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TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT dated as of July 28, 2020 (this “Agreement”) is entered into by and among (i) CLARIVATE PLC, a public limited company organized under the laws of the Island of Jersey (the “Company”), (ii) CHURCHILL CAPITAL CORP, a Delaware corporation (“Churchill”), (iii) CAMELOT HOLDINGS (JERSEY) LIMITED, a private limited company organized under the laws of the Island of Jersey (“Camelot”), (iv) the parties listed under the heading “ONEX SHAREHOLDERS” on the signature pages hereto (collectively, the “Onex Shareholders”), (v) the party listed under the heading “BARING SHAREHOLDER” on the signature pages hereto (the “Baring Shareholder,” and together with the Onex Shareholders, the “Investor Shareholders”), (vi) the parties listed under the heading “CHURCHILL FOUNDERS” on the signature pages hereto (the “Churchill Founders”) and (vii) REDTOP HOLDINGS LIMITED, a private company limited by shares incorporated under the laws of the Island of Jersey (“Seller”).
WHEREAS, (i) each of the Company, Camelot, the Investor Shareholders and the Management Shareholders named therein is party to that certain Amended and Restated Shareholders Agreement dated as of January 14, 2019 (as amended, the “Shareholders Agreement”), (ii) each of the Company, Churchill, Camelot, Churchill Sponsor LLC, the Founders named therein and Garden State Capital Partners LLC is party to that certain Sponsor Agreement dated as of January 14, 2019 (as amended, the “Sponsor Agreement”), and (iii) each of the Company and Jerre L. Stead is party to that certain Director Nomination Agreement dated as of May 13, 2019 (as amended, the “Director Nomination Agreement,” and together with the Shareholders Agreement and the Sponsor Agreement, the “Terminating Agreements”);
WHEREAS, (i) (x) pursuant to Section 6.3 of the Shareholders Agreement, the Shareholders Agreement may be terminated upon the written agreement of the Company and the Investor Shareholders, and (y) pursuant to Section 6.8 of the Shareholders Agreement, the Shareholders Agreement may be amended only by a written instrument duly executed by the Company and the Investor Shareholders (but only for so long as any Investor Shareholder holds any Company Shares (as defined therein)), (ii) pursuant to Section 12 of the Sponsor Agreement, the Sponsor Agreement may only be changed, amended, modified or waived as to any particular provision by a written instrument executed by the Company, Camelot and the other parties thereto charged with such change, amendment, modification or waiver, and (iii) pursuant to Section 16 of the Director Nomination Agreement, the Director Nomination Agreement may only be modified, amended or waived if such modification, amendment or waiver is approved in writing by the Company and Jerre L. Stead; 
WHEREAS, each of the Company, Camelot UK Bidco Limited (the “UK Buyer”), Clarivate IP (US) Holdings Corporation (“US Buyer,” and together with the UK Buyer, the “Buyers”), and Seller, have entered into a Purchase Agreement dated as of the date hereof and attached hereto as Exhibit A (as it may be amended from time to time hereafter in accordance with its terms, the “Purchase Agreement”); and 
WHEREAS, as a condition to the willingness of Seller to enter into the Purchase Agreement, and as an inducement and in consideration thereof, and in connection therewith, each of the Company, Churchill, Camelot, the Investor Shareholders and the Churchill Founders (collectively, the “Terminating Parties”) are entering into this Agreement in order to, among other things, (i) cause the Terminating Agreements to be terminated in each case in accordance with the terms thereof effective as of, and subject to, the occurrence of the Closing, (ii) release the Released Parties (as defined below) from any Claims (as defined below) arising out of, under, in connection with or in relation to, in whole or in part, any Terminating Agreement as provided in Section 3 and (iii) covenant to deliver signature pages to (x) that certain Registration Rights Agreement by and among the Company, the Investor Shareholders, the Churchill Founders and the other parties thereto, in all but de minimis respects in the form attached hereto as Exhibit B (the “New Registration Rights Agreement”), and (y) that certain Investor Rights Agreement by and among the Company and the other parties thereto, in all but de minimis respects in the form attached hereto as Exhibit C (the “Investor Rights Agreement”), at Closing;
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NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Certain Capitalized Terms. Unless otherwise provided herein, capitalized terms used but not defined herein shall have the meanings given in the Purchase Agreement.  The Purchase Agreement as in effect on the date hereof is attached hereto as Exhibit A.  The Company will promptly provide the Investor Shareholders with true and correct copies of any amendments to the Purchase Agreement entered into after the date hereof; provided that in no event shall any failure to provide any amendment to the Purchase Agreement impact the releases, waivers, covenants and agreements of the parties hereto or the termination of the Terminating Agreements in accordance with Section 2 or any of the Releasing Parties’ obligations pursuant to Section 4 below. The Support Agreement as in effect on the date hereof is attached hereto as Exhibit D.
2.Termination.   Notwithstanding anything in any Terminating Agreement to the contrary:
(a)Each of the Terminating Parties agrees that, in each case with respect to the Terminating Agreements to which such party hereto is a party, each of the Terminating Agreements shall terminate automatically and irrevocably and without any further action on the part of any Person effective as of, and subject to the occurrence of, the Closing, and from which time the Terminating Agreements shall have no further force or effect and none of the Terminating Parties (or any Subsidiary of the Company (including, after the Closing, any Acquired Company Entity)) shall have any rights or obligations thereunder or with respect thereto, contingent or otherwise; and
(b)Effective as of immediately prior to the Closing, no director of the Company is any longer an “Onex Shareholder Designee” or “Baring Shareholder Designee” (as each such term is defined in Article ‎44.2 of the Company’s Articles of Association), it being understood that (i) no director of the Company who was formerly an Onex Shareholder Designee or Baring Shareholder Designee shall be obligated to resign or otherwise step down from the board of directors of the Company solely by reason of termination of the Shareholders Agreement, (ii) Article 44.12 and Article 44.13 of the Company’s Articles of Association shall continue to apply until such time as no director of the Company who was an “Onex Shareholder Designee” or a “Baring Shareholder Designee” remains on the board of directors of the Company and (iii) each director of the Company who was an “Onex Shareholder Designee” or a “Baring Shareholder Designee” and who remains on the board of directors of the Company may share confidential, nonpublic information about the Company and its Subsidiaries with the Onex Investor Parties and the Baring Investor Parties (as each such term is defined in the Investor Rights Agreement), respectively, and each of their respective parent entities, general partners and managing members and any directors, officers, employees, agents, accountants or attorneys of the foregoing Persons so long as such Persons agree to keep such information confidential in accordance with Section 4.03 of the Investor Rights Agreement, subject to applicable Law, it being understood and agreed that the Onex Investor Parties and Baring Investor Parties, as applicable, shall be liable for any breach of this provision by any such Person (as if such Person was a party hereto).
3.Release. Effective as of the Closing, each of the Terminating Parties, on behalf of itself and its Affiliates, and its and their respective predecessors, successors and assigns and, in their capacities as such, the equityholders (including, without limitation, stockholders, partners and members), directors, managers, officers, employees, consultants, attorneys, agents, parents, subsidiaries, successors and assigns of each of the foregoing (collectively, the “Releasing Parties”), forever waives, releases, remises and discharges each of the other Terminating Parties and each of its Subsidiaries and their respective predecessors, successors and assigns and, in their capacities as such, the equityholders (including, without limitation, stockholders, partners and members), directors, managers, officers, employees, consultants, attorneys, agents, parents, subsidiaries, successors and assigns of each of the foregoing (collectively, the “Released Parties”) from any Claim that any Releasing Party may currently have, or may have in the future, arising out of, under, in connection with or in relation to, in whole or in part, any Terminating Agreement, including, without limitation, performance by any 
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party thereunder or any breach thereof (collectively, the “Released Claims”). Each Releasing Party, on behalf of itself and its Affiliates, and its and their respective predecessors, successors and assigns and, in their capacities as such, the equityholders (including, without limitation, stockholders, partners and members), directors, managers, officers, employees, consultants, attorneys, agents, parents, subsidiaries, successors and assigns of each of the foregoing, (i) represents that it has not assigned or transferred or purported to assign or transfer to any Person all or any part of, or any interest in, any Claim of any nature, character or description whatsoever, which is or which purports to be released or discharged by this ‎Section 3 and (ii) acknowledges that the Releasing Parties may hereafter discover facts other than or different from those that they know or believe to be true with respect to the subject matter of the Released Claims, but hereby expressly agrees that such Releasing Party (on behalf of itself and its Affiliates, and its and their respective predecessors, successors and assigns and, in their capacities as such, the equityholders (including, without limitation, stockholders, partners and members), directors, managers, officers, employees, consultants, attorneys, agents, parents, subsidiaries, successors and assigns of each of the foregoing) shall have waived and fully, finally and forever settled, released and relinquished any known or unknown, suspected or unsuspected, accrued or unaccrued, disclosed or undisclosed, liquidated or unliquidated, asserted or unasserted, or contingent or noncontingent claim with respect to the Released Claims, whether or not concealed or hidden, without regard to the subsequent discovery or existence of such different or additional facts. Each Releasing Party (on behalf of itself and its Affiliates, and its and their respective predecessors, successors and assigns and, in their capacities as such, the equityholders (including, without limitation, stockholders, partners and members), directors, managers, officers, employees, consultants, attorneys, agents, parents, subsidiaries, successors and assigns of each of the foregoing) hereby acknowledges and agrees that if, after the Closing, such Releasing Party (or any of its Affiliates, or its and their respective predecessors, successors and assigns or, in their capacities as such, the equityholders (including, without limitation, stockholders, partners and members), directors, managers, officers, employees, consultants, attorneys, agents, parents, subsidiaries, successors and assigns of each of the foregoing) should make any Claim or commence or threaten to commence any Action against any Released Party with respect to any Released Claim, this ‎Section 3 may be raised as a complete and absolute bar to any such Claim or Action, and the applicable Released Party may recover from such Releasing Party all costs and expenses incurred in connection with such Claim or Action, including attorneys’ fees.  For purposes of this Agreement, “Claim” means any and all demands, claims, causes of action, suits, disputes, accounts, bonds, bills, controversies, damages, costs, expenses, demands, judgments, and other Liabilities of whatever kind or nature, in law or in equity, known or unknown, asserted or unasserted, contingent or liquidated.Notwithstanding the foregoing, the Released Claims shall not include any Action or Claim arising under this Agreement as a result of a breach hereof.
4.New Governance Agreements. At or prior to the Closing, the Company, Seller, each Onex Shareholder, each Baring Shareholder, Churchill Sponsor LLC, Garden State Capital Partners LLC, M. Klein Associates, Inc., JMJS Group – II, LP, Jerre L. Stead, Michael S. Klein and Sheryl von Blucher shall each deliver (and Seller shall cause Capri TopCo to deliver) to the Company and the Onex Shareholders and the Baring Shareholders, (a) a duly executed counterpart signature page to the Investor Rights Agreement and (b) a duly executed counterpart signature page to the New Registration Rights Agreement.  Each of Seller and the Company further covenants and agrees that, from the date hereof until the Closing, neither Seller nor the Company shall modify, amend or waive (i) the terms of Section 1.04 of the Support Agreement or (ii) other than in de minimis respects, the forms of the New Registration Rights Agreement or Investor Rights Agreement attached to the Purchase Agreement, in either case without the prior written consent of the Onex Shareholders and the Baring Shareholders.

5.Further Assurances. Each of the parties hereto hereby further covenants and agrees to execute and deliver all further documents and agreements and take all further action reasonably requested by another party hereto, in each case, that may be reasonably necessary or desirable in order to enforce and effectively implement the terms and conditions of this Agreement. Without limiting the generality of the foregoing, each of 
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the parties hereto shall cooperate reasonably with each other and take such actions as may be required to effectuate the provisions of this Agreement in accordance with the requirements of Jersey law or other Applicable Law.
6.Complete Agreement. This Agreement embodies the complete agreement and understanding among the parties hereto with respect to the subject matter of this Agreement and supersedes and preempts any prior understandings, agreements or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any way.
7.Successors and Assigns. This Agreement is intended to bind, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.  No party to this Agreement may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other parties hereto.
8.Counterparts; Governing Law. This Agreement may be executed in two or more counterparts (including by means of facsimile or other electronic transmission), each of which shall be deemed to be an original and all of which shall constitute the same instrument. This Agreement and all claims and causes of action arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state that would mandate or allow the application of the laws of any other jurisdiction.
9.WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.Headings. The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.
11.Termination. This Agreement shall terminate automatically and without any further action on the part of any party hereto effective as of, and subject to the occurrence of, the termination of the Purchase Agreement pursuant to Section 10.01 thereof (without the Closing thereunder having occurred) and from which time this Agreement shall have no further force or effect. 
12.Specific Enforcement.  Each party hereto acknowledges that the remedies at law of the other parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
									
		CLARIVATE PLC	
			
		By:	/s/ Stephen Hartman

			Name: Stephen Hartman

			Title:  General Counsel

			

									
		CHURCHILL CAPITAL CORP	
			
		By:	/s/ Richard Hanks

			Name: Richard Hanks
			Title:  Chief Financial Officer

			

									
		CAMELOT Holdings (Jersey) Limited
	
			
		By:	/s/ Stephen Hartman

			Name: Stephen Hartman
			Title:  General Counsel

[Signature page to Termination Agreement]

Onex Shareholders:
									
		NEW PCO II INVESTMENTS LTD	
			
		By:	/s/ Christopher A. Govan

			Name: Christopher A. Govan

			Title: Vice President

			
		By:	/s/ Michelle Iskander

			Name: Michelle Iskander

			Title: Secretary

			

									
		ONEX PARTNERS HOLDINGS LLC
	
			
		By:	/s/ Joshua Hausman

			Name: Joshua Hausman

			Title: Director

			

									
		ONEX PARTNERS IV LP
	
		By:	Onex Partners IV GP LP, its general partner
		By:	Onex Partners Manager LP, its agent
		By:	Onex Partners Manager GP ULC, its general partner
			
		By:	/s/ Joshua Hausman

			Name: Joshua Hausman

			Title: Managing Director

			
		By:	/s/ Matthew Ross

			Name: Matthew Ross

			Title: Managing Director

			

[Signature page to Termination Agreement]

									
		ONEX PARTNERS IV PV LP

	
		By:	Onex Partners IV GP LP, its general partner
		By:	Onex Partners Manager LP LLC, its general partner
		By:	Onex Partners Manager GP ULC, its general partner
			
		By:	/s/ Joshua Hausman

			Name: Joshua Hausman

			Title: Managing Director

			
		By:	/s/ Matthew Ross

			Name: Matthew Ross

			Title: Managing Director

			

									
		ONEX PARTNERS IV SELECT LP

	
		By:	Onex Partners IV GP LLC, its general partner
		By:	Onex Partners Manager LP, its agent
		By:	Onex Partners Manager GP ULC, its general partner
			
		By:	/s/ Joshua Hausman

			Name: Joshua Hausman

			Title: Managing Director

			
		By:	/s/ Matthew Ross

			Name: Matthew Ross

			Title: Managing Director

			

									
		ONEX PARTNERS IV GP LP

	
		By:	Onex Partners Manager LP, its agent
		By:	Onex Partners Manager GP ULC, its general partner
			
		By:	/s/ Joshua Hausman

			Name: Joshua Hausman

			Title: Managing Director

			
		By:	/s/ Matthew Ross

			Name: Matthew Ross

			Title: Managing Director

			

[Signature page to Termination Agreement]

									
		ONEX US PRINCIPALS LP

	
		By:	Onex US Principals GP LLC, its general partner
			
		By:	/s/ Matthew Ross

			Name: Matthew Ross

			Title: Director

			

									
		ONEX CAMELOT CO-INVEST LP
	
		By:	Onex Partners IV GP LP, its general partner
		By:	Onex Partners Manager LP, its agent
		By:	Onex Partners Manager GP ULC, its general partner
			
		By:	/s/ Joshua Hausman

			Name: Joshua Hausman

			Title: Managing Director

			
		By:	/s/ Matthew Ross

			Name: Matthew Ross

			Title: Managing Director

[Signature page to Termination Agreement]

Baring Shareholder:
									
		ELGIN INVESTMENT HOLDINGS LIMITED
	
		By:	VSG Corporate Limited
			
		By:	/s/ Siddharth Swarup
			Name: Siddharth Swarup
			Title: Director 

[Signature page to Termination Agreement]

Churchill Founders:
									
		CHURCHILL SPONSOR LLC 
	
			
		By:	/s/ Michael S. Klein

			Name: Michael S. Klein
			Title:
			

									
		GARDEN STATE CAPITAL PARTNERS LLC 
	
			
		By:	/s/ Michael S. Klein

			Name: Michael S. Klein
			Title:
			

									
		M. KLEIN ASSOCIATES, INC. 
           (including in its capacity as Manager)
	
			
		By:	/s/ Michael S. Klein

			Name: Michael S. Klein
			Title:
			

									
		THE IYER FAMILY TRUST DATED 1/25/2001 
	
			
		By:	/s/ Balakrishnan S. Iyer

			Name: Balakrishnan S. Iyer

			Title: Trustee
			

									
		MILLS FAMILY I, LLC	
			
		By:	/s/ Karen G. Mills

			Name: Karen G. Mills
			Title: Managing Member
			

									
		K&BM LP	
			
		By:	/s/ Karen G. Mills

			Name: Karen G. Mills
			Title: Managing Partner

[Signature page to Termination Agreement]

									
		JMJS GROUP –- II, LP	
		By:	/s/ Jerre L. Stead

			Name: Jerre L. Stead
			Title: Executive Chairman & CEO

			
		By:	/s/ Jerre L. Stead

			JERRE L. STEAD
			
		By:	/s/ Michael S. Klein

			MICHAEL S. KLEIN
			
		By:	/s/ Sheryl Von Blucher

			SHERYL VON BLUCHER
			
		By:	/s/ Martin Broughton

			MARTIN BROUGHTON
			
		By:	/s/ Balakrisknan S. Iyer

			BALAKRISHNAN S. IYER
			
		By:	/s/ Karen G. Mills

			KAREN G. MILLS

[Signature page to Termination Agreement]

Seller:
									
		REDTOP HOLDINGS LIMITED 
	
			
		By:	/s/ Gordon Samson
			Name: Gordon Samson 
			Title: Director 

[Signature page to Termination Agreement]

Exhibit A
Purchase Agreement

(Omitted pursuant to Item 601(a)(5) of Regulation S-K.)

Exhibit B
Form of New Registration Rights Agreement

(Omitted pursuant to Item 601(a)(5) of Regulation S-K.)

Exhibit C
Form of Investor Rights Agreement

(Omitted pursuant to Item 601(a)(5) of Regulation S-K.)

Exhibit D
Support Agreement

(Omitted pursuant to Item 601(a)(5) of Regulation S-K.)farmerbros2020amendmentn

                                                                EXECUTION VERSION                                     AMENDMENT NO. 3                                    Dated as of July 23, 2020                                             to                       AMENDED AND RESTATED CREDIT AGREEMENT                                  Dated as of November 6, 2018         THIS AMENDMENT NO. 3 (this “Amendment”) is made as of July 23, 2020 by and among  Farmer Bros. Co., a Delaware corporation (the “Borrower”), the financial institutions listed on the signature  pages hereof and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”),  under that certain Amended and Restated Credit Agreement dated as of November 6, 2018 by and among  the Borrower, the other Loan Parties from time to time party thereto, the Lenders and the Administrative  Agent (as amended by that certain Amendment No. 1, dated as of September 6, 2019, that certain  Amendment No. 2, dated as of March 5, 2020 (“Amendment No. 2”), and as further amended, restated,  supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used  herein and not otherwise defined herein shall have the respective meanings given to them in the Credit  Agreement (as amended hereby).         WHEREAS, the Borrower, the Loan Parties party thereto and the Administrative Agent are party  to that certain Amended and Restated Pledge and Security Agreement, dated as of November 6, 2018 (as  amended by Amendment No. 2 and as further amended, restated, supplemented or otherwise modified from  time to time, the “Security Agreement”);         WHEREAS, the Borrower has requested that the Required Lenders and the Administrative Agent  agree to make certain amendments to the Credit Agreement and the Security Agreement; and         WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent have so agreed  on the terms and conditions set forth herein;         NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions  contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent hereby agree to enter  into this Amendment.         1.     Amendments to the Credit Agreement.           (a)    Effective as of the date of satisfaction of the conditions precedent set forth in Section 3  below (such date, the “Third Amendment Effective Date”), the parties hereto agree that each of the Credit  Agreement and Schedule 2.01A thereto are hereby amended to delete the stricken text (indicated in the  same manner as the following example: stricken text) and to add the double-underlined text (indicated in  the same manner as the following example:  double-underlined text) as set forth on Exhibit A hereto.         (b)    Exhibit B to the Credit Agreement is hereby amended and restated in its entirety as set  forth on Exhibit B hereto.           (c)    Schedules 1.01F, 3.06, 3.15, 6.01, 6.02 and 6.04 to the Credit Agreement are each hereby  amended and restated in their entirety as set forth on Exhibit C hereto.       ACTIVE 258919605 

 

      (d)    Exhibit D hereto is hereby added as a new Exhibit D to the Credit Agreement.            2.     Amendments to the Security Agreement.           (a)    Effective as of the Third Amendment Effective Date, the parties hereto agree that the  Security Agreement is hereby amended to delete the stricken text (indicated in the same manner as the  following example: stricken text) and to add the double-underlined text (indicated in the same manner as  the following example:  double-underlined text) as set forth on Exhibit E hereto.         (b)    Exhibit A to the Security Agreement is hereby amended and restated in its entirety as set  forth on Exhibit F hereto.         (c)    Exhibit G to the Security Agreement is hereby amended and restated in its entirety as set  forth on Exhibit G hereto.         3.     Conditions to Effectiveness.  The effectiveness of this Amendment is subject to the  satisfaction of the following conditions precedent:         (a)    The Administrative Agent (or its counsel) shall have received (i) counterparts of this  Amendment duly executed by the Borrower, the Required Lenders and the Administrative Agent (ii) such  other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably  request in connection with the transactions contemplated by this Amendment and the other Loan  Documents, and (iii) a customary legal opinion of the Loan Parties’ counsel, addressed to the  Administrative Agent, the Issuing Bank and the Lenders (together with any other local counsel opinions, if  required), all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.         (b)    The Administrative Agent (or its counsel) shall have received (i) for the account of each  applicable Lender party hereto that delivers its executed signature page to this Amendment by no later than  5:00 p.m. New York time on July 22, 2020, a consent fee in an amount equal to 0.30% of the Revolving  Commitment of each such consenting Lender under the Credit Agreement on the Third Amendment  Effective Date, which fees will be due and payable on, and subject to the occurrence of, the Third  Amendment Effective Date, (ii) payment of its reasonable and documented out-of-pocket expenses  (including reasonable and documented out-of-pocket fees and expenses of counsel for the Administrative  Agent) in connection with this Amendment, and (iii) all other fees then due and payable to the  Administrative Agent in connection with this Amendment, in each case that have been invoiced at least two  Business Days prior to the date hereof (except as otherwise reasonably agreed by the Borrower).         (c)    The Administrative Agent (or its counsel) shall have received (i) a certificate of each Loan  Party, dated the Third Amendment Effective Date and executed by its Secretary or Assistant Secretary,  which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the  execution, delivery and performance of this Amendment, (B) identify by name and title and bear the  signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party  and (C) contain appropriate attachments, including copies of the certificate or articles of incorporation or  organization of each Loan Party, including all amendments thereto, and a true and correct copy of its  by-laws or operating, management or partnership agreement, or other organizational or governing  documents, and (ii) a recently issued good standing certificate for each Loan Party from its jurisdiction of  organization or the substantive equivalent available in the jurisdiction of organization for each Loan Party  from the appropriate governmental officer in such jurisdiction.          (d)    The Administrative Agent (or its counsel) shall have received a projected cash flow  statement for the Borrower and its Subsidiaries for the thirteen (13) calendar week period commencing with  the first full week after the Third Amendment Effective Date in form and substance substantially consistent                                              2 

 

with the format previously delivered to the Administrative Agent prior to the Third Amendment Effective  Date.          (e)   The Administrative Agent (or its counsel) and each requesting Lender shall have received,  at least five days prior to the Third Amendment Effective Date, all documentation and other information  regarding the Loan Parties reasonably requested in writing at least 5 Business Days prior to the Third  Amendment Effective Date in connection with applicable “know your customer” and anti-money  laundering rules and regulations, including the USA PATRIOT Act.         (f)    The Administrative Agent shall have received a certificate in form and substance  reasonably satisfactory to the Administrative Agent, dated the Third Amendment Effective Date and signed  by the President, a Vice President or a Financial Officer of the Borrower, certifying (i) as to the matters set  forth in Section 4(b) below, (ii) that Availability is not less than zero and (iii) as to the solvency of the  Borrower and its Subsidiaries, taken as a whole, as of the Third Amendment Effective Date and after giving  pro forma effect to the transactions to occur on such date.          (g)   The Administrative Agent (or its counsel) shall have received a Borrowing Base Certificate  which calculates the Borrowing Base as of June 30, 2020 (or such earlier date as agreed to by the  Administrative Agent in its sole discretion), together with customary supporting documentation and  supplemental reporting requested by the Administrative Agent in its Permitted Discretion.          (h)   After giving effect to all Borrowings to be made on the Third Amendment Effective Date  and the issuance of any Letters of Credit on the Third Amendment Effective Date, the sum of (i) excess  Availability plus (ii) Unrestricted Cash shall not be less than $10,000,000.          (i)   Except as otherwise permitted under Section 5 below or under the Credit Agreement (as  amended hereby), each document (including any Uniform Commercial Code financing statement) required  by the Collateral Documents or under law or reasonably requested by the Administrative Agent in its sole  discretion to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the  benefit of itself, the Lenders and the other Secured Parties, a perfected Lien on the Collateral described  therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted  by Section 6.02 of the Credit Agreement (as amended hereby)), shall be in proper form for filing,  registration or recordation.           (j)   Except as otherwise permitted under Section 5 below or under the Credit Agreement (as  amended hereby), and to the extent not previously delivered, the Administrative Agent shall have received  (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement (as  amended hereby), together with an undated stock power for each such certificate executed in blank by a  duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the  Administrative Agent pursuant to the Security Agreement (as amended hereby) endorsed (without recourse)  in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.         4.     Representations and Warranties of the Loan Parties.  Each Loan Party hereby represents  and warrants as follows:         (a)    This Amendment, the Security Agreement (as amended hereby) and the Credit Agreement  (as amended hereby) constitute legal, valid and binding obligations of such Loan Party, enforceable in  accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or  other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of  whether considered in a proceeding in equity or at law.         (b)    As of the date hereof and after giving effect to the terms of this Amendment, (i) no Default                                              3 

 

or Event of Default has occurred and is continuing and (ii) the representations and warranties of such Loan  Party set forth in the Loan Documents (as amended hereby) are true and correct in all material respects with  the same effect as though made on and as of the date hereof (it being understood and agreed that any  representation or warranty which by its terms is made as of a specified date is true and correct in all material  respects only as of such specified date, and that any representation or warranty which is subject to any  materiality qualifier shall be required to be true and correct in all respects).         5.     Post-Closing Covenants. Subject to the occurrence of the Third Amendment Effective  Date, the Borrower hereby agrees to deliver, or cause to be delivered to the Administrative Agent, the items  described on Schedule 5 hereof or take the actions described on Schedule 5 hereof (as applicable), in each  case on or before the dates specified with respect to such items, or, in each case such later date as agreed  by the Administrative Agent in its sole discretion.         6.     Reaffirmation.  Without in any way establishing a course of dealing by the Administrative  Agent or any Lender, each Loan Party hereby (a) reaffirms the terms and conditions of the Credit Agreement  (as amended hereby), the Security Agreement (as amended hereby) and any other Loan Document executed  by it and acknowledges and agrees that such Credit Agreement (as amended hereby), such Security  Agreement (as amended hereby) and each and every such Loan Document executed by it in connection  with the Credit Agreement and the Security Agreement remains in full force and effect and is hereby  reaffirmed, ratified and confirmed, (b) to the extent such Loan Party granted Liens on or security interests  in any of its properties pursuant to any Loan Document and any filing made with any Governmental  Authority relating thereto, hereby ratifies and reaffirms each such grant of security and confirms that such  Liens and security interests continue to secure the Secured Obligations, and (c) to the extent such Loan  Party guaranteed or was an accommodation party with respect to any of the Secured Obligations or any  portion thereof, hereby ratifies and reaffirms such guaranties or accommodation liabilities, in each case,  subject to the limitations set forth in the applicable Loan Document(s).                7.     Prepayment on Third Amendment Effective Date.  To the extent the Borrower  prepays any Loans under the Credit Agreement on the Third Amendment Effective Date, (a) the parties  hereto agree to waive any requirement under the Credit Agreement for prior notice of any such prepayment  of Loans to the extent such prepayment is made on the Third Amendment Effective Date and (b) each  Lender party hereto hereby agrees, solely as to itself, to waive all losses, costs and expenses incurred by  such Lender under Section 2.16 of the Credit Agreement in connection with any such prepayment made on  the Third Amendment Effective Date.         8.     Reference to and Effect on the Credit Agreement and the Security Agreement.         (a)    Upon the effectiveness hereof, each reference in the Credit Agreement to “this  Agreement”, “hereunder”, “hereof”, “herein” or words of similar import, and each reference in the Loan  Documents to “Credit Agreement”, “Security Agreement”, “thereunder”, “thereof”, “therein” or words of  similar import, shall mean and be a reference to the Credit Agreement or the Security Agreement, each as  amended hereby, as applicable.         (b)    The Credit Agreement, the Security Agreement and all other documents, instruments and  agreements executed and/or delivered in connection therewith shall remain in full force and effect and are  hereby ratified and confirmed.         (c)    The execution, delivery and effectiveness of this Amendment shall not operate as a waiver  of any right, power or remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any  provision of the Credit Agreement, the Security Agreement or any other documents, instruments and  agreements executed and/or delivered in connection therewith.                                               4 

 

      (d)    This Amendment is a Loan Document.          9.     Governing Law.  This Amendment shall be construed in accordance with and governed by  the law of the State of New York.         10.    Headings.  Section headings in this Amendment are included herein for convenience of  reference only and shall not constitute a part of this Amendment for any other purpose.         11.    Counterparts.  This Amendment may be executed by one or more of the parties hereto on  any number of separate counterparts, and all of said counterparts taken together shall be deemed to  constitute one and the same instrument.  Signatures delivered by facsimile or other electronic means shall  have the same force and effect as manual signatures delivered in person.  Delivery of an executed signature  page to this Amendment by facsimile or other electronic transmission (e.g., “pdf” or “tif”) shall be effective  as delivery of a manually executed counterpart hereof.  The words “execution,” “signed,” “signature,” and  words of like import in this Amendment shall be deemed to include electronic signatures or the keeping of  records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a  manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the  extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and  National Commerce Act, or any other state laws based on the Uniform Electronic Transactions Act.         12.    Release of Claims.  Each Loan Party hereby represents and warrants that, as of the date of  its execution of this Amendment, there are no claims or offsets against or defenses or counterclaims to its  obligations under the Loan Documents (as amended hereby) and, in accordance therewith, each Loan Party,  both for itself and on behalf of each of its Subsidiaries, hereby: (a) waives any and all such claims, offsets,  defenses or counterclaims, whether known or unknown, arising prior to the date of its execution of this  Amendment and (b) releases and discharges the Administrative Agent, the Lenders and their respective  Related Parties (collectively the “Released Parties”) from any and all obligations, indebtedness, liabilities,  claims, rights, causes of action or demands whatsoever, whether known or unknown, suspected or  unsuspected, in law or equity, which such Loan Party or any of its Subsidiaries ever had, now has, claims  to have or may have against any Released Party arising on or prior to the date hereof and from or in  connection with the Loan Documents (as amended hereby) or the transactions contemplated hereby or  thereby.                                     [Signature Pages Follow]                                               5 

 

 

 

                                      JPMORGAN CHASE BANK, N.A.,                        individually as a Lender and as Administrative Agent                                                                        By:_______________________________________                        Name: Charles W. Shaw                        Title: Authorized Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Signature Page to Amendment No. 3 to  Amended and Restated Credit Agreement dated as of November 6, 2018                     Farmer Bros. Co.                

 

 

 

                      BANK OF AMERICA, N.A.,                        as a Lender                                                                        By:_______________________________________                        Name:  Rick Macias                        Title:  Senior Vice President                                                       Signature Page to Amendment No. 3 to  Amended and Restated Credit Agreement dated as of November 6, 2018                     Farmer Bros. Co. 

 

                        REGIONS BANK,                          as a Lender                                                                              By:_______________________________________                          Name:    David Baynash                         Title:   Senior Vice President                                          Signature Page to Amendment No. 3 to  Amended and Restated Credit Agreement dated as of November 6, 2018                       Farmer Bros. Co. 

 

DocuSign Envelope ID: DB16924F-7A9B-4B48-98FF-C47668CC4886                                                 ADVANTAGE CAPITAL MANAGEMENT LLC -                                                HAYMARKET INSURANCE COMPANY,                                                as a Lender                                                                                                                                                By:_______________________________________                                                Name: Yuan Zhou                                               Title: CIO                                      Signature Page to Amendment No. 3 to                          Amended and Restated Credit Agreement dated as of November 6, 2018                                             Farmer Bros. Co. 

 

                                                     Schedule 5                                Post-Closing Covenants    1.  On or prior to the date that is 45 days after the Third Amendment Effective Date (or such later date      as agreed to by the Administrative Agent in its sole discretion), the Borrower shall either (i) deliver      to  the  Administrative  Agent  evidence  of  the  dissolution  of  Coffee  Bean  International  LLC  or      (ii) ensure that Coffee Bean International LLC has become a Loan Guarantor pursuant to and in      accordance with the provisions of the Credit Agreement.   2.  On or prior to the date that is 60 days after the Third Amendment Effective Date (or such later date      as agreed to by the Administrative Agent in its sole discretion), the Administrative Agent or its      designee shall have conducted a desktop field examination of the Borrower’s and each Domestic      Subsidiary Guarantor’s Accounts and Inventory (it being agreed and acknowledged that failure by      the  Administrative  Agent  to  complete  such  field  examination  within  60  days  after  the  Third      Amendment Effective Date (or by such later date as agreed to by the Administrative Agent, as      applicable) shall not constitute an Event of Default to the extent such failure did not arise from any      act of (or failure to cooperate by) the Borrower or any of its Affiliates or any of their respective      employees, officers, directors or agents).   3.  On or prior to the date that is 60 days after the Third Amendment Effective Date (or such later date      as  agreed  to  by  the  Administrative  Agent  in  its  sole  discretion),  the  Borrower  and  the  Loan      Guarantors shall enter into Deposit Account Control Agreements with the Administrative Agent      and the applicable depository banks in respect of the accounts notified to the Administrative Agent      on or prior to the Third Amendment Effective Date.   4.  On or prior to the date that is 60 days after the Third Amendment Effective Date (or such later date      as agreed to by the Administrative Agent in its sole discretion), the Administrative Agent shall have      engaged  an  appraiser  and  received  an  appraisal  of  the  Borrower’s  and  each  Loan  Guarantor’s      machinery and equipment from a firm reasonably satisfactory to the Administrative Agent (it being      agreed and acknowledged that failure by the Administrative Agent to complete such  appraisal      within 60 days after the Third Amendment Effective Date (or by such later date as agreed to by the      Administrative Agent, as applicable) shall not constitute an Event of Default to the extent such      failure did not arise from any act of (or failure to cooperate by) the Borrower or any of its Affiliates      or any of their respective employees, officers, directors or agents).    5.  On or prior to the date that is 60 days after the Third Amendment Effective Date (or such later date      as agreed to by the Administrative Agent in its sole discretion), the Loan Parties shall deliver to the      Administrative  Agent  (a) such  Mortgage  Instruments in  respect  of  the  Northlake  Property  as      reasonably  requested  by  the  Administrative  Agent  and  (b) Mortgages  and  such  other  related      Mortgage Instruments as are reasonably requested by the Administrative Agent with respect to all      of the owned real property at the following locations, in each case in form and substance reasonably      satisfactory to the Administrative Agent:               1.   13131 N. Broadway Ext. Oklahoma City    OK    73114              2.   9373 Remick Ave.       Arleta           CA    91331              3.   11460 Commercial Pkwy. Castroville      CA    95012              4.   3921 W. Segerstrom Ave. Santa Ana       CA    92704              5.   9901 Bell Ranch Dr.    Sante Fe Springs CA    90670              6.   3880 Technology Way    Carson City      NV    89706                   

 

                  7.   7515 NE 33rd Dr.       Portland         OR    97211                 8.   2450 Boatman Ave.      Sacramento       CA    95691                 9.   8802 Swigert Ct.       Bakersfield      CA    93311                 10.   2751 S. Lilac Ave.    Bloomington      CA    92316                 11.   9 N.E. Skyline Dr.    Lee's Summit     MO    64086     6.  On or prior to the date that is 90 days after the Third Amendment Effective Date (or such later date as     agreed to by the Administrative Agent in its sole discretion), the Loan Parties shall deliver to the     Administrative  Agent  Mortgages  and  such  other  related  Mortgage  Instruments  as  are  reasonably     requested by the Administrative Agent with respect to all of the owned real property at the following     locations, in each case in form and substance reasonably satisfactory to the Administrative Agent:               1.   72205 Corporate Way         Thousand Palms    CA    92276              2.   4243 Arch Rd.               Stockton          CA    95215              3.   12832 Pennridge Dr.         Bridgeton         MO    63044              4.   17190 Yuma St.              Victorville       CA    92395              5.   2230 So. 2000 West          Salt Lake City    UT    84119              6.   3074 84th Lane N.E.         Blaine            MN.   55449              7.   1325 Don Haskins Dr.        El Paso           TX    79936              8.   5911 Office Blvd.           Albuquerque       NM    87109              9.   2385 N. Walgreen St.        Flagstaff         AZ    86004              10.   470 E. Todd Rd.            Santa Rosa        CA    95407              11.   3818 S. Evans Blvd.        Tucson            AZ    85714              12.   3217 Nebraska Ave.         Council Bluffs    IA    51501              13.   4576 N. Bendel             Fresno            CA    93722              14.   2301 S. 18th St.           Union Gap         WA    98903              15.   P.O. Box 67 89803 460 S. A St.  Elko         NV    89801              16.   480 Ryan Ave. Ste. 100     Chico             CA    95973              17.   5753 E. Shelby Dr. Ste. 1  Memphis           TN    38141              18.   1105 Aviation Dr           Lake Havasu       AZ    86404              19.   E 10915 Montgomery Dr.     Spokane           WA    99206              20.   2848 Chipeta               Grand Junction    CO    81501              21.   2625 Enterprise Ave.       Billings          MT    59102              22.   1312 E. Laurel             McAllen           TX    78501              23.   7855 Ostrow St.            San Diego         CA    92111              24.   2004 Lamar Drive           Round Rock        TX    78664     

 

                          EXHIBIT A   Amendments to Credit Agreement           [See attached.]                   

