into in contemplation of such  Person becoming a Subsidiary of such Borrower;                (e)   the documents described on Schedule 10.2.15;                (f)   the  Term  Loan  Documents,  each  as  amended,  restated,  supplemented  or  otherwise modified as permitted under the Intercreditor Agreement, including any Refinancing  Debt thereof;                (g)   any agreements evidencing a Qualified Receivables Transaction; and               (h)   agreements related to Debt permitted under Section 10.2.1 so long as (in  the case of Debt with an initial outstanding principal balance (or the establishment of revolving  lending commitments) greater than $5,000,000) the Board of Directors in its reasonable and good  faith judgment determines at the time such Debt is incurred (or revolving lending commitments  established) that entering into the applicable Restrictive Agreement will not affect the ability of  the Obligors to make payments on the Obligations.               10.2.16.    Hedging Agreements.  Enter into any Hedging Agreement, except  to hedge risks arising in the Ordinary Course of Business and not for speculative purposes.               10.2.17.    Conduct  of  Business.   Engage  in  any  business,  other  than  its  business  as  conducted  on  the  Effective  Date  and  any  activities  ancillary,  incidental,  complementary or reasonably related thereto.               10.2.18.    Affiliate Transactions.  Enter into or be party to any transaction with  an Affiliate, except:               (a)   transactions contemplated or otherwise permitted by the Loan Documents;                (b)   payment of reasonable compensation to officers and employees for services  actually rendered, and loans and advances permitted by Section 10.2.6;                (c)   payment of customary directors’ fees and indemnities;                (d)   transactions solely among (i) Obligors or (ii) non-Obligors;                (e)   transactions with Affiliates that were consummated prior to the Effective  Date, as shown on Schedule 10.2.18; and                (f)   transactions with Affiliates upon fair and reasonable terms no less favorable  (taken as a whole) than could reasonably be obtained in a comparable arm’s-length transaction  with a non-Affiliate.               10.2.19.    Plans.  Become party to any (a) Multiemployer Plan or (b) Foreign  Plan (which would reasonably be expected to result in a material liability to Borrowers), in each  case other than (i) any in existence on the Effective Date, (ii) in connection with the consummation  of a Permitted Acquisition, or (iii) as mandated by a government other than the United States for  employees of any Obligor or Subsidiary in connection with the establishment of manufacturing                                         99  NAI-1507796678v9  

 

  facilities in jurisdictions in which the Obligors and their Subsidiaries do not operate manufacturing  facilities on the Effective Date.               10.2.20.    [RESERVED.]               10.2.21.    Amendments  to  Subordinated  Debt  or  Term  Loan  Credit  Agreement.  Amend, supplement or otherwise modify (a) any document, instrument or agreement  relating to any Subordinated Debt (other than intercompany Debt, to the extent permitted to be  incurred  hereunder  and  except  for  the  provisions  of  any  document,  instrument  or  agreement  relating to the subordination of such intercompany Debt), if such modification (i) increases the  principal balance of such Debt (other than as a result of capitalization of fees and interest), or  increases any required payment of principal or interest (other than as a result of capitalization of  fees and interest), (ii) accelerates the date on which any installment of principal or any interest is  due,  or  adds  any  additional  redemption,  put  or  prepayment  provisions,  (iii)  shortens  the  final  maturity date or otherwise accelerates amortization, (iv) increases the interest rate, (v) modifies  any covenant in a manner or adds any representation, covenant or default that is more onerous or  restrictive in any material respect (when taken as a whole) for any Obligor, or that is otherwise  materially adverse to any Obligor or Lenders, or (vi) results in the Obligations not being fully  benefited by the subordination provisions thereof; or (b) the Term Loan Credit Agreement or any  related agreements, except as expressly permitted in the Intercreditor Agreement.         10.3. Financial Covenants.  As long as any Revolver Commitments or Obligations are  outstanding, Borrowers shall:               10.3.1. Fixed  Charge  Coverage  Ratio.  During  any  Financial  Covenant  Trigger  Period, maintain a Fixed Charge Coverage Ratio of at least 1.00 to 1.00 as of the last day of any  Fiscal Quarter and determined for the period consisting of the most recent four Fiscal Quarters  ended prior to the Financial Covenant Trigger Date.   SECTION 11.  EVENTS OF DEFAULT; REMEDIES ON DEFAULT         11.1. Events of Default.  Each of the following shall be an “Event of Default” hereunder,  if the same shall occur for any reason whatsoever, whether voluntary or involuntary, by operation  of law or otherwise:               (a)   a Borrower fails  to  pay  any  Obligations  when  due  (whether  at  stated  maturity, on demand, upon acceleration or otherwise); provided that, with respect to  any non- payment  (other  than  non-repayment  of  principal  when  due  hereunder), such  failure  shall  only  constitute an Event of Default if it is not cured within three (3) Business Days of the due date  thereof;               (b)   any representation, warranty or other written statement of an Obligor made  in  connection  with  any  Loan  Documents  or  transactions  contemplated  thereby  is  incorrect  or  misleading in any material respect when given;               (c)   a Borrower breaches or fails to perform any covenant contained in Section  7.3, 8.1, 8.2.4, 8.6.2, 10.1.3(d), 10.2 or 10.3;               (d)   an Obligor breaches or fails to perform any covenant contained in any Loan  Documents (other than as specified in clauses (a), (b) and (c) above), and such breach or failure is                                       100  NAI-1507796678v9  

 

  not cured within 30 days for any such breach or failure to perform any other covenant contained  in any Loan Document, in each case after a Senior Officer of such Obligor has knowledge thereof  or receives notice thereof from Agent, whichever is sooner;               (e)   a  Guarantor  repudiates,  revokes  or  attempts  to  revoke  its  Guaranty;  an  Obligor  denies or contests the validity or enforceability of any Loan Documents or Obligations,  or the perfection or priority of any Lien granted to Agent except for Collateral with a value not in  excess of $1,000,000 at any time; or any Loan Document ceases to be in full force or effect for  any reason (other than a waiver or release by Agent and Lenders or action or inaction by the Agent  or as otherwise permitted hereunder);               (f)   any breach or default (beyond the period of grace, if any, provided in the  instrument or agreement under which the Debt was created) of an Obligor has occurred and is  continuing under any document, instrument or agreement to which it is a party or by which it or  any  of  its  Properties  is  bound,  relating  to  any  Debt  (other  than  the  Obligations)  in  excess  of  $5,000,000, if the maturity of or any payment with respect to such Debt may be accelerated or  demanded due to such breach;               (g)   an Event of Default (as defined in the Term Loan Credit Agreement) has  occurred and is continuing under any Term Loan Document, which default shall not have been  cured within any applicable grace period (or a period of time sufficient to permit the acceleration  of the Term Loans) or waived by the lenders thereunder;                (h)   other  than  any  judgment  disclosed  on Schedule  11.1 (to  the  extent  the  aggregate amount of any such judgment plus accrued interest thereon does not exceed $5,000,000),  any final judgment or order for the payment of money is entered against an Obligor in an amount  that exceeds, individually or cumulatively with all unsatisfied final judgments or orders against all  Obligors, $5,000,000 (net of any insurance coverage therefor not denied in writing by the insurer)  and such final judgment(s) or order(s) shall not have been satisfied, vacated, discharged, stayed or  bonded pending appeal within 30 days from the entry thereof;               (i)   the  Obligors,  taken  as  a  whole,  are  enjoined,  restrained  or  in  any  way  prevented by any Governmental Authority from conducting any material part of their business;  there is a cessation of any material part of the Obligors’ business for a material period of time  (other than as permitted hereunder); any material Collateral or Property of the Obligors, taken as  a whole, is taken or impaired through condemnation; an Obligor agrees to or commences any  liquidation, dissolution or winding up of its affairs (except as otherwise permitted hereunder); or  the Obligors, taken as a whole, are not Solvent;               (j)   an Insolvency Proceeding is commenced by an Obligor; an Obligor makes  an  offer  of  settlement,  extension  or  composition  to  its  unsecured  creditors  generally;  or  an  Insolvency Proceeding is commenced against an Obligor and the Obligor consents to institution  of the proceeding, the petition commencing the proceeding is not timely contested by the Obligor,  the petition is not dismissed within 60 days after filing, or an order for relief is entered in the  proceeding;               (k)   an ERISA Event occurs with respect to a Pension Plan or Multiemployer  Plan that has resulted or could reasonably be expected to result in a material liability of an Obligor  to a Pension Plan, Multiemployer Plan or PBGC, or that constitutes grounds for appointment of a                                        101  NAI-1507796678v9  

 

  trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; an Obligor or  ERISA Affiliate fails to pay when due any installment payment with respect to its withdrawal  liability under Section 4201 of ERISA under a Multiemployer Plan; or any event similar to the  foregoing occurs or exists with respect to a Foreign Plan;                (l)   an Obligor is convicted for (i) a felony committed in the conduct of the  Obligor’s business, or (ii) the forfeiture of any material Property or any material Collateral by an  Obligor as a result of violating any state or federal law (including the Controlled Substances Act,  Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act); or               (m)   a Change of Control occurs.         11.2. Remedies upon Default.  If an Event of Default described in Section 11.1(j) occurs  with respect to any Borrower, then to the extent permitted by Applicable Law, all Obligations  (other than Secured Bank Product Obligations) shall become automatically due and payable and  all Revolver Commitments shall terminate, without any action by Agent or notice of any kind.  In  addition, or if any other Event of Default exists, Agent may in its discretion (and shall upon written  direction of Required Lenders) do any one or more of the following from time to time:               (a)   declare  any  Obligations (other  than  Secured  Bank  Product  Obligations)  immediately  due  and  payable,  whereupon  they  shall  be  due  and  payable  without  diligence,  presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrowers  to the fullest extent permitted by law;               (b)   terminate,  reduce  or  condition  any  Revolver  Commitment,  or  make  any  adjustment to the Aggregate Borrowing Base;               (c)   require  Obligors  to  Cash  Collateralize  LC  Obligations, Secured Bank  Product Obligations and other Obligations that are contingent or not yet due and payable, and, if  Obligors fail promptly to deposit such Cash Collateral, Agent may (and shall upon the direction  of Required Lenders) advance the required Cash Collateral as Revolver Loans (whether or not an  Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied); provided,  that if Borrowers are required to provide an amount of cash collateral pursuant to this Section 11.2,  such  amount  (to  the  extent  not  applied  in  accordance  with Section  5.6)  shall  be  returned  to  Borrowers within three Business Days after all Events of Default have been cured or waived; and               (d)   exercise any other rights or remedies afforded under any agreement, by law,  at equity or otherwise, including the rights and remedies of a secured party under the UCC.  Such  rights  and  remedies  include  the  rights  to  (i) take  possession  of  any  Collateral;  (ii)  require  Borrowers to assemble Collateral, at Borrowers’ expense, and make it available to Agent at a place  designated  by  Agent;  (iii)  subject  to  the  terms  of  any  Lease  Agreement  or  Lease  Waiver,  as  applicable, enter any premises where Collateral is located and store Collateral on such premises  until sold (and if the premises are owned or leased by a Borrower, Borrowers agree not to charge  for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after  any further manufacturing or processing thereof, at public or private sale, with such notice as may  be required by Applicable Law, in lots or in bulk, at such locations, all as Agent, in its discretion,  deems  advisable.   Each  Borrower  agrees  that  10  days  notice  of  any  proposed  sale  or  other  disposition of Collateral by Agent shall be reasonable.  Agent shall have the right to conduct such  sales on any Obligor’s premises, without charge, and such sales may be adjourned from time to                                        102  NAI-1507796678v9  

 

  time in accordance with Applicable Law.  Agent shall have the right to sell, lease or otherwise  dispose of any Collateral for cash, credit or any combination thereof, and Agent may purchase any  Collateral  at  public  or,  if  permitted  by  law,  private  sale  and,  in  lieu  of  actual  payment  of  the  purchase price, may set off the amount of such price against the Obligations.         11.3. License.  For the purpose of enabling Agent, upon the occurrence and during the  continuance of an Event of Default, to exercise the rights and remedies under Section 11.2 at such  time as Agent shall be lawfully entitled to exercise such rights and remedies, and for no other  purpose, Borrower hereby grants to Agent a non-exclusive license (subject to the rights of third  parties and to the extent not prohibited in the case of licensed in Intellectual Property and (i) in the  case of trademarks, to sufficient rights to quality control and inspection in favor of Borrower to  avoid  the  risk  of  invalidation  of  such  trademarks,  and  (ii)  in  the  case  of  trade  secrets,  to  an  obligation  of  Agent  to  take  steps  reasonable  under  the  circumstances  to  keep  trade  secrets  confidential to avoid the risk of invalidation of such trade secrets) to use, license or sub-license  (without payment of royalty or other compensation to any Person) any or all Intellectual Property  of  Borrowers,  computer  hardware  and  software,  trade  secrets,  brochures,  customer  lists,  promotional  and  advertising  materials,  labels,  packaging  materials  and  other  Property,  in  advertising  for  sale,  marketing,  selling,  collecting,  completing  manufacture  of,  or  otherwise  exercising any rights or remedies with respect to, any Collateral.  Each Borrower’s rights and  interests under Intellectual Property shall inure to Agent’s benefit.         11.4. Setoff.  At any time during an Event of Default, Agent, Issuing Bank, Lenders, and  any of their Affiliates are authorized, 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)(other than tax, payroll, trust or employee benefit accounts) at any time held and other  obligations (in whatever currency) at any time owing by Agent, Issuing Bank, such Lender or such  Affiliate to or for the credit or the account of an Obligor against any Obligations, irrespective of  whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand  under  this  Agreement  or  any  other  Loan  Document  and  although  such  Obligations  may  be  contingent or unmatured or are owed to a branch or office of Agent, Issuing Bank, such Lender or  such  Affiliate  different  from the  branch  or  office  holding  such  deposit  or  obligated  on  such  indebtedness.  The rights of Agent, Issuing Bank, each Lender and each such Affiliate under this  Section 11.4 are in addition to other rights and remedies (including other rights of setoff) that such  Person may have.         11.5. Remedies Cumulative; No Waiver.                 11.5.1. Cumulative Rights.  All agreements, warranties, guaranties, indemnities and  other undertakings of Borrowers under the Loan Documents are cumulative and not in derogation  of each other.  The rights and remedies of Agent and Lenders are cumulative, may be exercised at  any time and from time to time, concurrently or in any order, and are not exclusive of any other  rights or remedies available by agreement, by law, at equity or otherwise.  All such rights and  remedies shall continue in full force and effect until Full Payment of all Obligations.               11.5.2. Waivers.  No waiver or course of dealing shall be established by (a) the  failure or delay of Agent or any Lender to require strict performance by Borrowers with any terms  of  the  Loan  Documents,  or  to  exercise  any  rights  or  remedies  with  respect  to  Collateral  or  otherwise; (b) the making of any Loan or issuance of any Letter of Credit during a Default, Event  of Default or other failure by the Obligors to satisfy any conditions precedent; or (c) acceptance                                       103  NAI-1507796678v9  

 

  by Agent or any Lender of any payment or performance by an Obligor under any Loan Documents  in a manner other than that specified therein.  It is expressly acknowledged by Borrowers that any  failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by  satisfaction of such covenant on a subsequent date.   SECTION 12.  AGENT         12.1. Appointment, Authority and Duties of Agent.                 12.1.1. Appointment and Authority.  Each Lender appoints and designates Bank of  America as Agent hereunder.  Agent may, and each Lender authorizes Agent to, enter into all Loan  Documents  to  which  Agent  is  intended  to  be  a  party  and  accept  all  Security  Documents,  for  Agent’s benefit and the Pro Rata benefit of Lenders.  Each Lender agrees that any action taken by  Agent or Required Lenders in accordance with the provisions of the Loan Documents, and the  exercise by Agent or Required Lenders of any rights or remedies set forth therein, together with  all other powers reasonably incidental thereto, shall be authorized by and binding upon all Lenders.   Without limiting the generality of the foregoing, Agent shall have the sole and exclusive authority  to  (a)  act as  the disbursing  and collecting agent  for  Lenders with  respect  to  all payments  and  collections arising in connection with the Loan Documents; (b) execute and deliver as Agent each  Loan Document, including any intercreditor or subordination agreement, and accept delivery of  each Loan Document from any Obligor or other Person; (c) act as collateral agent for Secured  Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all  other purposes stated therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take  any Enforcement Action or otherwise exercise any rights or remedies with respect to any Collateral  under the Loan Documents, Applicable Law or otherwise.  The duties of Agent shall be ministerial  and administrative in nature, and Agent shall not have a fiduciary relationship with any Lender,  Secured Party, Participant or other Person, by reason of any Loan Document or any transaction  relating thereto.  Agent alone shall be authorized to determine whether any Accounts or Inventory  constitute Eligible Accounts or Eligible Inventory, or whether to impose or release any reserve,  which  determinations  and  judgments,  if  exercised  in  good  faith,  shall  exonerate  Agent  from  liability to any Lender or other Person for any error in judgment.               12.1.2. Duties.  The title of “Agent” is used solely as a matter of market custom and  the duties of Agent are administrative in nature only.  Agent has no duties except those expressly  set forth in the Loan Documents, and in no event does Agent have agency, fiduciary or implied  duty to or relationship with any Secured Party or other Person by reason of any Loan Document  or related transaction.  The conferral upon Agent of any right shall not imply a duty on Agent’s  part to exercise such right, unless instructed to do so by Required Lenders in accordance with this  Agreement.               12.1.3. Agent  Professionals.   Agent  may  perform  its  duties  through  agents  and  employees.  Agent may consult with and employ Agent Professionals, and shall be entitled to act  upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given  by an Agent Professional.  Agent shall not be responsible for the negligence or misconduct of any  agents, employees or Agent Professionals selected by it with reasonable care.               12.1.4. Instructions of Required Lenders.  The rights and remedies conferred upon  Agent under the Loan Documents may be exercised without the necessity of joinder of any other  party, unless required by Applicable Law.  In determining compliance with a condition for any                                        104  NAI-1507796678v9  