 

                                                                            EXHIBIT A                                                                     CONFORMED COPY                                    Incorporating Amendment No. 1, dated September 6, 2019;  and                                                   Amendment No. 2, dated March 5, 2020 ; and                                                       Amendment No. 3, dated July 23, 2020                       AMENDED AND RESTATED CREDIT AGREEMENT                                         dated as of                                      November 6, 2018                                          among                                    FARMER BROS. CO.,                              The other Loan Parties Party Hereto,                                   The Lenders Party Hereto                  CITIBANK, N.A. and PNC BANK, NATIONAL ASSOCIATION,                                 as Co-Syndication Agents,                      BANK OF AMERICA, N.A.  , and REGIONS BANK,  and                                    SUNTRUST BANK,                                as Co-Documentation Agents                                            and                              JPMORGAN CHASE BANK, N.A.,                                  as Administrative Agent                               ___________________________                              JPMORGAN CHASE BANK, N.A.,                          as Sole Bookrunner and Sole Lead Arranger   US-DOCS\116642938.10 253754568v.10ACTIVE 253754568

 

                                    TABLE OF CONTENTS                                                                                     Page  ARTICLE I  Definitions                                                               1         SECTION SECTION   1.01 Defined Terms                                          1        SECTION SECTION   1.02 Classification of Loans and Borrowings              31 42        SECTION SECTION   1.03 Terms Generally                                     31 43        SECTION SECTION   1.04 Accounting Terms; GAAP                              32 43        SECTION SECTION   1.05 Status of Obligations                               32 44        SECTION SECTION   1.06 Pro Forma Basis                                     32 44        SECTION SECTION   1.07 Limited Condition Acquisitions                      33 44        SECTION SECTION   1.08 Interest Rates; LIBOR Notification                  33 45        SECTION SECTION   1.09 Amendment and Restatement of the Existing Credit Agreement 34 45        SECTION 1.10   Letter of Credit Amounts                                      46  ARTICLE II  The Credits                                                           34 46         SECTION SECTION   2.01 Revolving Commitments                               34 46        SECTION SECTION   2.02 Loans and Borrowings                                34 46        SECTION SECTION   2.03 Requests for Revolving Borrowings                   35 47        SECTION SECTION   2.04 Intentionally Omitted  35 Protective Advances         47        SECTION SECTION   2.05 Swingline Loans  and Overadvances                   35 48        SECTION SECTION   2.06 Letters of Credit                                   37 50        SECTION SECTION   2.07 Funding of Borrowings                               41 55        SECTION SECTION   2.08 Interest Elections                                  42 56        SECTION SECTION   2.09 Termination and Reduction of Revolving Commitments  43 57        SECTION SECTION   2.10 Repayment of Loans; Evidence of Debt                44 58        SECTION SECTION   2.11 Prepayment of Loans                                 45 59        SECTION SECTION   2.12 Fees                                                45 61        SECTION SECTION   2.13 Interest                                            46 61        SECTION SECTION   2.14 Alternate Rate of Interest                          47 62        SECTION SECTION   2.15 Increased Costs                                     48 64        SECTION SECTION   2.16 Break Funding Payments                              49 65        SECTION SECTION   2.17 Withholding of Taxes; Gross-Up                      50 65        SECTION SECTION   2.18 Payments  Generally;  Allocation  of  Proceeds;  Sharing  of  Set-                       offs   53 69        SECTION SECTION   2.19 Mitigation Obligations; Replacement of Lenders      55 71        SECTION SECTION   2.20 Defaulting Lenders                                  56 72        SECTION SECTION   2.21 Returned Payments                                   58 74        SECTION SECTION   2.22 Intentionally Omitted                               58 74        SECTION SECTION   2.23 [Reserved]                                          58 74        SECTION SECTION   2.24 Swap Agreement Obligations                          58 74  ARTICLE III  Representations and Warranties.                                      59 75         SECTION SECTION   3.01 Organization; Powers                                59 75        SECTION SECTION   3.02 Authorization; Enforceability                       59 75        SECTION SECTION   3.03 Governmental Approvals; No Conflicts                59 75        SECTION SECTION   3.04 Financial Condition; No Material Adverse Change     59 75                                            -i-

 

       SECTION SECTION   3.05 Properties                                          59 75        SECTION SECTION   3.06 Litigation and Environmental Matters                60 76        SECTION SECTION   3.07 Compliance with Laws and Agreements; No Default     60 76        SECTION SECTION   3.08 Investment Company Status                           60 76        SECTION SECTION   3.09 Taxes                                               60 76        SECTION SECTION   3.10 ERISA; Plan Assets                                  60 77        SECTION SECTION   3.11 Disclosure                                          61 77        SECTION SECTION   3.12 Intentionally Omitted                               61 77        SECTION SECTION   3.13 Solvency                                            61 77        SECTION SECTION   3.14 Insurance                                           61 78        SECTION SECTION   3.15 Capitalization and Subsidiaries                     61 78        SECTION SECTION   3.16 Security Interest in Collateral                     62 78        SECTION SECTION   3.17 Employment Matters                                  62 78        SECTION SECTION   3.18 Reserve Regulations                                 62 78        SECTION SECTION   3.19 Use of Proceeds                                     62 78        SECTION SECTION   3.20 Burdensome Restrictions                             62 79        SECTION SECTION   3.21 Anti-Corruption Laws and Sanctions                  62 79        SECTION SECTION   3.22 EEA Affected  Financial Institutions                63 79  ARTICLE IV  Conditions.                                                           63 79         SECTION SECTION   4.01 Effective Date                                      63 79        SECTION SECTION   4.02 Each Credit Event                                   65 82  ARTICLE V  Affirmative Covenants.                                                 66 82         SECTION SECTION   5.01 Financial Statements , Borrowing Base Reporting,  and Other Information 66 82        SECTION SECTION   5.02 Notices of Material Events                          68 85        SECTION SECTION   5.03 Existence; Conduct of Business                      68 86        SECTION SECTION   5.04 Payment of Obligations                              68 86        SECTION SECTION   5.05 Maintenance of Properties                           68 87        SECTION SECTION   5.06 Books and Records; Inspection Rights                69 87        SECTION SECTION   5.07 Compliance with Laws and Material Contractual Obligations 69 87        SECTION SECTION   5.08 Use of Proceeds                                     69 87        SECTION SECTION   5.09 Accuracy of Information                             69 88        SECTION SECTION   5.10 Insurance                                           70 88        SECTION SECTION   5.11 Additional Collateral; Further Assurances           70 88        SECTION SECTION   5.12 Post-Closing Covenants                              71 90        SECTION 5.13   Appraisals and Field Exams                                    90  ARTICLE VI  Negative Covenants.                                                   72 91         SECTION SECTION   6.01 Indebtedness                                        72 91        SECTION SECTION   6.02 Liens                                               74 93        SECTION SECTION   6.03 Fundamental Changes                                 75 95        SECTION SECTION   6.04 Investments, Loans, Advances, Guarantees and Acquisitions 76 95        SECTION SECTION   6.05 Asset Sales                                         78 98        SECTION SECTION   6.06 Sale and Leaseback Transactions                     79 99        SECTION SECTION   6.07 Swap Agreements                                     79 99        SECTION SECTION   6.08 Restricted Payments; Certain Payments of Indebtedness 80 100        SECTION SECTION   6.09 Transactions with Affiliates                       81 101                                            -ii -

 

       SECTION SECTION   6.10 Restrictive Agreements                             81 101        SECTION SECTION   6.11 Amendment of Material Documents                    81 101        SECTION SECTION   6.12 Financial Covenants                                81 102        SECTION SECTION   6.13 Farmer Trademark                                   83 103        SECTION 6.14   Minimum Liquidity                                            103        SECTION 6.15   Capital Expenditures                                         103  ARTICLE VII  Events of Default.                                                  83 103         SECTION SECTION   7.01 Events of Default                                  83 103        SECTION SECTION   7.02 Application of Payments                            86 106  ARTICLE VIII  The Administrative Agent.                                          87 107         SECTION SECTION   8.01 Authorization and Action                           87 107        SECTION SECTION   8.02 Administrative Agent’s Reliance, Indemnification, Etc. 89 110        SECTION SECTION   8.03 Intentionally Omitted                              90 111        SECTION SECTION   8.04 The Administrative Agent Individually              90 111        SECTION SECTION   8.05 Successor Administrative Agent                     91 111        SECTION SECTION   8.06 Acknowledgments of Lenders and Issuing Bank        92 112        SECTION SECTION   8.07 Collateral Matters                                 92 113        SECTION SECTION   8.08 Credit Bidding                                     93 114        SECTION SECTION   8.09 Flood Laws                                         94 115  ARTICLE IX  Miscellaneous.                                                       94 115         SECTION SECTION   9.01 Notices                                            94 115        SECTION SECTION   9.02 Waivers; Amendments                                96 118        SECTION SECTION   9.03 Expenses; Limitation of Liability;  Indemnity; Damage Waiver 99 120        SECTION SECTION   9.04 Successors and Assigns                            101 123        SECTION SECTION   9.05 Survival                                          104 126        SECTION SECTION   9.06 Counterparts; Integration; Effectiveness; Electronic Execution 104 127        SECTION SECTION   9.07 Severability                                      105 128        SECTION SECTION   9.08 Right of Setoff                                   105 128        SECTION SECTION   9.09 Governing Law; Jurisdiction; Consent to Service of Process 106 129        SECTION SECTION   9.10 Headings                                          107 130        SECTION SECTION   9.11 Confidentiality                                   107 130        SECTION SECTION   9.12 Several Obligations; Nonreliance; Violation of Law 108 131        SECTION SECTION   9.13 USA PATRIOT Act                                   108 131        SECTION SECTION   9.14 Disclosure                                        108 131        SECTION SECTION   9.15 Appointment for Perfection                        108 132        SECTION SECTION   9.16 Interest Rate Limitation                          108 132        SECTION SECTION   9.17 Authorization to Distribute Certain Materials to Public-Siders 108 132        SECTION SECTION   9.18 Acknowledgment and Consent to Bail-In of Affected Financial Institutions 109 132        SECTION SECTION   9.19 Certain ERISA Matters                             109 133        SECTION SECTION   9.20 No Fiduciary Duty, etc.                           110 134        SECTION SECTION   9.21 Prepayment of Loans under the Existing Credit Agreement 111 134        SECTION SECTION   9.22 Acknowledgment Regarding Any Supported QFCs       111 135  ARTICLE X  Loan Guaranty.                                                       112 136                                             -iii -

 

       SECTION SECTION   10.01 Guaranty                                         112 136        SECTION SECTION   10.02 Guaranty of Payment                              112 136        SECTION SECTION   10.03 No Discharge or Diminishment of Loan Guaranty    112 136        SECTION SECTION   10.04 Defenses Waived                                  113 137        SECTION SECTION  10.05 Rights of Subrogation                             114 137        SECTION SECTION  10.06 Reinstatement; Stay of Acceleration               114 137        SECTION SECTION   10.07 Information                                      114 138        SECTION SECTION   10.08 Release of Loan Guarantors                       114 138        SECTION SECTION   10.09 Taxes                                            115 138        SECTION SECTION  10.10 Maximum Liability                                 115 139        SECTION SECTION   10.11 Contribution                                     115 139        SECTION SECTION   10.12 Liability Cumulative                             116 140        SECTION SECTION  10.13 Keepwell                                          116 140  SCHEDULES   :  Schedule 1.01F      – Farmer Trademark Schedule 1.01P      – Permitted Holders Schedule 2.01A      – Revolving Commitments Schedule 2.01B      – Letter of Credit Commitments Schedule 2.06       – Existing Letters of Credit Schedule 3.06       – Disclosed Matters Schedule 3.15       – Capitalization and Subsidiaries Schedule 5.12       – Post-Closing Covenants Schedule 6.01       – Existing Indebtedness Schedule 6.02       – Existing Liens Schedule 6.04       – Existing Investments Schedule 6.10       – Existing Restrictions  EXHIBITS :  Exhibit A    – Form of Assignment and Assumption Exhibit B    – Form of Compliance Certificate Exhibit C    – Joinder Agreement Exhibit D    – [Reserved] Form of Borrowing Base Certificate Exhibit E    – [Reserved] Exhibit F-1  – Form of U.S. Tax Certificate (Foreign Lenders That Are Not Partnerships) Exhibit F-2  – Form of U.S. Tax Certificate (Foreign Participants That Are Not Partnerships) Exhibit F-3  – Form of U.S. Tax Certificate (Foreign Participants That Are Partnerships) Exhibit F-4  – Form of U.S. Tax Certificate (Foreign Lenders That Are Partnerships) Exhibit G-1  – Form of Borrowing Request Exhibit G-2  – Form of Interest Election Request                                             -iv -

 

       “Account Debtor ” means any Person obligated on an Account.         “Acquisition ” means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Loan Party or any Subsidiary (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b)  directly  or  indirectly  acquires  (in  one  transaction  or  as  the  most  recent  transaction  in  a  series of transactions)  at  least  a  majority  (in  number  of  votes)  of  the  Equity  Interests  of  a  Person  which  has ordinary voting power for the election of directors or  other  similar  management  personnel  of a Person (other than Equity Interests having such power only by reason of the happening of a contingency).        “Adjusted  LIBO  Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.         “Administrative   Agent ”  means  JPMorgan  Chase  Bank,  N.A.  (including  its  branches  and affiliates), in its capacity as administrative agent for the Lenders hereunder and its successors in such capacity.        “Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.         “Affected  Financial  Institution ” means (a) any EEA Financial Institution or (b) any UK Financial Institution .         “Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.         “Agent Indemnitee” has the meaning assigned to it in Section 9.03(d).         “Aggregate   Credit   Exposure”   means,   at   any   time,   the   aggregate   Credit   Exposure   of   all   the Lenders at such time.         “Aggregate  Revolving  Exposure ” means, at any time, the aggregate Revolving Exposure of all the Lenders at such time.        “Agreement   Value ”  means,  for  each  Swap  Agreement,  on  any  date  of  determination,  the maximum  aggregate  amount  (giving  effect  to  any  netting  agreements)  that  the  Borrower  or  any Subsidiary would be required to pay if such Swap Agreement were terminated on such date.        “ALTA  ” means the American Land Title Association.         “Alternate  Base  Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period in dollars on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided  that for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not  available  for  such  one  month  Interest  Period,  the  Interpolated  Rate)  at  approximately  11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively.  If the Alternate                                              2

 

Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof  (for  the  avoidance of  doubt,  only  until  any  amendment  has  become  effective  pursuant  to  Section  2.14) , then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.  For the avoidance of doubt, if the Alternate Base Rate as determined pursuant to the foregoing  would  be  less  than 1.00 2.00 %  per   annum ,  such  rate  shall  be  deemed  to  be 1.00 2.00 % per annum  for purposes of this Agreement.         “Ancillary Document” has the meaning assigned to it in Section 9.06(b).         “Anti-Corruption  Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.        “APA ” has the meaning assigned to it in the definition of “Specified Acquisition”.         “Applicable Parties ” has the meaning assigned to it in Section 9.01(d)(iii).         “Applicable   Percentage ”  means,  with  respect  to  any  Lender, the (a) with   respect   to   Revolving Loans,   LC   Exposure,   Overadvances,   or   Swingline   Loans,   a   percentage of  equal   to   a   fraction   the numerator   of   which   is  such   Lender’s   Revolving   Commitment  and   the   denominator   of   which   is   the aggregate Revolving Commitments  represented  by  such  Lender’s  Revolving  Commitment ; provided  that, in  the  case  of  Section  2.20  when  a  Defaulting  Lender  shall  exist,  “Applicable  Percentage”  shall  mean  the percentage  of  the  aggregate  Revolving  Commitments  (disregarding  any  Defaulting  Lender’s  Revolving Commitment ) represented  by  such  Lender’s  Revolving  Commitment .  If if  the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the  Revolving Commitments  most  recently  in  effect,  giving  effect  to  any  assignments  and  to  any  Lender’s  status  as such Lender’s   share   of   the   Aggregate   Revolving   Exposure   at   that   time,   and   (b) with   respect   to   Protective Advances  or  with  respect  to  the  Aggregate  Credit  Exposure,  a  percentage  based  upon  such  Lender’s  pro rata  share  of  the  Aggregate  Credit  Exposure  and  the  unused  Commitments;  provided  that,  in  accordance with  Section 2.20,  so  long  as  any  Lender  shall  be  a Defaulting Lender  at  the  time  of  determination , such Defaulting Lender’s Commitment shall be disregarded in the calculations under clauses (a) and (b) above .         “Applicable  Rate ” means, from  and  as  of  the  Third  Amendment  Effective  Date,  (a)  for any day, 4.50%  per  annum  with respect to any Eurodollar Loan or and  3.50%  per  annum  with  respect  to  any ABR Loan  or  ; provided  that,  commencing  December  31,  2020,  the  Applicable  Rate  for  Eurodollar  Loans  and ABR  Loans  shall  each  be  increased  by  an  additional  1.00%  per  annum  on  each  day  that  the  aggregate Revolving  Commitments  exceed  $75,000,000;  provided  further  that,  if  on  or  after  December  31,  2020  the aggregate   Revolving   Commitments   are   reduced   to   $75,000,000   or   below,   the   Applicable   Rate   for Eurodollar  Loans  shall  be  4.50%  per  annum  and  the  Applicable  Rate  for  ABR  Loans  shall  be  3.50%  per annum,  and  (b)  for  any  day  with respect to the  commitment fees payable hereunder, as  the  case  may  be, the  applicable  rate  per  annum  set  forth  below  under  the  caption  “Eurodollar  Spread”,  “ABR  Spread”  or “Commitment Fee Rate”, as the case may be , based upon the Total Net Leverage Ratio applicable on such date: 0.50% per annum.                           Total Net     Commitment     Eurodollar      ABR                       Leverage Ratio:    Fee Rate      Spread        Spread          Category 1 :   < 1.50 to 1.00                                           0.20%        1.50%         0.50%         Category 2 :  > 1.50 to 1.00 but                                           0.25%        1.75%         0.75%                        < 2.00 to 1.00         Category 3 :  > 2.00 to 1.00 but  0.30%        2.00%         1.00%                                             3

 

                       < 2.50 to 1.00         Category 4 :  > 2.50 to 1.00 but                                           0.35%        2.25%         1.25%                        < 3.00 to 1.00         Category 5 :  > 3.00 to 1.00 but                                           0.40%        2.50%         1.50%                        < 3.50 to 1.00         Category 6 :  > 3.50 to 1.00 but                                           0.45%        2.75%         1.75%                        < 4.00 to 1.00         Category 7 :  > 4.00 to 1.00 but  0.50%        3.00%         2.00%                        < 4.50 to 1.00         Category 8 :   > 4.50 to 1.00     0.50%        3.50%         2.50%         For purposes of the foregoing,         (i)   if  at  any  time  the  Borrower  fails  to  deliver  the  Financials  on  or  before  the  date  the  applicable Financials   are   due  pursuant   to   Section  5.01,   Category   8  shall   be   deemed  applicable  for   the  period commencing  three  (3 ) Business  Days  after  the  required  date  of  delivery  and  ending  on  the  date  which  is three   (3)   Business   Days   after   the   Financials   are   actually   delivered,   after   which   the   Category  shall   be determined in accordance with the table above as applicable;         (ii)   adjustments,  if  any , to  the  Category  then  in  effect  shall  be  effective  three  (3 ) Business  Days after the Administrative Agent has received the applicable Financials (it being understood and agreed that each  change  in  Category  shall  apply  during  the  period  commencing  on  the  effective  date  of  such  change and ending on the date immediately preceding the effective date of the next such change); and         (iii)   notwithstanding   the   foregoing,  Category   8  shall   be   deemed   to   be  applicable   until  the Administrative  Agent’s   receipt   of   the   applicable   Financials  for   the  Borrower’s   fiscal   quarter  ending March  31,  2021,  and  adjustments  to  the  Category  then  in  effect  shall  thereafter  be  effected  in  accordance with the preceding paragraphs.         “Approved Electronic Platform ” has the meaning assigned to it in Section 9.01(d).         “Approved Fund ” has the meaning assigned to such term in Section 9.04.         “Arranger ” means JPMorgan Chase Bank, N.A. in its capacity as  sole  lead  arranger  and  sole bookrunner for the credit facility evidenced by this Agreement.        “Assignment  and  Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A  or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.         “Availability” means, at any time,  an amount equal to the sum of (a) the lesser of (i) the aggregate Revolving   Commitments   at   such   time   and   (ii) the   Borrowing   Base   Limit   at   such   time,  minus   (b) the Aggregate Revolving Exposure at such time (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Borrowings).         “Availability  Period ” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of all of the Revolving Commitments.                                              4

 

       “Available   Revolving   Commitment ”  means,  at  any  time  with  respect  to  any  Lender,  the Revolving Commitment of such Lender then in effect minus the Revolving Exposure of such Lender at such  time;  it  being  understood  and  agreed  that  any Lender’s  Swingline  Exposure and   unfunded participations  in  Overadvances  shall not be deemed to be a component of the Revolving Exposure for purposes of calculating the commitment fee under Section 2.12(a).         “Bail-In   Action ”  means  the  exercise  of  any  Write-Down  and  Conversion  Powers  by  the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.         “Bail-In  Legislation ” means (a) 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,  regulation,  rule  or  requirement  for  such  EEA  Member  Country  from  time  to  time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment  firms  or  other  financial  institutions  or  their  affiliates  (other  than  through  liquidation, administration or other insolvency proceedings).         “Banking  Services ” means each and any of the following bank services provided to any Loan Party  or  their  respective  Subsidiaries  by  any  Lender  or  any  of  its  Affiliates:   (a)  credit  cards  for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without  limitation,  controlled  disbursement,  automated  clearinghouse  transactions,  return  items,  any direct debit scheme or arrangement, overdrafts and interstate depository network services).         “Banking   Services   Agreement ”  means  any  agreement  entered  into  by  the  Borrower or  any Subsidiary in connection with Banking Services.         “Banking   Services   Obligations ”  means  any  and  all  obligations  of  the  Loan  Parties  and  their respective Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced  or  acquired  (including  all  renewals,  extensions  and  modifications  thereof  and  substitutions therefor) in connection with Banking Services.         “Banking  Services  Reserves”  means  all  Reserves  which  the  Administrative  Agent  from  time  to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.         “Bankruptcy  Code ” means Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto, as hereafter amended.         “Bankruptcy Event ” means, with respect to any Person, when such Person becomes the subject of a  voluntary  or  involuntary  bankruptcy  or  insolvency  proceeding,  or  has  had  a  receiver,  conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment or has had any order for relief in such proceeding entered  in  respect  thereof,  provided  that  a  Bankruptcy  Event  shall  not  result  solely  by  virtue  of  any ownership  interest,  or  the  acquisition  of  any  ownership  interest,  in  such  Person  by  a  Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs  of  attachment  on  its  assets  or  permits  such  Person  (or  such  Governmental  Authority  or                                              5

 

instrumentality)  to  reject,  repudiate,  disavow  or  disaffirm  any  contracts  or  agreements  made  by  such Person.         “Benchmark  Replacement”  means  the  sum  of : (a)  the  alternate  benchmark  rate  (which  may  be  a SOFR-Based   Rate)   that   has   been   selected   by   the   Administrative   Agent   and   the   Borrower   giving   due consideration   to   (i)   any   selection   or   recommendation   of   a   replacement   rate   or   the   mechanism   for determining  such  a  rate  by  the  Relevant  Governmental  Body  and/or  (ii)  any  evolving  or  then-prevailing market  convention  for  determining  a  rate  of  interest  as  a  replacement  to  the  LIBO  Rate  for  U.S.  dollar- denominated  syndicated  credit  facilities  and  (b)  the  Benchmark  Replacement  Adjustment;  provided  that, if  the  Benchmark  Replacement  as  so  determined  would  be  less  than  1.00%  per  annum,  the  Benchmark Replacement will be deemed to be 1.00% per annum for the purposes of this Agreement; provided further that   any   such   Benchmark   Replacement   shall   be   administratively   feasible   as   determined   by   the Administrative Agent in its sole discretion.        “Benchmark Replacement Adjustment”  means, with respect to any replacement of the LIBO Rate with  an  Unadjusted  Benchmark  Replacement  for  each  applicable  Interest  Period,  the  spread  adjustment, or  method  for  calculating  or  determining  such  spread  adjustment,  (which  may  be  a  positive  or  negative value   or   zero)   that   has   been   selected   by   the   Administrative   Agent   and   the   Borrower   giving   due consideration  to  (i)  any  selection  or  recommendation  of  a  spread  adjustment,  or  method  for  calculating  or determining such spread adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark  Replacement  by  the  Relevant  Governmental  Body  and/or  (ii)  any  evolving  or  then-prevailing market  convention  for  determining  a  spread  adjustment,  or  method  for  calculating  or  determining  such spread   adjustment,   for   the   replacement   of   the   LIBO   Rate   with   the   applicable   Unadjusted   Benchmark Replacement  for  U.S.  dollar-denominated  syndicated  credit  facilities  at  such  time  (for  the  avoidance  of doubt, such Benchmark Replacement Adjustment shall not be in the form of a reduction to the Applicable Rate).        “Benchmark   Replacement   Conforming   Changes”   means,   with   respect   to   any   Benchmark Replacement,  any  technical,  administrative  or  operational  changes  (including  changes  to  the  definition  of “Alternate  Base  Rate,”  the  definition  of  “Interest  Period,”  timing  and  frequency  of  determining  rates  and making   payments   of   interest   and   other   administrative   matters)   that   the   Administrative   Agent   (in consultation   with   the   Borrower)   decides   in   its   reasonable   discretion   may   be   appropriate   to   reflect   the adoption  and  implementation  of  such  Benchmark  Replacement  and  to  permit  the  administration  thereof by   the   Administrative   Agent   in   a   manner   substantially   consistent   with   market   practice   (or,   if   the Administrative  Agent  decides  that  adoption  of  any  portion  of  such  market  practice  is  not  administratively feasible  or  if  the  Administrative  Agent  determines  that  no  market  practice  for  the  administration  of  the Benchmark  Replacement  exists,  in  such  other  manner  of  administration  as  the  Administrative  Agent  (in consultation  with  the  Borrower)  decides  is  reasonably  necessary  in  connection  with  the  administration  of this Agreement).        “Benchmark  Replacement  Date”  means  the  earlier  to  occur  of  the  following  events  with  respect to the LIBO Rate:         (1)  in  the  case  of  clause  (1)  or  (2)  of  the  definition  of  “Benchmark  Transition  Event,”  the  later  of (a)  the  date  of  the  public  statement  or  publication  of  information  referenced  therein  and  (b)  the  date  on which  the  administrator  of  the  LIBO  Screen  Rate  permanently  or  indefinitely  ceases  to  provide  the  LIBO Screen Rate; or         (2)  in  the  case  of  clause  (3)  of  the  definition  of  “Benchmark  Transition  Event,”  the  date  of  the public statement or publication of information referenced therein.                                              6

 

       “Benchmark Transition Event”  means the occurrence  of one or more of the following events with respect to the LIBO Rate:         (1)  a  public  statement  or  publication  of  information  by  or  on  behalf  of  the  administrator  of  the LIBO   Screen   Rate   announcing   that   such   administrator   has   ceased   or   will   cease   to   provide   the   LIBO Screen Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Screen Rate;         (2)   a   public   statement   or   publication   of   information   by   the   regulatory   supervisor   for   the administrator   of   the   LIBO   Screen   Rate,   the   U.S.   Federal   Reserve   System,   an   insolvency   official   with jurisdiction  over  the  administrator  for  the  LIBO  Screen  Rate,  a  resolution  authority  with  jurisdiction  over the  administrator  for  the  LIBO  Screen  Rate  or  a  court  or  an  entity  with  similar  insolvency  or  resolution authority over the administrator for the LIBO Screen Rate, in each case which states that the administrator of   the   LIBO   Screen   Rate   has   ceased   or   will   cease   to   provide   the   LIBO   Screen   Rate   permanently   or indefinitely;   provided   that,   at   the   time   of   such   statement   or   publication,   there   is   no   successor administrator that will continue to provide the LIBO Screen Rate; and/or         (3)   a   public   statement   or   publication   of   information   by   the   regulatory   supervisor   for   the administrator of the LIBO Screen Rate announcing that the LIBO Screen Rate is no longer representative.         “Benchmark  Transition  Start  Date”  means  (a)  in  the  case  of  a  Benchmark  Transition  Event,  the earlier  of  (i)  the  applicable  Benchmark  Replacement  Date  and  (ii)  if  such  Benchmark  Transition  Event  is a public  statement  or  publication  of  information  of  a  prospective  event,  the  90th  day  prior  to  the  expected date  of  such  event  as  of  such  public  statement  or  publication  of  information  (or  if  the  expected  date  of such   prospective   event   is   fewer   than   90   days   after   such   statement   or   publication,   the   date   of   such statement   or   publication)   and   (b)   in   the   case   of   an   Early   Opt-in   Election,   the   date   specified  by   the Administrative   Agent   or   the   Required   Lenders ,  as   applicable,   by   notice   to   the   Borrower,  the Administrative Agent (in the case of such notice by the Required Lenders) and  the Lenders .        “Benchmark   Unavailability   Period”  means,   if   a   Benchmark   Transition   Event   and   its   related Benchmark  Replacement  Date  have  occurred  with  respect  to  the  LIBO  Rate  and  solely  to  the  extent  that the LIBO Rate has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that  such  Benchmark  Replacement  Date  has  occurred  if,  at  such  time,  no  Benchmark  Replacement  has replaced  the  LIBO  Rate  for  all  purposes  hereunder  in  accordance  with  Section  2.14  and  (y)  ending  at  the time  that  a  Benchmark  Replacement  has  replaced  the  LIBO  Rate  for  all  purposes  hereunder  pursuant  to Section 2.14.         “Beneficial   Owner ”  means,  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 ”  means  a  certification  regarding  beneficial  ownership  or control as required by the Beneficial Ownership Regulation.         “Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.        “Benefit  Plan ” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code, or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.                                              7

 

       “BFA   Lease ”  means  that  certain  lease  between  Boyd  Future  Associates  LLC  (as  lessor)  and Seller (as lessee), dated December 1, 2012, for the real estate located at 19730 NE Sandy Blvd., Portland, Oregon, as the same may be amended, modified or restated from time to time.        “BFA  Lease  Guaranty ” means that certain unsecured guaranty made by the Company in favor of Boyd Future Associates LLC in respect of the rental payments owed by the Seller (as lessee) under the BFA Lease, as the same may be amended, amended and restated or modified from time to time; provided , that,  no  amendment  or  modification  of  the  BFA  Lease  Guaranty  which  is  materially  adverse  to  the interests of the Lenders shall be effected without the prior written consent of the Required Lenders.        “Board ” means the Board of Governors of the Federal Reserve System of the U.S.        “Borrower ” has the meaning specified therefor in the preamble to this Agreement.        “Borrower  Audited  Financial  Statements ” means the Company’s consolidated balance sheet and statements of income, stakeholders’ equity and cash flows as of and for the fiscal year ended June 30, 2018 2019 , reported on by Deloitte & Touche LLP, independent public accountant.         “Borrower   Unaudited   Financial   Statements ”  means  the  Company’s  consolidated  balance  sheet and statements of income, stockholders’ equity and cash flows as of and for the fiscal quarter and the portion of the fiscal year ended on or about March 31,  2018 2020 .         “Borrowing ” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect  or , (b) a Swingline Loan , (c) a Protective Advance, or (d) an Overadvance .         “Borrowing  Base”  means,  at  any  time,  the  sum  of:  (a)  an  amount  equal  to  85%  of  the  Eligible Accounts  of  the  Borrower  and  the  Domestic  Subsidiary  Guarantors,  plus  (b)  an  amount  equal  to  50%  of the  Eligible  Inventory  of  the  Borrower  and  the  Domestic  Subsidiary  Guarantors,  at  such  time,  valued  at the   lower   of   cost   (determined   on   a   first-in-first-out   basis)   or   market   value,  minus   (c) Reserves. Notwithstanding  anything  in  this  Agreement  to  the  contrary , the  parties  hereto  acknowledge  and  agree that  (i)  any  adjustment  or  modification  of  the  defined  terms  used  in  the  determination  of  the  Borrowing Base  shall  not  constitute  a  reduction  in  the  rate  of  interest  or  fees  for  purposes  of  Section  9.02(b)  and  (ii) no  agreement,  consent,  waiver,  amendment,  modification  or  other  document  may  increase  the  advance rates  set  forth  in  the  definition  of  Borrowing  Base  or  add  new  categories  of  eligible  assets,  without  the written consent  of the Borrower and each Lender (other than any Defaulting Lender).         “Borrowing  Base  Certificate ” means  a  certificate,  signed  and  certified  as  accurate  and  complete by  a  Financial  Officer  of  the  Borrower,  in  substantially  the  form  of  Exhibit D  or  another  form  which  is acceptable to the Administrative Agent in its Permitted Discretion.         “Borrowing Base Limit” means, at any time, the sum of (a) the Borrowing Base at such time, plus (b) the Maximum Overadvance Amount at such time.         “Borrowing  Request ” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03, which shall be substantially in the form attached hereto as Exhibit  G-1  or any other form approved by the Administrative Agent.        “Burdensome   Restrictions ”  means  any  consensual  encumbrance  or  restriction  of  the  type described in clause (a) or (b) of Section 6.10.                                              8

 

       “Business  Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided  that, when used in connection with a Eurodollar Loan, the term “Business  Day ” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.         “Calculation Date” has the meaning assigned to such term in Section 2.11(c).         “Capital  Expenditures ” means, without duplication, any expenditure for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP, but excluding in each case any such expenditures that (i) are made to restore, repair, replace or rebuild property to the condition of such  property  immediately  prior  to  any  casualty  event,  to  the  extent  such  expenditure  is  made  with identifiable insurance proceeds, condemnation awards or damage recovery proceeds relating to any such casualty event, (ii) are financed with the proceeds of any Disposition of fixed or capital assets to the extent such expenditure is made within twelve (12) months of such Disposition, or (iii) are made pursuant to a Permitted Acquisition.         “Capital  Lease  Obligations ” of any Person means the obligations of such Person to pay rent or other  amounts  under  any  lease  of  (or  other  arrangement  conveying  the  right  to  use)  real  or  personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.         “CFC ” means  a  “controlled  foreign  corporation”  as  that  term  is  defined  under  Section  957  of  the Code.         “Change in Control ” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules  of  the  SEC  thereunder),  other  than  one  or  more  of  the  Permitted  Holders,  of  Equity  Interests representing more than the greater of (i) 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Company and (ii) the percentage thereof then held by the Permitted Holders; or (b)  the acquisition of direct or indirect Control of the Company by any Person or group (other than any of the Permitted Holders).         “Change  in  Law ” means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental  Authority;  or  (c)  compliance  by  any  Lender  or  the  Issuing  Bank  (or,  for  purposes  of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, rules, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that  notwithstanding  anything  herein  to  the  contrary,  (x)  the  Dodd-Frank  Wall  Street  Reform  and Consumer  Protection  Act  and  all  requests,  rules,  guidelines,  requirements  or  directives  thereunder  or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.                                              9

 

       “Charges ” has the meaning assigned to such term in Section 9.17.         “Class ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans  or , Swingline Loans , Protective  Advances  or Overadvances .         “Co-Documentation   Agent ”  means  each  of  Bank  of  America,  N.A. , and   Regions Bank   and SunTrust  Bank  in  its  capacity  as  a  co-documentation  agent  for  the  credit  facility  evidenced  by  this Agreement.         “Co-Syndication  Agent ” means each of Citibank, N.A. and PNC Bank, National Association in its capacity as a co-syndication agent for the credit facility evidenced by this Agreement.        “Code ” means the Internal Revenue Code of 1986, as amended from time to time.        “Collateral ” means any and all property of a Person in which a Lien is granted or purported to be granted pursuant to the Collateral Documents.  For the avoidance of doubt, the Collateral shall exclude the Excluded Collateral.         “Collateral Access Agreement” has the meaning given to such term in the Security Agreement.         “Collateral   Documents ”  means,  collectively,  the  Security  Agreement,  the Mortgages  and Mortgage Instruments , any  Deposit  Account  Control  Agreement  executed  pursuant  to  Section 5  of  the Third  Amendment  or  Section 4.14  of  the  Security  Agreement  and any other agreements, instruments and documents  executed and/or   delivered   in  connection  with  this  Agreement  that  are  intended  to  create, perfect  or  evidence  Liens  to  secure  the  Secured  Obligations,  including,  without  limitation,  all  other security agreements, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees, subordination  agreements,  pledges,  powers  of  attorney,  consents,  assignments,  contracts,  fee  letters, notices,  leases,  financing  statements  and  all  other written matter whether heretofore, now or hereafter executed by any Loan Party and delivered to the Administrative Agent.         “Co-Manufacturing  Agreement ” means that certain co-manufacturing agreement substantially in the  form  attached  as  Exhibit E to the APA, as the same  may  be  amended,  amended  and  restated  or modified  from  time  to  time;  provided ,  that,  no  amendment  or  modification  of  the  Co-Manufacturing Agreement (or to the form thereof attached to the APA) which is materially adverse to the interests of the Lenders shall be effected without the prior written consent of the Required Lenders.         “Commitment”   means,   with   respect   to   each   Lender   at   any   time,   the   sum   of   such   Lender’s Revolving   Commitment   at   such   time,   together   with   the   commitment   of   such   Lender   to   acquire participations in Protective Advances hereunder at such time.         “Commodity   Exchange   Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et  seq.),  as amended from time to time, and any successor statute.         “Communications ” has the meaning assigned to such term in Section 9.01(d).         “Company ” means the Borrower.         “Compliance Certificate ” has the meaning assigned to such term in Section 5.01(d).                                             10

 

       “Compounded   SOFR”  means   the   compounded   average   of   SOFRs   for   the   applicable Corresponding  Tenor,  with  the  rate,  or  methodology  for  this  rate,  and  conventions  for  this  rate  (which may   include   compounding   in   arrears   with   a   lookback   and/or   suspension   period   as   a   mechanism   to determine  the  interest  amount  payable  prior  to  the  end  of  each  Interest  Period)  being  established  by  the Administrative Agent in accordance with:         (1)   the   rate,   or   methodology   for   this   rate,   and   conventions   for   this   rate   selected   or recommended by the Relevant Governmental Body for determining compounded SOFR; or         (2)   if,  and  to  the  extent  that,  the  Administrative  Agent  determines  that  Compounded  SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions   for   this   rate   that   the   Administrative   Agent   determines   in   its   reasonable   discretion   are substantially   consistent   with   any   evolving   or   then-prevailing   market   convention   for   determining compounded SOFR for U.S. dollar-denominated syndicated credit facilities at such time;  provided,   that   if   the   Administrative   Agent   decides   that   any   such   rate,   methodology   or   convention determined   in   accordance   with  clause   (1)   or   clause   (2)   above   is   not   administratively   feasible   for   the Administrative  Agent,  then  Compounded  SOFR  will  be  deemed  unable  to  be  determined  for  purposes  of the definition of “Benchmark Replacement.”         “Connection  Income  Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.         “Consolidated   Interest   Expense ”  means,  with  respect  to  any  Person  for  any  period,  without duplication, the sum of cash interest expense (including that attributable to Capital Lease Obligations), net of cash interest income, with respect to Indebtedness of such Person and its Subsidiaries for such period, including commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net cash costs under Swap Agreements (other than in connection with the early termination thereof), but excluding any non-cash interest expense in connection with or related to any pension plan of the Borrower and/or any of its Subsidiaries.         “Consolidated Total Assets ” means, as of the date of any determination thereof, total assets of the Borrower  and  its  Subsidiaries  calculated  in  accordance  with  GAAP  on  a  consolidated  basis  and  reflected on the balance sheet of the most recently delivered Financials as of such date (or, if prior to the date of the delivery of the first financial statements to be delivered pursuant to Section 5.01(a) or (b) , the most recent financial statements referred to in Section 3.04(a)).         “Consolidated   Total   Indebtedness ”  means,  at  any  date,  the  sum,  without  duplication,  the aggregate funded principal amount of Indebtedness of the Borrower and its Subsidiaries consisting solely of (i) debt for borrowed money, (ii) debt obligations evidenced by promissory notes, bonds and similar instruments to the extent reflected as a long-term liability on the balance sheet of the Borrower, (iii) the principal portion of Capital Lease Obligations and purchase money debt and (iv) drawn and unreimbursed standby  letters of credit.  For the avoidance of doubt,  Consolidated  Total  Indebtedness  shall  exclude hedging obligations.         “Control ”  means  the  possession,  directly  or  indirectly,  of the  power  to  direct  or  cause  the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling ” and “Controlled ” have meanings correlative thereto.                                             11

 

       “Corresponding   Tenor”  with   respect   to   a   Benchmark   Replacement   means   a   tenor   (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the applicable Interest Period with respect to the LIBO Rate.         “Covenant Relief Period” means  the period commencing on the Third Amendment Effective Date and  ending  on  the  first  date  the  Administrative  Agent  receives  a  Compliance  Certificate  for  any  fiscal quarter  of  the  Borrower  ending  on  or  after  September  30,  2021,  which  Compliance  Certificate  (i) certifies that  no  Default  or  Event  of  Default  has  occurred  and  is  continuing  as  of  the  date  of  such  Compliance Certificate   and   (ii) demonstrates   compliance   with   each   of   the   financial   covenants   (to   the   extent applicable) set forth in Section 6.12 as of the end of  such fiscal quarter.         “Covered Party ” has the meaning assigned to it in Section 9.22.         “Credit  Exposure”  means,  as  to  any  Lender  at  any  time,  the  sum  of  (a)  such  Lender’s  Revolving Exposure  at  such  time,  plus  (b) an  amount  equal  to  its  Applicable  Percentage,  if  any,  of  the  aggregate principal amount of Protective Advances outstanding at such time.         “Credit  Party ” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.        “Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.         “Defaulting  Lender ” means any Lender that (a) has failed, within two Business Days of the date required  to  be  funded  or  paid,  to  (i)  fund  any  portion  of  its  Loans,  (ii)  fund  any  portion  of  its participations in Letters of Credit  or , Swingline Loans , Protective  Advances  or  Overadvances  or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s  good  faith  determination  that  a  condition precedent  to  funding  (specifically  identified  and including the particular Default, if any) has not been satisfied; (b) has notified the Borrower or any Credit Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with  any  of  its  funding  obligations  under  this  Agreement  (unless  such  writing  or  public  statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically  identified  and  including  the  particular  Default,  if  any)  to  funding  a  Loan  under  this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations as of the date of certification) to fund prospective Loans and participations in then outstanding Letters of Credit  and , Swingline Loans , Protective  Advances  and Overadvances  under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (A) a Bankruptcy Event or (B) a Bail-In Action.         “Deposit   Account   Control   Agreement”   has   the   meaning   assigned   to   such   term  in  the  Security Agreement.         “Disclosed Matters ” means the actions, suits, proceedings and environmental matters disclosed in Schedule 3.06 .                                             12

 

       “Disposition ” or “Dispose ” means the sale, transfer, license, lease or other disposition (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by  a  Subsidiary  of  such  Person),  including  any  sale,  assignment,  transfer  or  other  disposal,  with  or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.         “Dividing Person ” has the meaning assigned to it in the definition of “Division”.         “Division ”  means  the  division  of  the  assets,  liabilities  and/or  obligations  of  a  Person  (the “Dividing   Person ”) among two or more Persons (whether pursuant to a  “plan  of  division”  or  similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.        “Division  Successor ” means any Person that, upon the consummation of a Division of a Dividing Person,  holds  all  or  any  portion  of  the  assets,  liabilities  and/or  obligations  previously  held  by  such Dividing Person immediately prior to the consummation of such Division.  A Dividing Person which retains  any  of  its  assets,  liabilities  and/or  obligations  after  a  Division  shall  be  deemed  a  Division Successor upon the occurrence of such Division.         “Document ” has the meaning assigned to such term in the Security Agreement.         “dollars ” or “$” refers to lawful money of the U.S.         “Domestic  Subsidiary ” means a Subsidiary organized under the laws of a jurisdiction located in the U.S.         “Domestic  Subsidiary  HoldCo ” means  any  wholly  owned  Domestic  Subsidiary  of  the  Company that   has   no   assets   other   than :   (a)   the  Equity   Interests   of   or   indebtedness  of   one   or   more  Foreign Subsidiaries that are CFCs and (b) de minimis assets.         “Domestic  Subsidiary  Guarantor”  means  a  Subsidiary  Guarantor  organized  under  the  laws  of  a jurisdiction located in the U.S.         “Early Opt-in Election”  means the occurrence of:         (1)  (i)  a  determination  by  the  Administrative  Agent  or  (ii)  a  notification  by  the  Required  Lenders to  the  Administrative  Agent  (with  a  copy  to  the  Borrower)  that  the  Required  Lenders  have  determined that   U.S.   dollar-denominated   syndicated   credit   facilities   being   executed   at   such   time,   or   that   include language   similar   to   that   contained   in   Section   2.14   are   being   executed   or   amended,   as   applicable,   to incorporate or adopt a new benchmark interest rate to replace the LIBO Rate, and         (2)  (i)  the  election  by  the  Administrative  Agent  or  (ii)  the  election  by  the  Required  Lenders  to declare  that  an  Early  Opt-in  Election  has  occurred  and  the  provision,  as  applicable,  by  the  Administrative Agent  of  written  notice  of  such  election  to  the  Borrower  and  the  Lenders  or  by  the  Required  Lenders  of written notice of such election to the Administrative Agent.         “Earn-Outs ” means unsecured liabilities of the Company or any of its Subsidiaries arising under an agreement to make any deferred payment as a part of the Purchase Price for a Permitted Acquisition, including performance bonuses or consulting payments in any related services, employment or similar                                             13

 

agreement, in an amount that is subject to or contingent upon the revenues, income, cash flow or profits (or the like) of the target of such Permitted Acquisition.         “EBITDA ” means, for any period, Net Income for such period plus  (a) without duplication and to the  extent  deducted  in  determining  Net  Income  for  such  period,  the  sum  of  (i)  Consolidated  Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any unusual or non-recurring non-cash charges for such period, (v) any other non-cash charges for such period (but excluding any non- cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write-down or write-off of inventory), (vi) non-cash exchange, translation, or performance losses relating to any hedging transactions or foreign currency fluctuations, (vii) unusual or non-recurring cash charges, expenses or losses not described in the following clause (viii), (viii) unusual or non-recurring cash charges, expenses or losses related to strategic initiatives, business optimization and restructurings  in  connection  with  Project  Evolution,  including,  without  limitation,  severance  costs, relocation costs (including the relocation of the Company’s  corporate  headquarters  from  the  Torrance Facility),  integration  costs,  opening,  pre-opening,  closing  and  transition  costs  for  facilities  and distribution  centers,  signing  costs,  retention  or  completion  bonuses,  restructuring  charges,  systems establishment costs, curtailments or modifications to pension and retirement benefit plans and contract termination costs, (ix) solely  to  the  extent  incurred  during  the  period  of  April  1,  2017,  through  September 30,  2018,  integration  and  transaction  costs  associated  with  the  Specified  Acquisition  made  prior  to  the Effective  Date  in  an  aggregate  amount  not  to  exceed , for  each  of  the  fiscal  quarters  ending  June  30,  2017, September  30,  2017,  December  31,  2017,  March  31,  2018,  June  30,  2018,  and  September  30,  2018,  the amount  previously  identified  in  respect  of  such  fiscal  quarter  to  the  Administrative  Agent  in  writing  prior to  the  Effective  Date [intentionally  omitted] , (x) any equity-based or non-cash compensation charge or expense, including any such charge or expense arising from the grants of stock appreciation or similar rights, stock options, restricted stock, profits interests or other rights or equity-based incentive programs (“equity  incentives ”) or any other equity-based compensation and any one-time cash charges or expenses associated with the equity incentives or other long-term incentive compensation plans (including under deferred compensation arrangements), (xi) any fees and expenses incurred during such period (including, without limitation, any premiums, make-whole or penalty payments), or any amortization thereof for such period, in connection with any Permitted Acquisition or amendment or other modification of any Loan Document  (in  each  case,  including (1)   any  such  transaction  consummated  on  or  prior  to  the Third Amendment  Effective Date, but excluding any Permitted Acquisition that is not consummated  and  (2) advisory  fees,  field  examiner  expenses,  appraiser  expenses,  mortgage  related  fees  and  expenses,  and similar  fees  and  expenses,  in  each  case  incurred  in  connection  with  the  performance  of  the  obligations of  the  Loan  Parties  hereunder  and  under  the  other  Loan  Documents,  whether  incurred  by  a  Loan  Party or,  to  the  extent  actually  reimbursed  (or  required  to  be  reimbursed  hereunder  or  under  the  other  Loan Documents,   without   duplication   of   any   amounts   actually   reimbursed)   by   the   Borrower   and   its Subsidiaries,  by  the  Administrative  Agent  or  a  Lender ) and any charges or non-recurring merger costs incurred during such period as a result of any such consummated Permitted Acquisition, (xii)  the  amount of   any   restructuring   charges   or   reserves,   equity-based   or   non-cash   compensation   charges   or   expenses, including  any  such  charges  or  expenses  arising  from  grants  of  stock  appreciation  or  similar  rights,  stock options,  restricted  stock  or  other  rights,  retention  charges  (including  charges  or  expenses  in  respect  of incentive  plans),  start-up  or  initial  costs  for  any  project  or  new  production  line,  division  or  new  line  of business   or   other   business   optimization   expenses   or   reserves   including,   without   limitation,   costs   or reserves  associated  with  improvements  to  information  technology  and  accounting  functions,  integration and  facilities  opening  costs  or  any  one-time  costs,  in  each  case  incurred  in  connection  with  acquisitions, divestitures,  other  specified  transactions,  restructurings,  cost  savings  initiatives  and  other  initiatives occurring after the Effective Date  and  (xiii) solely in the case of any Test Period ending on or prior to September 30, 2020, the amount of “run rate” cost savings, operating enhancements, operating expense reductions  and  synergies  (collectively,  the  “Cost   Savings ”)  related  to  Permitted  Acquisitions,                                            14

 

restructurings, cost savings initiatives and other initiatives occurring after the Effective Date, in each case, projected by the Borrower in good faith to result from actions which have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) within twelve (12) months after such transaction or initiative is consummated (which Cost Savings shall be calculated on a pro forma basis as though such Cost Savings had been realized on the first day of the applicable Test Period), net of the amount of actual benefits realized during such Test Period from such actions; provided  that a Financial Officer of the Borrower shall have certified to the Administrative Agent that, in the good faith determination of the Borrower, such Cost Savings are (x) reasonably identifiable and factually supportable and (y) reasonably anticipated to result from actions which have been taken or with respect to which substantial steps have been taken or are expected to be taken within twelve (12) months after such transaction or initiative is consummated; provided , further , that such Cost Savings added back to EBITDA pursuant to this clause (xiii) for any Test Period ending March 31, 2020, June 30, 2020 or September 30, 2020 shall not exceed an aggregate amount equal to the least of (x) 15% of EBITDA, calculated prior to giving effect to this clause (xiii), for such Test Period, (y) an amount equal to the amount of Cost Savings actually realized by the Borrower and its Subsidiaries during such Test Period and (z) (A) for the Test Period ending March 31, 2020, $2,000,000, (B) for the Test Period ending June 30, 2020, $600,000 and (C) for the Test Period ending September 30, 2020, $50,000, as applicable (it being understood and agreed that no amounts may be added back to EBITDA pursuant to this clause (xiii) for any Test Period ending after September 30, 2020); minus  (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period, (ii) any unusual or non- recurring cash gains and any non-cash items of income for such period and (iii) exchange, translation, or performance gains relating to any hedging transactions or foreign currency fluctuations, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP  for  the  applicable period .         “ECP ” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange  Act  or  any  regulations  promulgated  thereunder  and  the  applicable  rules  issued  by  the Commodity Futures Trading Commission and/or the SEC.        “EEA  Financial  Institution ” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.        “EEA   Member   Country ”  means  any  of  the  member  states  of  the  European  Union,  Iceland, Liechtenstein and Norway.         “EEA  Resolution  Authority ” means any public administrative authority or any Person entrusted with  public  administrative  authority  of  any  EEA  Member  Country  (including  any  delegee)  having responsibility for the resolution of any EEA Financial Institution.         “Effective  Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).         “Electronic  Signature ” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.                                             15

 

       “Eligible   Accounts”   means,   at   any   time,   the   Accounts   of   the   Borrower   and   the   Domestic Subsidiary  Guarantors  which  the  Administrative  Agent  determines  in  its  Permitted  Discretion  are  eligible as  the  basis  for  the  extension  of  Revolving  Loans  and  Swingline  Loans  and  the  issuance  of  Letters  of Credit.   Without  limiting  the  Administrative  Agent’s  discretion  provided  herein,  Eligible  Accounts  shall not include any Account of any such Loan Party:         (i)   which   is   not   subject   to   a   first   priority   perfected   security   interest   (subject   to   Permitted Borrowing Base Liens) in favor of the Administrative Agent;         (ii)  which  is  subject  to  any  Lien  other  than  (i)  Liens  in  favor  of  the  Administrative  Agent, (ii) Permitted   Encumbrances   which   do  not  have  priority  over  the  Liens  in  favor  of  the  Administrative Agent, and/or (iii) Permitted Borrowing Base Liens;         (iii) (i)  which  is  unpaid  more  than  90  days  after  the  due  date  set  forth  in  the  original  invoice therefor  (provided  that,  notwithstanding  the  foregoing,  not  more  than  $5,000,000  of  Eligible  Accounts  in the  aggregate  may  be  unpaid  for  more  than  ninety  (90)  days  after  the  due  date  set  forth  in  the  original invoice  therefor),  or  (ii)  which  has  been  written  off  the  books  of  such  Loan  Party  or  otherwise  designated as uncollectible;         (iv)  which  is  owing  by  an  Account  Debtor  for  which  more  than  50%  of  the  Accounts  owing from  such  Account  Debtor  and  its  Affiliates  are  (i)  unpaid  more  than  90  days  after  the  due  date  set  forth in  the  original  invoice  therefor  or  (ii)  written  off  the  books  of  a  Loan  Party  or  otherwise  designated  as uncollectible;         (v)   which  is  owing  by  an  Account  Debtor  to  the  extent  the  aggregate  amount  of  Accounts owing   from   such   Account   Debtor   and   its   Affiliates   to   the   Borrower   and   all   Domestic   Subsidiary Guarantors  exceeds  25%  of  the  aggregate  amount  of  Eligible  Accounts  of  the  Borrower  and  all  Domestic Subsidiary Guarantors (to the extent of such excess);         (vi)  with   respect   to   which   any   covenant,   representation   or   warranty   contained   in   this Agreement or in the Security Agreement has been breached or is not true;         (vii) which  (i)  does  not  arise  from  the  sale  of  goods  or  performance  of  services  in  the  ordinary course   of   business,   (ii)   is   not   evidenced   by   an   invoice   or   other   documentation   satisfactory   to   the Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent  upon  such  Loan  Party’s  completion  of  any  further  performance,  (v)  represents  a  sale  on  a  bill- and-hold,  guaranteed  sale,  sale-and-return,  sale  on  approval,  consignment,  cash-on-delivery  or  any  other repurchase or return basis or (vi) relates to payments of interest, finance charges or late charges;         (viii) for  which  the  goods  giving  rise  to  such  Account  have  not  been  shipped  (or  delivered  to the   extent   such   sales   are   on   FOB   destination   terms)   to   the   Account   Debtor   or   for   which   the   services giving rise to such Account have not been performed by such Loan Party or if such Account was invoiced more than once;         (ix)  with   respect   to   which   any   check   or   other   instrument   of   payment   has   been   returned uncollected for any reason;         (x)   which  is  owed  by  an  Account  Debtor  which  has  (i)  applied  for,  suffered,  or  consented  to the  appointment  of  any  receiver,  custodian,  trustee,  or  liquidator  of  its  assets,  (ii)  had  possession  of  all  or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against   it,   any   request   or   petition   for   liquidation,   reorganization,   arrangement,   adjustment   of   debts,                                             16

 

adjudication   as   bankrupt,   winding-up,   or   voluntary   or   involuntary   case   under   any   state   or   federal bankruptcy   laws   (other   than   post-petition   accounts   payable   of   an   Account   Debtor   that   is   a   debtor-in- possession   under   the   Bankruptcy   Code   and   reasonably   acceptable   to   the   Administrative   Agent), (iv) admitted  in  writing  its  inability , or  is  generally  unable  to,  pay  its  debts  as  they  become  due  or  (v) ceased operation of its business;         (xi)  which is owed by any Account Debtor which has sold all or substantially all of its assets;         (xii) which   is   owed   by   an   Account   Debtor   which   (i)   does   not   maintain   its   chief   executive office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., or  the  District  of  Columbia,  Canada,  or  any  province  of  Canada  unless,  in  any  such  case,  such  Account  is backed  by  a  letter  of  credit  acceptable  to  the  Administrative  Agent  in  its  Permitted  Discretion  and  which is in the possession of, and is directly drawable by, the Administrative Agent;         (xiii) which is owed in any currency other than U.S. dollars;         (xiv) which   is   owed   by   (i)   any   Governmental   Authority   of   any   country   other  than  the  U.S. unless such Account is backed by a letter of credit acceptable to the Administrative Agent in its Permitted Discretion  and  which  is  in  the  possession  of,  and  is  directly  drawable  by,  the  Administrative  Agent,  or (ii) any   Governmental   Authority   of   the   U.S.,   or   any   department,   agency,   public   corporation,   or instrumentality  thereof,  unless  the  Federal  Assignment  of  Claims  Act  of  1940,  as  amended  (31  U.S.C.  § 3727  et  seq .  and   41   U.S.C.   §   15  et  seq .),   and   any   other   steps   necessary   to   perfect   the   Lien   of   the Administrative   Agent   in   such   Account   have   been   complied   with   to   the   Administrative   Agent’s satisfaction;         (xv)  which   is   owed   by   any   Affiliate   of   any   Loan   Party   or   any   employee,   officer,   director, agent or stockholder of any Loan Party or any of its Affiliates;         (xvi) which  is  owed  by  an  Account  Debtor  or  any  Affiliate  of  such  Account  Debtor  to  which any  Loan  Party  is  indebted,  but  only  to  the  extent  of  such  indebtedness,  or  is  subject  to  any  security, deposit,  progress  payment,  retainage  or  other  similar  advance  made  by  or  for  the  benefit  of  an  Account Debtor, in each case to the extent thereof;         (xvii) which  is  subject  to  any  counterclaim,  deduction,  defense,  setoff  or  dispute  but  only  to  the extent of any such counterclaim, deduction, defense, setoff or dispute;         (xviii) which is evidenced by any promissory note, chattel paper or instrument;         (xix) which  is  owed  by  an  Account  Debtor  (i)  located  in  any  jurisdiction  which  requires  filing of  a  “Notice  of  Business  Activities  Report”  or  other  similar  report  in  order  to  permit  such  Borrower  to seek   judicial   enforcement   in   such  jurisdiction  of  payment  of  such  Account,  unless  such  Borrower  has filed such report or qualified to do business in such jurisdiction or (ii) which is a Sanctioned Person;         (xx)  with  respect  to  which  such  Loan  Party  has  made  any  agreement  with  the  Account  Debtor for  any  reduction  thereof,  other  than  discounts  and  adjustments  given  in  the  ordinary  course  of  business, or  any  Account  which  was  partially  paid  and  such  Loan  Party  created  a  new  receivable  for  the  unpaid portion of such Account;                                             17

 

       (xxi) which  does  not  comply  in  all  material  respects  with  the  requirements  of  all  applicable laws  and  regulations,  whether  Federal,  state  or  local,  including  without  limitation  the  Federal  Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;         (xxii) which  is  for  goods  that  have  been  sold  under  a  purchase  order  or  pursuant  to  the  terms  of a contract  or  other  agreement  or  understanding  (written  or  oral)  that  indicates  or  purports  that  any  Person other  than  such  Loan  Party  has  or  has  had  an  ownership  interest  in  such  goods,  or  which  indicates  any party other than such Loan Party as payee or remittance party; or         (xxiii) which was created on cash on delivery terms.  In  determining  the  amount  of  an  Eligible  Account  of  the  Borrower  or  a  Domestic  Subsidiary  Guarantor, the  face  amount  of  an  Account  may,  in  the  Administrative  Agent’s  Permitted  Discretion,  be  reduced  by, without  duplication , to  the  extent  not  reflected  in  such  face  amount,  (i) the  amount  of  all  accrued  and actual  discounts,  claims,  credits  or  credits  pending,  promotional  program  allowances,  price  adjustments, finance charges or other allowances (including any amount that such Borrower may be obligated to rebate to   an   Account   Debtor   pursuant   to   the   terms   of   any   agreement   or   understanding   (written   or   oral))   and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Loan Party to reduce the amount of such Account.         “Eligible  Inventory”  means,  at  any  time,  the  Inventory  of  the  Borrower  or  a  Domestic  Subsidiary Guarantor  which  the  Administrative  Agent  determines  in  its  Permitted  Discretion  is  eligible  as  the  basis for the extension of Revolving Loans and Swingline Loans and the issuance of Letters of Credit.  Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory of any such Loan Party shall not include any Inventory:         (i)   which   is   not   subject   to   a   first   priority   perfected   Lien   (subject   to   Permitted   Borrowing Base Liens) in favor of the Administrative Agent;         (ii)  which  is  subject  to  any  Lien  other  than  (i)  Liens  in  favor  of  the  Administrative  Agent, (ii) a  Permitted  Encumbrances  which  do  not  have  priority  over  the  Liens  in  favor  of  the  Administrative Agent, and/or (iii) Permitted Borrowing Base Liens;         (iii) which is, in the Administrative Agent’s opinion, slow moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;         (iv)  with   respect   to   which   any   covenant,   representation   or   warranty   contained   in   this Agreement  or  in  the  Security  Agreement  has  been  breached  or  is  not  true  and  which  does  not  conform  in any material respect to all material applicable standards imposed by any U.S. Governmental Authority;         (v)   in   which   any   Person   other   than   such   Loan   Party   shall   (i)   have   any   direct   or   indirect ownership,   interest   or   title   or   (ii)   be   indicated   on   any   purchase   order   or   invoice   with   respect   to   such Inventory as having or purporting to have an interest therein;         (vi)  which   constitutes   spare   or   replacement   parts,   subassemblies,   packaging   and   shipping material,  manufacturing  supplies,  samples,  prototypes,  displays  or  display  items,  bill-and-hold  or  ship-in- place   goods,   goods   that   are   returned   or   marked   for   return,   repossessed   goods,   defective   or   damaged goods,  goods  held  on  consignment,  or  goods  which  are  not  of  a  type  held  for  sale  in  the  ordinary  course of business; provided , that this clause (f) shall not exclude any coffee brewing equipment;                                             18

 

       (vii) which  is  not  located  in  the  U.S.  or  is  in  transit  with  a  common  carrier  from  vendors  and suppliers,  provided   that,   notwithstanding   the   foregoing,   up   to   $5,000,000   of   Inventory   in   transit   from vendors and suppliers may be included as Eligible Inventory despite the foregoing provision of this clause (g)  so long as:               (i)    the  Administrative  Agent  shall  have  received  (1)  a  true  and  correct  copy  of  the bill  of  lading  and  other  shipping  documents  for  such  Inventory  and  (2)  evidence  of  satisfactory  casualty insurance  naming  the  Administrative  Agent  as  lender  loss  payee  and  otherwise  covering  such  risks  as  the Administrative Agent may reasonably request,               (ii)   if  the  bill  of  lading  is  non-negotiable,  the  Inventory  must  be  in  transit  within  the U.S.,  and  the  Administrative  Agent  shall  have  received,  if  requested,  a  duly  executed  Collateral  Access Agreement,  in  form  and  substance  satisfactory  to  the  Administrative  Agent,  from  the  applicable  customs broker, freight forwarder or carrier for such Inventory,               (iii)  if the bill of lading is negotiable, the Inventory must be in transit from outside the U.S.,  and  the  Administrative  Agent  shall  have  received  (1)  confirmation  that  the  bill  is  issued  in  the  name of  such  Loan  Party  and  consigned  to  the  order  of  the  Administrative  Agent,  and  an  acceptable  agreement has  been  executed  with  such  Loan  Party’s  customs  broker,  in  which  the  customs  broker  agrees  that  it holds  the  negotiable  bill  as  agent  for  the  Administrative  Agent  and  has  granted  the  Administrative  Agent access  to  the  Inventory,  (2)  confirmation  that  such  Loan  Party  has  paid  for  the  goods,  and  (3)  an  estimate from  such  Loan  Party  of  the  customs  duties  and  customs  fees  associated  with  the  Inventory  in  order  to establish an appropriate Reserve,               (iv)   the common carrier is not an Affiliate of the applicable vendor or supplier, and               (v)    the customs broker is not an Affiliate of any Loan Party;         (viii) which   is   located   in   any   location   leased   by   such   Loan   Party   unless   (i)   the   lessor   has delivered   to   the   Administrative   Agent   a   Collateral   Access   Agreement   or  (ii)  a  Rent  Reserve  has  been established  by  the  Administrative  Agent  in  its  Permitted  Discretion;  provided  that  such  Inventory  may  be included  as  Eligible  Inventory  despite  this  clause (h),  without  any  Rent  Reserve  being  established,  until the 60th day after the Third Amendment Effective Date;         (ix)  which  is  located  in  any  third  party  warehouse  or  is  in  the  possession  of  a  bailee  (other than  a  third  party  processor)  and  is  not  evidenced  by  a  Document  (other  than  bills  of  lading  to  the  extent permitted   pursuant   to   clause (g)   above),   unless   (i) such   warehouseman   or   bailee   has   delivered   to   the Administrative   Agent   a   Collateral   Access   Agreement   or   (ii) a   Rent   Reserve   for   such   warehousing   or bailment  has  been  established  by  the  Administrative  Agent  in  its  Permitted  Discretion;  provided  that  such Inventory  may  be  included  as  Eligible  Inventory  despite  this  clause  (i),  without  any  such  Rent  Reserve being established, until the 60th day after the Third Amendment Effective Date;         (x)   which  is  being  processed  offsite  at  a  third  party  location  or  outside  processor,  or  is  in- transit to or from such third party location or outside processor;         (xi)  which is a discontinued product or component thereof;         (xii) which is the subject of a consignment by such Loan Party as consignor;         (xiii) which is past its expiration date;                                             19

 

       (xiv) which   contains   or   bears   any   intellectual   property   rights   licensed   to   such   Loan   Party unless   the   Administrative   Agent   is   satisfied   that   it   may   sell   or   otherwise   dispose   of   such   Inventory without   (i)   infringing   the   rights   of   such   licensor,   (ii)   violating   any   contract   with   such   licensor,   or (iii) incurring  any  liability  with  respect  to  payment  of  royalties  other  than  royalties  incurred  pursuant  to sale of such Inventory under the current licensing agreement;         (xv)  which  is  not  reflected  in  a  current  perpetual  inventory  report  of  such  Loan  Party  (unless such Inventory is reflected in a report to the Administrative Agent as “in transit” Inventory);         (xvi) for which reclamation rights have been asserted by the seller;         (xvii) which has been acquired from a Sanctioned Person;         (xviii) which  consists  of  equipment  (other  than  brewed  and  liquid  coffee  equipment  (including coffee brewers and grinders, cocoa and cappuccino dispensing machines, and similar machines)); or         (xix) which is work-in-progress, unless consisting of in-process green coffee.         “Environmental   Laws ”  means  all  laws,  rules,  regulations,  codes,  ordinances,  and  all  binding orders, decrees, judgments, injunctions, notices or agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters to the extent related to exposure to Hazardous Materials.         “Environmental   Liability ”  means  any  liability  (including  any  liability  for damages,  costs  of environmental remediation, fines, penalties or indemnities), of the Borrower or Subsidiary resulting from (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials resulting in personal injury or property damage or a claim of such injury or property damage, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed by or imposed upon the Borrower or any Subsidiary with respect to any of the foregoing.        “Equity  Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.        “ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.        “ERISA  Affiliate ” means any trade or business (whether or not incorporated) that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.         “ERISA  Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard                                             20

 

with respect to any Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate  any  Plan  or  Plans  or  to  appoint  a  trustee  to  administer  any  Plan;  (f) the  incurrence  by  the Company  or  any  of  its  ERISA  Affiliates  of  any  liability  with  respect  to  the  withdrawal  or  partial withdrawal of the Company or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan  from  the  Company  or  any  ERISA  Affiliate  of  any  notice,  concerning  the  imposition  upon  the Company or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization critical status , within the meaning of Title IV of ERISA.         “ESOP ” means the Farmer Bros. Co. Amended and Restated Employee Stock Ownership Plan, effective  January  1,  2000,  as  the  same  now  exists  and  may  hereafter  be  amended,  modified, supplemented, extended, renewed, restated or replaced.         “ESOP  Indebtedness ” means the Indebtedness owing by the ESOP to the Company pursuant to the ESOP Loan Documents and all interest, fees, reimbursement obligations, expenses, indemnification and other obligations with respect thereto.        “ESOP  Loan  Agreements ” means the (a) ESOP Loan Agreement, dated as of March 28, 2000, between the Company, as lender and the ESOT and (b) ESOP Loan Agreement No. 2, dated as of July 21, 2003, between the Company, as lender, and the ESOT, in each case as the same now exists and may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.         “ESOP  Loan  Documents ” means, collectively, the ESOP Loan Agreements, the ESOP Notes and all other agreements, documents and instruments executed and/or delivered in connection with any of the foregoing, as each of the foregoing now exists and may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.         “ESOP  Notes ” means the (a) Promissory Note, dated March 28, 2000 and (b) Promissory Note, dated July 21, 2003, in each case payable by the ESOT to the Company, as the same now exists and may hereafter be amended, modified, supplemented, executed, renewed, restated or replaced.         “ESOT ”  means  Farmer  Bros.  Co.  Employee  Stock  Ownership  Benefit  Trust,  created  by  the Company pursuant to the ESOT Trust Agreement to implement the ESOP, as the same now exists and may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.         “ESOT   Trust   Agreement ”  means  the  Farmer  Bros.  Co.  Employee  Stock  Ownership  Trust Agreement, dated September 28, 2005, between the Company and the ESOT Trustee, as the same now exists and may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.         “ESOT Trustee ” means Greatbanc Trust Company and any successors in such capacity.        “EU  Bail-In  Legislation  Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.         “Eurodollar ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted LIBO Rate.                                             21

 

       “Event of Default ” has the meaning assigned to such term in Section 7.01.         “Excess Cash Amount” has the meaning assigned to such term in Section 2.11(c).         “Excluded Collateral ” has the meaning assigned to such term in the Security Agreement.         “Excluded Swap Obligation ” means, with respect to any Loan Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Guarantor of, or the grant by such Loan Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Guarantor’s failure for any reason to constitute an ECP at the time the Guarantee of such Loan Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.        “Excluded Taxes ” means 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 net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Revolving Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Revolving Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Revolving Commitment or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f); and (d) any Taxes imposed under FATCA.         “Existing Credit Agreement ” has the meaning assigned to such term in the recitals hereto.         “Existing Letters of Credit ” means the Letters of Credit heretofore issued pursuant to the Existing Credit Agreement and described on Schedule 2.06.         “Farmer   Trademark ”  means,  collectively,  the  trademarks  owned  by  the Company  set  forth  on Schedule 1.01F.         “FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted  pursuant  to  any  intergovernmental  agreement,  treaty  or  convention  among  Governmental Authorities and implementing such Sections of the Code.         “Federal  Funds  Effective  Rate ” means, for any day, the rate calculated by the NYFRB based on such  day’s  federal  funds  transactions  by  depositary institutions, as determined in such manner as the NYFRB   shall be  set forth on its  public  website the  Federal  Reserve  Bank  of  New  York’s  Website  from                                             22