 

  action hereunder, including satisfaction of any condition in Section 6, Agent may presume that the  condition is satisfactory to a Secured Party unless Agent has received notice to the contrary from  such Secured Party before Agent takes the action. Agent may request instructions from Required  Lenders  with  respect  to  any  act  (including  the  failure  to  act)  in  connection  with  any  Loan  Documents,  and may seek assurances  to  its  satisfaction from  Lenders of their indemnification  obligations under Section 12.6 against all Claims that could be incurred by Agent in connection  with any act.  Agent shall be entitled to refrain from any act until it has received such instructions  or  assurances,  and  Agent  shall  not  incur  liability  to  any  Person  by  reason  of  so  refraining.   Instructions of Required Lenders shall be binding upon all Lenders, and no Lender shall have any  right of action whatsoever against Agent as a result of Agent acting or refraining from acting in  accordance with the instructions of Required Lenders.  Notwithstanding the foregoing, instructions  by and consent of all Lenders shall be required in the circumstances described in Section 15.1.1,  and in no event shall Required Lenders, without the prior written consent of each Lender, direct  Agent to accelerate and demand payment of Loans held by one Lender without accelerating and  demanding payment of all other Loans, nor to terminate the Revolver Commitment of one Lender  without terminating the Revolver Commitments of all Lenders.  In no event shall Agent be required  to take any action that, in its opinion, is contrary to Applicable Law or any Loan Documents or  could subject any Agent Indemnitee to personal liability.         12.2. Agreements Regarding Collateral, Field Examination Reports and Borrower  Materials.                 12.2.1. Lien Releases; Care of Collateral.  Lenders authorize Agent to release any  Lien with respect to any Collateral (a) upon Full Payment of the Obligations; (b) that is the subject  of  an  Asset  Disposition  which  Borrowers  certify  in  writing  to  Agent  is  a  Permitted  Asset  Disposition or a Lien which Borrowers certify is a Permitted Lien entitled to priority over Agent’s  Liens (and Agent may rely conclusively on any such certificate without further inquiry); (c) that  does not constitute a material part of the Collateral; (d) as required to effect any sale or other  disposition of Collateral in connection with any exercise of remedies of Agent pursuant to the  Security Documents; or (e) with the written consent of the Required Lenders.  Lenders hereby  authorize Agent to execute and deliver any instruments, documents and agreements necessary or  desirable to evidence and confirm the release of any Collateral pursuant to the foregoing provisions  of this paragraph, all without the further consent or joinder of any Lender.  Agent shall have no  obligation  whatsoever  to  any  Lenders  to  assure  that  any  Collateral  exists  or  is  owned  by  a  Borrower, or is cared for, protected, insured or encumbered, nor to assure that Agent’s Liens have  been  properly  created,  perfected  or  enforced,  or  are  entitled  to  any  particular  priority,  nor  to  exercise any duty of care with respect to any Collateral.               12.2.2. Possession of Collateral.  Agent and Lenders appoint each Lender as agent  (for the benefit of Secured Parties) for the purpose of perfecting Liens in any Collateral held or  controlled by such Lender, to the extent such Liens are perfected by possession or control.  If any  Lender obtains possession or control of any Collateral, it shall notify Agent thereof and, promptly  upon Agent’s request, deliver such Collateral to Agent or otherwise deal with it in accordance with  Agent’s instructions.               12.2.3. Reports.  Agent shall promptly forward to each Lender, when complete,  copies of any field audit, examination or appraisal report prepared by or for Agent with respect to  any Obligor  or  Collateral  (“Report”).  Reports  and  other  Borrower  Materials  may  be  made  available  to  Lenders  by  providing  access  to  them  on  the  Platform,  but  Agent shall  not be                                       105  NAI-1507796678v9  

 

  responsible for system failures or access issues that may occur from time to time, except such  system  failures or  access  issues  that arise  as  a  result  of  Agent’s  gross  negligence  or  willful  misconduct. Each  Lender  agrees  (a)  that  neither  Bank  of  America  nor  Agent  makes  any  representation or warranty as to the accuracy or completeness of any Report or any Borrower  Material, and shall not be liable for any information contained in or omitted from any Report or  Borrower  Material;  (b)  that  the  Reports  are  not  intended  to  be  comprehensive  audits  or  examinations, and that Agent or any other Person performing any audit or examination will inspect  only specific information regarding Obligations or the Collateral and will rely significantly upon  Borrowers’  books  and  records  as  well  as  upon  representations  of  Borrowers’  officers  and  employees; and (c) to keep all Reports confidential and strictly for such Lender’s internal use, and  not to distribute any Report or other Borrower Materials (or the contents thereof) to any Person  (except  to  such  Lender’s  Participants,  attorneys  and  accountants)  or  use  any  Report or  any  Borrower Material in any manner other than administration of the Loans and other Obligations.   Each Lender agrees to indemnify and hold harmless Agent and any other Person preparing a Report  from any action such Lender may take as a result of or any conclusion it may draw from any  Borrower Materials, as well as from any Claims arising as a direct or indirect result of Agent  furnishing same to such Lender, via Platform or otherwise.         12.3. Reliance By Agent.  Agent shall be entitled to rely, and shall be fully protected in  relying, upon any certification, notice or other communication (including those by telephone, telex,  telegram, telecopy or e-mail) believed by it to be genuine and correct and to have been signed, sent  or made by the proper Person, and upon the advice and statements of Agent Professionals.  Agent  shall have a reasonable and practicable amount of time to act upon any instruction, notice or other  communication under any Loan Document, and shall not be liable for any delay in acting, except  to the extent such delay is due to Agent’s gross negligence or willful misconduct.         12.4. Action  Upon  Default.   Agent  shall  not  be  deemed  to  have  knowledge  of  any  Default  or  Event  of  Default  unless  it  has  received  written  notice  from  a  Lender  or  Borrower  specifying the occurrence and nature thereof.  If any Lender acquires knowledge of a Default or  Event of Default, it shall promptly notify Agent and the other Lenders thereof in writing.  Each  Lender  agrees  that,  except  as  otherwise  provided  in  any  Loan  Documents  or  with  the  written  consent  of  Agent  and  Required  Lenders,  it  will  not  take  any  Enforcement  Action,  accelerate  Obligations (other than Secured Bank Product Obligations owing to such Lender or its Affiliates)  under any Loan Documents, or exercise any right that it might otherwise have under Applicable  Law  to  credit  bid  at  foreclosure  sales,  UCC  sales  or  other  similar  dispositions  of  Collateral.   Notwithstanding the foregoing, however, a Lender may take action to preserve or enforce its rights  against an Obligor where a deadline or limitation period is applicable that would, absent such  action, bar enforcement of Obligations held by such Lender, including the filing of proofs of claim  in an Insolvency Proceeding.  Each Lender hereby irrevocably authorizes Agent, based upon the  instruction of the Required Lenders, to credit bid and purchase (either directly or through one or  more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under  the provisions of the Bankruptcy Code, including pursuant to Sections 9-610 or 9-620 of  the  Bankruptcy Code, at any sale thereof conducted under the provisions thereof (including Section  363 of the Bankruptcy Code) or any applicable bankruptcy, insolvency, reorganization or other  similar law (whether domestic or foreign) now or hereafter in effect, or at any sale or foreclosure  conducted by Agent (whether by judicial action or otherwise) in accordance with applicable law.         12.5. Ratable Sharing.  If any Lender shall obtain any  payment or  reduction  of any  Obligation,  whether  through  set-off  or  otherwise,  in  excess  of  its  share  of  such  Obligation,                                       106  NAI-1507796678v9  

 

  determined on a Pro Rata basis or in accordance with Section 5.6.1, as applicable, such Lender  shall forthwith purchase from Agent, Issuing Bank and the other Lenders such participations in  the  affected  Obligation  as  are  necessary  to  cause  the  purchasing  Lender  to  share  the  excess  payment or reduction on a Pro Rata basis or in accordance with Section 5.6.1, as applicable.  If  any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase  shall be rescinded and the purchase price restored to  the extent of such recovery, but  without  interest.  No Lender shall set off against any Dominion Account without the prior consent of Agent.   Notwithstanding  the  foregoing,  if  a  Defaulting  Lender  obtains  a  payment  or  reduction  of  any  Obligation, it shall immediately turn over the full amount thereof to Agent for application under  Section 4.2.2 and it shall provide a written statement to Agent describing the Obligation affected  by such payment or reduction.         12.6. Indemnification  of  Agent  Indemnitees.  EACH  LENDER  SHALL  INDEMNIFY  AND  HOLD  HARMLESS  AGENT  INDEMNITEES,  TO  THE  EXTENT  NOT   REIMBURSED      BY    OBLIGORS     (BUT   WITHOUT      LIMITING    THE  INDEMNIFICATION  OBLIGATIONS  OF  OBLIGORS  UNDER  ANY  LOAN  DOCUMENTS),  ON  A  PRO  RATA  BASIS,  AGAINST  ALL  CLAIMS  THAT  MAY  BE  INCURRED BY OR ASSERTED AGAINST ANY AGENT  INDEMNITEE, PROVIDED  THE CLAIM RELATES TO OR ARISES FROM AN AGENT INDEMNITEE ACTING AS  OR  FOR  AGENT  (IN  ITS  CAPACITY  AS  AGENT),  EXCEPT  WITH  RESPECT  TO  CLAIMS DIRECTLY AND SOLELY CAUSED BY AGENT’S GROSS NEGLIGENCE OR  WILLFUL MISCONDUCT.  In Agent’s discretion, it may reserve for any such Claims made  against an Agent Indemnitee, and may satisfy any judgment, order or settlement relating thereto,  from proceeds of Collateral prior to making any distribution of Collateral proceeds to Lenders.  If  Agent is sued by any receiver, bankruptcy trustee, debtor-in-possession or other Person for any  alleged  preference  or  fraudulent  transfer,  then  any  monies  paid  by  Agent  in  settlement  or  satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’  fees) incurred in the defense of same, shall be promptly reimbursed to Agent by each Lender to  the extent of its Pro Rata share.          12.7. Limitation on Responsibilities of Agent.  Agent shall not be liable to Lenders for  any action taken or omitted to be taken under the Loan Documents, except for losses directly and  solely caused by Agent’s gross negligence or willful misconduct.  Agent does not assume any  responsibility for any failure or delay in performance or any breach by any Obligor or Lender of  any  obligations  under the  Loan Documents.  Agent  does  not  make to  Lenders  any  express  or  implied warranty, representation or guarantee with respect to any Obligations, Collateral, Loan  Documents or Obligor.  No Agent Indemnitee shall be responsible to Lenders for any recitals,  statements,  information,  representations or  warranties  contained  in  any  Loan  Documents,  Borrower Materials or Report; the execution, validity, genuineness, effectiveness or enforceability  of  any  Loan  Documents;  the  genuineness,  enforceability,  collectability,  value,  sufficiency,  location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien  therein; the validity, enforceability or collectability of any Obligations; or the assets, liabilities,  financial condition, results of operations, business, creditworthiness or legal status of any Obligor  or Account Debtor.  No Agent Indemnitee shall have any obligation to any Lender to ascertain or  inquire into the existence of any Default or Event of Default, the observance or performance by  any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent  contained in any Loan Documents.         12.8. Successor Agent and Co-Agents.                                         107  NAI-1507796678v9  