 

time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate, provided  that, if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.         “Federal   Reserve   Bank   of   New   York’s   Website”   means   the   website   of   the   NYFRB   at http://www.newyorkfed.org, or any successor source.         “Financial Covenants ” means the financial covenants set forth in Section 6.12.        “Financial   Officer ”  means  the  chief  financial  officer,  principal  accounting officer, treasurer or controller of the Borrower.         “Financials ” means the annual or quarterly financial statements, and accompanying certificates and other documents, of the Borrower and its Subsidiaries required to be delivered pursuant to Section 5.01(a) or 5.01(b), as applicable.         “FIRREA ” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989.         “Fixed Charge  Coverage Ratio” means, at any date for  any Test Period, the ratio of (a) the sum of (i) EBITDA  for   such   Test   Period  minus   (ii) expenses   for   taxes   paid   in   cash   during   such   Test   Period, minus  (iii) 50%  of  depreciation  for  such  Test  Period,  minus  (iv) Restricted  Payments  made  in  cash  during such   Test   Period,   to   (b) Fixed   Charges,   all  calculated   for   the   Borrower   and   its   Subsidiaries   on   a consolidated   basis   in   accordance   with   GAAP .   Notwithstanding   the   foregoing,   solely   for   purposes   of calculating   the   Fixed   Charge   Coverage   Ratio,   EBITDA   (x)  for   the  Test   Period   ending   September   30, 2021   shall   be   computed   by   multiplying   EBITDA   for   the   period   beginning   July   1,   2021   and   ending September  30,  2021  by  four  (4),  (y) for  the  Test  Period  ending  December  31,  2021  shall  be  computed  by multiplying  EBITDA  for  the  period  beginning  July  1,  2021  and  ending  December  31,  2021  by  two  (2), and  (z) for  the  Test  Period  ending  March  31,  2022  shall  be  computed  by  multiplying  EBITDA  for  the period beginning July 1, 2021 and ending March 31, 2022 by four thirds (4/3).         “Fixed  Charges”  means,  for  any  Test  Period , without  duplication,  (a) cash  Consolidated  Interest Expense  for  such  Test  Period,  plus  (b) scheduled  principal  payments  on  Indebtedness  actually  made  in cash  during  such  Test  Period,  plus  (c) the  aggregate  amount  of  mandatory  commitment  reductions  made pursuant to Section 2.09(f) during such Test Period.         “Flood Laws ” has the meaning assigned to such term in Section 8.09.         “Foreign   Lender ”  means  (a)  if  the  Borrower  is  a  U.S.  Person,  a  Lender,  with  respect  to  the Borrower, that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender, with respect to the Borrower, that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.        “Foreign Subsidiary ” means any Subsidiary which is not a Domestic Subsidiary.        “Funding Account ” has the meaning assigned to such term in Section 4.01(h).         “GAAP ” means generally accepted accounting principles in the U.S.        “Governmental  Authority ” means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body,                                             23

 

instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property  or  services,  (f) all  Indebtedness  of  others  secured  by  (or  for  which  the  holder  of  such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, provided, in the case of any such obligations that are non-recourse to such Person, that the amount of obligations counted as Indebtedness shall be no greater than the fair market value of the assets subject to such Lien, (g) obligations under any Earn-Out that is due and payable, (h) all Capital Lease Obligations of such Person, (i) all reimbursement obligations of such Person as an account party in respect of letters of credit, bankers’ acceptances and letters of guaranty (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit, bankers’ acceptances or letters of guaranty plus the aggregate amount of drawings thereunder that have not been reimbursed), (j) net obligations  under  any  and  all  Swap  Agreements  valued  at  the  Agreement  Value  thereof  and  (k)  all Guarantees  by  such  Person  of  Indebtedness  described  in  the  foregoing  clauses  of  others;  provided , however , that the term “Indebtedness” shall not include (i) trade accounts or accounts payable, accrued expenses and liabilities incurred and customer deposits received in each instance, in the ordinary course of  business  and  not  constituting  indebtedness  for  borrowed  money  or  evidenced  by  notes  or  other instruments, (ii) payments owed by Buyer (or any of its affiliates), and any Guarantee thereof by the Company, pursuant to Sections 1.9 and 8.10 of the APA, Sections 2 and 6.14 of the Transition Services Agreement  and  Sections  3(e)  and  12(u)  of  the  Co-Manufacturing  Agreement,  (iii)  purchase  price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warranties or other unperformed obligations of the seller of such asset or (iv) obligations arising under conditional purchase agreements in respect of real property to the extent the purchase or other acquisition of such real property is conditioned on the sale or other transfer of another real property and such obligation to purchase comes due within 180 days of such agreement.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) 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 the terms of such Indebtedness provide that such Person is not liable therefor.         “Indemnified  Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a) hereof, Other Taxes.         “Indemnitee ” has the meaning assigned to such term in Section 9.03( bc).         “Ineligible Institution ” has the meaning assigned to such term in Section 9.04(b).         “Information ” has the meaning assigned to such term in Section 9.12.         “Interest  Coverage  Ratio ” means,  with  respect  to  any  Test  Period,  the  ratio  of  (a)  EBITDA  of  the Borrower  and  the  Subsidiaries  for  such  Test  Period  to  (b)  Consolidated  Interest  Expense  of  the  Borrower and the Subsidiaries for such Test Period, in each case, calculated for the Borrower and its Subsidiaries on a consolidated  basis  in  accordance  with  GAAP  and , to  the  extent  applicable,  on  a  pro  forma  basis  with such pro forma adjustments as are appropriate and consistent with Section 1.06.         “Interest  Election  Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.08 which shall be substantially in the form attached hereto as Exhibit G-2  or any other form approved by the Administrative Agent.                                             25

 

       “Interest  Payment  Date ” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December and the Maturity Date, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part  and,  in  the  case  of  a  Eurodollar  Borrowing  with  an  Interest  Period  of  more  than  three  months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration  after  the  first day of such Interest Period and the Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.         “Interest  Period ” means, with respect to any Eurodollar Borrowing, the period commencing on the  date  of  such  Eurodollar  Borrowing  and  ending (a) one   week   after   the   date   of   such   Eurodollar Borrowing  or  (b) on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided , that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless , such next succeeding Business Day would fall in the next calendar month, in which case such Interest  Period  shall  end  on  the next immediately  preceding Business Day and (ii) any Interest Period described in clause (b) of this definition  that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period)  shall  end  on  the  last  Business  Day  of  the  last  calendar  month  of  such  Interest  Period.   For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.         “Interpolated  Rate ” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate (for the longest period for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.   When  determining  the  rate  for  a  period  which  is  less than  the  shortest  period  for  which  the  LIBO  Screen  Rate  is  available,  the  LIBO  Screen  Rate  for  purposes of  clause  (a)  above  shall  be  deemed  to  be  the  overnight  screen  rate  where  “overnight  screen  rate”  means the overnight rate determined by  the Administrative Agent from such service as the Administrative Agent may  select.   Notwithstanding  the  foregoing,  in  no  event  shall  the  Interpolated  Rate  be  less  than  1.00%  per annum.         “Inventory ” has the meaning assigned to such term in the Security Agreement.         “Investment ” has the meaning provided in Section 6.04.         “IRS ” means the United States Internal Revenue Service.         “Issuing  Bank ” means JPMorgan Chase Bank, N.A. and any other Lender that agrees to act as an Issuing Bank, each in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i).  Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. Each reference herein to the “Issuing Bank” in connection with a Letter of Credit or other matter shall be deemed to be a reference to the relevant Issuing Bank with respect thereto.        “Joinder Agreement ” means a Joinder Agreement in substantially the form of Exhibit C .                                             26

 

       “Landlord  Lien  State”  means  any  state  in  which,  at  any  time,  a  landlord’s,  warehouseman’s  or bailee’s  claim  for  rent,  charges  and  other  amounts  due  or  to  become  due  with  respect  to  such  location  has priority   (notwithstanding   any   contractual   provision   to   the   contrary)   by   operation   of   applicable Requirement of Law over the Lien of the Administrative Agent in any of the Collateral.         “LCA   Election ”  means  the Borrower’s election to treat a specified Permitted Acquisition as a Limited Condition Acquisition.        “LCA Test Date ” shall have the meaning set forth in Section 1.07.         “LC Collateral Account ” has the meaning assigned to such term in Section 2.06(j).         “LC Disbursement ” means any payment made by an Issuing Bank pursuant to a Letter of Credit.         “LC   Exposure ”  means,  at  any  time,  the  sum  of  (a) the  aggregate undrawn  amount  of  all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.   For  all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any  amount  may  still  be  drawn  thereunder  by  reason  of  the  operation  of  Article  29(a)  of  the  Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or  such  later  version  thereof  as  may  be  in  effect  at  the  applicable  time)  or  Rule  3.13  or  Rule  3.14  of  the International  Standby  Practices,  International  Chamber  of  Commerce  Publication  No.  590  (or  such  later version  thereof  as  may  be  in  effect  at  the  applicable  time)  or  similar  terms  of  the  Letter  of  Credit  itself,  or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be  “outstanding”  and  “undrawn”  in  the  amount  so  remaining  available  to  be  paid,  and  the  obligations  of the  Borrower  and  each  Lender  shall  remain  in  full  force  and  effect  until  the  Issuing  Bank  and  the  Lenders shall  have  no  further  obligations  to  make  any  payments  or  disbursements  under  any  circumstances  with respect to any Letter of Credit.         “Lenders ”  means  the  Persons  listed  on  Schedule  2.01A  and  any  other  Person  that  shall  have become a Lender hereunder pursuant to an Assignment and Assumption, other than any such Person that ceases  to  be  a  Lender  hereunder  pursuant  to  an  Assignment  and  Assumption.   Unless  the  context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.         “Letter of Credit Agreement ” has the meaning assigned to such term in Section 2.06(b).         “Letter  of  Credit  Commitment ” means, with respect to each Issuing Bank, the commitment of such Issuing Bank to issue Letters of Credit hereunder.  The initial amount of each Issuing Bank’s Letter of  Credit  Commitment  is  set  forth  on  Schedule  2.01B,  or  if  an  Issuing  Bank  has  entered  into  an Assignment and Assumption or has otherwise assumed a Letter of Credit Commitment after the Effective Date, the amount set forth for such Issuing Bank as its Letter of Credit Commitment in the Register maintained by the Administrative Agent.  The Letter of Credit Commitment of an Issuing Bank may be modified from time to time by agreement between such Issuing Bank and the Borrower, and notified to the Administrative Agent.        “Letters  of  Credit ” means the letters of credit issued pursuant to this Agreement, including the Existing  Letters  of  Credit,  and  the  term  “Letter   of   Credit ”  means  any  one  of  them  or  each  of  them singularly, as the context may require.                                             27

 

       “Liabilities”   means   any  losses,   claims  (including   intraparty   claims),   demands,   damages   or liabilities of any kind.         “LIBO  Rate ” means, with respect to any Eurodollar Borrowing and for any applicable Interest Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; provided  that, if the LIBO Screen Rate shall not be available at  such  time  for  such  Interest  Period  (the  “Impacted   Interest   Period ”),  then  the  LIBO  Rate  for  such Interest Period shall be the Interpolated Rate , subject  to  Section  2.14  in  the  event  that  the  Administrative Agent  shall  conclude  that  it  shall  not  be  possible  to  determine  such  Interpolated  Rate  (which  conclusion shall   be   conclusive   and   binding   absent   manifest   error).   Notwithstanding  the  above,  to  the  extent  that “LIBO  Rate”  or  “Adjusted  LIBO  Rate”  is  used  in  connection  with  an  ABR  Borrowing,  such  rate  shall  be determined  as  modified  by  the  definition  of  Alternate  Base  Rate .  It is understood and agreed that all of the terms and conditions of this definition of “LIBO Rate” shall be subject to Section 2.14.         “LIBO  Screen  Rate ” means, for any day and time, with respect to any Eurodollar Borrowing and for  any  Interest  Period,  the  London  interbank  offered  rate  as  administered  by  ICE  Benchmark Administration  (or  any  other  Person  that  takes  over the administration of such rate) for dollars for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the  appropriate  page  of  such  other  information  service  that  publishes  such  rate  from  time  to  time  as selected by the Administrative Agent in its reasonable discretion); provided  that if the LIBO Screen Rate as so determined would be less than zero 1.00% per annum , such rate shall be deemed to be zero 1.00% per annum  for the purposes of this Agreement.         “Lien ”  means,  with  respect  to  any  asset,  (a) any  mortgage,  deed  of  trust,  lien,  pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or  a  lessor  under  any  conditional  sale  agreement,  capital  lease  or  title  retention  agreement  (or  any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset  and  (c) in  the  case  of  securities,  any  purchase option, call or similar right of a third party with respect to such securities.        “Limited  Condition  Acquisition ” means any Permitted Acquisition permitted hereunder by the Borrower or one or more of its Subsidiaries whose consummation is not conditioned on the availability of, or on obtaining, third party financing.         “Liquidity”  means,  at  any  time,  the  sum  of  (a) Availability  at  such  time,  plus  (b) all  Specified Cash   and   unrestricted   and   unencumbered   (except   for   Liens   of   the   type   described   in   the   definition   of Specified Cash) cash equivalents at such time (x) owned by a Loan Party, (y) located in the United States, and  (z) maintained  in  an  account  that  is  subject  to  a  first  priority  security  interest  (subject  to  Permitted Encumbrances  of  the  type  described  in  clause  (j)  of  the  definition  thereof)  in  favor  of  the  Administrative Agent,   for   the   benefit   of   the   Secured   Parties,   pursuant   to   control   agreements   in   favor   of   the Administrative  Agent  and  reasonably  satisfactory  to  the  Administrative  Agent  (provided  that,  prior  to  the date   on   which   control   agreements   are   required   to   be  executed  pursuant  to  the  Third  Amendment,  this clause (z)  shall  not  apply  to  Specified  Cash),  minus  (c) the  aggregate  outstanding  amount  of  Protective Advances at such time.         “LLC ” means any Person that is a limited liability company under the laws of its jurisdiction of formation.                                             28

 

       “Loan  Documents ” means, collectively, this Agreement, including schedules and exhibits hereto, any  promissory  notes  issued  pursuant  to  this  Agreement,  any  Letter  of  Credit  applications  and  any agreements between the Borrower and an Issuing Bank regarding the issuance by such Issuing Bank of Letters of Credit hereunder and/or the respective rights and obligations between the Borrower and such Issuing Bank in connection thereunder, the Collateral Documents, the Loan Guaranty, any amendments, modifications or supplements thereto (including,  for  the  avoidance  of  doubt,  the  Third  Amendment)  or waivers thereof, legal opinions issued in connection with the other Loan Documents, UCC filings and all other  agreements,  instruments,  documents  and  certificates  identified  in  Section  4.01  executed  and delivered to, or in favor of, the Administrative Agent or any Lender and including all other agreements, pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, with or in favor of the Administrative Agent and/or the Lenders and delivered  to  the  Administrative  Agent  or  any  Lender  in  connection  with  this  Agreement  or  the transactions contemplated hereby.  Any reference in this Agreement or any other Loan Document to a Loan  Document  shall  include  all  appendices,  exhibits  or  schedules  thereto,  and  all  amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.        “Loan Guarantor ” means each Loan Party.         “Loan Guaranty ” means Article X  of this Agreement.         “Loan Parties ” means, collectively, the Borrower and the Subsidiary Guarantors.        “Loans ”  means  the  loans  and  advances  made  by  the  Lenders pursuant  to  this  Agreement, including Swingline Loans , Overadvances, and Protective Advances .         “Material  Adverse  Effect ” means a material adverse effect on (a) the business, assets, operations, or financial condition of the Company and its Subsidiaries, taken as a whole  (provided  that,  solely  for purposes   of   making   the   representation   and   warranty   set   forth   in   Section 3.04(b)   as   a   condition   to   the occurrence  of  the  Third  Amendment  Effective  Date  and  as  a  condition  to  any  extension  of  credit  during the  period  beginning  on  the  Third  Amendment  Effective  Date  and  ending  on  and  including  December  31, 2020,  this  clause (a)  shall  exclude  changes  or  effects  arising  out  of  or  otherwise  related  to  the  impact  of the  COVID-19  pandemic  on  the  Company’s  operations  as  reflected  in  the  projections  of  the  Company most   recently   delivered   to   the   Administrative   Agent   prior   to   the   Third   Amendment   Effective   Date) , (b) the ability of the Loan Parties taken as a whole to perform any of their obligations under the Loan Documents to which it is a party, (c) the Collateral, or the Administrative Agent’s Liens (on behalf of itself and other Secured Parties) on the Collateral or the priority of such Liens, or (d) the material rights or remedies available to the Administrative Agent, the Issuing Bank or the Lenders under any of the Loan Documents.         “Material  Domestic  Subsidiary ” means  each  Domestic  Subsidiary  which,  as  of  the  most  recent fiscal  quarter  of  the  Borrower,  for  the  period  of  four  consecutive  fiscal  quarters  then  ended,  for  which financial  statements  have  been  delivered  pursuant  to  Section  5.01( a)  or  (b)  (or,  if  prior  to  the  date  of  the delivery of the first financial statements to be delivered pursuant to Section 5.01(a) or (b), the most recent financial statements referred to in Section 3.04(a)), contributed greater than five percent (5%) of EBITDA of  the  Borrower  and  the  Subsidiaries  for  such  period  or  which  contributed  greater  than  five  percent  (5%) of   Consolidated   Total   Assets   as   of   such   date;  provided   that,   if   at   any   time   the   aggregate   amount   of EBITDA   or   Consolidated   Total   Assets   attributable   to   all   Domestic   Subsidiaries   that   are   not   Material Domestic Subsidiaries exceeds ten percent (10%) of EBITDA for any such period or ten percent (10%) of Consolidated  Total  Assets  as  of  the  end  of  any  such  fiscal  quarter,  the  Borrower  (or,  in  the  event  the                                            29

 

Borrower  has  failed  to  do  so  within  ten  (10)  Business  Days,  the  Administrative  Agent)  shall  designate sufficient  Domestic  Subsidiaries  as  “Material  Domestic  Subsidiaries”  to  eliminate  such  excess,  and  such designated   Subsidiaries   shall   for   all   purposes   of   this   Agreement   constitute   Material   Domestic Subsidiaries .  For  the  avoidance  of  doubt,  no  Domestic  Subsidiary  Holdco  shall  be  a  Material  Domestic Subsidiary.         “Material   Indebtedness ”  means  Indebtedness  (other  than  the  Loans  and  Letters  of  Credit),  or obligations in respect of one or more Swap Agreements, of any one or more of the Company and its Subsidiaries  in  an  aggregate  principal  amount  exceeding  $10,000,000.   For  purposes  of  determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting  agreements)  that  the  Borrower  or  such  Subsidiary  would  be  required  to  pay  if  such  Swap Agreement were terminated at such time.         “Material  Real  Property ” means  any  fee  owned  real  property  having  a  fair  market  value  greater than $ 5,000,000.         “Maturity   Date ”  means  November  6,  2023  or  any  earlier  date  on  which  the  Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.         “Maximum  Overadvance  Amount ” means,  as  of  any  date,  an  aggregate  amount  not  to  exceed  at any time the lesser of (a)  the amount set forth opposite such date in the table below and (b) solely after the date on which all appraisals for such real property and machinery and equipment, in each case owned by a Loan  Party  as  of  the  Third  Amendment  Effective  Date,  have  been  delivered  to  the  Administrative  Agent and  the  Borrower  as  required  hereunder,  the  sum  of  (i)  an  amount  equal  to  70%  of  the  appraised  value  of all  Mortgaged  Property  subject  to  a  first  priority  Mortgage  (subject  only  to  Liens  permitted  by  Section 6.02   that   do   not   secure   Indebtedness),   in   each   case   based   on   the   most   recent   appraisal   delivered   by Borrower  in  accordance  with  the  terms  hereof  and  (ii)  an  amount  equal  to  50%  of  the  appraised  value  of the   machinery   and   equipment   of   the   Loan   Parties   subject   to   a   first   priority   Lien   in   favor   of   the Administrative   Agent,   for   the   benefit   of   the   Secured   Parties   (subject   to   only   to   Liens   permitted   by Section 6.02 that do not secure Indebtedness), at such time:                      For any Date                     Maximum                   Occurring During              Overadvance Amount                       July 2020                     $37,992,538                      August 2020                    $44,802,367                    September 2020                   $47,522,116                      October 2020                   $52,195,782                    November 2020                    $56,349,421                     December 2020                   $58,491,619                      January 2021                   $68,397,423                     February 2021                   $67,972,549                      March 2021                     $65,536,511                       April 2021                    $63,928,934                       May 2021                      $70,714,628                                            30

 

                June 2021 and any month             $66,846,869                       thereafter         “Maximum Rate ” has the meaning assigned to such term in Section 9.17.         “MIRE  Event ” means, at any time, to the extent any Mortgaged Properties exist at such time, any increase,  extension  or  renewal  of  any  of  the  Revolving  Commitments  or  Loans  (excluding  (i)  any continuation or conversion of any Borrowing, (ii) the making of any Loan after the Effective Date or (iii) the issuance, renewal or extension of any Letter of Credit).         “Moody’s ” means Moody’s Investors Service, Inc.         “Mortgage ” means each mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Secured Parties,  on  real  property of owned   in   fee   by   a  Loan  Party,  including  any  amendment,  restatement, modification or supplement thereto.         “Mortgage   Instruments ”  means  such  title  reports,  ALTA  title  insurance  policies  (with endorsements  customary for the applicable jurisdiction to the extent available, which shall not include any ALTA   3.1   endorsements ),  evidence  of  zoning  compliance   to   the   extent   available   in   the   applicable jurisdiction   and   required   in   order   to   obtain   an   ALTA   3   endorsement ,  property  insurance,  flood certifications and , if  required  by  applicable  Flood  Laws  based  on  the  flood  zone  determination  obtained by   the   Administrative   Agent,   evidence   of   required   flood  insurance  (and,  if  applicable  FEMA  form acknowledgements  of  insurance), opinions   of   counsel,  ALTA  surveys,  appraisals,  environmental assessments and reports  (including,  to  the  extent  required  hereunder  or  under  the  other  Loan  Documents, Phase  I  studies  and,  to  the  extent  required  as  a  result  of  any  Phase  I  study,  Phase  II  studies) , mortgage tax affidavits  and  declarations  and  other  similar  information  and  related  certifications  as  are reasonably requested by, and in form and substance reasonably acceptable to, the Administrative Agent from time to time.   Mortgage Instruments shall not include legal opinions.         “Mortgaged Property ” means any parcel of real property subject to a Mortgage.         “Multiemployer  Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions or with respect to which the Borrower or any ERISA Affiliate has incurred or could reasonably be expected to incur any liability with respect to a complete withdrawal or partial withdrawal therefrom (within the meaning of Sections 4203 or 4205 of ERISA, respectively).        “Net  Income ” means, for any period, the consolidated net income (or loss) of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided  that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Company or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Company or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Company or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary (other than the Borrower or Loan Guarantor) to the extent that the declaration or payment of dividends or similar  distributions  by  such  Subsidiary  is  not  at the  time  permitted  by  the  terms  of  any  contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.         “Net Proceeds” means:                                             31

 

       (i)   with   respect   to   any   event   not   described   in   the   following   clause   (b)   of   this   definition, (i) the  cash  proceeds  received  in  respect  of  such  event  including  (x) any  cash  received  in  respect  of  any non-cash   proceeds   (including   any   cash   payments   received   by   way   of   deferred   payment   of   principal pursuant   to   a   note   or   installment   receivable   or   purchase   price   adjustment   receivable   or   otherwise,   but excluding  any  interest  payments),  but  only  as  and  when  received,  (y) in  the  case  of  a  casualty,  insurance proceeds,   and   (z) in   the   case   of   a   condemnation   or   similar   event,   condemnation   awards   and   similar payments,  minus  (ii) the  sum  of  (x) all  reasonable  fees  and  out-of-pocket  expenses  paid  to  third  parties (including  advisors  but  excluding  Affiliates  of  the  Borrower)  in  connection  with  such  event,  (y) in  the case   of   a   sale,   transfer   or   other   Disposition   of   an   asset   (including   pursuant   to   a   Sale   and   Leaseback Transaction  or  a  casualty  or  a  condemnation  or  similar  proceeding),  the  amount  of  all  payments  required to  be  made  as  a  result  of  such  event  to  repay  Indebtedness  (other  than  Loans)  secured  by  such  asset  or otherwise  subject  to  mandatory  prepayment  as  a  result  of  such  event,  and  (z) the  amount  of  all  taxes  paid (or  reasonably  estimated  to  be  payable)  and  the  amount  of  any  reserves  established  to  fund  contingent liabilities   reasonably   estimated   to   be   payable,   in   each   case   during   the   two-year  period  following  such event  and  that  are  directly  attributable  to  such  event  (as  determined  reasonably  and  in  good  faith  by  a Financial Officer of the Borrower); and         (ii)  in   connection   with   any   issuance   or   sale   of  Equity   Interests  or   any   incurrence   of Indebtedness,  (i)  the  cash  proceeds  received  from  such  issuance  or  incurrence,  minus  (ii)  to  the  extent paid   to   third   parties   (including   advisors   but   excluding   Affiliates   of   the   Borrower),   reasonable   out-of- pocket   attorneys’   fees,   investment   banking   fees,   accountants’   fees,   underwriting   discounts   and commissions   and   other   reasonable   out-of-pocket   and   customary   costs,   fees,   and   expenses   actually incurred (or reasonably expected to be incurred) in connection therewith.         “Non-Consenting Lender ” has the meaning assigned to such term in Section 9.02(d).         “Non-U.S. Lender ” means a Lender that is not a U.S. Person.         “Northlake  Property ” means the real property located at 1912 Farmer Brothers Drive, Northlake, TX 76262.         “NYFRB ” means the Federal Reserve Bank of New York.         “NYFRB  Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business  Day,  for  the  immediately  preceding  Business  Day);  provided   that  if  none  of  such  rates  are published for any day that is a Business Day, the term “NYFRB  Rate ” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided,  further , that if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.         “Obligated Party ” has the meaning assigned to such term in Section 10.02.         “Obligations ” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure,  Letter  of  Credit  commissions,  all  accrued  and  unpaid  fees  and  all  expenses,  charges, reimbursements, indemnities, debts, covenants and other obligations and indebtedness (including interest and  fees  accruing  during  the  pendency  of  any  bankruptcy,  insolvency,  receivership  or  other  similar proceeding, regardless of whether allowed or allowable in such proceeding), liabilities and duties of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect (including those acquired by assumption), joint or several, absolute or contingent, matured or unmatured,                                            32

 

liquidated  or  unliquidated,  secured  or  unsecured,  arising  by  contract,  operation  of  law  or  otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans  made  or  reimbursement  or  other  obligations  incurred  or  any  of  the  Letters  of  Credit  or  other instruments  at  any  time  evidencing  any  thereof,  including,  without  limitation,  the  obligations  of  the Borrower to reimburse any amount in respect of any of the foregoing that the Administrative Agent or any Lender, in each case in its sole discretion, may elect to pay or advance on behalf of the Borrower.        “OFAC  ” means the Office of Foreign Assets Control of the  United  States  Department  of  the Treasury.        “Other  Connection  Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or any Loan Document).         “Other  Taxes ” means all present or future stamp, court or documentary, intangible, recording, filing  or  similar  Taxes  that  arise  from  any  payment  made  under,  from  the  execution,  delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).         “Overadvance” has the meaning assigned to such term in Section 2.05(f).         “Overnight  Bank  Funding  Rate ” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its  public  website the  Federal Reserve  Bank  of  New  York’s  Website  from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.         “Parent ” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.        “Participant ” has the meaning assigned to such term in Section 9.04(c).         “Participant Register ” has the meaning assigned to such term in Section 9.04(c).         “PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.         “Permitted   Acquisition ” means any Acquisition by a Loan Party in a transaction  that  satisfies each of the following requirements:         (a)   such Acquisition is not a hostile acquisition;        (b)    the business acquired in connection with such Acquisition is (i) located in the U.S., (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are permitted to be engaged on the Effective                                             33

 

Date  and  any  business  activities  that  are  reasonably  similar,  related,  complementary,  ancillary  or incidental thereto;         (c)   both before and after giving effect (including giving effect on a pro forma basis) to such Acquisition and the Loans (if any) requested to be made in connection therewith, no Event of Default has occurred and is continuing or would result therefrom;         (d)   both before and after giving effect (including giving effect on a pro forma basis) to such Acquisition and the Loans (if any) requested to be made in connection therewith, the Borrower and the Subsidiaries are in compliance with the Financial Covenants then in effect for the most recently ended Test Period;         (e)   if the aggregate consideration paid in respect of such Acquisition exceeds $20,000,000, the Borrower shall have delivered to the Administrative Agent (i) a certificate of a Financial Officer or other  executive  officer  of  the  Borrower  certifying that  the  conditions  set  forth  in  this  definition  of “Permitted Acquisition” will have been met as of the date of consummation of such Acquisition and (ii) solely  to  the  extent  available  in  connection  with  the  relevant  Acquisition  and  not  in  breach  of  any confidentiality  or  similar  restriction  in  the  applicable  acquisition  documents, copies  of  the  relevant acquisition documents and all business and financial information related to such Acquisition reasonably requested by the Administrative Agent including pro forma financial statements and statements of cash flow (unless waived by the Administrative Agent in its sole discretion);        (f)    in the case of a merger or consolidation involving (I) the Borrower, the Borrower is the surviving  entity  of  such merger and/or consolidation and (II) any Loan Party, such Loan Party is the surviving entity of such merger and/or consolidation;         (g)   all actions required to be taken with respect to any newly acquired or formed Subsidiary of the Borrower or a Loan Party or any other newly acquired assets of the Borrower or a Loan Party, as applicable, required under Section 5.11 shall be taken by the timeframes specified therein;  and         (h)   for any Acquisition consummated prior to March 31, 2022, the aggregate consideration paid or payable in respect of such Acquisition, when taken together with the aggregate consideration paid in  respect  of  all  other  Permitted  Acquisitions  consummated  during  the  fiscal  year  in  which  such Acquisition was consummated, does not exceed $2,500,000 during any such fiscal year of the Borrower .; and         (ix)  if  any  of  the  Accounts,  Inventory,  machinery  and  equipment  acquired  in  connection  with such   Acquisition   are   proposed   by   the   Borrower   to   be   included   in   the   determination   of   the   Borrowing Base,   the   Administrative   Agent,   at   its   option   and  in  its  Permitted  Discretion,  shall  have  conducted  an audit  and  field  examination  of  such  assets  at  the  sole  cost  of  the  Borrower,  the  results  of  which  shall  be satisfactory to the Administrative Agent in its Permitted Discretion.         “Permitted  Borrowing  Base  Liens”  means  (i) Liens  described  in  clauses  (a),  (b),  ( g),  (j),  and  (k) of  the  definition  of  Permitted  Encumbrances  and  Liens  permitted  pursuant  to  Section  6.02(m),  in  each case,  solely  to  the  extent  any  such  Lien  does  not  secure  any  Indebtedness  and  does  not  have  priority  over the Lien in favor of the Administrative Agent, and (ii) Liens permitted pursuant to Section 6.02(a).         “Permitted  Discretion”  means  a  determination  made  by  the  Administrative  Agent  in  good  faith and   in   the   exercise   of   reasonable   (from   the   perspective   of   a   secured   asset-based   lender)   business judgment.    When   Permitted   Discretion   relates   to   the   establishment   of   Reserves   after   the   Third Amendment  Effective   Date  or   the   imposition   of   additional   exclusionary   criteria   after   the   Third                                             34

 

Amendment  Effective  Date,  it  shall  require  that  (a) such  establishment  or  imposition  be  based  on  (i)  the results  of  any  field  exam  or  appraisal  performed  after  the  Third  Amendment  Effective  Date,  or  (ii) an analysis  of  facts  or  events  first  occurring  or  first  discovered  by  the  Administrative  Agent  after  the  Third Amendment   Effective   Date   or   that   are   different   from   the   facts   or   events   occurring   and   known   to   the Administrative   Agent   on   the   Third   Amendment   Effective   Date,   unless   the   Borrower   and   the Administrative   Agent   otherwise   agree   in   writing,   (b) the   contributing   factors   to   the   imposition   of   any Reserves shall not duplicate (i) the exclusionary criteria set forth in the definitions of Eligible Accounts or Eligible  Inventory,  as  applicable  (and  vice  versa)  or  (ii) any  reserves  deducted  in  computing  book  value, and  (c) the  amount  of  any  such  Reserve  so  established  or  the  effect  of  any  adjustment  or  imposition  of exclusionary   criteria   shall   be   a   reasonable   quantification   of   the   incremental   dilution   of   the   Borrowing Base attributable to such contributing factors.         “Permitted Encumbrances ” means:         (i)          (a)    Liens  imposed  by  law  for  Taxes  that  are  not  yet  due  or  are  being contested in compliance with Section 5.04 (excluding ERISA Liens for the avoidance of doubt);         (ii)         (b)    carriers’,  warehousemen’s,  mechanics’,  materialmen’s,  repairmen’s, landlords’, customs brokers, custom and forwarding agents and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;         (iii)        (c)   pledges  and  deposits  made  in  the  ordinary  course  of  business  in compliance  with  workers’  compensation,  unemployment  insurance  and  other  social  security  laws  or regulations;         (iv)         (d)    deposits  to  secure  the  performance  of  bids,  tenders,  trade  contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;         (v)          (e)   judgment and other similar Liens in respect of judgments, orders for the payment of money or other court proceedings that do not constitute an Event of Default under Section 7.01(k);         (vi)         (f)    (i)  easements,  zoning  restrictions,  licenses,  rights-of-way,  site  plan agreements, development agreements, cross easement or reciprocal agreements, and other non-monetary encumbrances on real property that do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary (taken as a whole) or the ordinary operation of such real property or (ii) title defects or irregularities with respect to any real property which are of a minor nature and which in the aggregate do not materially detract from the value of  the  affected  property  or  interfere  with  the  ordinary  conduct  of  business  of  the  Borrower  or  any Subsidiary or the ordinary operation of such real property;         (vii)        (g)    Liens  arising  from  precautionary  UCC  financing  statement  filings  (or similar filings under applicable law) regarding operating leases;         (viii)       (h)    the  interests  of  lessors  or  sublessors  under  operating  leases  and  non- exclusive licensors or sublicensors under license agreements;         (ix)         (i)    Liens or rights of setoff against credit balances of the Company or any Subsidiary with credit card issuers or credit card processors to secure obligations of the Company or such                                             35

 

Subsidiary, as the case may be, to any such credit card issuer or credit card processor incurred in the ordinary course of business as a result of fees and chargebacks;         (x)          (j)    Bankers’ liens, rights of setoff and other similar Liens in the ordinary course of business in favor of a bank or institution with which accounts or deposits are maintained in the ordinary course of business;         (xi)         (k)    Liens in the nature of the right of setoff in favor  of  counterparties  to contractual agreements with the Loan Parties or their Subsidiaries in the ordinary course of business;         (xii)        (l)   possessory Liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments and cash equivalents, provided that such liens (i) attach only to such Investments and (ii) secure any obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing; and         (xiii)       (m)    customary restrictions on subletting and assignments thereof contained in leases not otherwise prohibited hereunder.         “Permitted Holders ” means the Persons listed on Schedule 1.01P.         “Permitted Investments ” means:        (a)    direct  obligations  of,  or  obligations  the  principal  of  and  interest  on  which  are unconditionally  guaranteed  by,  the  U.S.  (or  by  any agency  thereof  to  the  extent  such  obligations  are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;        (b)    investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;         (c)   investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic  office  of  any  commercial  bank  organized under the laws of the U.S. or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;         (d)   fully  collateralized  repurchase  agreements  with  a  term  of  not  more  than  30  days  for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and         (e)   money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.         “Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.        “Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of                                             36

 

which  the  Borrower  or  any  ERISA  Affiliate  is  (or,  if  such  plan  were  terminated,  would  under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.        “Plan  Asset  Regulations ” means 29 CFR § 2510.3-101 et seq. , as modified by Section 3(42) of ERISA.         “Platform ”  means  Debt  Domain,  Intralinks,  Syndtrak  or  a  substantially  similar  electronic transmission system.         “Prime   Rate ” means the rate of interest last quoted by The Wall  Street  Journal  as  the  “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined  by  the  Administrative  Agent)  or  any  similar  release  by  the  Board  (as  determined  by  the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.         “Proceeding”  means  any  claim,  litigation,  investigation,  action,  suit,  arbitration  or  administrative, judicial or regulatory action or proceeding in any jurisdiction.         “Project   Evolution ”  means  the  strategic  initiative,  business  optimization  and  restructuring  of Company’s business as identified to the Administrative Agent prior to the Effective Date.         “Projections ” has the meaning assigned to such term in Section 5.01(e).         “PTE ” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.         “Protective Advance” has the meaning assigned to such term in Section 2.04.         “Public-Sider ” means a Lender or any representative of such Lender that does not want to receive material non-public information within the meaning of federal and state securities laws.         “Purchase   Price ”  means,  with  respect  to  any  Acquisition,  an  amount  equal  to  the  aggregate consideration, whether cash, property or securities (including the fair market value of any Equity Interests of the Company issued in connection with such Acquisition and including the maximum amount of Earn- Outs), paid or delivered by the Company or one of its Subsidiaries in connection with such Acquisition (whether paid at the closing thereof or payable thereafter and whether fixed or contingent), but excluding therefrom (a) any cash of the seller and its Affiliates used to fund any portion of such consideration and (b) any cash acquired in connection with such Acquisition.         “Qualified  ECP  Guarantor ” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes  an  “eligible  contract  participant”  under  the  Commodity  Exchange  Act  or  any  regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.        “QFC Credit Support ” has the meaning assigned to it in Section 9.22.                                             37

 

       “Recipient ”  means,  as  applicable,  (a)  the  Administrative  Agent,  (b)  any  Lender  and  (c)  any Issuing Bank, or any combination thereof (as the context requires).         “Refinance Indebtedness ” has the meaning assigned to such term in Section 6.01(f).         “Register ” has the meaning assigned to such term in Section 9.04(b).         “Regulation  D ” means Regulation D of the Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.         “Related  Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.         “Release ”  means  any  releasing,  spilling,  leaking,  pumping, pouring,  emitting,  emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of any Hazardous Material into the environment.         “Relevant   Governmental   Body”   means   the   Federal   Reserve   Board   and/or   the   NYFRB,   or   a committee  officially  endorsed  or  convened  by  the  Federal  Reserve  Board  and/or  the  NYFRB  or,  in  each case, any successor thereto.         “Rent Reserves” means an amount not to exceed the sum of (x) one (1) month’s base rent for all of the Loan Parties’ leased locations that are not located in Landlord Lien States, plus  (y) two (2) months’ rent for all of the Loan Parties’ leased locations located in Landlord Lien States.         “Report”   means   reports   prepared   by   the   Administrative   Agent   or   another   Person   showing   the results   of   appraisals,   field   examinations   or   audits   pertaining   to   the  assets   of   the  Loan   Parties   from information furnished by or on behalf of the  Borrower and its Subsidiaries , after the Administrative Agent has  exercised  its  rights  of  inspection  pursuant  to  this  Agreement,  which  Reports  may  be  distributed  to  the Lenders by the Administrative Agent subject to Lenders’ confidentiality obligations hereunder.         “Required   Lenders ”  means,  at  any  time,  Lenders  (other  than  Defaulting  Lenders)  having Revolving Exposures and unused Revolving Commitments representing more than 50% of the sum of the Aggregate Revolving Exposure and unused Revolving Commitments at such time; provided  that, as long as there are only two Lenders, Required Lenders shall  mean  both  Lenders;  provided ,  further   that,  for purposes of calculating Revolving Exposure in the determination of “Required Lenders”, the Swingline Exposure  of  any  Lender  shall  be  its  Applicable  Percentage  of  the  aggregate  principal  amount  of  all Swingline  Loans  outstanding  at  such  time  unless  such  Lender  has  not  funded  its  participations  in Swingline Loans within one Business Day of such Lender’s receipt of notice from the Administrative Agent pursuant to Section 2.05(c) (such amount, the “Swingline  Unfunded  Amount ” of such Lender), in which case (i) the unfunded Revolving Commitment of such Lender shall be deemed to be reduced by such Swingline Unfunded Amount and (ii) the unfunded Revolving Commitment of the Swingline Lender shall be deemed to be increased by such Swingline Unfunded Amount.        “Requirement  of  Law ” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority                                             38

 

(including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.         “Reserves ” means  any  and  all  reserves  which  the  Administrative  Agent  deems  necessary,  in  its Permitted Discretion, including, without limitation, to reflect:         (i)   the   impediments   to   the   Administrative   Agent’s   ability   to   realize   upon   the   Collateral included in the Borrowing Base in accordance with the Loan Documents;         (ii)  claims  and  liabilities  that  will  need  to  be  satisfied,  or  will  dilute  the  amounts  received  by Lenders, in connection with the realization upon such Collateral; and         (iii) criteria, events, conditions, contingencies, or risks that adversely affect any component of the   Borrowing   Base,   the   Collateral   included   therein,   or   the   validity   or   enforceability   of   the   Loan Documents  or  any  material  remedies  of  the  Administrative  Agent,  each  Issuing  Bank,  and  each  Lender under the Loan Documents with respect to such Collateral.  Without   limiting   the   foregoing,   Reserves   may   include   any   and   all   reserves   which   the   Administrative Agent   deems   necessary,   in   its   Permitted   Discretion,  for   accrued   and   unpaid   interest   on   the   Secured Obligations,  Banking  Services  Reserves,  volatility  reserves,  reserves  for  up  to  two  weeks  of  payroll  for route   truck   drivers   (plus   any   past   due   payroll   amounts),   Rent   Reserves   (but   solely   to   the   extent   the Administrative Agent has not received an executed Collateral Access Agreement for the applicable leased location),  reasonable  reserves  for  consignee’s,  warehousemen’s,  and  bailee’s  charges  (but  solely  to  the extent   the   Administrative   Agent   has   not   received   an   executed   Collateral   Access   Agreement   from   the applicable  consignee,  warehouseman,  or  bailee),  reserves  for  dilution  of  Accounts,  reserves  for  Inventory shrinkage,  reserves  for  customs  charges  and  shipping  charges  related  to  any  Inventory  in  transit,  reserves for   Swap   Agreement   Obligations,   reserves   for   contingent   liabilities   of   any   Loan   Party,   reserves   for uninsured   losses   of   any   Loan   Party,   reserves   for   uninsured,   underinsured,   un-indemnified   or   under- indemnified   liabilities   or   reasonably   foreseeable   potential   liabilities   with   respect   to   any   litigation,   and reserves  for  taxes,  fees,  assessments,  and  other  governmental  charges  with  respect  to  the  Collateral  or  any Loan  Party.   So  long  as  no  Event  of  Default  has  occurred,  Administrative  Agent  shall  notify  Borrower  at least two Business Days in advance of the imposition of, or increase to, any such Reserve.         “Resolution Authority ” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.        “Restricted   Payment ” means any dividend or other distribution (whether  in  cash,  securities  or other property) with respect to any Equity Interests in the Company or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of  the  purchase,  redemption,  retirement,  acquisition,  cancellation  or  termination  of  any  such  Equity Interests in the Company or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Company or any Subsidiary.         “Revolving   Commitment ”  means,  with  respect  to  each  Lender,  the  amount  set  forth  on Schedule 2.01A  opposite  such  Lender’s  name,  or  in  the  Assignment  and  Assumption  or  other documentation or record (as such term is defined in Section 9-102(a)(70) of the UCC) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable,  and  giving  effect  to  (a) any  reduction in  such  amount  from  time  to  time  pursuant  to Section 2.09 and (b) any reduction or increase in such amount from time to time pursuant to assignments by  or  to  such  Lender  pursuant  to  Section 9.04;  provided ,  that   at  no  time  shall  the Revolving Credit                                             39

 

Exposure  of  any  Lender  exceed  its  Revolving  Commitment.   The  aggregate  amount  of  the  Lenders’ Revolving Commitments as of the Second Third  Amendment Effective Date is $125,000,000.         “Revolving   Exposure ”  means,  with  respect  to  any  Lender  at  any  time,  the  sum  of (a)  the outstanding principal amount of such Lender’s Revolving Loans, LC Exposure , and Swingline Exposure at such time ., plus  (b) an  amount  equal  to  its  Applicable  Percentage  of  the  aggregate  principal  amount  of Overadvances   outstanding   at   such   time;   provided   that,   solely   for   purposes   of   calculating   Revolving Exposure  in  the  determination  of  “Required  Lenders”,  (i)  the  Revolving  Exposure  of  any  Lender  shall also  include  an  amount  equal  to  such  Lender’s  Applicable  Percentage  of  the  aggregate  principal  amount of Protective Advances outstanding at such time and (ii) notwithstanding anything in this definition to the contrary,  to  the  extent  a  Lender  has  not  funded  its  participations  in  Protective  Advances  or  Overadvances within  one  Business  Day  of  such  Lender’s  receipt  of  notice  from  the  Administrative  Agent  (such  amount, the  “Unfunded  Amount”  of  such  Lender),  (x)  the  unfunded  Revolving  Commitment  of  such  Lender  shall be  deemed  to  be  reduced  by  such  Unfunded  Amount  and  (y)  the  unfunded  Revolving  Commitment  of  the Administrative Agent shall be deemed to be increased by such Unfunded Amount.         “Revolving   Lender ”  means,  as  of  any  date  of  determination,  a  Lender with  a  Revolving Commitment  or,  if  the  Revolving  Commitments  have  terminated  or  expired,  a  Lender  with Revolving Credit  Exposure.         “Revolving Loan ” means a Loan made pursuant to Section 2.01.         “S&P ” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.         “Sale and Leaseback Transaction ” has the meaning assigned to such term in Section 6.06.         “Sanctioned  Country ” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).        “Sanctioned   Person ” means, at any time, (a) any Person listed in any Sanctions-related  list  of designated  Persons  maintained  by  OFAC,  the  U.S.  Department  of  State,  the  United  Nations  Security Council,  the  European  Union,  any  European  Union  member  state,  or  Her  Majesty’s  Treasury  of  the United Kingdom (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.        “Sanctions ” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state, or Her Majesty’s Treasury of the United Kingdom.         “SEC ” means the Securities and Exchange Commission of the U.S.         “Second Amendment Effective Date ” means March 5, 2020.         “Secured  Obligations ” means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates to the extent notification of such Swap Agreement Obligations has been provided to the Administrative Agent in accordance with Section 2.24; provided, however, that the definition of “Secured Obligations” shall not create any guarantee by any Loan Guarantor of (or grant of security interest by any Loan Guarantor to                                             40

 

support,  as  applicable)  any  Excluded  Swap  Obligations  of  such  Loan  Guarantor  for  purposes  of determining any obligations of any Loan Guarantor.         “Secured   Parties ”  means  the  holders  of  the  Secured  Obligations  from  time  to  time  and  shall include (a) the Administrative Agent in respect of all present and future obligations and liabilities of the Borrower and each Subsidiary of every type and description  arising  under  or  in  connection  with  this Agreement or any other Loan Document, (b) the Lenders in respect of their respective Loans and LC Exposure and all other present and future obligations and liabilities of the Borrower and each Subsidiary of  every  type and description arising under or in connection  with  this  Agreement  or  any  other  Loan Document, (c) the Issuing Bank in respect of its LC Exposure and all other present and future obligations and liabilities of the Borrower and each Subsidiary of every type and description arising under or in connection with this Agreement or any other Loan Document,  (d)  each  Lender  and  Affiliate  of  such Lender that is a provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each Lender and Affiliate of a Lender that is a holder of Swap Agreement Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party  under  any  Loan  Document,  and  (g)  the  respective  successors  and  (in  the  case  of  a  Lender, permitted) transferees and assigns of each of the foregoing.         “Security  Agreement ” means that certain Amended and Restated Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, among the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.         “Seller ” means Boyd Coffee Company, an Oregon corporation.         “Settlement ” has the meaning assigned to such term in Section 2.05(d).         “Settlement Date ” has the meaning assigned to such term in Section 2.05(d).         “SOFR”  with  respect  to  any  day  means  the  secured  overnight  financing  rate  published  for  such day  by  the  NYFRB,  as  the  administrator  of  the  benchmark  (or  a  successor  administrator),  on  the  Federal Reserve Bank of New York’s Website.         “SOFR-Based Rate” means SOFR, Compounded SOFR or Term SOFR.         “Specified  Acquisition ” means the Acquisition consummated by Boyd Assets Co., a Delaware corporation, (or one of its affiliates) (“Buyer ”) pursuant to that certain asset purchase agreement dated August 18, 2017 made by and among, the Company (as parent), the Seller, the Buyer and the other parties thereto (the “APA ”), as the same made be amended, amended and restated or otherwise modified from time to time; provided , that, no amendment or modification of the APA which is materially adverse to the interests of the Lenders shall be effected without the prior written consent of the Required Lenders.        “Specified Ancillary Obligations ” means all obligations and liabilities (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) of any of the Subsidiaries, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured,  liquidated  or  unliquidated,  secured  or  unsecured,  arising  by  contract,  operation  of  law  or                                             41

 

otherwise, to the Lenders or any of their Affiliates under any Swap Agreement or any Banking Services Agreement.         “Specified   Cash”   means,   at   any   time,   100%   of   the   unrestricted   cash   (i.e.   cash   that   is   not “restricted”  for  GAAP  purposes)  maintained  by  the  Borrower  and  its  Subsidiaries  that  is  not  subject  to any  Liens  at  such  time  other  than  Liens  created  under  the  Loan  Documents  and  Permitted  Encumbrances of the type described in clause (j) of the definition thereof.         “Specified Dispositions” has the meaning assigned to such term in Section 2.11(d).         “Specified  Event  of  Default ” means any Event of Default that shall exist under Sections 7.01 (a), (b), (d) (solely on account of a breach of Section 6.12), (h), or (i).         “Statements ” has the meaning assigned to such term in Section 2.18(g).         “Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number  one  and  the  denominator  of  which  is  the  number  one  minus  the  aggregate  of  the  maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) expressed as a decimal  established  by  the  Board  to  which  the  Administrative  Agent  is  subject  with  respect  to  the Adjusted  LIBO  Rate,  for  eurocurrency  funding  (currently  referred  to  as  “Eurocurrency  liabilities”  in Regulation  D).   Such  reserve  percentage  shall  include  those  imposed  pursuant  to  Regulation  D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D or any comparable regulation.  The Statutory Reserve Rate  shall  be  adjusted  automatically  on  and  as  of  the  effective  date  of  any  change  in  any  reserve percentage.         “Subordinated  Indebtedness ” of a Person means any Indebtedness of such Person the payment of which is subordinated in right of payment of the Secured Obligations on then customary terms reasonably satisfactory to the Administrative Agent.         “subsidiary ”  means,  with  respect  to  any  Person  (the  “parent ”)  at  any  date,  any  corporation, limited  liability  company,  partnership,  association  or  other  entity  the  accounts  of  which  would  be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited  liability  company,  partnership,  association  or  other  entity  (a) of  which  securities  or  other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.        “Subsidiary ”  means  any  direct  or  indirect  subsidiary  of  the  Company  or  a  Loan  Party,  as applicable.         “Subsidiary  Guarantor ” means each  Material  Domestic  Subsidiary that is a party to the Loan Guaranty.  The Subsidiary Guarantors on the Third  Amendment  Effective Date are identified as such in Schedule 3.15  hereto.         “Supported QFC ”  has the meaning assigned to it in Section 9.22.                                             42

 

       “Swap  Agreement ” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any  combination  of  these  transactions;  provided   that  no  phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.         “Swap   Agreement   Obligations ”  means  any  and  all  obligations  of  the  Loan  Parties  and  their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or  acquired  (including  all  renewals,  extensions  and  modifications  thereof  and  substitutions  therefor), under (a) any and all Swap Agreements permitted hereunder with a Lender or an Affiliate of a Lender and designated  by  the  Borrower  as  “Secured  Obligations”  at  the  time  of  entering  into  any  such  Swap Agreement, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement transaction.        “Swap  Obligation ” means, with respect to any Loan Guarantor, any obligation to pay or perform under  any  agreement,  contract  or  transaction  that  constitutes  a  “swap”  within  the  meaning  of  section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.        “Swingline  Exposure ” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be the sum of (a) its Applicable  Percentage  of  the  total  Swingline  Exposure  at  such  time  other  than  with  respect  to  any Swingline  Loans  made  by  such  Lender  in  its  capacity  as  a  Swingline  Lender  and  (b) the  aggregate principal amount of all Swingline Loans made by such Lender as a Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).         “Swingline  Lender ” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.         “Swingline Loan ” has the meaning assigned to such term in Section 2.05(a).         “Taxes ”  means  any  and  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   SOFR”   means   the   forward-looking   term   rate  based  on  SOFR  that  has  been  selected  or recommended by the Relevant Governmental Body.         “Test  Period ” means the period of four (4) consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (or, if prior to the date of the delivery of the first financial statements to be delivered pursuant to Section 5.01(a) or (b), the most recent financial statements referred to in Section 3.04(a))).         “Third   Amendment”   means   that   certain   Amendment   No.   3   to   Amended   and   Restated   Credit Agreement,   dated   as   of   July   23,   2020,   among   the   Borrower,   the   Subsidiary   Guarantors,   the Administrative Agent, and the Lenders party thereto.         “Third Amendment Effective Date” means July 23, 2020.                                             43

 

       “Torrance   Facility ”  means  the  Company’s  facility  located  at  20333  Normandie  Avenue, Torrance, California.         “Total   Net   Leverage   Ratio ”  means,  at  any  date,  the  ratio  of  (a)  an  amount  equal  to  (i) Consolidated Total Indebtedness as of such date minus (ii) Unrestricted Cash on such date in an aggregate amount not to exceed $7,500,000 to (b) EBITDA for the most recently ended Test Period, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.        “Transactions ”  means  the  execution,  delivery  and  performance  by the  Borrower  of  this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.        “Transition Services Agreement ” means that certain transition services agreement substantially in the form attached as Exhibit K to the APA, as the same  may  be  amended,  amended  and  restated  or modified from time to time, in each case with the prior written consent of the Administrative Agent; provided ,  that,  no  amendment  or  modification  of  the  Transition  Services  Agreement  (or  to  the  form thereof attached to the APA) which is materially adverse to the interests of the Lenders shall be effected without the prior written consent of the Required Lenders.         “Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.         “UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.        “UK   Financial   Institution ” means any BRRD Undertaking (as such term is defined  under  the PRA  Rulebook  (as  amended  form  time  to  time)  promulgated  by  the  United  Kingdom  Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.         “UK   Resolution   Authority ”  means  the  Bank  of  England  or  any  other  public  administrative authority having responsibility for the resolution of any UK Financial Institution.         “Unadjusted   Benchmark   Replacement”  means   the   Benchmark   Replacement   excluding   the Benchmark   Replacement   Adjustment;   provided   that,   if   the   Unadjusted   Benchmark   Replacement   as   so determined   would   be   less   than   1.00%   per   annum,   the   Unadjusted   Benchmark   Replacement   will   be deemed to be 1.00% per annum for the purposes of this Agreement.         “Unliquidated  Obligations ” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is:  (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.         “Unrestricted  Cash ” means, at any date time , 100% of the unrestricted cash (i.e.  cash  that  is  not “restricted”   for   GAAP   purposes)   maintained  by  the Loan   Parties  Borrower   and   its   Subsidiaries   in accounts located in the United States at such time and that are not subject to any Liens at such time other                                             44

 

than  Liens  created  under  the  Loan  Documents  and  Permitted  Encumbrances  of  the  type  described  in clause (j) of the definition thereof ., minus  the  amount  of  all  cash  permitted  to  be  retained  by  the  Borrower or  its  Subsidiaries  at  such  time  (including  as  a  result  of  netting  from  the  gross  proceeds  of  any  applicable transaction  any  cash  amounts  contemplated  by  the  definition  of  Net  Proceeds)  after  giving  effect  to  the mandatory prepayments enumerated in Section 2.11(d) (and, to the extent that Section 2.11(d) stipulates a particular   use   of   proceeds,   solely   to   the   extent   that   such   cash   is   used   or   is   committed   to   be   used   in accordance with the requirements of Section 2.11(d)).         “U.S. ” means the United States of America.         “U.S.  Person ” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.         “U.S. Special Resolution Regime ” has the meaning assigned to it in Section 9.22.         “U.S. Tax   Compliance   Certificate ”  has  the  meaning  assigned  to  such  term  in Section 2.17(f)(ii)(B)(3).         “USA  PATRIOT  Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).         “Withdrawal   Liability ”  means  liability  to  a  Multiemployer  Plan  as  a  result  of  a  complete  or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.         “Withholding Agent ” means any Loan Party and the Administrative Agent.         “Write-Down and Conversion Powers ” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that  liability  into  shares,  securities or obligations  of  that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.         SECTION 1.02     Classification  of  Loans  and  Borrowings .  For purposes of this Agreement, Loans  may  be  classified  and  referred  to  by  Class  (e.g .,  a  “Revolving  Loan”)  or  by  Type  (e.g .,  a “Eurodollar Loan”) or by Class and Type (e.g ., a “Eurodollar Revolving Loan”).  Borrowings also may be classified  and  referred  to  by  Class  (e.g .,  a  “Revolving  Borrowing”)  or  by  Type  (e.g .,  a  “Eurodollar Borrowing”) or by Class and Type (e.g ., a “Eurodollar Revolving Borrowing”).         SECTION 1.03     Terms  Generally .  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and  interpretations  thereunder  having  the  force  of law  or  with  which  affected  Persons  customarily                                             45

 

Date and (d) the Borrower hereby agrees to compensate each Lender for any and all losses, costs and expenses incurred by such Lender in connection with the sale and assignment of any Eurodollar Loans (including the “Eurodollar Loans” under the Existing Credit Agreement) and such reallocation described above, in each case to the extent requested by such Lender and on the terms and in the manner set forth in Section 2.16 hereof.         SECTION 1.10     Letter  of  Credit  Amounts .  Unless  otherwise  specified  herein,  the  amount  of a Letter  of  Credit  at  any  time  shall  be  deemed  to  be  the  amount  of  such  Letter  of  Credit  available  to  be drawn  at  such  time;  provided  that,  with  respect  to  any  Letter  of  Credit  that,  by  its  terms  or  the  terms  of any   Letter   of   Credit   Agreement   related   thereto,   provides   for   one   or   more   automatic   increases   in   the available amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum amount of  such  Letter  of  Credit  after  giving  effect  to  all  such  increases,  whether  or  not  such  maximum  amount  is available to be drawn at such time.                                        ARTICLE II                                        The Credits        SECTION 2.01      Revolving   Commitments .   Subject  to  the  terms  and  conditions  set  forth herein, each Lender severally (and not jointly) agrees to make Revolving Loans in dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result (after giving effect to any application of proceeds of such Borrowing pursuant to Section 2.10) in (i) such Lender’s Revolving Credit  Exposure exceeding such Lender’s Revolving Commitment or at  such  time,  (ii ) the  Aggregate  Credit  Exposure  exceeding  the  aggregate  Revolving  Commitments  at  such  time  or  (iii ) the Aggregate  Revolving  Exposure  exceeding  the lesser   of   (x) the   sum   of   the   aggregate  Revolving Commitments  at  such  time  and  (y) the  Borrowing  Base  Limit .  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower  may  borrow,  prepay  and  reborrow  Revolving Loans.         SECTION 2.02     Loans and Borrowings .  (a)               (a)    Each Loan (other than a Swingline Loan , Protective  Advance  or  Overadvance ) shall be  made  as part  of  a  Borrowing  consisting  of Loans  of  the  same  Class  and  Type  made  by  the Lenders ratably in accordance with their respective Revolving Commitments of the applicable Class.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations  hereunder;  provided   that  the  Revolving  Commitments  of  the  Lenders  are several  and  no Lender shall be responsible for any other Lender’s failure to make Loans as required.  Any Protective Advance, any Overadvance, and any  Swingline Loan shall be made in accordance with the procedures set forth in Section Sections 2.04 and  2.05.               (b)    Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith, provided  that all Borrowings made on the Effective Date must be made as ABR Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.08.  Each Swingline Loan , Protective  Advance  and Overadvance  shall be an ABR Loan.  Each Lender at its option may  make  any Eurodollar  Loan  by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided  that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.                                             49

 

             (c)    At  the  commencement  of  each  Interest  Period  for  any  Eurodollar  Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000.  ABR Borrowings may be in any amount integral  multiple  of  $100,000 .  Borrowings of more than one Type and Class may be outstanding at the same time; provided  that there shall not at any time be more than a total of 510  Eurodollar Borrowings outstanding.               (d)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.        SECTION 2.03      Requests   for  Revolving  Borrowings .  To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by submitting a Borrowing Request not later than (a) in the case of a Eurodollar Borrowing, 12:00 noon, Chicago time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, 12:00 noon, Chicago  time,  on  the  date  of  the  proposed  Borrowing;  provided   that  any  such  notice  of  an  ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 11:00 a.m., Chicago time, on the date of such proposed Borrowing.  Each such Borrowing Request shall be irrevocable and shall be signed by a Financial Officer of the Borrower.  Each such Borrowing Request shall specify the following information in compliance with Section 2.02:                      (i)    the  aggregate  amount  of  the  requested  Revolving  Borrowing  and  a breakdown of the separate wires comprising such Borrowing;                      (ii)   the date of such Revolving Borrowing, which shall be a Business Day;                      (iii)  whether  such  Revolving  Borrowing  is  to  be  an  ABR  Borrowing  or  a Eurodollar Borrowing; and                      (iv)  in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”  If  no  election  as  to  the  Type  of  Revolving  Borrowing  is  specified,  then  the  requested  Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.         SECTION 2.04     Intentionally Omitted Protective Advances .               (a)    Subject  to  the  limitations  set  forth  below , the  Administrative  Agent  is  authorized by  the  Borrower  and  the  Lenders,  from  time  to  time  in  the  Administrative  Agent’s  sole  discretion  (but shall  have  absolutely  no  obligation  to),  to  make  Loans  to  the  Borrower,  on  behalf  of  all  Lenders,  which the   Administrative   Agent,   in   its   Permitted   Discretion,   deems   necessary   or   desirable   (i) to   preserve   or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment  of  the  Loans  and  other  Obligations,  or  (iii) to  pay  any  other  amount  chargeable  to  or  required to  be  paid  by  the  Borrower  pursuant  to  the  terms  of  this  Agreement,  including  payments  of  reimbursable expenses  (including  costs,  fees,  and  expenses  as  described  in  Section  9.03)  and  other  sums  payable  under the  Loan  Documents  (any  of  such  Loans  are  herein  referred  to  as  “Protective  Advances”);  provided  that, the   aggregate   principal   amount   of   Protective   Advances   outstanding   at   any   time   shall   not   at   any   time exceed   the   lesser   of   (x) $12,500,000,   and   (y) an   amount   equal   to   10%   of   the   aggregate   Revolving                                             50

 

Commitments  at  such  time;  provided  further  that  no  Protective  Advance  may  be  made  hereunder  if,  after giving  effect  to  the  funding  of  any  such  Protective  Advance,  (A)  the  Aggregate  Credit  Exposure  exceeds the aggregate Revolving Commitments at such time or (B) the Credit Exposure of any Lender exceeds the Revolving   Commitment   of   such   Lender   at   such   time.    Protective   Advances   may   be   made   even   if   the conditions  precedent  set  forth  in  Section  4.02  have  not  been  satisfied.   The  Protective  Advances  shall  be secured  by  the  Liens  in  favor  of  the  Administrative  Agent  in  and  to  the  Collateral  and  shall  constitute Obligations  hereunder.   All  Protective  Advances  shall  be  ABR  Borrowings.   The  making  of  a  Protective Advance   on   any   one   occasion   shall   not   obligate   the   Administrative   Agent   to   make   any   Protective Advance  on  any  other  occasion.   The  Administrative  Agent’s  authorization  to  make  Protective  Advances may  be  revoked  at  any  time  by  the  Required  Lenders.   Any  such  revocation  must  be  in  writing  and  shall become effective prospectively  upon the Administrative Agent’s receipt thereof.  At any time that there is sufficient   Availability   and   the   conditions   precedent   set   forth   in   Section   4.02   have   been   satisfied,   the Administrative Agent may request the Revolving Lenders to make a Revolving Loan to repay a Protective Advance.    At   any   other   time   the   Administrative   Agent   may   require   the   Lenders   to   fund   their   risk participations described in Section 2.04(b).               (b)    Upon  the  making  of  a  Protective  Advance  by  the  Administrative  Agent  (whether before  or  after  the  occurrence  of  a  Default),  each  Lender  shall  be  deemed,  without  further  action  by  any party  hereto,  to  have  unconditionally  and  irrevocably  purchased  from  the  Administrative  Agent,  without recourse  or  warranty,  an  undivided  interest  and  participation  in  such  Protective  Advance  in  proportion  to its  Applicable  Percentage.   The  Administrative  Agent  may,  at  any  time,  require  the  Lenders  to  fund  their participations   in   Protective   Advances.    Each   Lender   acknowledges   and   agrees   that   its   obligation   to acquire participations in Protective Advances pursuant to this paragraph is absolute and unconditional and shall   not   be   affected   by   any   circumstance   whatsoever,   including   the   occurrence   and   continuance   of   a Default  or  reduction  or  termination  of  the  Revolving  Commitments,  and  that  each  such  payment  shall  be made  without  any  offset,  abatement,  withholding  or  reduction  whatsoever.   Each  Lender  shall  comply with   its   obligation   under   this   paragraph   by   wire   transfer   of   immediately   available   funds,   in   the   same manner  as  provided  in  Section 2.07  with  respect  to  Loans  made  by  such  Lender  (and  Section 2.07  shall apply,  mutatis  mutandis,  to  the  payment  obligations  of  the  Lenders).   From  and  after  the  date,  if  any,  on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative  Agent  shall  promptly  distribute  to  such  Lender,  such  Lender’s  Applicable  Percentage  of all  payments  of  principal  and  interest  and  all  proceeds  of  Collateral  received  by  the  Administrative  Agent in  respect  of  such  Protective  Advance.   The  purchase  of  participations  in  a  Protective  Advance  pursuant to this paragraph shall not relieve the Borrower of any default in the repayment thereof.         SECTION 2.05     Swingline Loans  and Overadvances .               (a)    Subject to the terms and conditions set forth herein, from time to time during the Availability Period the Swingline Lender may, but shall have no obligation to, make Swingline Loans in dollars to the Borrower in an aggregate principal amount at any time outstanding that will not result in (i) the  aggregate  principal  amount  of  outstanding  Swingline  Loans  exceeding  $15,000,000,  (ii) the Swingline Lender’s Revolving Credit  Exposure exceeding its Revolving Commitment , or  at  such  time, (iii )  the   Aggregate   Credit   Exposure   exceeding   the   aggregate   Revolving   Commitments   at   such   time   or (iv ) the Aggregate Revolving Exposure exceeding the lesser  of  (x) the  sum  of  the  aggregate Revolving Commitments  at  such  time  and  (y) the  Borrowing  Base  Limit ; provided  that the Swingline Lender shall not  be  required  to  make  a  Swingline  Loan  to  refinance  an  outstanding  Swingline  Loan ,  Protective Advance  or  Overadvance .  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.               (b)    To request a Swingline Loan, the Borrower shall submit a written notice to the Administrative Agent by telecopy or electronic mail, not later than 12:00 noon, Chicago time, on the day                                            51

 

replaced  Swingline  Lender  shall  remain  a  party  hereto  and  shall  continue  to  have  all  the  rights  and obligations of a Swingline Lender under this Agreement with respect to Swingline Loans made by it prior to its replacement, but shall not be required to make additional Swingline Loans.               (e)    Subject to the appointment and acceptance of a successor Swingline Lender, the Swingline Lender may resign as Swingline Lender at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, the Swingline Lender shall be replaced in accordance with Section 2.05(d) above.               (f)    Any  provision  of  this  Agreement  to  the  contrary  notwithstanding,  at  the  request of  the  Borrower,  the  Administrative  Agent  may  in  its  sole  discretion  (but  with  absolutely  no  obligation), make  Loans  to  the  Borrower,  on  behalf  of  the  Revolving  Lenders,  in  amounts  that  exceed  Availability (any   such   excess   Loans   are   herein   referred   to   collectively   as   “Overadvances”);   provided   that,   no Overadvance  shall  result  in  a  Default  due  to  the  Borrower’s  failure  to  comply  with  Section  2.01  for  so long  as  such  Overadvance  remains  outstanding  in  accordance  with  the  terms  of  this  paragraph,  but  solely with  respect  to  the  amount  of  such  Overadvance.   In  addition,  Overadvances  may  be  made  even  if  the condition  precedent  set  forth  in  Section 4.02(c)  has  not  been  satisfied.   All  Overadvances  shall  constitute ABR   Borrowings.    The   making   of   an   Overadvance   on   any   one   occasion   shall   not   obligate   the Administrative   Agent   to   make   any   Overadvance   on   any   other   occasion.    The   authority   of   the Administrative  Agent  to  make  Overadvances  is  limited  to  an  aggregate  amount  not  to  exceed  at  any  time the  lesser  of  (x) $12,500,000,  and  (y) an  amount  equal  to  10%  of  the  aggregate  Revolving  Commitments at  such  time;  provided  that  no  Overadvance  may  be  made  hereunder  if,  after  giving  effect  to  the  funding of   any   such   Overadvance,   (i)   the   Aggregate   Credit   Exposure   exceeds   the   aggregate   Revolving Commitments  at  such  time  or  (ii)  the  Credit  Exposure  of  any  Lender  exceeds  the  Revolving  Commitment of  such  Lender  at  such  time;  provided  further  that  the  Required  Lenders  may  at  any  time,  via  written notice  of  the  same,  revoke  the  Administrative  Agent’s  authorization  to  make  Overadvances.   Any  such revocation  must  be  in  writing  and  shall  become  effective  prospectively  upon  the  Administrative  Agent’s receipt thereof.               (g)    Upon  the  making  of  an  Overadvance,  each  Revolving  Lender  shall  be  deemed, without  further  action  by  any  party  hereto,  to  have  unconditionally  and  irrevocably  purchased  from  the Administrative   Agent,   without   recourse   or   warranty,   an   undivided   interest   and   participation   in   such Overadvance   in   proportion   to   its   Applicable   Percentage   of   the   Revolving   Commitment.    The Administrative   Agent   may,   at   any   time,   require   the   Revolving   Lenders   to   fund   their   participations   in Overadvances.    Each   Lender   acknowledges   and   agrees   that   its   obligation   to   acquire   participations   in Overadvances  pursuant  to  this  paragraph  is  absolute  and  unconditional  and  shall  not  be  affected  by  any circumstance   whatsoever,   including   the   occurrence   and   continuance   of   a   Default   or   reduction   or termination   of   the   Revolving   Commitments,   and   that   each   such   payment   shall   be   made   without   any offset,  abatement,  withholding  or  reduction  whatsoever.   Each  Lender  shall  comply  with  its  obligation under  this  paragraph  by  wire  transfer  of  immediately  available  funds,  in  the  same  manner  as  provided  in Section 2.07  with  respect  to  Loans  made  by  such  Lender  (and  Section 2.07  shall  apply,  mutatis  mutandis, to  the  payment  obligations  of  the  Lenders).   From  and  after  the  date,  if  any,  on  which  any  Revolving Lender  is  required  to  fund  its  participation  in  any  Overadvance  purchased  hereunder,  the  Administrative Agent  shall  promptly  distribute  to  such  Lender,  such  Lender's  Applicable  Percentage  of  all  payments  of principal  and  interest  and  all  proceeds  of  Collateral  received  by  the  Administrative  Agent  in  respect  of such Overadvance.  The purchase of participations in an Overadvance pursuant to this paragraph shall not relieve the Borrower of any default in the repayment thereof.         SECTION 2.06     Letters of Credit .  (a)                                              53

 

using the Issuing Bank’s standard form (each, a “Letter  of  Credit  Agreement ”).  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) (x) the aggregate undrawn amount of all outstanding Letters  of  Credit  issued  by  the  Issuing  Bank  at  such  time  plus  (y) the  aggregate  amount  of  all  LC Disbursements  made  by  the  Issuing  Bank  that  have  not  yet  been  reimbursed  by  or  on  behalf  of  the Borrower at such time shall not exceed the Issuing Bank’s Letter of Credit Commitment  at  such  time , (ii) the  aggregate  LC  Exposure  shall  not  exceed  $15,000,000,  (iii) no  Revolving  Lender’s Revolving Credit  Exposure shall exceed its Revolving Commitment , and  at  such  time,  (iv ) the  Aggregate Credit   Exposure   shall   not   exceed   the   aggregate   Revolving   Commitments   at   such   time   and   (v ) the Aggregate Revolving Exposure shall not exceed the lesser  of  the  aggregate Revolving Commitments  at such  time  and  the  Borrowing  Base  Limit .  The Borrower may, at any time and from time to time, reduce the Letter of Credit Commitment of the Issuing Bank with the consent of the Issuing Bank; provided  that the Borrower shall not reduce the Letter of Credit Commitment of the Issuing Bank if, after giving effect of such reduction, the conditions set forth in clauses (i) through ( iv v) above shall not be satisfied.         The Issuing Bank shall not be under any obligation to issue any Letter of Credit if:                      (i)    any   order,   judgment   or   decree   of   any   Governmental   Authority   or arbitrator   shall   by   its  terms  purport  to  enjoin  or  restrain  the  Issuing  Bank  from  issuing  such  Letter  of Credit,  or  any  law  applicable  to  the  Issuing  Bank  shall  prohibit,  or  require  that  the  Issuing  Bank  refrain from,  the  issuance  of  letters  of  credit  generally  or  such  Letter  of  Credit  in  particular  or  shall  impose  upon the  Issuing  Bank  with  respect  to  such  Letter  of  Credit  any  restriction,  reserve  or  capital  requirement  (for which  the  Issuing  Bank  is  not  otherwise  compensated  hereunder)  not  in  effect  on  the  Effective  Date , or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense that was not applicable on the Effective Date and that the Issuing Bank in good faith deems material to it; or                      (ii)   the  issuance  of  such  Letter  of  Credit  would  violate  one  or  more  policies of the Issuing Bank applicable to letters of credit generally.               (c)    Expiration  Date .  Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the  case  of  any  renewal  or  extension  thereof,  including,  without  limitation,  any  automatic  renewal provision, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the  Maturity  Date  (or  such  later  date  as  to  which  the  Administrative  Agent  may  agree  in  its  sole discretion).               (d)    Participations .  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation  in  such  Letter  of  Credit  equal  to  such Lender’s  Applicable  Percentage  of  the  aggregate  amount  available  to  be  drawn  under  such  Letter  of Credit.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a                                            55