 

              12.8.1. Resignation; Successor Agent.  Subject to the appointment and acceptance  of a successor Agent as provided below, Agent may resign at any time by giving at least 30 days  written notice thereof to Lenders and Borrowers.  Upon receipt of such notice, Required Lenders  shall have the right to appoint a successor Agent which shall be (a) a Lender or an Affiliate of a  Lender; or (b) a commercial bank that is organized under the laws of the United States or any state  or  district  thereof,  has  a  combined  capital  surplus  of  at  least  $200,000,000  and  in  each  case  (provided no Event of Default exists) is reasonably acceptable to Borrowers.  If no successor agent  is appointed prior to the effective date of the resignation of Agent, then Agent may appoint a  successor agent from among Lenders.  Upon acceptance by a successor Agent of an appointment  to serve as Agent hereunder, such successor Agent shall thereupon succeed to and become vested  with all the powers and duties of the retiring Agent without further act, and the retiring Agent shall  be discharged from its duties and obligations hereunder but shall continue to have the benefits of  the indemnification set forth in Sections 12.6 and 15.2.  Notwithstanding any Agent’s resignation,  the provisions of this Section 12 shall continue in effect for its benefit with respect to any actions  taken or omitted to be taken by it while Agent.  Any successor to Bank of America by merger or  acquisition of stock or this loan shall continue to be Agent hereunder without further act on the  part of the parties hereto, unless such successor resigns as provided above.               12.8.2. Separate Collateral Agent.  It is the intent of the parties that there shall be  no violation of any Applicable Law denying or restricting the right of financial institutions to  transact business in any jurisdiction.  If Agent believes that it may be limited in the exercise of any  rights or remedies under the Loan Documents due to any Applicable Law, Agent may appoint an  additional  Person  who  is  not  so  limited,  as  a  separate  collateral  agent  or  co-collateral  agent;  provided such collateral agent or co-collateral agent is reasonably acceptable to Borrowers (unless  an Event of Default exists).  If Agent so appoints a collateral agent or co-collateral agent, each  right and remedy intended to be available to Agent under the Loan Documents shall also be vested  in such separate agent.  Every covenant and obligation necessary to the exercise thereof by such  agent shall run to and be enforceable by it as well as Agent.  Lenders shall execute and deliver  such documents as Agent deems appropriate to vest any rights or remedies in such agent.  If any  collateral agent or co-collateral agent shall die or dissolve, become incapable of acting, resign or  be removed, then all the rights and remedies of such agent, to the extent permitted by Applicable  Law, shall vest in and be exercised by Agent until appointment of a new agent.         12.9. Due Diligence and Non-Reliance.  Each Lender acknowledges and agrees that it  has, independently and without reliance upon Agent or any other Lenders, and based upon such  documents, information and analyses as it has deemed appropriate, made its own credit analysis  of each Obligor and its own decision to enter into this Agreement and to fund Loans and participate  in  LC  Obligations  hereunder.   Each Lender  has  made  such  inquiries  concerning  the  Loan  Documents, the Collateral and each Obligor as such Lender feels necessary.  Each Lender further  acknowledges  and  agrees  that  the  other  Lenders  and  Agent  have  made  no  representations  or  warranties  concerning  any  Obligor,  any  Collateral  or  the  legality,  validity,  sufficiency  or  enforceability  of  any  Loan  Documents  or  Obligations.   Each  Lender  will,  independently  and  without  reliance  upon  the  other  Lenders  or  Agent,  and  based  upon  such  financial  statements,  documents and information as it deems appropriate at the time, continue to make and rely upon its  own  credit  decisions  in  making  Loans  and  participating  in  LC  Obligations  and  in  taking  or  refraining  from  any  action under any  Loan  Documents.  Except  for notices,  reports and other  information expressly requested by a Lender, Agent shall have no duty or responsibility to provide  any Lender with any notices, reports or certificates furnished to Agent by any Obligor or any credit  or  other  information  concerning  the  affairs,  financial  condition,  business  or  Properties  of  any                                       108  NAI-1507796678v9  

 

  Obligor (or any of its Affiliates) which may come into possession of Agent or any of Agent’s  Affiliates.         12.10. Replacement of Certain Lenders.  If a Lender (a) is a Defaulting Lender, (b) fails  to  give its  consent  to  any  amendment, waiver or action for which consent  of all  Lenders was  required and Required Lenders consented, then, in addition to any other rights and remedies that  any Person may have, Agent may, by notice to such Lender within 10 days after such event, require  such  Lender  to  assign  all  of  its  rights  and  obligations  under  the  Loan  Documents  to  Eligible  Assignee(s) specified by Agent, pursuant to appropriate Assignment and Acceptance(s) and within  20 days after Agent’s notice.  Agent is irrevocably appointed as attorney-in-fact to execute any  such Assignment and Acceptance if Lender fails to execute same.  Such Lender shall be entitled  to receive, in cash, concurrently with such assignment, all amounts owed to it under the Loan  Documents, including all principal, interest and fees through the date of assignment (but excluding  any prepayment charge).         12.11. Remittance of Payments and Collections.                 12.11.1.    Remittances Generally.  All payments by any Lender to Agent shall  be made by the time and on the day set forth in this Agreement, in immediately available funds.   If no time for payment is specified or if payment is due on demand by Agent and request for  payment is made by Agent by 11:00 a.m. on a Business Day, payment shall be made by Lender  not later than 2:00 p.m. on such day, and if request is made after 11:00 a.m., then payment shall  be made by 11:00 a.m. on the next Business Day.  Payment by Agent to any Lender shall be made  by wire transfer, in the type of funds received by Agent.  Any such payment shall be subject to  Agent’s right of offset for any amounts due from such Lender under the Loan Documents.               12.11.2.    Failure to Pay.  If any Lender fails to pay any amount when due by  it to Agent pursuant to the terms hereof, such amount shall bear interest from the due date until  paid  at  the  rate  determined  by  Agent  as  customary  in  the  banking  industry  for  interbank  compensation.  In no event shall Borrowers be entitled to receive credit for any interest paid by a  Lender to Agent, nor shall any Defaulting Lender be entitled to interest on any amounts held by  Agent pursuant to Section 4.2.               12.11.3.    Recovery of Payments.  If Agent pays any amount to a Lender in the  expectation that a related payment will be received by Agent from an Obligor and such related  payment is not received, then Agent may recover such amount from each Lender that received it.   If  Agent  determines  at  any  time  that  an  amount  received  under  any  Loan  Document  must  be  returned to an Obligor or paid to any other Person pursuant to Applicable Law or otherwise, then,  notwithstanding any other term of any Loan Document, Agent shall not be required to distribute  such amount to any Lender.  If any amounts received and applied by Agent to any Obligations are  later required to be returned by Agent pursuant to Applicable Law, each Lender shall pay to Agent,  on demand, such Lender’s Pro Rata share of the amounts required to be returned.         12.12. Agent in its Individual Capacity.  As a Lender, Bank of America shall have the  same rights and remedies under the other Loan Documents as any other Lender, and the terms  “Lenders,” “Required Lenders” or any similar term shall include Bank of America in its capacity  as  a  Lender.  Each of Bank of America and its  Affiliates  may accept  deposits  from,  maintain  deposits or credit balances for, invest in, lend money to, provide Bank Products to, act as trustee  under indentures of, serve as financial or other advisor to, and generally engage in any kind of                                        109  NAI-1507796678v9  

 

  business with, Obligors and their Affiliates, as if Bank of America were any other bank, without  any duty to account therefor (including any fees or other consideration received in connection  therewith) to the other Lenders.  In their individual capacity, Bank of America and its Affiliates  may receive information regarding Obligors, their Affiliates and their Account Debtors (including  information subject to confidentiality obligations), and each Lender agrees that Bank of America  and its Affiliates shall be under no obligation to provide such information to Lenders, if acquired  in such individual capacity and not as Agent hereunder.         12.13. Agent Titles.  Each Lender, other than Bank of America, that is designated (on the  cover page of this Agreement or otherwise) by Bank of America as an “Agent” or “Arranger” of  any type shall not have any right, power, responsibility or duty under any Loan Documents other  than  those  applicable  to  all  Lenders,  and  shall  in  no  event  be  deemed  to  have  any  fiduciary  relationship with any other Lender.         12.14. Secured  Bank  Product  Providers.  Each  Secured  Bank  Product  Provider,  by  delivery of a notice to Agent of a Bank Product, agrees to be bound by the Loan Documents,  including Sections 5.6, 15.3.3 and 12.  Each Secured Bank Product Provider shall indemnify and  hold harmless Agent Indemnitees, to the extent not reimbursed by Obligors, against all Claims that  may be incurred by or asserted against any Agent Indemnitee in connection with such provider’s  Secured Bank Product Obligations.         12.15. No Third Party Beneficiaries.  This Section 12 is an agreement solely among  Secured Parties and Agent, and shall survive Full Payment of the Obligations.  This Section 12  does not confer any rights or benefits upon Borrowers or any other Person other than as set forth  in Section 12.8.  As between Borrowers and Agent, any action that Agent may take under any  Loan Documents or with respect to any Obligations shall be conclusively presumed to have been  authorized and directed by Secured Parties.         12.16. Agent May File Proofs of Claim.  In case of the pendency of any proceeding under  the Bankruptcy Code or any other insolvency, debtor relief or debt adjustment law or any other  judicial proceeding relative to any Obligor, the Agent (irrespective of whether the principal of any  Loan  shall  then  be  due  and  payable  as  herein  expressed  or  by  declaration  or  otherwise  and  irrespective of whether the Agent shall have made any demand on the Borrowers) shall be entitled  and empowered, by intervention in such proceeding or otherwise:               (a)   to file and prove a claim for the whole amount of the principal and interest owing   and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such   other documents as may be necessary or advisable in order to have the claims of the Lenders and the   Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of   the Lenders and the Agent and their respective agents and counsel and all other amounts due the Lenders   and the Agent under Sections 3.2, 3.4, 12.6 and 15.2) allowed in such judicial proceeding; and               (b)   to collect and receive any monies or other property payable or deliverable on any   such claims and to distribute the same;                                        110  NAI-1507796678v9  

 

              and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar   official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the   Agent and, if the Agent shall consent to the making of such payments directly to the Lenders, to pay to   the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the   Agent and its agents and counsel, and any other amounts due the Agent under Sections 3.2, 3.4, 12.6 and   15.2.   SECTION 13.  [RESERVED]         13.1. [RESERVED].     SECTION 14.  BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS         14.1. Successors and Assigns.  This Agreement shall be binding upon and inure to the  benefit of Borrowers, Agent, Lenders, Secured Parties and their respective successors and assigns,  except that (a) no Borrower shall have the right to assign its rights or delegate its obligations under  any  Loan Documents; and (b) any assignment by a Lender must be made in  compliance with  Section 14.3.  Agent may treat the Person which made any Loan as the owner thereof for all  purposes  until  such  Person  makes  an  assignment  in  accordance  with Section  14.3.   Any  authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee  or assignee of such Lender.         14.2. Participations.               14.2.1. Permitted Participants; Effect.  Any Lender may, in the ordinary course of  its  business  and in accordance with  Applicable  Law, at  any time sell to  a financial institution  (“Participant”) a participating interest in the rights and obligations of such Lender under any Loan  Documents.  Despite any sale by a Lender of participating interests to a Participant, such Lender’s  obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely  responsible  to  the  other  parties  hereto  for  performance  of  such  obligations,  such  Lender  shall  remain the holder of its Loans and Revolver Commitment for all purposes, all amounts payable by  Borrowers shall be determined as if such Lender had not sold such participating interests, and  Borrowers and Agent shall continue to deal solely and directly with such Lender in connection  with the Loan Documents.  Each Lender shall be solely responsible for notifying its Participants  of any matters under the Loan Documents, and Agent and the other Lenders or Obligors shall not  have any obligation or liability to any such Participant. Each Participant shall be entitled to the  benefits of Sections 3.7, 3.9 and 5.9 to the same extent as if it were a Lender and had acquired its  interest  by  assignment  pursuant  to Section  14.3 (it  being  understood  that  the  documentation  required under Section 5.10 shall be delivered to the Lender who sells the participation); provided  that such Participant (A) agrees to be subject to the provisions of Section 3.8 as if it were an  assignee under Section 14.3 and (B) shall not be entitled to receive any greater payment under  Sections 3.7 or 5.10, with respect to any participation, than the Lender from whom it acquired the  applicable participation would have been entitled to receive.                                         111  NAI-1507796678v9  

 

              14.2.2. Voting Rights.  Each Lender shall retain the sole right to approve, without  the  consent  of  any  Participant,  any  amendment,  waiver  or  other  modification  of  any  Loan  Documents  other  than  that  which  (i)  forgives  principal  (other  than  mandatory  prepayments),  interest or fees (other than wavier of default interest), (ii) reduces the stated interest rate or fees  payable  with  respect  to  any  Loan  or  Revolver  Commitment  in  which  such  Participant  has  an  interest (other than wavier of default interest), (iii) postpones the Commitment Termination Date  or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan  or Revolver Commitment, or (iv) releases any Borrower, Guarantor or substantial portion of the  Collateral (except as otherwise permitted herein).               14.2.3. Participant Register.  Each Lender that sells a participation shall, acting as a  non-fiduciary agent of Borrowers (solely for tax purposes), maintain a register in which it enters  the Participant’s name, address and interest in Commitments, Loans (and stated interest) and LC  Obligations.  Entries in the register shall be conclusive, absent manifest error, and such Lender  shall treat each Person recorded in the register as the owner of the participation for all purposes,  notwithstanding any notice to the contrary.  No Lender shall have an obligation to disclose any  information in such register except to the extent necessary to establish that a Participant’s interest  is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.               14.2.4. Benefit of Set-Off.  Borrowers agree that each Participant shall have a right  of set-off in respect of its participating interest to the same extent as if such interest were owing  directly to  a  Lender, and each  Lender shall also  retain the right  of set-off with  respect  to  any  participating interests sold by it.  By exercising any right of set-off, a Participant agrees to share  with Lenders all amounts received through its set-off, in accordance with Section 12.5 as if such  Participant were a Lender.         14.3. Assignments.                 14.3.1. Permitted Assignments.  A Lender may assign to an Eligible Assignee any  of its rights and obligations under the Loan Documents, as long as (a) each assignment is of a  constant, and not a varying, percentage of the transferor Lender’s rights and obligations under the  Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of  $5,000,000  (unless  otherwise  agreed  by  Agent  in  its  discretion)  and  integral  multiples  of  $1,000,000 in excess of that amount; (b) except in the case of an assignment in whole of a Lender’s  rights  and  obligations,  the  aggregate  amount  of  the  Revolver  Commitments  retained  by  the  transferor Lender is at least $5,000,000 (unless otherwise agreed by Agent in its discretion); and  (c) the parties to each such assignment shall execute and deliver to Agent, for its acceptance and  recording, an Assignment and Acceptance.  Nothing herein shall limit the right of a Lender to  pledge or assign any rights under the Loan Documents to (i) any Federal Reserve Bank or the  United States Treasury as collateral security pursuant to Regulation A of the Board of Governors  and any Operating Circular issued by such Federal Reserve Bank, or (ii) counterparties to swap  agreements  relating  to  any  Loans; provided, however,  that  any  payment  by Borrowers to  the  assigning Lender in respect of any Obligations assigned as described in this sentence shall satisfy  Borrowers’ obligations hereunder to the extent of such payment, and no such assignment shall  release the assigning Lender from its obligations hereunder.               14.3.2. Effect; Effective Date.  Upon delivery to Agent  of an assignment notice  substantially in the form of Exhibit D and a processing fee of $3,500 (unless otherwise agreed by  Agent  in  its  discretion),  the  assignment  shall  become  effective  as  specified  in  the  notice,  if it                                       112  NAI-1507796678v9  

 

  complies with this Section 14.3.  From such effective date, the Eligible Assignee shall for all  purposes be a Lender under the Loan Documents, and shall have all rights and obligations of a  Lender thereunder (provided that any liability of Borrowers to such assignee under Section 3.7,  3.8 and 5.9 shall be limited to the amount, if any, that would have been payable thereunder by  Borrowers  in  the  absence  of such  assignment,  except  to  the  extent  any  such  amounts  are  attributable to a Change in Law occurring after the date of such assignment).  Upon consummation  of  an  assignment,  the  transferor  Lender,  Agent  and  Borrowers  shall  make  appropriate  arrangements for issuance of replacement and/or new Notes, as applicable.  The transferee Lender  shall  comply  with Section  5.10 and  deliver,  upon  request,  an  administrative  questionnaire  satisfactory to Agent.               14.3.3. Certain  Assignees.   No  assignment  or  participation  may  be  made to  a  Borrower, Affiliate of a Borrower, Defaulting Lender or natural person.  Any assignment by a  Defaulting Lender shall be effective only upon payment by the Eligible Assignee or Defaulting  Lender to Agent of an aggregate amount sufficient, upon distribution (through direct payment,  purchases of participations or other compensating actions as Agent deems appropriate), to satisfy  all  funding  and  payment  liabilities  then  owing  by  the  Defaulting  Lender  hereunder.   If  an  assignment by a Defaulting Lender shall become effective under Applicable Law for any reason  without compliance with the foregoing sentence, then the assignee shall be deemed a Defaulting  Lender for all purposes until such compliance occurs.               14.3.4. Register.  Agent, acting as a non-fiduciary agent of Borrowers (solely for  tax  purposes),  shall  maintain  (a)  a  copy  (or  electronic  equivalent)  of  each  Assignment  and  Acceptance  delivered  to  it,  and  (b)  a  register  for  recordation  of  the  names,  addresses  and  Commitments of, and the Loans, interest and LC Obligations owing to, each Lender.  Entries in  the register shall be conclusive, absent manifest error, and Borrowers, Agent and Lenders shall  treat each Person recorded in such register as a Lender for all purposes under the Loan Documents,  notwithstanding any notice to the contrary.  Agent may choose to show only one Borrower as the  borrower in the register, without any effect on the liability of any Obligor with respect to the  Obligations.  The register shall be available for inspection by Borrowers or any Lender, from time  to time upon reasonable notice.   SECTION 15.       MISCELLANEOUS         15.1. Consents, Amendments and Waivers.                 15.1.1. Amendment.   No  modification  of  any  Loan  Document,  including  any  extension or amendment of a Loan Document or any waiver of a Default or Event of Default, shall  be effective without the prior written agreement of Agent (with the consent of, and as directed by,  the Required Lenders) and each Obligor party to such Loan Document; provided, however, that               (a)   without  the  prior  written  consent  of  Agent,  no  modification  shall  be  effective with respect to any provision in a Loan Document that relates to any rights, duties or  discretion of Agent;               (b)   without the prior written consent of Issuing Bank, no modification shall be  effective with respect to any LC Obligations or Section 2.3;               (c)   without the prior written consent of each affected Lender (including any  such Lender that is a Defaulting Lender), no modification shall be effective that would (i) increase                                       113  NAI-1507796678v9  