 

Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.               (e)    Reimbursement .  If the Issuing Bank shall make any LC Disbursement in respect of  a  Letter  of  Credit,  the  Borrower  shall  reimburse  such  LC  Disbursement  by  paying  to  the Administrative Agent in dollars the amount equal to such LC Disbursement, calculated as of the date the Issuing Bank made such LC Disbursement, not later than the first Business Day following the date on which the Borrower shall have received notice of such LC Disbursement from the Issuing Bank; provided that, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount of such LC Disbursement and, to the extent so financed, the Borrower’s obligation  to  make  such  payment  shall  be  discharged  and  replaced  by  the  resulting  ABR  Revolving Borrowing or Swingline Loan, as applicable.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the amount of the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.   Promptly  following  receipt  of  such  notice,  each  Revolving  Lender  shall  pay  to  the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.               (f)    Obligations   Absolute .   The  Borrower’s  obligation  to  reimburse  LC Disbursements  as  provided  in  paragraph (e)  of  this Section  shall  be  absolute,  unconditional  and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply  with  the  terms  of  such  Letter  of  Credit,  or (iv)  any  other  event  or  circumstance  whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a  legal  or  equitable  discharge  of,  or  provide  a  right  of  setoff  against,  the  Borrower’s  obligations hereunder.  None of the Administrative Agent, the Revolving Lenders, the Issuing Bank or any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any  Letter  of  Credit  (including  any  document  required  to  make  a  drawing  thereunder),  any  error  in interpretation of technical terms , any  error  in  translation  or any consequence arising from causes beyond the control of the Issuing Bank; provided  that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit                                            56

 

comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a nonappealable  judgment of  a  court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such  determination.   In  furtherance  of  the  foregoing  and  without  limiting  the  generality  thereof,  the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.               (g)    Disbursement   Procedures .  The Issuing Bank shall,   promptly for   any   Letter   of Credit   shall,   within   the   time   allowed   by   applicable   law   or   the   specific   terms   of   such   Letter   of   Credit following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  The Issuing Bank shall promptly after  such  examination  notify the Administrative Agent and the Borrower by telephone (confirmed by facsimile or email) of such demand for payment and whether the Issuing Bank has made or will make an LC  Disbursement  thereunder;  provided   that  any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.               (h)    Interim   Interest .  If the Issuing Bank shall make any LC Disbursement,  then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement  is  made  to  but  excluding  the  date  that  the reimbursement   is   due   and   payable Borrower reimburses  such  LC  Disbursement , at the rate per annum then applicable to ABR Revolving Loans and such interest shall be due and payable on the date when such reimbursement is payable; provided  that, if the  Borrower  fails  to  reimburse  such  LC  Disbursement  when  due  pursuant  to  paragraph (e)  of  this Section, then Section 2.13( cd) shall apply.  Interest accrued pursuant to this paragraph shall be for the account  of  the  Issuing  Bank,  except  that  interest  accrued  on  and  after  the  date  of  payment  by  any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.               (i)    Replacement and Resignation of the Issuing Bank .                      (i)    The  Issuing  Bank  may  be  replaced  at  any  time  by  written  agreement among  the  Borrower,  the  Administrative  Agent  (such consent  not  to  be  unreasonably  withheld  or delayed),  the  replaced  Issuing  Bank  and  the  successor Issuing Bank.  The Administrative Agent shall notify  the  Revolving  Lenders  of  any  such  replacement  of  the  Issuing  Bank.   At  the  time  any  such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced  Issuing  Bank  pursuant  to  Section  2.12(b).   From  and  after  the  effective  date  of  any  such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.                      (ii)   Subject to the appointment and acceptance of a successor Issuing Bank, the Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior written notice to the                                             57

 

Administrative Agent, the Borrower and the Revolving Lenders, in which case, such resigning Issuing Bank shall be replaced in accordance with Section 2.06(i)(i) above.               (j)    Cash Collateralization .  If any Event of Default shall occur and be continuing, on the  Business  Day  that  the  Borrower  receives  written  notice  from  the  Administrative  Agent  or  the Required Lenders (or, if the maturity of the Loans has  been  accelerated,  Revolving  Lenders  with  LC Exposure representing greater than 50% of the total LC Exposure) if such notice is received prior to 1:00 p.m., Chicago time, or otherwise on the next succeeding Business Day, demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the “LC Collateral  Account ”), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided  that the obligation to deposit such cash collateral shall become  effective  immediately,  and  such  deposit  shall  become  immediately  due  and  payable,  without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in Section 7.01 (h) or (i).  The Borrower also shall deposit cash collateral pursuant to this  paragraph  as  and  to  the  extent  required  by  Section 2.11(b).   Such  deposit  shall  be  held  by  the Administrative Agent as collateral for the payment and performance of the Secured Obligations.  The Administrative  Agent  shall  have  exclusive  dominion and  control,  including  the  exclusive  right  of withdrawal, over the LC Collateral Account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account and all money or other assets on deposit therein or credited thereto.  Other than any interest earned on the investment of such deposits, which investments shall be made  at  the  option  and  sole  discretion  of  the  Administrative  Agent  and  at  the  Borrower’s  risk  and expense,  such  deposits  shall  not  bear  interest.   Interest  or  profits,  if  any,  on  such  investments  shall accumulate in the LC Collateral Account.  Moneys in the LC Collateral Account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed  and,  to  the  extent  not  so  applied,  shall  be  held  for  the  satisfaction  of  the  reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50%  of  the  total  LC  Exposure),  be  applied  to  satisfy  other  Secured  Obligations.   If  the  Borrower  is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all such Events of Default  have  been  cured  or  waived  as  confirmed  in writing by the Administrative Agent.               (k)    Intentionally Omitted .               (l)    LC  Exposure  Determination .  For all purposes of this Agreement, the amount of a Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at the time of determination.               (m)    Existing  Letters  of  Credit .  The Existing Letters of Credit shall be deemed to be Letters of Credit issued hereunder on the Effective Date.         SECTION 2.07     Funding of Borrowings .  (a)                (a)    Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 2:00 p.m., Chicago time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the  Lenders  in  an  amount  equal  to  such  Lender’s  Applicable  Percentage;  provided   that Protective                                            58

 

Advances  shall  be  made  as  provided  in  Section  2.04  and  Overadvances  and  Swingline Loans shall be made as provided in Section 2.05.  Except in respect of the provisions of this Agreement covering the reimbursement  of  Letters  of  Credit,  the  Administrative  Agent  will  make  such  Loans  available  to  the Borrower by promptly crediting the amounts so received, in like funds, to the Funding Account; provided that ABR Revolving Loans made to finance the reimbursement of (i)  an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank  and  (ii) a  Protective Advance or Overadvance shall be retained by the Administrative Agent to the extent the Lenders have not funded any participations therein .               (b)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. If  both  the  Borrower  and  such  Lender  pay  such  amount  to  the  Administrative  Agent,  then  the Administrative Agent shall refund the payment made by the Borrower.         SECTION 2.08     Interest Elections .  (a)                (a)    Each  Borrowing  initially  shall  be  of  the  Type  specified  in  the  applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such  portion  shall  be  considered  a  separate  Borrowing.   This  Section  shall  not  apply  to  Swingline Borrowings, Overadvances, or Protective Advances,  which may not be converted or continued.               (b)    To  make  an  election  pursuant  to  this  Section,  the  Borrower  shall  notify  the Administrative Agent of such election by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such Interest Election Request shall be irrevocable and shall be signed by a Financial Officer of the Borrower.  Notwithstanding any contrary provision herein, this Section shall not be construed to permit the Borrower to elect an Interest Period for Eurodollar Loans that does not comply with Section 2.02(d).               (c)    Each  Interest  Election  Request  shall  specify  the  following  information  in compliance with Section 2.02:                      (i)    the Borrowing to which such Interest Election Request  applies  and,  if different options are being elected with respect to different portions thereof, the portions thereof to be                                             59

 

allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);                      (ii)  the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;                      (iii) whether  the  resulting  Borrowing  is  to  be  an  ABR  Borrowing  or  a Eurodollar Borrowing; and                      (iv)  if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.  If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.               (d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof  and  of  such  Lender’s  portion  of  each  resulting Borrowing.               (e)    If the Borrower fails to deliver a timely Interest Election Request with respect to a  Eurodollar  Borrowing  prior  to  the  end  of  the  Interest  Period  applicable  thereto,  then,  unless  such Borrowing  is  repaid  as  provided  herein,  at  the  end of  such  Interest  Period  such  Borrowing  shall  be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as such Event of Default is continuing (i) no outstanding Borrowing may be  converted  to  or  continued  as  a  Eurodollar  Borrowing  and  (ii)  unless  repaid,  each  Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.         SECTION 2.09     Termination and Reduction of Revolving Commitments .  (a)                (a)    Unless previously terminated, the Revolving Commitments shall terminate on the Maturity Date.               (b)    The Borrower may at any time terminate the Revolving Commitments upon (i) the payment in full of all outstanding Revolving  Loans, together with accrued and unpaid interest thereon and  on  any  LC  Exposure,  (ii)  the  cancellation  and  return  of  all  outstanding  Letters  of  Credit  (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash  deposit  (or  at  the  discretion  of  the  Administrative  Agent  a  back-up  standby  letter  of  credit satisfactory to the Administrative Agent and the Issuing Bank) in an amount equal to 105% of the LC Exposure as of such date), (iii) the payment in full of the accrued and unpaid fees, and (iv) the payment in full of all reimbursable expenses and other Obligations, together with accrued and unpaid interest thereon.               (c)    The  Borrower  may  from  time  to  time  reduce  the  Revolving  Commitments; provided  that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $5,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving  Loans in  accordance  with  Section  2.11, (x)   the  Aggregate Revolving Credit   Exposure  would  exceed  the aggregate Revolving Commitments  at  such  time  or  (y)  the  Aggregate  Revolving  Exposure  would  exceed the lesser of the aggregate Revolving Commitments at such time and the Borrowing Base Limit .                                             60

 

             (d)    The Borrower shall notify the Administrative Agent of any election to terminate or  reduce  the  Revolving  Commitments  under  paragraph (b)  or  (c)  of  this  Section  at  least  three  (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the  effective  date  thereof.   Promptly  following  receipt  of  any  notice,  the  Administrative  Agent  shall advise  the  Lenders  of  the  contents  thereof.   Each  notice  delivered  by  the  Borrower  pursuant  to  this Section  shall  be  irrevocable;  provided   that  a  notice  of  termination  of  the  Revolving  Commitments delivered  by  the  Borrower  may  state  that  such  notice  is  conditioned  upon  the  effectiveness  of  other indebtedness or any other event, in which case such notice may be revoked or delayed by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.   Any  termination  or  reduction  of  the  Revolving  Commitments  shall  be  permanent.   Each reduction of the Revolving Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.               (e)    If at any time the aggregate outstanding principal amount of Indebtedness of the Borrower  and  its  Subsidiaries  which  is  incurred  or exists  in  reliance  on  Section  6.01(e)  exceeds $10,000,000 (any such amount in excess of $10,000,000 being referred to as the “Excess Purchase Money Amount ”), the aggregate Revolving Commitments shall automatically and irrevocably be reduced by an amount  equal  to  the  applicable  Excess  Purchase  Money  Amount.   Any  reduction  of  the  Revolving Commitments pursuant to this Section 2.09(e) shall be permanent and shall be made ratably among the Lenders in accordance with their respective Revolving Commitments at such time.               (f)    If  at  any  time  the  Borrower  or  any  of  its  Subsidiaries  receives  net  cash  proceeds in  excess  of  $5,000,000  from  any  individual  Disposition  (other  than  Dispositions  permitted  pursuant  to Sections  6.05 (a),  (b),  ( c),  (d),  (h),  (i),  (j),  (l),  and  (m),  or  Dispositions  among  Loan  Parties)  (any  such amount  in  excess  of  $5,000,000  being  referred  to  as  the  “ Excess  Disposition  Amount ”) On  September  30, 2021 and on the last day of each fiscal quarter of the Borrower ending thereafter , the aggregate Revolving Commitments  shall  automatically  and  irrevocably  be reduced  by an   amount   equal   to   the  applicable Excess   Disposition   Amount.    Any $5,000,000.    Any   such   reduction  of  the  Revolving  Commitments pursuant   to   this   Section  2.09(f)  shall  be  permanent   and  .   Each   such   reduction   of  the   Revolving Commitments  shall be made ratably among the Lenders in accordance with their respective Revolving Commitments at such time.               (g)    The  aggregate  Revolving  Commitments  shall  be  automatically  and  irrevocably reduced  concurrently  with,  and  in  an  amount  equal  to,  each  mandatory  prepayment  required  to  be  made on  or  after  the  Third  Amendment  Effective  Date  pursuant  to  Section 2.11(d).   Any  such  reduction  of  the Revolving  Commitments  shall  be  permanent.   Each  such  reduction  of  the  Revolving  Commitments  shall be  made  ratably  among  the  Lenders  in  accordance  with  their  respective  Revolving  Commitments  at  such time.         SECTION 2.10     Repayment of Loans; Evidence of Debt .  (a)                (a)    The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan  on  the  Maturity  Date   and ,  (ii ) to   the   Administrative   Agent   the   then   unpaid   amount   of   each Protective  Advance  on  the  earlier  of  the  Maturity  Date  and  written  demand  by  the  Administrative  Agent, (iii ) to  the  Administrative  Agent  for  the  account  of  the  Swingline  Lender  the  then  unpaid  principal amount of each Swingline Loan on the earlier of the Maturity Date and the fifth Business Day after such Swingline Loan is made; provided  that on each date that a Revolving Loan is made, the Borrower shall repay all Swingline Loans then outstanding and the proceeds of any such Revolving Loan shall be applied by the Administrative Agent to repay any Swingline Loans outstanding , and  (iv) to  the  Administrative                                             61

 

Agent   the   then  unpaid  principal  amount  of  each  Overadvance  on  the  earlier  of  the  Maturity  Date  and written demand by the Administrative Agent .               (b)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.               (c)    The Administrative Agent shall maintain accounts in which it shall record (i) the amount  of  each  Loan  made  hereunder,  the  Class  and  Type  thereof  and  the  Interest  Period  applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.               (d)    The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this  Section  shall  be  prima   facie   evidence  of  the  existence  and  amounts  of  the  obligations  recorded therein; provided  that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.               (e)    Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form reasonably acceptable to the Administrative Agent and the Borrower.  Thereafter, the  Loans  evidenced  by  such  promissory  note  and  interest  thereon  shall  at  all  times  (including  after assignment  pursuant  to  Section  9.04)  be  represented  by  one  or  more  promissory  notes  in  such  form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).         SECTION 2.11     Prepayment of Loans .  (a)                (a)    The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part and without premium or penalty, subject to prior notice in accordance with  paragraph ( be)  of  this  Section  and,  if applicable, payment of any  break  funding  expenses  under Section 2.16.               (b)    In the event and on any  such occasion that (i)  except  to  the  extent  such  excess arises  from  Overadvances  permitted  under  Section  2.05,  the Aggregate Revolving Exposure exceeds the lesser of  (x) the aggregate Revolving Commitments at such time  (including, for the avoidance of doubt, as a result of any reduction of the Revolving Commitments made pursuant to Section 2.09(e)  or , 2.09(f) ) or 2.09(g))  and  (y) the  Borrowing  Base  Limit,  or  (ii)  the  sum  of  (x)  the  Aggregate  Revolving  Exposure  plus (y)   the   aggregate   outstanding   principal   amount   of   all   Protective   Advances   at   such   time   exceeds   the aggregate  Revolving  Commitments  at  such  time,  then,  in  each  such  case , the Borrower shall prepay the Revolving  Loans, LC Exposure and/or Swingline Loans or cash collateralize LC Exposure in an account with the Administrative Agent pursuant to Section 2.06(j), as applicable, in an aggregate amount equal to such excess.               (c)    Unless  otherwise  agreed  by  the  Required  Lenders,  if,  after  the  Third  Amendment Effective  Date,  at  5.00  p.m.  Central  Time  of  any  Friday  in  any  week  (or  if  such  Friday  is  not  a  Business Day,   the   immediately   following   Business   Day)   (each   such   date,   a   “Calculation   Date”),   the   aggregate amount  of  Unrestricted  Cash  of  the  Borrower  and  its  Subsidiaries  exceeds  $10,000,000  (such  excess,  the                                            62

 

“Excess  Cash  Amount”),  the  Borrower  shall,  promptly  but  in  any  event  no  later  than  on  the  first  Business Day   immediately   following   the   applicable   Calculation   Date,   prepay   the   outstanding   Loans   in   an aggregate   amount   equal   to   the   lesser   of   (i) the   Excess   Cash   Amount   rounded   to   the   nearest   $100,000 (provided  that  such  amount  required  to  be  paid  shall  not  exceed  the  Excess  Cash  Amount)  and  (ii) the aggregate principal amount of Loans then outstanding.               (d)    Unless  otherwise  agreed  by  the  Required  Lenders,  the  Borrower  shall  promptly (but  in  any  event  no  later  than  five  (5)  Business  Days  following  receipt  of  the  relevant  Net  Proceeds  by the  Borrower  or  any  of  its  Subsidiaries ) prepay  the  Loans  outstanding  in  an  aggregate  amount  equal  to 100%  of  the  Net  Proceeds  received  by  the  Borrower  or  any  of  its  Subsidiaries  from  any  of  the  following: (i) any sale or issuance of Equity Interests by the Borrower or any of its Subsidiaries  (other than issuances of  Equity  Interests  by  a  Subsidiary  Guarantor  to  the  Borrower  or  another  Subsidiary  Guarantor);  (ii) any incurrence  by  the  Borrower  or  any  of  its  Subsidiaries  on  or  after  the  Third  Amendment  Effective  Date  of Indebtedness  not  permitted  hereunder;  (iii) any  Disposition  by  the  Borrower  or  any  of  its  Subsidiaries pursuant to Section 6.05(b) (to the extent such Disposition is made to a non-Loan Party), 6.05(g), 6.05(k), 6.05(n),  6.05(p)  or  6.05(q)  (collectively,  the  “Specified  Dispositions”),  except  for  the  first  $2,500,000  of Net  Proceeds  from  Specified  Dispositions  of  assets  other  than  real  property  received  by  the  Borrower  or its  Subsidiaries  after  the  Third  Amendment  Effective  Date;  provided,  that,  notwithstanding  the  foregoing, with   respect   to   the   first   $10,000,000   of  Net  Proceeds  from  any  Specified  Disposition  of  real  property owned   by   any   Loan   Party   made   on   or   after   the   Third   Amendment   Effective   Date,   67%   of   such   Net Proceeds  shall  be  used  to  prepay  the  Loans,  and  the  remaining  33%  may  be  retained  by  the  Loan  Parties and  not  applied  to  prepay  the  Loans  so  long  as  such  retained  Net  Proceeds  are,  within  180  days,  used  for capital   expenditures,   costs,   improvements   and/or   operating   synergies   in   connection   with   such   real property  or  associated  branch  consolidations  (provided  that,  to  the  extent  of  any  such  Net  Proceeds  that have  not  been  so  applied  by  the  end  of  such  180-day  period,  a  prepayment  shall  be  required  at  such  time in   an   amount   equal   to   such   Net   Proceeds   that   have   not   been   so   applied);   and   (iv)   a   casualty   or condemnation  event  (or  in  connection  with  any  other  loss,  destruction,  or  condemnation  of  any  assets  of the  Borrower  or  its  Subsidiaries);  provided,  that  such  Net  Proceeds  described  in  this  clause (iv)  shall  not be  required  to  be  used  to  prepay  the  Loans  to  the  extent  a  Financial  Officer  of  the  Borrower  shall  have notified  the  Administrative  Agent  on  or  prior  to  the  date  that  is  five  (5 ) Business  Days  after  the  date  such Net  Proceeds  are  received  that  no  Specified  Event  of  Default  has  occurred  and  is  continuing  at  such  time and   that   such   proceeds   are   expected   to   be   used   to   repair,   replace,   or   restore   any   asset   (other   than Inventory)  in  respect  of  which  such  Net  Proceeds  were  paid  no  later  than  180  days  following  the  date  of receipt  of  such  Net  Proceeds  (provided  that,  to  the  extent  of  any  such  Net  Proceeds  that  have  not  been  so applied  by  the  end  of  such  180-day  period,  a  prepayment  shall  be  required  at  such  time  in  an  amount equal to such Net Proceeds that have not been so applied).               (e)    (c)  The  Borrower  shall  notify  the  Administrative  Agent (and,  in  the  case  of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (except  for  any  prepayment  required  pursuant  to  Section 2.11(c))  not later than 12:00 p.m., Chicago time, (A) in the case of prepayment of a Eurodollar Revolving Borrowing, three one (31) Business Days Day  before the date of prepayment and (B) in the case of prepayment of an ABR Loan (including any Swingline Loan , Protective  Advance  or  Overadvance ), on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing  or  portion  thereof  to  be  prepaid;  provided   that,  if  a  notice  of  prepayment  is  given  in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked or delayed if such notice of termination is revoked  or  delayed  in  accordance  with  Section 2.09.   Promptly  following  receipt  of  any  such  notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.   Each  partial  prepayment  of  any  Revolving Borrowing  shall  be  in  an  amount  that  would  be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section                                            63

 

2.02 ,  except   as   necessary   to   apply   fully   the   required   amount   of   a   mandatory   prepayment .   Each prepayment of a Revolving Borrowing shall be applied ratably to the Revolving Loans included in the prepaid Borrowing ; provided that any mandatory prepayment made pursuant to Section 2.11(c) or 2.11(d) shall  be  applied  as  set  forth  in  Section  2.11(f)  below .  Prepayments shall be accompanied by (i) accrued interest  to  the  extent  required  by  Section  2.13  and  (ii)  break  funding  payments  (if  any)  pursuant  to Section 2.16 .               (f)    Unless otherwise agreed by the Required Lenders, all prepayments required to be made   pursuant   to   Sections   2.11(c)   and   2.11(d)   shall   be   applied,   first   to   prepay   outstanding   Protective Advances  and  Overadvances  ratably,  second  to  prepay  all  other  outstanding  Loans  ratably,  and  third  to cash collateralize 105% of the outstanding amount of LC Exposure.               (g)    In  the  event  and  on  any  such  occasion  that  the  aggregate  outstanding  principal amount   of   Protective   Advances   exceeds   the   maximum   amount   of   Protective   Advances   permitted   by Section   2.04,   the   Borrower   shall   prepay   Protective   Advances   in   an   aggregate   amount   necessary   to eliminate such excess.               (h)    In  the  event  and  on  any  such  occasion  that  the  aggregate  outstanding  principal amount  of  Overadvances  exceeds  the  maximum  amount  of  Overadvances  permitted  by  Section  2.05(f), the Borrower shall prepay Overadvances in an aggregate amount necessary to eliminate such excess.         SECTION 2.12     Fees .  (a)                (a)    The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the commitment  fee  rate  set  forth  in  clause (b)  of  the definition  of  “ Applicable Rate ” on the average daily Available Revolving Commitment of such Lender during  the  period  from  and  including  the  Effective Date  to  but  excluding  the  date  on  which  such Revolving  Commitment  terminates.   Commitment  fees  accrued  through  and  including  the  last  day  of March,  June,  September  and  December  of  each  year  shall  be  payable  in  arrears  on  the  fifteenth  day following such last day and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).               (b)    The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall  accrue  at  the  same  Applicable  Rate  used  to  determine  the  interest  rate  applicable  to  Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof  attributable  to  unreimbursed  LC  Disbursements)  during  the  period  from  and  including  the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank for its own account a fronting fee, which shall accrue at the rate of 0.125% per annum (or such lower amount as may be agreed by the Issuing Bank and the Borrower) on the average daily amount of the  LC  Exposure  (excluding  any  portion  thereof  attributable  to  unreimbursed  LC  Disbursements) attributable to Letters of Credit issued by the Issuing  Bank  during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as  well  as  the  Issuing  Bank’s  standard  fees  and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including September 30, December 31, March 31 and June 30 of each year shall be payable in arrears on the first Business Day following each such date, commencing on the                                            64

 

first such date to occur after the Effective Date; provided  that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank  pursuant  to  this  paragraph  shall  be  payable  within  ten  (10)  days  after  written  demand.   All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).               (c)    The Borrower agrees to pay to the Administrative Agent, for its own account, fees  payable  in  the  amounts  and  at  the  times  separately  agreed  upon  between  the  Borrower  and  the Administrative Agent.               (d)    All  fees  payable  hereunder  shall  be  paid  on  the  dates  due,  in  dollars  in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.         SECTION 2.13     Interest .               (a)    The  Loans  comprising  each  ABR Borrowing  (including each  Swingline  Loan , but  excluding  each  Protective  Advance  and  Overadvance ) shall bear interest at the Alternate Base Rate plus the Applicable Rate; and               (b)    The  Loans  comprising  each  Eurodollar  Borrowing  shall  bear  interest  at  the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.               (c)    Each   Protective   Advance   and   each   Overadvance   shall   bear   interest   at   the Alternate Base Rate plus the Applicable Rate plus 2% per annum.               (d)    (c)  Notwithstanding  the  foregoing,  upon  the  occurrence and  during  the continuation of a Specified Event of Default, the Administrative Agent or the Required Lenders may, at their  option,  by  written  notice  to  the  Borrower  (which  notice  may  be  revoked  at  the  option  of  the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender directly affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans  as  provided  in  the  preceding  paragraphs  of  this Section or (ii) in the case of any other amount outstanding and overdue hereunder, such amount shall bear interest at 2% plus the rate applicable to such fee or other obligation as provided hereunder.               (e)    (d)  Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the  Revolving  Commitments;  provided   that  (i) interest accrued pursuant to paragraph ( cd) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.               (f)    (e)  All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall                                            65

 

be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.         SECTION 2.14     Alternate Rate of Interest . (a)               (a)    If prior to the commencement of any Interest Period for a Eurodollar Borrowing:                      (i)    the  Administrative  Agent  determines  (which  determination  shall  be conclusive  and  binding  absent  manifest  error)  that adequate  and  reasonable  means  do  not  exist  for ascertaining, (including, without limitation, by means of an Interpolated Rate or because the LIBO Screen Rate is not available or published on a current basis) the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or                      (ii)   the Administrative Agent is advised by the Required  Lenders  that  the Adjusted  LIBO  Rate  or  the  LIBO  Rate,  as  applicable,  for  the  applicable  Interest  Period  will  not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans included in such Borrowing for such Interest Period;  then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by electronic communication  as  provided  in  Section 9.01  as  promptly  as  practicable  thereafter  and,  until  the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into an ABR Borrowing on the last day of the then current Interest Period  applicable  thereto,  and  (ii)  if  any  Borrowing  Request  requests  a  Eurodollar  Borrowing,  such Borrowing shall be made as an ABR Borrowing.               (b)  If   at   any   time   the   Administrative   Agent   determines   (which   determination   shall   be conclusive  absent  manifest  error)  that  (i)  the  circumstances  set  forth  in  clause  (a)(i)  have  arisen  and  such circumstances  are  unlikely  to  be  temporary  or  (ii)  the  circumstances  set  forth  in  clause  (a)(i)  have  not arisen   but   either   (w)   the   supervisor   for   the   administrator   of   the   LIBO   Screen   Rate   has   made   a   public statement   that   the   administrator   of   the   LIBO   Screen   Rate   is   insolvent   (and   there   is   no   successor administrator  that  will  continue  publication  of  the  LIBO  Screen  Rate),  (x)  the  administrator  of  the  LIBO Screen  Rate  has  made  a  public  statement  identifying  a  specific  date  after  which  the  LIBO  Screen  Rate will  permanently  or  indefinitely  cease  to  be  published  by  it  (and  there  is  no  successor  administrator  that will  continue  publication  of  the  LIBO  Screen  Rate),  (y)  the  supervisor  for  the  administrator  of  the  LIBO Screen  Rate  has  made  a  public  statement  identifying  a  specific  date  after  which  the  LIBO  Screen  Rate will  permanently  or  indefinitely  cease  to  be  published  or  (z)  the  supervisor  for  the  administrator  of  the LIBO  Screen  Rate  or  a  Governmental  Authority  having  jurisdiction  over  the  Administrative  Agent  has made  a  public  statement  identifying  a  specific  date  after  which  the  LIBO  Screen  Rate  may  no  longer  be used   for   determining   interest   rates   for   loans,   then   the   Administrative   Agent   and   the   Borrower   shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such  time,  and  shall  enter  into  an  amendment  to  this  Agreement  to  reflect  such  alternate  rate  of  interest and  such  other  related  changes  to  this  Agreement  as  may  be  applicable  (but  for  the  avoidance  of  doubt, such  related  changes  shall  not  include  a  reduction  of  the  Applicable  Rate);  provided  that,  if  such  alternate rate  of  interest  as  so  determined  would  be  less  than  zero,  such  rate  shall  be  deemed  to  be  zero  for  the purposes  of  this  Agreement.  Notwithstanding  anything  to  the  contrary  in  Section  9.02,  such  amendment shall  become  effective  without  any  further  action  or  consent  of  any  other  party  to  this  Agreement  so  long as  the  Administrative  Agent  shall  not  have  received,  within  five  Business  Days  of  the  date  notice  of  such alternate  rate  of  interest  is  provided  to  the  Lenders,  a  written  notice  from  the  Required  Lenders  stating                                            66

 

that   such   Required   Lenders   object   to   such   amendment.    Until   an   alternate   rate   of   interest   shall   be determined  in  accordance  with  this  clause  (b)  (but,  in  the  case  of  the  circumstances  described  in  clause (ii)(w),  clause  (ii)(x)  or  clause  (ii)(y)  of  the  first  sentence  of  this  Section  2.14(b),  only  to  the  extent  the LIBO  Screen  Rate  for  such  Interest  Period  is  not  available  or  published  at  such  time  on  a  current  basis), (x) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing  as,  a  Eurodollar  Borrowing,  shall  be  ineffective  and  any  such  Eurodollar  Borrowing  shall  be repaid  or  converted  into  an  ABR  Borrowing  on  the  last  day  of  the  then  current  Interest  Period  applicable thereto,   and   (y)   if   any   Borrowing   Request   requests   a   Eurodollar   Borrowing,   such   Borrowing   shall   be made as an ABR Borrowing.               (b)    Notwithstanding  anything  to  the  contrary  herein  or  in  any  other  Loan  Document, upon   the   occurrence   of   a   Benchmark   Transition   Event   or   an   Early   Opt-in   Election,   as   applicable,   the Administrative   Agent   and   the   Borrower   may   amend   this   Agreement   to   replace   the   LIBO   Rate   with   a Benchmark   Replacement.   Any   such   amendment   with   respect   to   a   Benchmark   Transition   Event   will become  effective  at  5:00  p.m.  on  the  fifth  (5th)  Business  Day  after  the  Administrative  Agent  has  posted such  proposed  amendment  to  all  Lenders  and  the  Borrower,  so  long  as  the  Administrative  Agent  has  not received, by such time, written notice of objection to such proposed amendment from Lenders comprising the   Required   Lenders;   provided   that,   with   respect   to   any   proposed   amendment   containing   any   SOFR- Based   Rate,   the   Lenders   shall   be   entitled   to   object   only   to   the   Benchmark   Replacement   Adjustment contained  therein.   Any  such  amendment  with  respect  to  an  Early  Opt-in  Election  will  become  effective on  the  date  that  Lenders  comprising  the  Required  Lenders  have  delivered  to  the  Administrative  Agent written  notice  that  such  Required  Lenders  accept  such  amendment.  No  replacement  of  LIBO  Rate  with  a Benchmark Replacement will occur  prior to the applicable Benchmark Transition Start Date.               (c)    In   connection   with   the   implementation   of   a   Benchmark   Replacement,   the Administrative  Agent  will  have  the  right  to  make  Benchmark  Replacement  Conforming  Changes  from time  to  time  and,  notwithstanding  anything  to  the  contrary  herein  or  in  any  other  Loan  Document,  any amendments   implementing   such   Benchmark   Replacement   Conforming   Changes   will   become   effective without any further action or consent of any other party to this Agreement.               (d)    The  Administrative  Agent  will  promptly  notify  the  Borrower  and  the  Lenders  of (i)  any  occurrence  of  a  Benchmark  Transition  Event  or  an  Early  Opt-in  Election,  as  applicable,   (ii)  the implementation  of  any  Benchmark  Replacement,  (iii)  the  effectiveness  of  any  Benchmark  Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any   determination,   decision   or   election  that   may   be  made   by   the   Administrative   Agent   or   Lenders pursuant  to  this  Section  2.14,  including  any  determination  with  respect  to  a  tenor,  rate  or  adjustment  or  of the  occurrence  or  non-occurrence  of  an  event,  circumstance  or  date  and  any  decision  to  take  or  refrain from  taking  any  action,  will  be  conclusive  and  binding  absent  manifest  error  and  may  be  made  in  its  or their  sole  discretion  and  without  consent  from  any  other  party  hereto,  except , in  each  case,  as  expressly required  pursuant to this Section 2.14.               (e)    Upon   the   Borrower’s   receipt   of   notice   of   the   commencement   of   a   Benchmark Unavailability  Period,  (i)  any  Interest  Election  Request  that  requests  the  conversion  of  any  Borrowing  to, or   continuation   of   any   Borrowing   as,   a   Eurodollar   Borrowing   shall   be   ineffective,   and   (ii)   if   any Borrowing   Request   requests   a   Eurodollar   Borrowing,   such   Borrowing   shall   be   made   as   an   ABR Borrowing.   Furthermore,  if  any  Eurodollar  Loan  is  outstanding  on  the  date  of  the  Borrower’s  receipt  of notice  of  the  commencement  of  a  Benchmark  Unavailability  Period,  then  on  the  last  day  of  the  Interest Period  applicable  to  such  Loan  (or  the  next  succeeding  Business  Day  if  such  day  is  not  a  Business  Day), such  Loan  shall  be  converted  by  the  Administrative  Agent  to,  and  shall  constitute,  an  ABR  Loan  on  such day.                                             67

 

             (f)    (c)  If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so notify the Administrative Agent, the  Administrative  Agent  shall  promptly  give  notice  thereof  to  the  Borrower  and  the  other  Lenders, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Eurodollar Loans, or to continue or convert outstanding Loans as or into Eurodollar, shall be suspended.  In the case of the making of a Eurodollar Borrowing, such Lender’s Loan shall be made as an ABR Borrowing as part of the same Revolving Borrowing for the same Interest Period and, if the affected Eurodollar Loan is then outstanding, such Loan shall be converted to an ABR Revolving  Loan either (i) on the last day of the then current  Interest  Period  applicable  to  such  Eurodollar  Loan  if  such  Lender  may  lawfully  continue  to maintain  such  Loan  to  such  date  or  (ii)  immediately  if  such  Lender  shall  determine  that  it  may  not lawfully continue to maintain such Eurodollar Loan to such date.  Notwithstanding the foregoing, the affected  Lender  shall,  prior  to  giving  such  notice to  the  Administrative  Agent,  designate  a  different lending office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion.         SECTION 2.15     Increased Costs .               (a)    Increased Costs .  (a) If any Change in Law shall:                      (i)    impose, modify or deem applicable any reserve, special deposit, liquidity or  similar  requirement  (including  any  compulsory  loan  requirement,  insurance  charge  or  other assessment)  against  assets  of,  deposits  with  or  for  the  account  of,  or  credit  extended  by,  any  Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;                      (ii)  impose  on  any  Lender  or  the  Issuing  Bank  or  the  London  interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or                      (iii)  subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;  and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any  such  Loan)  or  to  increase  the  cost  to such Lender,  the  Issuing  Bank  or  such  other  Recipient  of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest  or  otherwise),  then  the  Borrower  will  pay to  such  Lender,  the  Issuing  Bank  or  such  other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.               (b)    If any Lender or the Issuing Bank determines that any Change in Law regarding capital  or  liquidity  requirements  has  or  would  have  the  effect  of  reducing  the  rate  of  return  on  such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Revolving Commitments of, or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into                                            68