 

  the Revolver Commitment of such Lender; or (ii) reduce the amount of, or waive any payment of,  any principal, interest or fees payable to such Lender (other than waiver of default interest or  waiver of any Default or Event of Default); and               (d)   without the prior written consent of all Lenders (except a Defaulting Lender  as provided in Section 4.2), no modification shall be effective that would (i) extend the Revolver  Termination  Date or  postpone  any  payment  of,  any  principal,  interest  or  fees  payable  to  any  Lender; (ii) alter Sections 5.6 or 15.1.1; (iii) amend the definitions of Tranche A Borrowing Base,  Tranche  B  Borrowing  Base  or  the  Aggregate  Borrowing  Base  (or  any  component  definition  thereof), Pro Rata or Required Lenders; (iv) increase any advance rate or increase total Revolver  Commitments; (v) release all or substantially all of the Collateral; (vi) release Collateral with a  book value greater than $10,000,000 during any calendar year, except as contemplated by the Loan  Documents; or (vii) release any Obligor from liability for any Obligations, other than as expressly  permitted by this Agreement.                15.1.2. Limitations.   The  agreement  of  Borrowers  shall  not  be  necessary  to  the  effectiveness of any modification of a Loan Document that deals solely with the rights and duties  of Lenders, Agent and/or Issuing Bank as among themselves.  Only the consent of the parties to  the Fee Letter or any agreement relating to a Bank Product shall be required for any modification  of such agreement, and any non-Lender that is party to a Bank Product agreement shall have no  right  to  participate  in  any  manner  in  modification,  amendment,  supplement,  extension  or  restatement of any other Loan Document.  Any waiver or consent granted by Agent or Lenders  hereunder shall be effective only if in writing and only for the matter specified.               15.1.3. Payment for Consents.  No Borrower will, directly or indirectly, pay any  remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to  any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender  with any modification of any Loan Documents, unless such remuneration or value is concurrently  paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.               15.1.4. Technical  Amendments.   Notwithstanding  anything  to  the  contrary  contained in Section 15.1, if Agent and Borrowers shall have jointly identified any error of a  technical  nature in  any  provision  of the  Loan Documents,  then Agent  and Borrowers shall be  permitted to amend such provision and such amendment shall become effective without any further  action or consent of any other party to any Loan Document if the same is not objected to in writing  by the Required Lenders within five Business Days following receipt of notice thereof.         15.2. Indemnity.  EACH  BORROWER  SHALL  INDEMNIFY  AND  HOLD  HARMLESS  THE  INDEMNITEES  AGAINST  ANY  CLAIMS  THAT  MAY  BE  INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS  ASSERTED  BY  ANY  OBLIGOR  OR  OTHER  PERSON  OR  ARISING  FROM  THE  NEGLIGENCE OF AN INDEMNITEE.  In no event shall any party to a Loan Document have  any obligation thereunder to indemnify or hold harmless an Indemnitee to the extent a Claim is  determined  in  a  final, non-appealable  judgment  by  a  court  of  competent  jurisdiction  to  have  resulted from the gross negligence or willful misconduct of such Indemnitee or a Claim solely  among the Indemnitees.         15.3. Waiver  of  Consequential  Damages,  etc.  To  the  fullest  extent  permitted  by  applicable law, each Borrower shall not assert, and hereby waives, and acknowledges that no other                                        114  NAI-1507796678v9  

 

  Person shall have, 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 Loan Document or any agreement or  instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the  use of the proceeds thereof.  No Indemnitee shall be liable for any damages arising from the use  by  others  of  any  information  or  other  materials  distributed  to  such  party  by  such  Indemnitee  through telecommunications, electronic or other information transmission systems in connection  with this Agreement or the other Loan Documents or the transactions contemplated hereby or  thereby.         15.4. Notices and Communications.                 15.4.1. Notice  Address.   Subject  to Section  4.1.4,  all  notices  and  other  communications by or to a party hereto shall be in writing and shall be given to any Borrower, at  Borrower Agent’s address shown on the signature pages hereof, and to any other Person at its  address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender  after the Effective Date, at the address shown on its Assignment and Acceptance), or at such other  address as a party may hereafter specify by notice in accordance with this Section 15.4.  Each such  notice or other communication shall be effective only (a) if given by facsimile transmission, when  transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given  by  mail,  three  Business  Days  after  deposit  in  the  U.S.  mail,  with  first-class  postage  pre-paid,  addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to  the notice address with receipt acknowledged.  Notwithstanding the foregoing, no notice to Agent  pursuant to Section 2.1.4, 2.3, 3.1.2, 4.1.1 or 5.3.3 shall be effective until actually received by the  individual to whose attention at Agent such notice is required to be sent.  Any written notice or  other communication that is not sent in conformity with the foregoing provisions shall nevertheless  be effective on the date actually received by the noticed party.  Any notice received by Borrower  Agent shall be deemed received by all Borrowers.               15.4.2. Electronic  Communications;  Voice  Mail.   Electronic  mail  and  internet  websites may be used only for routine communications, such as financial statements, Borrowing  Base  Certificates  and  other  information  required  by Section  10.1.2,  administrative  matters,  distribution of Loan Documents for execution and delivery of executed signature pages, matters  permitted under Section 4.1.4 and such other communications as agreed by Agent.  Agent and  Lenders  make  no  assurances  as  to  the  privacy  and  security  of  electronic  communications.   Electronic and voice mail may not be used as effective notice under the Loan Documents.               15.4.3. Platform.   Borrower  Materials  shall  be  delivered  pursuant  to  procedures  approved  by  Agent,  including  electronic  delivery  (if  possible)  upon  request  by  Agent  to  an  electronic system maintained by Agent (“Platform”).  Borrowers shall notify Agent of each posting  of Borrower Materials to be provided by them, which notice may be communicated electronically  in accordance with Section 15.4.2 and the Borrower Materials shall be deemed received by Agent  only upon its receipt of such notice.  Borrower Materials, Reports and other information relating  to this credit facility may be made available to Lenders on the Platform.  The Platform is provided  “as  is” and “as  available.”  Agent  does  not  warrant  the  accuracy  or  completeness  of  any  information  on  the  Platform  nor  the  adequacy  or  functioning  of  the  Platform,  and  expressly  disclaims liability for any errors or omissions in the Borrower Materials or any issues involving  the Platform, except to the extent such errors, omissions or issues arise as a result of Agent’s gross  negligence or willful misconduct.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR                                       115  NAI-1507796678v9  

 

  STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR  A  PARTICULAR  PURPOSE,  NON-INFRINGEMENT  OF  THIRD  PARTY  RIGHTS,  OR  FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY AGENT WITH  RESPECT TO BORROWER MATERIALS, REPORTS OR THE PLATFORM.  Secured Parties  acknowledge that Borrower Materials may include material non-public information of Obligors  and should not be made available to any personnel who do not wish to receive such information  or  who  may  be  engaged  in  investment  or  other  market-related  activities  with  respect  to  any  Obligor’s securities.  Agent, each Secured Party, each Obligor and each Lender acknowledge that  (a) the information on the Platform may include material non-public information concerning the  Company  or  a  Subsidiary,  as  the  case  may  be,  (b)  it  has  developed  compliance  procedures  regarding the use of material non-public information, and (c) it will handle such material non- public information  in  accordance with  Applicable  Law.  No Agent  Indemnitee shall have any  liability to Borrowers, Secured Parties or any other Person for losses, claims, damages, liabilities  or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of  the Platform or delivery of Borrower Materials and other information through the Platform or over  the internet, except to the extent such losses, claims, damages, liabilities or expenses of any kind  (whether in tort, contract or otherwise) arise as a result of Agent’s gross negligence or willful  misconduct.               15.4.4. Public  Information.   Obligors and  Secured  Parties  acknowledge  that  “public” information may not be segregated from material non-public information on the Platform.   Secured Parties acknowledge that Borrower Materials may include Obligors’ material non-public  information,  and  should  not  be  made  available  to  personnel  who  do  not  wish  to  receive  such  information or may be engaged in investment or other market-related activities with respect to an  Obligor’s securities.                15.4.5. Non-Conforming Communications.  Agent and Lenders may rely upon any  notices purportedly given by or on behalf of any Borrower even if such notices were not made in  a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as  understood by the recipient, varied from a later confirmation.  Each Borrower shall indemnify and  hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any  telephonic communication purportedly given by or on behalf of a Borrower.         15.5. Performance of Borrowers’ Obligations.  Agent may, in its discretion at any time  and from time to time, at Borrowers’ expense, with, unless an Event of Default is continuing,  five  days prior notice to Borrower, pay any amount or do any act required of a Borrower under any  Loan Documents or otherwise lawfully requested by Agent to (a) enforce any Loan Documents or  collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend  or maintain the validity or priority of Agent’s Liens in any Collateral, including any payment of a  judgment,  insurance  premium,  warehouse  charge,  finishing  or  processing  charge,  or  landlord  claim, or any discharge of a Lien.  All payments, costs and expenses (including Extraordinary  Expenses) of Agent under this Section 15.5 shall be reimbursed to Agent by Borrowers, promptly  following demand, with interest from the date incurred to the date of payment thereof at the Default  Rate applicable to Base Rate Loans.  Any payment made or action taken by Agent under this  Section 15.5 shall be without prejudice to any right to assert an Event of Default or to exercise any  other rights or remedies under the Loan Documents.                                         116  NAI-1507796678v9  

 

        15.6. Credit Inquiries.  Each Borrower hereby authorizes Agent and Lenders (but they  shall have no obligation) to respond to usual and customary credit inquiries from third parties  concerning any Borrower or Subsidiary.         15.7. Severability.  Wherever possible, each provision of the Loan Documents shall be  interpreted in such manner as to be valid under Applicable Law.  If any provision is found to be  invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the  remaining provisions of the Loan Documents shall remain in full force and effect.         15.8. Cumulative Effect; Conflict of Terms.  The provisions of the Loan Documents  are cumulative.  The parties acknowledge that the Loan Documents may use several limitations,  tests or measurements to regulate similar matters, and they agree that these are cumulative and that  each must be performed as provided.  Except as otherwise provided in another Loan Document  (by specific reference to the applicable provision of this Agreement), if any provision contained  herein is in direct conflict with any provision in another Loan Document, the provision herein shall  govern and control.         15.9. Counterparts; Execution.  Any Loan Document may be executed in counterparts,  each of which shall constitute an original, but all of which when taken together shall constitute a  single contract.  This Agreement shall become effective when Agent has received counterparts  bearing the signatures of all parties hereto.  Delivery of a signature page of any Loan Document  by  telecopy  or  other  electronic  means  shall  be  effective  as  delivery  of a  manually  executed  counterpart of such agreement.  The words  “execution,” “execute”, “signed,” “signature,” and  words of like import in or related to any document to be signed in connection with this Agreement  and  the  transactions  contemplated  hereby  (including  without  limitation  Assignment  and  Acceptances, amendments or other modifications, Notices of Borrowing, waivers and consents)  shall be deemed to include electronic signatures, the electronic matching of assignment terms and  contract formations on electronic platforms approved by the Agent, 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;  provided that notwithstanding anything contained herein to the contrary the Agent is under no  obligation to agree to accept electronic signatures in any form or in any format unless expressly  agreed to by the Agent pursuant to procedures approved by it.         15.10. Entire Agreement.  Time is of the essence with respect to all Loan Documents and  Obligations.   The  Loan  Documents  constitute  the  entire agreement,  and  supersede  all  prior  understandings and agreements, oral or written, among the parties relating to the subject matter  hereof.         15.11. Relationship with Lenders.  The obligations of each Lender hereunder are several,  and no Lender shall be responsible for the obligations or Revolver Commitments of any other  Lender.  Amounts payable hereunder to each Lender shall be a separate and independent debt.  It  shall not be necessary for Agent or any other Lender to be joined as an additional party in any  proceeding for such purposes.  Nothing in this  Agreement and no action of Agent or Lenders  pursuant  to  the  Loan  Documents  shall  be  deemed  to  constitute  Agent  and  Lenders  to  be  a                                        117  NAI-1507796678v9  

 

  partnership, association, joint venture or any other kind of entity, nor to constitute control of any  Borrower.         15.12. No Advisory or Fiduciary Responsibility.  In connection with all aspects of each  transaction contemplated by any Loan Document, Borrowers acknowledge and agree that (a)(i)  this credit facility and any related arranging or other services by Agent, any Lender, any of their  Affiliates or any arranger are arm’s-length commercial transactions between Borrowers and such  Person; (ii) Borrowers have consulted their own legal, accounting, regulatory and tax advisors to  the  extent  they  have  deemed  appropriate;  and  (iii)  Borrowers  are  capable  of  evaluating  and  understanding, and do understand and accept, the terms, risks and conditions of the transactions  contemplated by the Loan Documents; (b) each of Agent, Lenders, their Affiliates and any arranger  is and has been acting solely as a principal in connection with this credit facility, is not the financial  advisor, agent or fiduciary for Borrowers, any of their Affiliates or any other Person, and has no  obligation  with  respect  to  the  transactions  contemplated  by  the  Loan  Documents  except  as  expressly  set  forth  therein;  and  (c)  Agent,  Lenders,  their  Affiliates  and  any  arranger  may  be  engaged in a broad range of transactions that involve interests that differ from Borrowers and their  Affiliates, and have no obligation to disclose any of such interests to Borrowers or their Affiliates.   To the fullest extent permitted by Applicable Law, each Borrower hereby waives and releases any  claims that it may have against Agent, Lenders, their Affiliates and any arranger with respect to  any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any  transaction contemplated by a Loan Document.         15.13. Process Agent.  Without prejudice to any other mode of service allowed under any  relevant law, each Borrower:         (i)   irrevocably appoints National Registered Agents, Inc. as its agent for service of process in        relation to any proceedings before the New York courts in connection with any Loan Document;        and         (ii)  agrees that failure by an agent for service of process to notify the relevant Borrower of the        process will not invalidate the proceedings concerned.               If any person appointed as an agent for service of process is unable for any reason to act   as agent for service of process, the Company (on behalf of all the Obligors) must immediately (and in any   event within five days of such event taking place) appoint another agent on terms acceptable to Agent.    Failing this, Agent may appoint another agent for this purpose.         15.14. Confidentiality.  Each of Agent, Lenders and Issuing Bank agrees to maintain the  confidentiality of all Information (as defined below) with the same degree of care that it uses to  protect its confidentiality information, except that Information may be disclosed (a) to its Related  Parties  (provided such Persons are informed of the confidential  nature of the  Information and  instructed to  keep such Information  confidential) involved in  the transaction;  (b) to  the extent  requested  by  any  governmental,  regulatory  or  self-regulatory  authority  purporting  to  have  jurisdiction over it or its Related Parties; (c) to the extent required by Applicable Law or by any  subpoena or similar legal process; (d) to any other party hereto; (e) in connection with any action  or  proceeding,  or  other  exercise  of  rights  or  remedies,  relating  to  any  Loan  Documents  or  Obligations;  (f)  subject  to  an  agreement  containing  provisions  substantially  the  same  as  this                                        118  NAI-1507796678v9  

 

  Section 15.14, to any Transferee or any actual or prospective party (or its Related Parties) to any  Bank Product or to any swap, derivative or other transaction under which payments are to be made  by reference to an Obligor or Obligor’s obligations; (g) with the consent of Borrower Agent; or  (h) to the extent such Information (i) becomes publicly available other than as a result of a breach  of  this Section  15.14 or  (ii)  is  available  to  Agent,  any  Lender,  Issuing  Bank  or  any  of  their  Affiliates on a nonconfidential basis from a source other than Borrowers.  Notwithstanding the  foregoing,  Agent  and  Lenders  may  publish or  disseminate  general  information  describing  this  credit  facility,  including  the  names  and  addresses  of  Borrowers  and  a  general  description  of  Borrowers’ businesses, and may use Borrowers’ logos, trademarks, product photographs or name  in advertising materials.  As used herein, “Information” means all information received from an  Obligor or Subsidiary relating to it or its business or to the Collateral. Any Person required to  maintain the confidentiality of Information pursuant to this Section 15.14 shall be deemed to have  complied if it exercises the same degree of care to maintain the confidentiality of such Information  that  it  accords  its  own  confidential  information.   Each  of  Agent,  Lenders  and  Issuing  Bank  acknowledges that (i) Information may include material non-public information concerning an  Obligor or Subsidiary; (ii) it has developed compliance procedures regarding the use of material  non-public information; and (iii) it will handle such material non-public information in accordance  with Applicable Law, including federal and state securities laws.  This Section 15.14 shall survive  Full Payment of the Obligations.         15.15. [Reserved].         15.16. GOVERNING  LAW.   THIS  AGREEMENT  AND  THE  OTHER  LOAN  DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE  LAWS OF THE STATE OF NEW YORK.         15.17. Consent to Forum; Bail-In of EEA Financial Institutions.                 15.17.1.    Forum.  EACH PARTY HERETO HEREBY CONSENTS TO THE  EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING  IN  NEW  YORK  COUNTY  AND  OF  THE  UNITED  STATES  DISTRICT  COURT  OF  THE  SOUTHERN  DISTRICT  OF  NEW  YORK,  AND  ANY  APPELLATE  COURT  FROM  ANY  THEREOF, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN  DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY  IT SOLELY IN ANY SUCH COURT.  EACH PARTY HERETO IRREVOCABLY WAIVES  ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH  COURT’S  PERSONAL  OR  SUBJECT  MATTER  JURISDICTION,  VENUE  OR  INCONVENIENT  FORUM.   EACH  PARTY  HERETO  IRREVOCABLY  CONSENTS  TO  SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 15.4.1.   A final judgment in any proceeding of any such court shall be conclusive and may be enforced in  other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.               15.17.2.    Other Jurisdictions.  Nothing herein shall limit the right of Agent or  any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any  party  to  serve  process  in  any  other  manner  permitted  by  Applicable  Law.   Nothing  in  this  Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained  in any forum or jurisdiction.                                         119  NAI-1507796678v9  

 