 

consideration  such  Lender’s  or  the  Issuing  Bank’s  policies  and  the  policies  of  such  Lender’s  or  the Issuing Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts  as  will  compensate  such  Lender  or  the  Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.               (c)    A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower accompanied by a certificate setting forth in reasonable detail any amount or amounts and upon such delivery of such items, shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.               (d)    Failure  or  delay  on  the  part  of  any  Lender  or  the  Issuing  Bank  to  demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided  that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided  further  that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.         SECTION 2.16     Break  Funding  Payments .  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result  of  an  Event  of  Default  or  as  a  result  of  any  prepayment  pursuant  to  Section  2.11),  (b)  the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 or 9.02(d), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense (excluding any loss of margin or profit therefrom) attributable to such event.  In the case of a Eurodollar  Loan,  such  loss,  cost  or  expense  to  any Lender  shall  be  deemed  to  include  an  amount determined by  such  Lender  to be  the  excess,  if  any,  of  (i)  the  amount  of  interest  which  would  have accrued on the principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan (but not including the Applicable Rate, margin or profit applicable thereto), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and  period  from  other  banks  in  the  eurodollar  market.   A  certificate  of  any  Lender  setting  forth  in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and upon delivery of such items shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.         SECTION 2.17     Withholding of Taxes; Gross-Up .  (a)                                              69

 

             (a)    Payments   Free   of   Taxes .   Any  and  all  payments  by  or  on  account  of  any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction  or  withholding  has  been  made  (including  such  deductions  and  withholdings  applicable  to additional sums payable under this Section 2.17) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.               (b)    Payment  of  Other  Taxes  by  the  Borrower Loan  Parties .  The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.               (c)    Evidence  of  Payment .  As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the  Administrative  Agent  the  original  or  a  certified  copy  of  a  receipt  issued  by  such  Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.               (d)    Indemnification by the Loan Parties .  The Loan Parties shall jointly and severally indemnify  each  Recipient,  within  ten  (10)  days  after  demand  therefor,  for  the  full  amount  of  any Indemnified  Taxes  (including  Indemnified  Taxes  imposed  or  asserted  on  or  attributable  to  amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient 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.  A certificate as to the amount of such payment or liability delivered to any Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.               (e)    Indemnification   by   the   Lenders .   Each  Lender  shall  severally  indemnify  the Administrative  Agent,  within  ten  (10)  days  after  demand  therefor,  for  (i)  any  Indemnified  Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent  shall  be  conclusive  absent  manifest  error.   Each  Lender  hereby  authorizes  the  Administrative Agent  to  set  off  and  apply  any  and  all  amounts  at  any  time  owing  to  such  Lender  under  any  Loan Document  or  otherwise  payable  by  the  Administrative  Agent  to  such  Lender  from  any  other  source against any amount due to the Administrative Agent under this paragraph (e).               (f)    Status   of   Lenders .   (i) Any  Lender  that  is  entitled  to  an  exemption from  or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by                                            70

 

             (h)    Survival .   Each  party’s  obligations  under  this  Section  2.17  shall  survive  the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.               (i)    Defined   Terms .  For purposes of this Section 2.17, the term “applicable  law” includes FATCA and the term “Lender” includes any Issuing Bank.         SECTION 2.18     Payments Generally; Allocation of Proceeds; Sharing of Set-offs .   (a)                (a)    The Borrower shall make each payment or prepayment required to be made by them  hereunder  (whether  of  principal,  interest,  fees  or  reimbursement  of  LC  Disbursements,  or  of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Chicago time, on the date when due or the date fixed for any prepayment hereunder, in immediately available funds, without setoff,  recoupment  or  counterclaim.   Any  amounts  received  after  such  time  on  any  date  may,  in  the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, Chicago, Illinois 60603, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative  Agent  shall  distribute  any  such  payments  received  by  it  for  the  account  of  any  other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.               (b)    At any time that payments are not required to be applied in the manner required by  Section 7.02,  any  proceeds  of  Collateral  received  by  the  Administrative  Agent  not  constituting  a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower) shall be applied ratably first , to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the Borrower (other than in connection with Banking  Services  Obligations  or  Swap  Agreement Obligations),  second ,  to  pay  any  fees  or  expense  reimbursements  then  due  to  the  Lenders  from  the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), third , to pay interest due  in  respect  of  the  Overadvances  and  Protective  Advances  ratably,  fourth,  to  pay the  principal  of  the  Overadvances  and  Protective  Advances  ratably,  fifth,  to  pay  interest  then due and payable  on  the  Loans (other   than   the   Overadvances   and   Protective   Advances)   ratably, fourth sixth ,  to prepay principal on the Loans (other  than  Overadvances  and  Protective  Advances)  and unreimbursed LC Disbursements and to pay any amounts owing with respect to Banking Services Obligations and Swap Agreement Obligations (up   to   and   including  the  amount  most  recently  provided  to  the  Administrative Agent   pursuant   to   Section   2.24),   ratably, fifth seventh ,  to pay an amount to the Administrative Agent equal  to  one  hundred  five  percent  (105%) of  the  aggregate  undrawn  face  amount  of  all  outstanding Letters of Credit, to be held as cash collateral for such Obligations , and sixth eighth , to the payment of any other  Secured  Obligation  due  to  the  Administrative Agent  or  any  Secured  Party  by  the  Borrower. Notwithstanding  the  foregoing,  amounts  received  from  any  Loan  Party  shall  not  be  applied  to  any Excluded Swap Obligation of such Loan Party.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless an Event of Default has occurred and is continuing, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (a) on the expiration date of the Interest Period applicable thereto or (b) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in  any  such  event,  the  Borrower  shall  pay  the  break  funding  payment  required  in  accordance  with                                            73

 

Section 2.16.  The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.               (c)    At the election of the Administrative Agent, all payments of principal, interest, LC  Disbursements,  fees,  premiums,  reimbursable  expenses  (including,  without  limitation,  all reimbursement for fees, costs and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of the Borrower maintained with the Administrative Agent. The Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans  and  Overadvances,  but  such  a  Borrowing  may  only  constitute  a  Protective Advance  if  it  is  to  reimburse  costs,  fees,  and  expenses  as  described  in  Section  9.03 ) and that all such Borrowings shall be deemed to have been requested pursuant to Section 2.03 or 2.05, as applicable, and (ii)  the  Administrative  Agent  to  charge  any  deposit  account  of  the  Borrower  maintained  with  the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.               (d)    If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements or Swingline  Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements  and Swingline  Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline  Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline  Loans; provided  that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such  participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline  Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.               (e)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank pursuant to the terms hereof or any other Loan Document (including any date that is fixed for prepayment by notice from the Borrower to the Administrative Agent pursuant to Section 2.11) that the Borrower will not make such payment or prepayment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as  the  case  may  be,  severally  agrees  to  repay  to  the  Administrative  Agent  forthwith  on  demand  the                                            74

 

amount  so  distributed  to  such  Lender  or  Issuing  Bank  with  interest  thereon,  for  each  day  from  and including  the  date  such  amount  is  distributed  to  it  to  but  excluding  the  date  of  payment  to  the Administrative Agent, at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.               (f)    If  any  Lender  shall  fail  to  make  any  payment  required  to  be  made  by  it hereunder, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations hereunder until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender hereunder.  Application of amounts pursuant to (i) and (ii) above shall be made in any order determined by the Administrative Agent in its discretion.               (g)    The  Administrative  Agent  may  from  time  to  time  provide  the  Borrower  with account statements or invoices with respect to any of the Secured Obligations (the “Statements ”).  The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrower’s convenience.  Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations.  If the Borrower pays the full amount indicated on a Billing  Statement on or before the due date indicated on such Billing Statement, the Borrower shall not be in default  of  payment  with  respect  to  the  billing  period  indicated  on such  Statement ; provided , that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent’s or the Lenders’ right to receive payment in full at another time.        SECTION 2.19      Mitigation Obligations; Replacement of Lenders .               (a)    If any Lender requests compensation under Section 2.15, or if the Borrower is required  to  pay  any  Indemnified  Taxes  or  additional  amounts  to  any  Lender  or  any  Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed  cost  or  expense  and  would  not  otherwise  be  disadvantageous  to  such  Lender.   The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.               (b)    If (i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required  to  pay  any  Indemnified  Taxes  or  additional  amounts  to  any  Lender  or  any  Governmental Authority  for  the  account  of  any  Lender  pursuant  to  Section 2.17  or  (iii)  any  Lender  becomes  a Defaulting Lender, then the Borrower may, at their sole expense and effort, upon notice to such Lender and  the  Administrative  Agent,  require  such  Lender  to  assign  and  delegate,  without  recourse  (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than  its  existing  rights  to  payments  pursuant  to  Section  2.15  or  2.17)  and  obligations  under  this Agreement  and  other  Loan  Documents  to  an  assignee  (other  than  an  Ineligible  Institution)  that  shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided  that (x) the Borrower shall have received the prior written consent of the Administrative Agent (and in circumstances where its consent would be required under Section 9.04, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld or delayed, (y) such Lender shall have  received  payment  of  an  amount  equal  to  the  outstanding  principal  of  its  Loans  and  funded                                            75

 

participations in LC Disbursements and Swingline  Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (z) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made  pursuant  to  Section 2.17,  such  assignment  will  result  in  a  reduction  in  such  compensation  or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  Each party hereto agrees that (a) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower,  the  Administrative  Agent  and  the  assignee  (or,  to  the  extent  applicable,  an  agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (b) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed  to  have  consented  to an and   be  bound  by  the  terms  thereof;  provided   that,  following  the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.         SECTION 2.20     Defaulting  Lenders .  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:               (a)    fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);               (b)    any  payment  of  principal,  interest,  fees  or  other  amounts  received  by  the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at  such  time  or  times  as  may  be  determined  by  the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by  such  Defaulting  Lender  to  any  Issuing  Bank  or  the  Swingline  Lender  hereunder;  third,  to  cash collateralize the Issuing Banks’ LC Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Borrower may request (so long as no Default or Event of Default exists and subject to the other conditions set forth in this Agreement), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future  funding  obligations  with  respect  to  Loans  under  this  Agreement  and  (y)  cash  collateralize  the Issuing Banks’ future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or the Swingline Lender as a result of any judgment of a court  of  competent  jurisdiction  obtained  by  any  Lender,  the  Issuing  Banks  or  the  Swingline  Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction  obtained  by  the  Borrower  against  such Defaulting  Lender  as  a  result  of  such  Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made                                            76

 

or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure  and  Swingline  Loans  are  held  by  the  Lenders  pro  rata  in  accordance  with  the  Revolving Commitments without giving effect to clause (d) below.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;               (c)    such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly  provided  in  Section  9.02(b)) and the Revolving Commitment  and Revolving Credit   Exposure  of  such  Defaulting  Lender  shall  not  be  included  in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02) or under any other Loan Document; provided, that, except as otherwise provided in Section 9.02, this clause (c) shall not apply to the vote of a Defaulting Lender in the case  of  an  amendment,  waiver  or  other  modification requiring the consent of such Lender or each Lender directly affected thereby;               (d)    if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender then:                      (i)   all  or  any  part  of  the  Swingline  Exposure  and  LC  Exposure  of  such Defaulting Lender (other than the portion of such Swingline Exposure referred to in clause (b) of the definition of such term) shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only (x) to the extent that the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time) and (y) to the extent that such reallocation does not, as to any non-Defaulting  Lender,  cause  such  non-Defaulting  Lender’s Revolving Credit   Exposure  to  exceed  its Revolving Commitment;                      (ii)   if  the  reallocation  described  in  clause  (i)  above  cannot,  or  can  only partially,  be  effected,  the  Borrower  shall  within  two  (2)  Business  Days  following  notice  by  the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;                      (iii)  if  the  Borrower  cash  collateralizes  any  portion  of such  Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such  Defaulting  Lender  pursuant  to  Section  2.12(b) with  respect  to  such  Defaulting  Lender’s  LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;                      (iv)  if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and                      (v)   if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights                                            77

 

each case, shall deliver to the Administrative Agent, promptly after entering into such Swap Agreement, written notice setting forth the aggregate amount of all such Swap Agreement Obligations of such Loan Party or Subsidiary to such Lender or Affiliate (whether matured or unmatured, absolute or contingent). In furtherance of that requirement, each such Lender or Affiliate thereof shall furnish the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts  due  or  to  become  due  in  respect  of  such  Swap  Agreement  Obligations.   The  most  recent information  provided  to  the  Administrative  Agent  shall  be  used  in  determining  whether  and  to  what extent such Swap Agreement Obligations constitute Secured Obligations hereunder.                                        ARTICLE III                                Representations and Warranties .         Each Loan Party represents and warrants to the Lenders that:         SECTION 3.01     Organization;   Powers .   Each  Loan  Party  and  each  Subsidiary  is  duly organized, validly existing and (to the extent the concept is applicable in such jurisdiction and, in the case of  any  Subsidiary  other  than  the  Borrower,  except  where  the  failure  to  do  so,  individually  or  in  the aggregate, would not reasonably be expected to result in a Material Adverse Effect) in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.         SECTION 3.02     Authorization;   Enforceability .   The  Transactions  are  within  each  Loan Party’s (to the extent applicable to such Loan Party) organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders of such Loan Party. Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan  Party  and  constitutes  a  legal,  valid  and  binding  obligation  of  such  Loan  Party,  enforceable  in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.         SECTION 3.03     Governmental Approvals; No Conflicts .  The Transactions (a) do not require any  consent  or  approval  of,  registration  or  filing with,  or  any  other  action  by,  any  Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings  necessary  to  perfect  Liens  created  pursuant  to  the  Loan  Documents,  (b)  will  not  violate  any Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not violate or result in a default under any indenture, agreement or other instrument  evidencing  Material  Indebtedness  binding upon any Loan Party or any Subsidiary or the assets of any Loan Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents, except, with respect to clauses (b) and (c) of this Section 3.03, to the extent that such breach, contravention or violation would not reasonably be expected to result in a Material Adverse Effect.         SECTION 3.04     Financial Condition; No Material Adverse Change .  (a)                (a)    The  Borrower  Audited  Financial  Statements  and  the  Borrower  Unaudited Financial Statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Company and its consolidated Subsidiaries as of such dates and for such periods                                            79

 

covered thereby in accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes in the case of the Borrower Unaudited Financial Statements.               (b)    Since  June  30, 2018 2019 , there   has   been  no material   adverse   change  in   the business,   assets,   operations   or   financial   condition  of   the   Company   and   its   Subsidiaries  (taken   as   a whole). event  or  circumstance  has  occurred  that  could  reasonably  be  expect  to  have  a  Material  Adverse Effect.         SECTION 3.05     Properties .  (a)                (a)    Each of the Company and its Subsidiaries has good and indefeasible marketable title to, or valid leasehold interests in, (i)  all of its real and personal property material to its business, except   for  (ii) all   of   its   machinery   and   equipment   with   an   aggregate  fair   market   value   greater   than $2,500,000  to the extent included in the calculation of the Maximum Overadvance Amount, and (iii) as of the  last  day  of  the  month  for  which  the  most  recent  Borrowing  Base  Certificate  was  delivered  pursuant  to Section  5.01(h),  all  of  its  Eligible  Inventory  included  in  such  Borrowing  Base  Certificate  ,  except  for, with  respect  to  the  foregoing  clauses  (i)  and  (ii),  minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and other Liens permitted pursuant to Section 6.02.               (b)    Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks, tradenames,  copyrights,  patents  and  other  intellectual  property  necessary  to  its  business  as  currently conducted and the use thereof by each Loan Party and each Subsidiary does not infringe in any material respect upon the rights of any other Person, and each Loan Party’s and each Subsidiary’s rights thereto are not subject to any licensing agreement or similar arrangement (other than (A) restrictions relating to software licenses that may limit such Loan Party’s ability to transfer or assign any such agreement to a third party, (B) licensing agreements or similar agreements that do not materially impair the ability of the Administrative  Agent  or  the  Lenders  to  avail  themselves  of  their  rights  of  disposal  and  other  rights granted  under  the  Collateral  Documents  in  respect  of  Inventory  and  (C)  such  infringements  that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect).         SECTION 3.06     Litigation and Environmental Matters .  (a)                (a)    There  are  no  actions,  suits  or  proceedings  by  or  before  any  arbitrator  or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination  and  that,  if  adversely  determined,  could  reasonably  be  expected,  individually  or  in  the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any Loan Document or the Transactions.               (b)    Except  for  the  Disclosed  Matters  or  with  respect  to  any  other  matters  that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect (i) as of the Effective Date, no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability and (ii) no Loan Party or any Subsidiary (A) has failed to comply with any  Environmental  Law  or  to  obtain,  maintain  or  comply  with  any  permit,  license  or  other  approval required under any Environmental Law, (B) has incurred any Environmental Liability or (C) knows of any threatened Environmental Liability.        SECTION 3.07      Compliance   with   Laws   and   Agreements;   No   Default .   Except  where  the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with (i) all Requirements of Law                                            80

 

applicable to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property.  No Default has occurred and is continuing.        SECTION 3.08      Investment   Company   Status .   No  Loan  Party  or  any  Subsidiary  is  an “investment company” as defined in, or required to register under, the Investment Company Act of 1940.         SECTION 3.09     Taxes .  Each Loan Party and each Subsidiary has timely filed or caused to be filed all federal, state and other material Tax returns and reports required to have been filed and has paid or caused to be paid all federal, state and other material Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.         SECTION 3.10     ERISA;  Plan  Assets .  Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) no ERISA Event has occurred or is reasonably expected to occur, and (ii) the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.   Notwithstanding that the Borrower and its Subsidiaries maintain and contribute to “employee benefit plans,” as defined in ERISA Section 3(3), none of the Borrower or any of its Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations).         SECTION 3.11     Disclosure .               (a)    (a)  None  of  the  reports,  financial  statements,  certificates  or  other  information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (other than projections, cash  flow forecasts,  other forward looking information and information of a general economic or industry specific nature),  as  modified  or  supplemented  by  other  information  so  furnished,  contains  any  material misstatement of fact or omits to state any material fact necessary to make the statements therein, at the time of and in the light of the circumstances under which they were made, not misleading; provided  that, with respect to projected financial information  and  cash  flow  forecasts , the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such projected financial information was or  cash  flow  forecasts  were  delivered prior to the Third  Amendment  Effective Date, as of the Third  Amendment  Effective Date (it being understood that projections are subject to inherent uncertainties and contingencies which may be outside the control of any Loan Party and that no assurance can be given that such projected financial information will be realized).               (b)    (a)  As  of  the Third   Amendment  Effective Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Effective Date to any Lender in connection with this Agreement is true and correct in all respects.         SECTION 3.12     Intentionally Omitted .         SECTION 3.13     Solvency .  (a)                (a)    Immediately after the consummation of the Transactions to occur on the Third Amendment  Effective Date  and immediately after the funding of each Loan and issuance of each Letter of Credit   hereunder , (i) the fair value of the respective assets of the Borrower and its Subsidiaries, on a                                            81

 

consolidated basis and at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise;  (ii)  the  present  fair  saleable  value  of the  respective  property  of  the  Borrower  and  its Subsidiaries, on a consolidated basis, will be greater than the amount that will be required to pay the probable liability of their respective debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower and its Subsidiaries, on a consolidated basis, will be able to pay their respective debts and liabilities, subordinated, contingent or otherwise,  as  such  debts  and  liabilities  become  absolute  and  matured;  and  (iv)  the  Borrower  and  its Subsidiaries, on a consolidated basis, will not have unreasonably small capital with which to conduct their respective business in which they are engaged as such business is now conducted and is proposed to be conducted after the Third Amendment  Effective Date.               (b)    The Borrower and its Subsidiaries, taken as a whole, do not intend to, or believe that they will, incur debts beyond their ability to pay such debts as they mature in the ordinary course of business.        SECTION 3.14      Insurance .   The  Borrower  maintains,  and  has  caused  each  Subsidiary  to maintain,  with  financially  sound  and  reputable  insurance  companies,  insurance  on  all  their  real  and personal property in such amounts, subject to such deductibles and self-insurance retentions and covering such properties and risks as are adequate and comparable to those customarily maintained by companies engaged in the same or similar lines of business operating in the same or similar locations.         SECTION 3.15     Capitalization  and  Subsidiaries .  Schedule  3.15  sets forth, as of the Third Amendment  Effective Date, (a) a correct and complete list of the name and relationship to the Company of each and all of the Company’s Subsidiaries, (b) a  true  and  complete  listing  of  each  class  of  each Subsidiary’s authorized Equity Interests all of which are owned beneficially and of record by the Persons identified on Schedule 3.15 , and (c) the type of entity of the Company and each of its Subsidiaries.  All of the  issued  and  outstanding  Equity  Interests  owned  by  any  Loan  Party  have  been  (to  the  extent  such concepts are relevant with respect to such ownership interests) duly authorized and validly issued and are fully paid and non-assessable.  There are no outstanding commitments or other obligations of any Loan Party (other than the Company) to issue, and no options, warrants or other rights of any Person to acquire, any  shares  of  any  class  of  capital  stock  or  other  equity  interests  of  any  Loan  Party  (other  than  the Company).  As of the Third   Amendment  Effective Date, other than in respect of any stock  incentive program, there are no outstanding commitments or other obligations of the Company to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of the Company.        SECTION 3.16      Security  Interest  in  Collateral .  The provisions of this Agreement and the other Loan Documents create legal and valid Liens on the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and having priority over all other Liens on the Collateral except in the case of (a) Liens permitted by Section 6.02, to the  extent  any  such  Liens  would  have  priority  over the  Liens  in  favor  of  the  Administrative  Agent pursuant  to  any  applicable  law  or  an  agreement  permitted  hereunder,  (b) Liens  perfected  only  by possession (including possession of any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral and (c) Liens perfected only by control, filing or recording to the extent that, despite due authorization by the applicable Loan Party, the Administrative Agent has not obtained control or has not recorded such Lien.        SECTION 3.17      Employment Matters .  As of the Third Amendment  Effective Date, except as would not reasonably be expected either individually or in the aggregate, to have a Material Adverse Effect, there are no strikes, lockouts or organized slowdowns against the Borrower or any Subsidiary                                            82

 

pending or, to their knowledge, threatened.  Except as would not reasonably be expected to result in a Material Adverse Effect, (i) the hours worked by and payments made to employees of the Borrower and its  Subsidiaries  have  not  been  in  violation  of  the Fair  Labor  Standards  Act  or  any  other  applicable Federal, state, local or foreign law dealing with such matters and (ii) all payments due from the Borrower or any Subsidiary, or for which any claim may be made  against  the  Borrower  or  any  Subsidiary,  on account  of  wages  and  employee  health  and  welfare  insurance  and  other  benefits,  have  been  paid  or accrued as a liability on the books of the Borrower or such Subsidiary.         SECTION 3.18     Reserve   Regulations .  No part of the proceeds of any Loan or Letter of Credit has been used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.        SECTION 3.19      Use  of  Proceeds .  The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 5.08.         SECTION 3.20     Burdensome   Restrictions .   No  Loan  Party  is  subject  to  any  Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.         SECTION 3.21     Anti-Corruption  Laws  and  Sanctions .  The Borrower has implemented and maintains  in  effect  policies  and  procedures  designed  to  ensure  compliance  by  the  Borrower,  its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable  Sanctions,  and  the  Borrower,  its  Subsidiaries  and  their  respective  officers  and,  to  the knowledge of the Borrower, its directors, employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.  None of (a) the Borrower, any Subsidiary or, to the knowledge of the Borrower or Subsidiary, any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will directly or, to the knowledge of the Borrower, indirectly violate Anti-Corruption Laws or applicable Sanctions.  To the extent applicable, each Loan Party and each Subsidiary is in compliance, in all material respects, with (x) the Trading with the Enemy Act, as amended, and each of the foreign asset control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (y) the USA PATRIOT Act.         SECTION 3.22     EEA Affected   Financial   Institutions .   No  Loan  Party  is  an EEA Affected Financial Institution.                                        ARTICLE IV                                        Conditions .         SECTION 4.01     Effective  Date .  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):               (a)    Credit  Agreement  and  Other  Loan  Documents .  The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory  to  the  Administrative  Agent  (which  may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party  has  signed  a  counterpart  of  this  Agreement,  (ii)  either  (A) a  counterpart  of  each  other  Loan                                            83

 

             (o)    Approvals .  All governmental and third party approvals necessary in connection with  the  financing  contemplated  hereby  and  the  continuing  operations  of  the  Borrower  and  its Subsidiaries (including shareholder approvals, if any) shall have been obtained on terms satisfactory to Administrative Agent and shall be in full force and effect.               (p)    Corporate  Structure .  The corporate structure, capital structure and other material debt instruments, material accounts and governing documents of the Borrower and its Affiliates shall be acceptable to the Administrative Agent in its sole discretion.               (q)    Legal   Due   Diligence .   The  Administrative  Agent  and  its  counsel  shall  have completed all legal due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.               (r)    USA  PATRIOT  Act,  Etc .  (i) The Administrative Agent and the Lenders shall have received, at least five (5) days prior to the Effective Date, all documentation and other information reasonably requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, for each Loan Party, to the extent reasonably requested in writing of the Borrower at least five (5) Business Days prior to the Effective Date and (ii) to the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Effective Date, any Lender that has requested, in a written notice to the Borrower  at  least  ten  (10)  days  prior  to  the  Effective  Date,  a  Beneficial  Ownership  Certification  in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).               (s)    Other   Documents .   The  Administrative  Agent  shall  have  received  such  other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.  The Administrative Agent shall notify the Borrower, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding.         SECTION 4.02     Each  Credit  Event .  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to  issue,  amend,  renew  or  extend  any  Letter  of Credit, is subject to the satisfaction of the following conditions:               (a)    The  representations  and  warranties  of  the  Loan  Parties  set  forth  in  the  Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).               (b)    At  the  time  of  and  immediately  after  giving  effect to  such  Borrowing  or  the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing.               (c)    After  giving   effect   to   any  Borrowing   and   the   use   of   proceeds   thereof   or   the issuance, amendment, renewal or extension of any Letter of Credit, Availability shall not be less than $0.                                             86

 

Each  Borrowing  and  each  issuance,  amendment,  renewal  or  extension  of  a  Letter  of  Credit  shall  be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a)  and , (b) , and (c)  of this Section.                                        ARTICLE V                                    Affirmative Covenants .         Until the Revolving Commitments shall have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder (other than contingent or indemnity obligations for which no claim has been made) shall have been paid in full and all Letters of Credit shall have expired or terminated  (or  have  been  cash  collateralized  pursuant  to  the  terms  hereof)  in  each  case  without  any pending draw, and all LC Disbursements shall have been  reimbursed,  each Loan Party covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:         SECTION 5.01     Financial  Statements , Borrowing  Base  Reporting,  and  Other  Information . The Borrower will furnish to the Administrative Agent and each Lender:               (a)    within one hundred twenty (120) days after the end of  each  fiscal  year  of  the Company,  its  audited  consolidated  balance  sheet  and  related  statements  of  operations,  stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification, commentary or exception and without any qualification or exception as to the scope of such audit except to the extent resulting solely from (i) an upcoming maturity date under the credit facilities provided for herein occurring within one year from the time such opinion is delivered or (ii) an actual  or  anticipated breach of any Financial Covenant) to the effect  that  such  consolidated  financial  statements present  fairly  in  all  material  respects  the  financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants provided , that the requirements of this clause (a) shall be deemed to have been satisfied if the Administrative Agent has been furnished with a consolidated annual report for the Company and its Subsidiaries containing the foregoing information on form 10-K in the time period specified above in this clause (a);               (b)    within forty-five (45) days after the end of each of the first three fiscal quarters of each  fiscal  year  of the Company, its consolidated balance  sheet  and  related  statements  of  operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion  of  such  fiscal  year,  setting  forth  in  each case  in  comparative  form  the  figures  for  the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer of the Borrower as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end and audit adjustments  and  the  absence  of  footnotes,  provided ,  that  the  requirements  of  this  clause  (b)  shall  be deemed to have been satisfied if the Administrative Agent has been furnished with a quarterly report for the Company and its Subsidiaries containing the foregoing information on form 10-Q in the time period specified above in this clause (b);               (c)    concurrently  with  any  delivery  of  financial  statements  under  clause  (a)  or  (b) above,  a  certificate  of  a  Financial  Officer  of  the Borrower  in  substantially  the  form  of  Exhibit   B   (a “Compliance  Certificate ”) (i) certifying, in the case of the financial statements delivered under clause (b), as  presenting  fairly  in  all  material  respects  the  financial  condition  and  results  of  operations  of  the                                            87

 

Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end and audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, and (iii) in the case of the financial statements delivered  under  clauses  (a)  or  (b)  above,  setting  forth  reasonably  detailed  calculations  demonstrating compliance with Section 6.12 for such period;               (d)    within thirty (30) days after the end of each calendar month, as of the period then ended, the Company’s consolidated balance sheet and related statements of operations and cash flows as of the end of and for such calendar month and the then elapsed portion of such fiscal year, all certified by a Financial Officer of the Borrower as presenting fairly in all material respects the financial condition and results  of  operations  of  the  Company  and  its  consolidated  Subsidiaries  on  a  consolidated  basis  in accordance with GAAP consistently applied, subject to normal year-end and audit adjustments and the absence of footnotes;               (e)    no later than the earlier of (i) forty-five (45) days after the start of each fiscal year quarter  of the Company  (commencing  with  the  fiscal  quarter  ending  September  30,  2020) , and (ii) three  (3)  Business  Days  after  the  date  such  Projections are approved by the board of directors of the Company,  a  copy  of  the  final  plan  and  forecast  (including  a  monthly  projected  consolidated  income statement)  of  the  Company  for  each  month  of  such  fiscal year quarter   (the  “Projections ”)  in  form reasonably satisfactory to the Administrative Agent (it being understood that the Company’s customary format consistent with the format Projections  delivered to the Administrative Agent in connection with the Effective Date on July 7, 2020  will be satisfactory);               (f)    promptly following any request therefor, (x) such other information regarding the operations, changes in ownership of Equity Interests, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request (including,  without  limitation,  variance  reports  during  the  Covenant Relief  Period  describing  variances  from  the  cash  flow  projections  for  such  weekly  period;  provided,  that no  more  than  two  such  variance  reports  per  fiscal  month  may  be  requested  by  the  Administrative  Agent) and (y) 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               (g)    promptly  after  the  same  become  publicly  available, copies  of  all  periodic  and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by the Company to its shareholders generally, as the case may be .;               (h)    within 30 days of the end of each calendar month (commencing with the calendar month   ended   July   31,   2020),   as   of   the   month-end   then   ended,   a   Borrowing   Base   Certificate   and supporting information (in a format and with such detail consistent with such information delivered to the Administrative  Agent  on  or  prior  to  the  Third  Amendment  Effective  Date  as  required  by  Section 3(g)  of the Third Amendment);               (i)    within 30 days of the end of each calendar month (commencing with the calendar month  ended  July  31,  2020)  and  at  such  other  times  as  may  be  requested  by  the  Administrative  Agent  in its  Permitted  Discretion,  as  of  the  period  then  ended,  all  delivered  electronically  in  a  text  formatted  file  or other form reasonably acceptable to the Administrative Agent:                                             88

 

                    (i)    a summary  aging  (including  name  and  balance  due)  of  the  Accounts  of the Borrower and the Domestic Subsidiary Guarantors for each Account Debtor;                      (ii)   a  schedule   detailing   the   Inventory   of   the   Borrower   and   the   Domestic Subsidiary  Guarantors  by  location  (showing  Inventory  in  transit,  any  Inventory  located  with  a  third  party under  any  consignment,  bailee  arrangement,  or  warehouse  agreement),  by  class  (raw  material,  work-in- process, and finished goods), by product type, and by volume on hand, which Inventory shall be valued at the  lower  of  cost  (determined  on  a  first-in,  first-out  basis)  or  market  and  adjusted  for  Reserves  as  the Administrative  Agent  has  previously  indicated  to  the  Borrower  are  deemed  by  the  Administrative  Agent to be appropriate in its Permitted Discretion;                      (iii)  a worksheet  of  calculations  prepared  by  the  Borrower  and  the  Domestic Subsidiary  Guarantors  to  determine  Eligible  Accounts  and  Eligible  Inventory,  such  worksheets  detailing the  Accounts  and  Inventory  excluded  from  Eligible  Accounts  and  Eligible  Inventory  and  the  reason  for such exclusion;                      (iv)   a reconciliation  of  the  Accounts  and  Inventory  of  the  Borrower  and  the Domestic  Subsidiary  Guarantors  between  (A) the  amounts  shown  in  the  Borrower’s  general  ledger  and financial  statements  and  the  reports  delivered  pursuant  to  clauses  (i)  and  (ii)  above  and  (B) the  amounts and  dates  shown  in  the  reports  delivered  pursuant  to  clauses  (i)  and  (ii)  above  and  the  Borrowing  Base Certificate delivered pursuant to clause (h) above as of such date; and                      (v)    a schedule  and  aging  of  the  Borrower’s  and  each  Domestic  Subsidiary Guarantor’s trade payables;               (j)    promptly upon the Administrative Agent’s request in its Permitted Discretion:                      (i)    an  updated  customer  list  for  the  Borrower  and  its  Subsidiaries,  which  list shall   state   the   customer’s   name,   mailing   address   and   phone   number,   delivered   electronically   in   a   text formatted   file   acceptable   to   the   Administrative   Agent   and   certified   as   true   and   correct   by   a   Financial Officer of the Borrower; and                      (ii)   such  other  information  as  requested  by  the  Administrative  Agent  in  its Permitted Discretion; and               (k)    solely   during   the   Covenant   Relief   Period,   on   every   other   Monday   (or   if   such Monday  is  not  a  Business  Day,  the  immediately  following  Business  Day),  commencing  with  August  3, 2020,  a  rolling  13-week  cash  flow  forecast  covering  the  Borrower  and  its  Subsidiaries  on  a  consolidated basis , which  cash  flow  forecast  shall  include  anticipated  uses  of  proceeds  of  the  Loans  for  each  week during  such  period  and  be  substantially  similar  to  the  form  delivered  to  the  Administrative  Agent  on  or prior to the Third Amendment Effective Date as required by Section 3(d)  of the Third Amendment.         Documents required to be delivered pursuant to clauses (a), (b) and (g) of this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which  such  documents  are  filed  for  public  availability  on  the  SEC’s  Electronic  Data  Gathering  and Retrieval system (EDGAR) or (ii) on which such documents are posted on the Company’s behalf on an Internet  or  intranet  website,  if  any,  to  which  each  Lender  and  the  Administrative  Agent  have  access (whether a commercial, third-party website or whether made available by the Administrative Agent). Notwithstanding anything contained herein, in every instance the Company shall be required to provide paper  copies  of  the  compliance  certificates  required  by  clause (c)  of  this  Section 5.01  to  the Administrative Agent.   The  Administrative  Agent  shall  have  no  obligation  to  request  the  delivery  of  or  to                                             89

 

maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor  compliance  by  the  Borrower  with  any  such  request  by  a  Lender  for  delivery,  and  each  Lender shall  be  solely  responsible  for  timely  accessing  posted  documents  or  requesting  delivery  of  paper  copies of such document to it and maintaining its copies of such documents.         SECTION 5.02     Notices of Material Events .  The Borrower will furnish to the Administrative Agent  (which the Administrative Agent shall promptly  distribute  to  each  Lender)  prompt  (but  in  any event within  any  time  period  that  may  be  specified  below no  later  than  five  (5)  Business  Days ) written notice of the following:               (a)    the occurrence of any Default;               (b)    receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced or threatened against any Loan Party or any Subsidiary that is non- frivolous (as reasonably determined by the Borrower) and, if adversely determined, could reasonably be expected to have a Material Adverse Effect;               (c)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to have a Material Adverse Effect;               (d)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect;  and               (e)    any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification .;               (f)    [reserved];               (g)    (i)  any  instance  of  loss,  damage,  destruction  or  casualty  event  to  any  portion  of Collateral  having  a  fair  market  value  of  $2,500,000  or  more,  individually  or  collectively  for  any  related series of such instances, whether or not covered by insurance, to the extent the cost to repair or replace (as applicable)   such   Collateral   as   a   result   of   such   casualty   or   insured   damage   would   exceed   $50,000, individually   or   collectively   for   any   related   series   of   such   instances,   or   (ii)   the   commencement   of   any action  or  proceeding  for  the  taking  of  any  portion  of  the  Collateral  (or  any  interest  therein)  under  power of  eminent  domain  or  by  condemnation  or  similar  proceeding  to  the  extent  such  portion  of  the  Collateral (or  interest  therein)  proposed  to  be  taken  has  a  fair  market  value  of  $2,500,000  or  more,  individually  or collectively for any related series of such instances;               (h)    any   Disposition   or   exchange   of   any   real   property,   machinery   or   equipment included   in   the   Maximum   Overadvance   Amount   having   a   fair   market   value   of   $2,500,000   or   more, individually or collectively for any related series of such instances; and               (i)    any   and   all   default   notices   received   by   a   Loan   Party   from   a   landlord, warehouseman   or   bailee   under   or   with   respect   to   any   leased   location,   warehouse   or   other   bailment location   where   Collateral   is   located ,  to   the  extent   such   notice   provides   that  the   applicable  landlord, warehouseman  or  bailee  intends  to  terminate  the  lease  (or  other  applicable  agreement  or  arrangement)  or exercise   material   remedies   under   the   lease   (or   other   applicable   agreement   or   arrangement)  (it   being understood  and  agreed  that  any  action  having  the  effect  of  removal,  disposal  or  seizure  of  any  physical Collateral at such location shall constitute a “material remedy”).                                             90