              15.17.3.    Acknowledgement  and  Consent  to  Bail-In  of  EEA  Financial  Institutions.   Notwithstanding anything to the contrary in any Loan Document or in any other  agreement, arrangement or understanding among the parties, each party hereto (including each  Secured Party) acknowledges that any liability arising under a Loan Document of any Secured  Party that is an EEA Financial Institution, 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 under any  Loan  Documents  which  may  be  payable  to  it  by  any  Secured  Party  that  is  an  EEA  Financial  Institution; and (b) the effects of any Bail-in Action on any such liability, including (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 any Loan 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.          15.18. Waivers by Borrowers.  To the fullest extent permitted by Applicable Law,  each Borrower waives (a) the right to trial by jury (which Agent and each Lender hereby  also  waives)  in any  proceeding  or  dispute  of  any  kind  relating  in  any  way  to  any  Loan  Documents,  Obligations  or  Collateral;  (b)  presentment,  demand,  protest,  notice  of  presentment, default, non-payment, maturity, release, compromise, settlement, extension or  renewal  of  any  commercial  paper,  accounts,  documents,  instruments,  chattel  paper  and  guaranties at any time held by Agent on which a Borrower may in any way be liable, and  hereby ratifies anything Agent may do in this regard; (c) notice prior to taking possession or  control of any Collateral (except as required under the Loan Documents); (d) any bond or  security that might be required by a court prior to allowing Agent to exercise any rights or  remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim  against Agent, Issuing Bank or any Lender, on any theory of liability, for special, indirect,  consequential, exemplary or punitive damages (as opposed to direct or actual damages) in  any way relating to any Enforcement Action, Obligations, Loan Documents or transactions  relating thereto; and (g) notice of acceptance hereof.  Each Borrower acknowledges that the  foregoing waivers are a material inducement to Agent, Issuing Bank and Lenders entering into this  Agreement  and  that  Agent  and  Lenders are  relying  upon  the  foregoing  in  their  dealings  with  Borrowers.  Each Borrower has reviewed the foregoing waivers with its legal counsel and has  knowingly and voluntarily waived its jury trial and other rights following consultation with legal  counsel.  In the event of litigation, this Agreement may be filed as a written consent to a trial by  the court.         15.19. Patriot Act Notice.  Agent and Lenders hereby notify Borrowers that pursuant to  the requirements of the Patriot Act, Agent and Lenders are required to obtain, verify and record  information that identifies each Borrower, including its legal name, address, tax ID number and  other information that will allow Agent and Lenders to identify it in accordance with the Patriot  Act.  Agent and Lenders will also require information regarding each personal guarantor, if any,  and may require information regarding Borrowers’ management and owners, such as legal name,  address, social security number and date of birth.  Borrowers shall, promptly upon request,  provide  all documentation and other information as Agent, Issuing Bank or any Lender may reasonably                                        120  NAI-1507796678v9  

 

  request  from  time  to  time  in  order  to  comply  with  any  obligations  under  any  “know  your  customer,” anti-money laundering or other requirements of Applicable Law.         15.20. Effect of Amendment and Restatement.  This Agreement is intended to amend  the Second A&R Loan Agreement, without novation, and solely for convenience of reference, to  restate  it.   For  the  avoidance  of  doubt,  this  Agreement  shall  not  become  effective  until  the  satisfaction (or waiver)  of the requirements  set  forth in Section 6.2 and the occurrence of the  Effective Date.  The Company and each other Obligor hereby acknowledge, certify and agree that  the “Obligations” outstanding under and  as  defined in  the Original  Loan Agreement as  of the  Restatement Effective Date,  the A&R Loan Agreement as of the Second Restatement Effective  Date and  the  Second  A&R  Loan  Agreement  as  of  the  Effective  Date,  continue  to  remain  Obligations outstanding under this Agreement (except to the extent such existing Obligations are  Excluded Swap Obligations).  Except as expressly modified herein, all of the terms and provisions  of the (x) Original Loan Agreement shall continue to apply for the periods prior to the Restatement  Effective Date, (y) the A&R Loan Agreement shall continue to apply for periods period to the  Second Restatement Effective Date and (z) the Second A&R Loan Agreement shall continue to  apply for the periods prior to the Effective Date, in each case, including any determinations of  payment  dates,  interest  rates,  compliance  with  covenants  and  other  obligations,  accuracy  of  representations and warranties, Events of Default or any amount payable to Agent or Lenders.   From and after the Effective Date, all references in the Notes and other Loan Documents to (i) the  “Loan Agreement” shall be deemed to include references to this Agreement, and (ii) the “Lenders”  or “Agent” shall mean such terms as defined in this Agreement.  As to all periods occurring on or  after the Effective Date, all of the covenants in  the Original Loan Agreement, the A&R Loan  Agreement and the Second A&R Loan Agreement shall be of no further force and effect (with  respect to such periods), it being understood that all obligations of Borrowers under the Original  Loan  Agreement, the  A&R  Loan  Agreement and  the  Second  A&R  Loan  Agreement  shall  be  governed by this Agreement from and after the Effective Date.           15.21. Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the  liens and security interests granted to Agent pursuant to this Agreement in any Term Loan First  Lien Collateral and the exercise of any right or remedy by Agent with respect to any Term Loan  First Lien Collateral hereunder are subject to the provisions of the Intercreditor Agreement.  In the  event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the  terms of the Intercreditor Agreement shall govern and control. For so long as the Intercreditor  Agreement remains in effect, the delivery of any Term Loan First Lien Collateral to the Term Loan  Agent  as  required  by  the  Intercreditor  Agreement  shall  satisfy  any  delivery  requirement  with  respect  to  such  Collateral  hereunder.   Any  reference  in  this  Agreement  or  any  other  Loan  Document to “first priority lien” or words of similar effect in describing Liens created hereunder  or under any other Loan Document shall be understood to refer to such priority as set forth in the  Intercreditor Agreement.          15.22. Supported  QFCs.   To  the  extent  that  the  Loan  Documents  provide  support,  through a guarantee or otherwise, for any Swap Contract or any other agreement or instrument that  is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the  parties  acknowledge  and  agree  as  follows  with  respect  to  the  resolution  power  of  the  Federal  Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd- Frank  Wall  Street  Reform  and  Consumer  Protection  Act  (together  with  the  regulations  promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported  QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan                                       121  NAI-1507796678v9  

 

  Documents and any Supported QFC may in fact be stated to be governed by the laws of the State  of New York and/or of the United States or any other state of the United States):               15.22.1.    Acknowledgement. In the event a Covered Entity that is party to a  Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special  Resolution  Regime,  the  transfer  of  such Supported  QFC  and  the  benefit  of  such  QFC  Credit  Support (and any interest and obligation in or under such Supported QFC and such QFC Credit  Support, and any rights in property securing such Supported QFC or such QFC Credit Support)  from such Covered Party will be effective to the same extent as the transfer would be effective  under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support  (and any such interest, obligation and rights in property) were governed by the laws of the United  States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a  Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default  Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC  Credit Support that may be exercised against such Covered Party are permitted to be exercised to  no greater extent than such Default Rights could be exercised under the U.S. Special Resolution  Regime if the Supported QFC and the Loan Documents were governed by the laws of the United  States or a state of the United States. Without limitation of the foregoing, it is understood and  agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event  affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.               15.22.2.    QFC Definitions. As used in this Section 15.22, the following terms  have the following meanings:                     “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined         under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.                     “Covered Entity” means any of the following: (i) a “covered entity” as that term         is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as         that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered         FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).                     “Default Right” has the meaning assigned to that term in, and shall be interpreted         in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.                     “QFC” has the meaning assigned to the term “qualified financial contract” in,         and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).         15.23. NO  ORAL  AGREEMENT.  THIS  AGREEMENT  AND  THE  OTHER  LOAN  DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,  CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  BETWEEN  THE  PARTIES.   THERE  ARE  NO  UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.                  [Remainder of page intentionally left blank; signatures begin on following page]                                       122  NAI-1507796678v9  

 

                                                                                             123  NAI-1507796678v9  

 

        IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set  forth above.                                      BORROWERS:                                                                          COMMERCIAL VEHICLE GROUP, INC.                                                                                                               By:                                                                Name: Tim Trenary                                     Title: Chief Financial Officer                                     Address:                                           7800 Walton Parkway                                           New Albany, OH 43054                                           Attn: Chief Financial Officer                                           Telecopy: (614) 289-5365                                                                                                               TRIM SYSTEMS, INC.                                     TRIM SYSTEMS OPERATING CORP.                                     CABARRUS PLASTICS, INC.                                     MAYFLOWER VEHICLE SYSTEMS, LLC                                     CVG MANAGEMENT CORPORATION                                     CVG LOGISTICS, LLC                                     CVG ALABAMA, LLC                                     CVG CVS HOLDINGS LLC                                     CVG AR LLC                                     CVG MONONA LLC                                     CVG MONONA WIRE LLC                                     CVG NATIONAL SEATING COMPANY LLC                                     CVG SPRAGUE DEVICES LLC                                                                                                               By:                                                                Name: Tim Trenary                                     Title: Chief Financial Officer                                                                                                                     124  NAI-1507796678v9  

 

                                       AGENT AND LENDERS:                                                                          BANK OF AMERICA, N.A.,                                     as Agent and Lender                                                                                                               By:                                                                Name:                                      Title:                                        Address:                                           135 S. LaSalle, 9th Floor                                           Chicago, IL 60603                                           Telecopy: (312) 453-2234                                                                                                                                                    JPMORGAN CHASE BANK, N.A.,                                     as a Lender                                                                                                               By:                                                                Name:                                      Title:                                        Address:                                                                                                                                                        125  NAI-1507796678v9  

 

                                       SCHEDULE 1.1                                          to                               Loan and Security Agreement                         REVOLVER COMMITMENTS OF LENDERS       Lender                         Revolver Commitment                                  Bank of America, N.A.         Tranche A Revolver Commitment: $67,500,000                                Tranche B Revolver Commitment:$5,250,000                                Aggregate Revolver Commitment: $67,500,000                                  JPMorgan Chase Bank, N.A.                                     Tranche A Revolver Commitment: $22,500,000                                Tranche B Revolver Commitment $1,750,000                                                                Aggregate Revolver Commitment: $22,500,000                                        [* The total commitment is $67.5 million for BoA and $22.5 million for JPMorgan for a total of $90    million. Of the $90 million, $7 million is Tranche B (FILO), and as that amortizes, the full amount of the    Tranche A commitment becomes available (subject to the applicable Borrowing Base availability.]

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