 

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.         SECTION 5.03     Existence;  Conduct  of  Business .  Each Loan Party will, and will cause each Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect (i) its legal existence and (ii) except to the extent failure to do so could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits with respect to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, provided  that the foregoing shall not prohibit any merger, consolidation, liquidation, dissolution, disposition or other transaction permitted under Section 6.03 or Section 6.05.         SECTION 5.04     Payment   of   Obligations .   Each  Loan  Party  will,  and  will  cause  each Subsidiary to, pay or discharge all of its respective Material Indebtedness and all other material liabilities and material obligations, including Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (c) the failure to pay or discharge such Material Indebtedness or liabilities and obligations could not be reasonably expected to result in a Material Adverse Effect.         SECTION 5.05     Maintenance   of   Properties .   Each  Loan  Party  will,  and  will  cause  each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted and except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.         SECTION 5.06     Books  and  Records;  Inspection  Rights .  The Borrower will, and will cause each of its Subsidiaries to, (a) keep proper books of record and account in which full, true and correct entries in all material respects are made of all dealings and transactions in relation to its business and activities  and  (b)  permit  any  representatives  designated  by  the  Administrative  Agent  (including employees of the Administrative Agent or any consultants, accountants, lawyers, agents and appraisers retained  by  the  Administrative  Agent),  as  and  when determined  by  the  Administrative  Agent,  upon reasonable prior notice and during reasonable hours, to visit and inspect its properties, to examine and make  extracts  from  its  books  and  records, and  to  discuss  its  affairs,  finances  and  condition  with  its officers and independent public accountants  and  to  provide  contact  information  for  each  bank  where  each Loan  Party  has  a  deposit  and/or  securities  account  (provided  that  each  such  Loan  Party  only  authorizes the Administrative Agent to contact the bank(s) if an Event of Default has occurred and is continuing), all at such reasonable times and as often as reasonably requested; provided , however , that if no Event of Default has occurred and is continuing, a representative of the Borrower shall be given the opportunity to be present for any discussion with its independent public accountant and the Borrower shall only have to reimburse the Administrative Agent for one such visit in any twelve (12) month period.  Each Loan Party acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to each Loan Party’s assets for internal use by the Administrative Agent and the Lenders subject to the  confidentiality  obligations  of  the  Administrative Agent and the Lenders hereunder.         SECTION 5.07     Compliance   with   Laws   and   Material   Contractual   Obligations .  Each  Loan Party will, and will cause each Subsidiary to, (i) comply with each Requirement of Law applicable to it or its property (including without limitation Environmental Laws) except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect and (ii) perform in all material respects                                            91

 

its material obligations under material agreements to which it is a party, except, in each case, where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  Each Loan Party will maintain in effect and enforce policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.         SECTION 5.08     Use of Proceeds .               (a)    The  proceeds  of  the  Loans  and  the  Letters  of  Credit  will  be  used  only  for financing  the  working  capital  needs  and  general  corporate  purposes  of  the  Borrower  in  the  ordinary course of business (including, without limitation, for Capital Expenditures, acquisitions permitted and/or not  restricted  hereunder  and  to  pay  fees,  commissions,  transaction  costs  and  expenses  incurred  in connection with the Transactions) and to refinance certain existing Indebtedness and for other purposes not prohibited by this Agreement.  No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.               (b)    The  Borrower  will  not  request  any  Borrowing  or  Letter  of  Credit,  and  the Borrower shall not use, and the Borrower shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit or lend, contribute or otherwise make available such proceeds to any Subsidiary or other Person directly or, to the knowledge of the Borrower, indirectly (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or  transaction  of  or  with  any  Sanctioned  Person,  or  in  any  Sanctioned  Country,  except  to  the  extent permitted for a Person required to comply with Sanctions or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.         SECTION 5.09     Accuracy   of   Information .   The  Loan  Parties  will  ensure  that  any information, including financial statements or other documents, furnished to the Administrative Agent or the  Lenders  in  connection  with  this  Agreement  or  any  other  Loan  Document  or  any  amendment  or modification  hereof  or  thereof  or  waiver  hereunder or  thereunder  (other  than  projections, cash   flow forecasts,  other forward looking information and information of a general economic or industry specific nature) contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by the Borrower on the date thereof as to the matters specified in this Section 5.09; provided  that, with respect to projected financial information  and cash flow forecasts , the Loan Parties will only ensure that such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being understood that projections and cash flow forecasts  are subject to inherent uncertainties and contingencies which may be outside the control of any Loan Party and that no assurance can be given that such projected financial information or cash flow  will be realized).        SECTION 5.10      Insurance .   Each  Loan  Party  will,  and  will  cause  each  Subsidiary  to, maintain with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including,  without  limitation:   loss  or  damage  by fire  and  loss  in  transit;  theft,  burglary,  pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the                                             92

 

Collateral  Documents.   The  Borrower  will  furnish  to  the  Lenders,  upon  reasonable  request  of  the Administrative Agent, information in reasonable detail as to the insurance so maintained.         SECTION 5.11     Additional Collateral; Further Assurances .  (a)                (a)    Subject to applicable Requirements of Law, as promptly as possible but in any event not later than sixty (60) days following the date on which any Person becomes a Subsidiary  or  any Subsidiary  qualifies  independently  as , or  is  designated  by  the  Borrower  (or  the  Administrative  Agent  as contemplated  by  the  definition  of  “ Material  Domestic  Subsidiary”)  as,  a  Material  Domestic  Subsidiary, pursuant   to   the   definition   of  “Material   Domestic   Subsidiary,” ,  the  Borrower  shall  provide  the Administrative Agent with written notice thereof setting forth information in reasonable detail describing the material assets of such Person and shall cause each such Subsidiary (x) to become a Loan Party by executing a Joinder Agreement and (y) to deliver to the Administrative Agent a joinder to the Security Agreement (in the form contemplated thereby) pursuant to which such Subsidiary agrees to be bound by the terms and provisions thereof, to be accompanied by appropriate corporate organizational  resolutions, other corporate organizational   documentation  and  legal  opinions  in  form  and  substance  reasonably satisfactory to the Administrative Agent and its counsel ; provided , however,  that  no  Domestic  Subsidiary of  a  Foreign  Subsidiary  and  no  Domestic  Subsidiary  HoldCo  shall  be  required  to  become  a Loan  Party hereunder .  Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and a “Grantor” under the Security Agreement (pursuant to the terms thereof) and thereupon shall have all of the rights, benefits, duties and obligations in such capacities under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral . in accordance  with  Section 5.11(b) .  In  connection  with  the  foregoing,  the  Administrative  Agent  shall  have received  all  documentation  and  other  information  regarding  such  newly  formed  or  acquired  Subsidiaries as  may  be  required  to  comply  with  the  applicable  “know  your  customer”  rules  and  regulations,  including the USA PATRIOT  Act.               (b)    The Borrower will cause, and will cause each other Loan Party to cause, all of its owned property (whether personal, tangible, intangible, or mixed, but other than any Excluded Collateral) to be subject at all times to first priority, perfected Liens in favor of the Administrative Agent for the benefit  of  the  Secured  Parties  to  secure  the  Secured  Obligations  in  accordance  with  the  terms  and conditions of the Collateral Documents, subject in any case to Liens permitted by Section 6.02.  Each Loan  Party  will  (i) cause  100%  of  the  issued  and outstanding  Equity  Interests  of  each  of  its  directly owned Domestic Subsidiaries (other than Domestic Subsidiary HoldCos), (ii) cause 65% of the issued and outstanding  Equity  Interests  entitled  to  vote  (within  the  meaning  of  Treas.  Reg.  Section  1.956-2(c)(2))  in each  directly  owned  Subsidiary  that  is  a  CFC  or  Domestic  Subsidiary  Holdco  to , in  each  case,  be to  be subject at all times to a first priority, perfected Lien (subject to Liens permitted under Section 6.02) in favor of the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative  Agent  shall  reasonably  request  and  (iii ii ) deliver  Mortgages  and all such   other   related Mortgage  Instruments as   reasonably   requested   by   the   Administrative   Agent   with  respect  to (x)   the Northlake   Property  no   later   than all   owned   real   property   of   such   Loan   Party,   other   than   (x) the   real properties  owned  by  the  Loan  Parties  as  of  the  Third  Amendment  Effective  Date  located  in  Idaho  Falls, Rapid  City,  Bishop,  and  Roswell,  (y) any  real  property  acquired  by  a  Loan  Party  (or  that  is  owned  by  a Loan  Party  that  is  acquired)  after  the  Third  Amendment  Effective  Date  with  an  individual  fair  market value   at   the   time   of   such   acquisition   (as   reasonably   determined   by   the   Administrative   Agent)   not exceeding  $300,000,  and  (z) the  real  properties  owned  by  the  Loan  Parties  as  of  the  Third  Amendment Effective  Date  and  located  in  San  Antonio  and  Austin  so  long  as  each  such  real  property  identified  in  this clause (z)   is   disposed   of   on   or   prior   to   the  date  that  is sixty   (60) 180   days  after  the Second Third Amendment Effective Date (or such later date as the  Administrative  Agent  may  agree  in  the  exercise  of                                            93

 

its  reasonable  discretion  with  respect  thereto)  (it  being  understood  and  agreed  that  the  Loan  Parties  shall not  be  required  to  deliver  a  title  insurance  policy  in  connection  therewith),  (y)  any  Material  Real  Property to  the  extent  requested  by  the  Administrative  Agent  and  (z)  at  any  time  an  Event  of  Default  exists  and  is continuing,   any   Material   Real   Property   or   other   real   property   owned   by   any   Loan   Party   to   the   extent requested  by  the  Administrative  Agent  or  the  Required  Lenders ; provided  that  the  Administrative  Agent shall   promptly   notify  the   Lenders  of   any   request   for   a   Mortgage   pursuant   to   the   foregoing   Section 5.11(b)(iii)(y)   or   (z)   (the   date   of   any   such   notice   to   the   Lenders,   a   “ Mortgage   Notice   Date ”). Notwithstanding the foregoing, (i) agreed to by the Administrative Agent in its sole discretion); provided, that  no  such  required  Mortgage  or  related  Mortgage  Instrument  shall  be  required  to  be  delivered  until (A) except  as  otherwise  provided  in  the  following  clauses  (B)  through  (D),  the  date  that  is  90  days  after the   Third   Amendment   Effective   Date,   (B) with   respect   only   to   the   real   properties  owned  by  the  Loan Parties   as   of   the   Third   Amendment   Effective   Date   and   located   in   Oklahoma   City,   Arleta,   Castroville, Santa   Ana,   Santa   Fe   Springs,   Bloomington,   Lee’s   Summit,   Carson   City,   Portland,   Sacramento,   and Bakersfield,  and  Mortgage  Instruments  in  respect  of  the  Northlake  Property , in  each  case,  the  date  that  is 60  days  after  the  Third  Amendment  Effective  Date,  (C)  with  respect  only  to  the  real  properties  referenced in  clause  (z)  above,  to  the  extent  not  disposed  of  on  or  prior  to  180  days  after  the  Third  Amendment Effective  Date  (or  such  later  date  as  agreed  to  by  the  Administrative  Agent  in  its  sole  discretion),  the  date this is 60 days after such disposition deadline (as the same may have been extended), and (D) with respect to  real  property  acquired  by  a Loan  Party  (or  that  is  owned  by  a  Loan  Party  that  is  acquired)  after  the Third  Amendment  Effective  Date,  90  days  after  the  acquisition  thereof,  in  each  case,  or  such  later  date  as agreed to by the Administrative Agent in its sole discretion; provided, further, that  no such Mortgages and related  Mortgage Instruments requested pursuant to the foregoing Section 5.11(b) (iii)(y) or (z) are shall be required to be delivered hereunder  until  the  date  that  is  the  later  of  ( A)  sixty  (60)  days  after  a  request therefor   is   made  by   the   Administrative   Agent  and   (B)   thirty   (30)   days   after   the   applicable   Mortgage Notice   Date,   and  (ii)   no  such   pledge   agreement   in   respect  of   the  Equity   Interests   of   a   CFC   shall   be required   hereunder   to   the in   respect   of   any   real   property   to   the  extent the Administrative Agent or   its counsel  determines that   such   pledge in   its   reasonable   discretion   that   (1) such   Mortgage   and/or   related Mortgage  Instruments  would not provide material credit support for the benefit of the Secured Parties pursuant   to  legally   valid,   binding   and   enforceable   pledge   agreements. or   (2) the   cost   (including   any applicable   mortgage   recording   taxes),   burden,   or   potential   lender   liability   (including   as   a   result   of environmental  assessments)  of  obtaining  such  Mortgage  or  related  Mortgage  Instrument  outweighs  the benefit  to  be  afforded  to  the  Secured  Parties  by  such  Mortgage  and/or  Mortgage  Instrument.   In  no  event shall any Loan Party be obligated to deliver a legal opinion in connection with any Mortgage or Mortgage Instrument.               (c)    Without  limiting  the  foregoing, but   subject   to   the   other   limitations   set   forth herein,   each  Loan  Party  will,  and  will  cause each Subsidiary  to,  execute  and  deliver,  or  cause  to  be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will  take  or  cause  to  be  taken  such  further  actions  (including  the  filing  and  recording  of  financing statements,  fixture  filings,  Mortgages,  Mortgage  Instruments,  deeds  of  trust  and  other  documents  and such  other  actions  or  deliveries  of  the  type  required  by  Section  4.01,  as  applicable),  which  may  be required  by  any  Requirement  of  Law  or  which  the  Administrative  Agent  may,  from  time  to  time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties.  If the Administrative Agent reasonably determines that it is required by applicable law to have appraisals prepared in respect of the Mortgaged Property of any Loan Party, Loan Parties  shall  cooperate  with  the  Administrative  Agent  to  obtain  appraisals  that  satisfy  the  applicable requirements  of  the  Real  Estate  Appraisal  Reform  Amendments  of  FIRREA ,  subject   to   Section 5.13 hereof .                                             94

 

             (d)    Notwithstanding anything to the contrary set forth herein :                      (i)    the  Administrative  Agent  shall  not  accept  any  Mortgage  from  any  Loan Party   in   respect   of   any   real   property   (including,   for   the   avoidance   of   doubt,   the   Mortgages   required pursuant  to  Section 5.11(b))  until  the  date  that  is  (1) if  such  Mortgaged  Property  relates  to  a  property  not located   in   a   “special   flood   hazard   area”   in   any   Flood   Insurance   Rate   Map   published   by   the   Federal Emergency   Management   Agency   (or   any   successor   agency),   five   (5 )  Business   Days  or   (2) if   such Mortgaged  Property  relates  to  a  property  located  in  a  “special  flood  hazard  area”  in  any  Flood  Insurance Rate  Map  published  by  the  Federal  Emergency  Management  Agency  (or  any  successor  agency),  forty- five  (45)  days,  in  each  case,  after  the  Administrative  Agent  has  delivered  to  the  Lenders  the  following documents  in  respect  of  such  real  property:  (x) a  completed  flood  hazard  determination  from  a  third  party vendor;  (y) if  such  real  property  is  located  in  a  “special  flood  hazard  area”  in  any  Flood  Insurance  Rate Map   published   by   the   Federal   Emergency   Management   Agency   (or   any   successor   agency),   (A) a notification  to  the  applicable  Loan  Parties  of  that  fact  and  (if  applicable)  notification  to  the  applicable Loan   Parties   that   flood   insurance   coverage   is   not   available   and   (B) evidence   of   the   receipt   by   the applicable   Loan   Parties   of   such   notice;   and   (z) if  required  by  Flood  Laws,  evidence  of  required  flood insurance;  provided  that  any  such  Mortgage  may  be  accepted  by  the  Administrative  Agent  prior  to  such period  expiring  if  the  Administrative  Agent  shall  have  received  confirmation  from  each  Lender  that  such Lender has completed any necessary flood insurance due diligence to its reasonable satisfaction; and                      (ii)  Notwithstanding   anything   to   the   contrary   set   forth   herein , no  MIRE Event may be closed until the date that is ( i1) if there are no Mortgaged Properties in a “special flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or  any  successor  agency),  ten  (10)  Business  Days or ( ii 2) if there are any Mortgaged Properties in a “special flood hazard area”, thirty (30) days, in each case, after the Administrative Agent has delivered to the  Lenders  the  following  documents  in  respect  of  such  Mortgaged  Property:  (x)  a  completed  flood hazard determination from a third party vendor; (y) if such Mortgaged Property is located in a “special flood  hazard  area”,  (A)  a  notification  to  the  applicable  Loan  Party  of  that  fact  and  (if  applicable) notification to the applicable Loan Party that flood insurance coverage is not available and (B) evidence of the receipt by the applicable Loan Party of such notice; and (z) if required by applicable Flood Laws, evidence of required flood insurance with respect to which flood insurance has been made available under applicable Flood Laws; provided  that any such MIRE Event may be closed prior to such period expiring if the Administrative Agent shall have received confirmation  from  each  Lender  that  such  Lender  has completed any necessary flood insurance due diligence to its reasonable satisfaction.  No  Default  or  Event  of  Default  shall  result  by  reason  of  a  breach  of  Section 5.11(b)  of  this  Agreement  or Section 5   of   the   Third   Amendment   due   to   any   failure   to   deliver   any   Mortgages   by   the   applicable deadlines  in  Section 5.11(b)  of  this  Agreement  and  Section 5  of  the  Third  Amendment  if  such  failure  is (x) not  caused  by  any  act  or  omission  on  the  part  of  any  Loan  Party  and  (y) is  caused  by  a  delay  by  the Administrative Agent or any Lender in taking the actions contemplated by this Section 5.11(d).         SECTION 5.12     Post-Closing Covenants .  The Borrower shall comply with the covenants set forth on Schedule 5.12.         SECTION 5.13     Appraisals   and   Field   Exams .   At   any   time   that  the   Administrative   Agent requests   in   its   Permitted   Discretion,   each   Loan   Party   will   provide   the   Administrative   Agent   with appraisals  (or  updates  thereof)  of,  or  will  allow  the  Administrative  Agent  or  its  designee  to  conduct  field exams  of,  their  Inventory  and  Accounts  ( and  to  the  extent  required  by  any  Lender  to  comply  with  any applicable Requirements of Law, real property, machinery, and equipment) from an appraiser or examiner selected and engaged  by the Administrative Agent, such appraisals, examinations, and updates to include, without   limitation,   information   required   by   any   applicable   Requirement   of   Law;   provided   that,   unless                                            95

 

(i) an  Event  of  Default  has  occurred  and  is  continuing,  (ii) such  appraisal  of  real  property  is  required  by any  applicable  Requirement  of  Law  (including,  without  limitation,  as  provided  under  Section  5.11(c))  or conducted  in  connection  with  a  MIRE  Event  or  (iii) such  field  exam  or  appraisal  is  conducted  pursuant  to the  definition  of  Permitted  Acquisition,  the  Borrower  shall  only  reimburse  the  Administrative  Agent  for one  appraisal  and  one  field  exam  for  each  of  the  foregoing  asset  classes  in  any  12-month  period  (it  being agreed   and   acknowledged   by   the   Administrative   Agent   that   the   field  exam  undertaken  after  the  Third Amendment   Effective   Date   pursuant   to   the   requirement   therefor   set   forth   on   Schedule 5   to   the   Third Amendment   shall   constitute   the   field   exam   for   the   12-month   period   ending   on   and   from   the   Third Amendment Effective Date).                                        ARTICLE VI                                     Negative Covenants .         On and after the Effective Date and until the Revolving Commitments shall have expired or been terminated  and  the  principal  of  and  interest  on  each  Loan  and  all  fees,  expenses  and  other  amounts payable under any Loan Document (other than contingent or indemnity obligations for which no claim has been made) shall have been paid in full and all Letters of Credit shall have expired or terminated (or have been cash collateralized pursuant to the terms hereof), in each case without any pending draw, and all  LC  Disbursements  shall  have  been  reimbursed,  each Loan Party covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:         SECTION 6.01     Indebtedness .  No Loan Party will, nor will it permit any Subsidiary  to, create, incur, assume or suffer to exist any Indebtedness, except:               (a)    the Secured Obligations;               (b)    Indebtedness existing on the date hereof Third Amendment Effective Date  and set forth in Schedule 6.01  and extensions, renewals, refinancings and replacements of any such Indebtedness that  does  not  increase  the  outstanding  principal  amount  thereof  (except  to  the  extent  of  prepayment premiums and fees owing in connection with such refinancing, extension, renewal or replacement);               (c)    Indebtedness of the Borrower to any Subsidiary and of  any  Subsidiary  to  the Borrower or any other Subsidiary, provided that (i) such Indebtedness is subject to Section 6.04(d) and (ii)  Indebtedness  owing  by  any  Loan  Party  to  any  Subsidiary  that  is  not  a  Loan  Party  shall  be subordinated  in  right  of  payment  to  the  Secured  Obligations  on  terms  reasonably  satisfactory  to  the Administrative Agent (it being agreed and acknowledged that the subordination terms set forth in the Security Agreement are satisfactory to the Administrative Agent);               (d)    Guarantees  by  the  Borrower  of  Indebtedness  of  any  Subsidiary  and  by  any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by the Borrower or Subsidiary that is a Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) if the Indebtedness so guaranteed is subordinated in right of payment to the Secured Obligations, then the Guarantees  permitted  under  this  clause  (d)  shall  be  subordinated  in  right  of  payment  to  the  Secured Obligations  of  the  applicable  Subsidiary  on  the  same  terms  as  the  Indebtedness  so  Guaranteed  is subordinated to the Secured Obligations;               (e)    Indebtedness  of  the  Borrower  or  any  Subsidiary  incurred  to  finance  the acquisition,  construction  or  improvement  of  any  fixed  or  capital  assets,  including  Capital  Lease Obligations  and  any  Indebtedness  assumed  in  connection  with  the  acquisition  of  any  such  assets  or                                            96

 

secured  by  a  Lien  on  any  such  assets  prior  to  the  acquisition  thereof,  and  refinancings,  extensions, renewals  and  replacements  of  any  such  Indebtedness that  do  not  increase  the  outstanding  principal amount thereof (except to the extent of prepayment premiums and fees owing in connection with such refinancing, extension, renewal or replacement); provided  that (i) such Indebtedness is incurred prior to or within two hundred seventy (270) days after such acquisition or the completion of such construction or improvement, (ii) the aggregate principal amount of Indebtedness permitted  by  incurred  pursuant  to  this clause (e) , when  taken  together  with  the  aggregate  principal  amount  of  Indebtedness  incurred  pursuant  to Section  6.01(n)  below,  shall not exceed $ 40,000,000 1,000,000  at any time outstanding, and (iii) at the time  of  and  immediately  after  giving  effect  (including  giving  effect  on  a  pro  forma  basis)  to  the incurrence of such Indebtedness the Borrower is in compliance with Section 2.11(b);               (f)    Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance  Indebtedness ”) of any of the Indebtedness described in clauses (e), (m) and (n) hereof (such Indebtedness being referred to herein as the “Original  Indebtedness ”); provided that (i) such Refinance Indebtedness does not increase the principal amount of the Original Indebtedness (except to the extent of prepayment  premiums  and  fees  owing  in  connection  with  such  refinancing,  extension,  renewal  or replacement), (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) to the extent that such Original Indebtedness was incurred pursuant to a clause in this Section 6.01 which required a specified average weighted life-to-maturity, such Refinance Indebtedness does not result in a shortening of the average weighted life-to-maturity of such Original Indebtedness and (v) if such Original Indebtedness was subordinated in right of payment to the  Secured  Obligations,  then  the  terms  and  conditions  of  such  Refinance  Indebtedness  must  include subordination terms and conditions that are at least  as  favorable  to  the  Administrative  Agent  and  the Lenders as those that were applicable to such Original Indebtedness;               (g)    Indebtedness  owed  to  any  Person  providing  workers’ compensation,  health, disability  or  other  employee  benefits  or  property, casualty  or  liability  insurance,  pursuant  to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;               (h)    Indebtedness  of  any  Loan  Party  in  respect  of  performance  bonds,  bid  bonds, appeal  bonds,  surety  bonds  and  similar  obligations,  in  each  case  provided  in  the  ordinary  course  of business;               (i)    Indebtedness  in  respect  of  cash  management  and  treasury  obligations  netting services, overdraft protections, employee credit card programs and otherwise in connection with deposit and checking accounts, in each case, in the ordinary course of business;               (j)    contingent liabilities in respect of any indemnification obligation, adjustment of purchase price (including working capital adjustments), non-compete, or similar obligation of Company or the applicable Subsidiary incurred in connection with the consummation of one or more Permitted Acquisitions;               (k)    unsecured Indebtedness of Company or its Subsidiaries in respect of Earn-Outs owing  to  sellers  of  assets  or  Equity  Interests  to  the  Borrower  or  its  Subsidiaries  that  is  incurred  in connection with the consummation of one or more Permitted Acquisitions;                                             97

 

             (l)    Indebtedness in respect of Swap Agreements permitted under Section 6.07;               (m)    Indebtedness  of  any  Person  that  becomes  a  Subsidiary  after  the  date  hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in  contemplation  of  or  in  connection  with  such  Person  becoming  a  Subsidiary  and  (ii)  the  aggregate principal amount of Indebtedness permitted by this clause (m) shall not exceed $10,000,000 at any time outstanding;               (n)    other  Indebtedness  so  long  as  (i)  no  Event  of  Default  has  occurred  and  is continuing  or  would  result  from  the  incurrence  of  such  Indebtedness   and ,  (ii)  both  before  and immediately after giving effect to the incurrence of such Indebtedness, the Borrower is in compliance on a pro forma basis with the Financial Covenants ;, and  (iii) the  aggregate  principal  amount  of  Indebtedness incurred   pursuant   to   this   clause (n),   when   taken   together   with   the   aggregate   principal   amount   of Indebtedness   incurred   pursuant   to   Section   6.01(e)   above,   does   not   exceed   $1,000,000   at   any   time outstanding ;               (o)    Indebtedness  representing  deferred  compensation  to employees,  directors  and officers of the Borrower and its Subsidiaries incurred in the ordinary course of business;               (p)    accrual of interest, accretion or amortization of original  issue  discount,  or  the payment of interest in kind, in each case, on Indebtedness that otherwise is permitted hereunder; and               (q)    Indebtedness owed to any Person providing property, casualty, liability, or other insurance to Company or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year.         SECTION 6.02     Liens .  No Loan Party will, nor will it permit any Subsidiary  to,  create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:               (a)    Liens created pursuant to any Loan Document;               (b)    Permitted Encumbrances;               (c)    any Lien on any property or asset of the Borrower or any Subsidiary existing on the date  hereof Third  Amendment  Effective  Date  and set forth in Schedule 6.02 ; provided  that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall  secure  only  those  obligations  which  it  secures  on  the  date  hereof,  and  refinancings,  extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof (except to the extent of prepayment premiums and fees owing in connection with any such refinancing, extension, renewal and replacement);               (d)    Intentionally Omitted;               (e)    any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided  that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of such Subsidiary and                                             98

 

(iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and refinancings, extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof (except to the extent of prepayment premiums and fees owing in connection with any such refinancing, extension, renewal and replacement);               (f)    Liens  of  a  collecting  bank  arising  in  the  ordinary course  of  business  under Section 4-208 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;               (g)    Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06;               (h)    Liens  on  fixed  or  capital  assets  acquired,  constructed  or  improved  by  the Borrower  or  any  Subsidiary;  provided  that  (i)  such Liens  secure  Indebtedness  permitted  by  Section 6.01(e), (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within two hundred seventy (270) days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary;               (i)    (1A) Liens  on  deposits  made  to  secure  obligations  under  coffee-related  Swap Agreements  with  Persons  (“Counterparties ”)  that  are  not  Secured  Parties,  and  ( 2B) Liens  on  deposits made  to  secure  obligations  under  Swap  Agreements  permitted  under  Section 6.07  that  are  not  coffee- related  so  long  as  the  aggregate  amount  of such   deposits deposits   subject   to   such   Liens,   when   taken together   with   the   aggregate   amount   of   obligations   secured   by   Liens   permitted   under   Section   6.02(p) below,  does not exceed $ 10,000,000 1,000,000  at any time outstanding;  provided,  that  for  the  avoidance of doubt, such dollar cap shall not apply to deposits made to secure obligations under coffee-related Swap Agreements to the extent permitted under Section 6.02(i)(A) or Permitted Encumbrances;               (j)    Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;               (k)    (1) Liens solely on any cash earnest money deposits,  escrow  arrangements  or similar arrangements made by the Company or any Subsidiary in connection with any letter of intent or purchase  agreement  for  a  Permitted  Acquisition  and (2)  solely  in  connection  with  the  Specified Acquisition  and  solely  to  the  extent  contemplated  by  Section  2.02(c)  of  the  Transition  Services Agreement (and only for so long as the Transition Services Agreement is in force and effect), any Lien on the “working capital” deposit account of the Company or any of its Subsidiaries arising solely as a result of the withdrawal rights and/or co-signatory rights of the Seller (and/or any affiliates of the Seller party to the Transition Services Agreement) with respect to such  deposit  account;  provided   that  the  aggregate credit balance in such deposit account shall not exceed $3,000,000 at any one time;               (l)    Liens  granted  in  the  ordinary  course  of  business  on  the  unearned  portion  of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under Section 6.01;               (m)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods so long as such liens attach only to the imported goods;                                             99

 

             (n)    leases, licenses, subleases or sublicenses of real property or equipment granted to others  in  the  ordinary  course  of  business  which  do not  (i)  interfere  in  any  material  respect  with  the business of the Borrower and its Subsidiaries, taken as a whole, or (ii) secure any Indebtedness;               (o)    non-exclusive  licenses  or  sublicenses  of  intellectual  property  granted  by  any Loan Party in the ordinary course of business; and               (p)    Liens  securing  obligations  as  to  which  the  aggregate  outstanding  principal amount of the obligations secured thereby , when  taken  together  with  the  aggregate  amount  of  deposits subject  to  Liens  permitted  under  Section  6.02(i)(B)  above,  does not exceed $ 6,000,000 1,000,000  at any time.         SECTION 6.03     Fundamental Changes .  (a)                (a)    No  Loan  Party  will,  nor  will  it  permit  any  Subsidiary  to,  merge  into  or consolidate  with  any  other  Person,  or  permit  any  other  Person  to  merge  into  or  consolidate  with  it, consummate a Division as the Dividing Person, otherwise Dispose of all or substantially all of its assets, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Subsidiary of the Borrower may merge into the Borrower in a transaction in which the Borrower is the surviving entity, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party, (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower which owns such Subsidiary determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous  to  the Lenders; provided  that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04, (iv) the Borrower or any Subsidiary may change its legal form following 30 days’ prior written notice to the Administrative Agent and the Administrative Agent shall  have  acknowledged  in  writing  that  either  (1) such  change  will  not  adversely  affect  the  validity, perfection  or  priority  of  the  Administrative  Agent’s  security  interest  in  the  Collateral,  or  (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral) or will be taken within any time period reasonably specified by the Administrative Agent or (v) the Borrower or any Subsidiary may consummate a merger, consolidation or liquidation if the purpose thereof is to effect an Investment permitted pursuant to Section 6.04 or a Disposition permitted pursuant to Section 6.05; provided  that (x) any such transaction to which the Borrower is a party shall result in the Borrower as the surviving entity and (y) any such transaction to which any Loan Party (other than the Borrower) is a party shall result in a Loan Party as the surviving entity.               (b)    No Loan Party will, nor will it permit any Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on  the  date  hereof  and  businesses  reasonably  similar,  related,  complementary,  ancillary  or  incidental thereto.               (c)    No Loan Party will, nor will it permit any Subsidiary to, change its fiscal year from the basis in effect on the Effective Date unless it has given the Administrative Agent not less than thirty (30) days’ prior written notice thereof; provided, that any Subsidiary acquired in an Acquisition may change its fiscal year so it corresponds to that of the Borrower.         SECTION 6.04     Investments,   Loans,   Advances,   Guarantees   and   Acquisitions .   No  Loan Party will, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any                                            100

 

merger with, or as a Division Successor pursuant to the Division of, any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger or Division) any evidence of Indebtedness or Equity Interests  or  other  securities  of,  make  or  permit  to  exist  any  loans  or  advances  to,  Guarantee  any obligations  of,  or  permit  to  exist  any  Equity  Interest  in,  any  other  Person,  or  purchase  or  otherwise acquire  (in  one  transaction  or  a  series  of  transactions)  any  assets  of  any  other  Person  constituting  a business  unit  (whether  through  purchase  of  assets, merger  or  otherwise)  (each  of  the  foregoing,  an “Investment ”) except:               (a)    Permitted Investments;               (b)    Investments in existence on the date  hereof Third  Amendment  Effective  Date  and described in Schedule 6.04 ;               (c)    investments  by  the  Borrower  and  its  Subsidiaries  in  Equity  Interests  in  their respective Subsidiaries, provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement  (subject  to  the  limitations  applicable  to  Equity  Interests  of  a Foreign Subsidiary  referred  to  in  Section  5.11),  and  (B) , (B) during  the  Covenant  Relief  Period,  the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties (together, in each case, with outstanding intercompany loans and  advances  permitted  under  clause  (B)  to  the  proviso  to  Section 6.04(d),   outstanding   Guarantees   permitted   under   clause   (i)   to   the   proviso   to   Section   6.04(e),   and Investments  permitted  under  clause (m)  below)  shall  not  exceed  $1,000,000  in  the  aggregate  at  any  time outstanding (in each case determined without regard to any write-downs or write-offs), and (C) other than during  the  Covenant  Relief  Period,  the  aggregate  amount  of  investments  by  Loan  Parties  in  Subsidiaries that   are   not   Loan   Parties   (together,   in   each   case,   with   outstanding   intercompany   loans   and   advances permitted under clause (B) to the proviso to Section 6.04(d) and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not exceed $5,000,000 in the aggregate at any time outstanding (in each case determined without regard to any write-downs or write-offs);               (d)    loans or advances made by the Borrower to any Subsidiary  and  made  by  any Subsidiary to the Borrower or any other Subsidiary, provided that (A) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged to the extent required by the Security Agreement, and  (B) during  the  Covenant  Relief  Period,  the  amount  of  such  loans  and  advances  made  by Loan   Parties   to   Subsidiaries   that   are   not   Loan   Parties   (together,   in   each   case,   with   outstanding investments   permitted   under   clause   (B)   to   the   proviso   to   Section   6.04(c),   outstanding   Guarantees permitted  under  clause  (i)  to  the  proviso  to  Section 6.04(e),  and  Investments  permitted  under  clause (m) below)  shall  not  exceed  $1,000,000  in  the  aggregate  at  any  time  outstanding  (in  each  case  determined without  regard  to  any  write-downs  or  write-offs),  and  (C) other  than  during  the  Covenant  Relief  Period, the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together, in each case, with outstanding investments permitted under clause (B) to the proviso to Section 6.04(c)  and  outstanding  Guarantees  permitted  under the  proviso  to  Section 6.04(e))  shall  not  exceed $5,000,000 in the aggregate at any time outstanding (in each case determined without regard to any write- downs or write-offs);               (e)    Guarantees constituting Indebtedness permitted by Section  6.01,  provided  that (i) during the Covenant Relief Period, the aggregate principal amount of Indebtedness of Subsidiaries that are   not   Loan   Parties   that   is   Guaranteed   by   any   Loan   Party   (together,   in   each   case,   with   outstanding investments  permitted  under  clause  (B)  to  the  proviso  to  Section  6.04(c),  outstanding  intercompany  loans and  advances  permitted  under  clause  (B)  to  the  proviso  to  Section  6.04(d),  and  Investments  permitted under  clause (m)  below)  shall  not  exceed  $1,000,000  in  the  aggregate  at  any  time  outstanding  (in  each case  determined  without  regard  to  any  write-downs  or  write-offs)  and  (ii) other  than  during  the  Covenant Relief  Period,  the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties                                            101

 

that is Guaranteed by any Loan Party (together, in each  case,  with  outstanding  investments  permitted under clause (B) to the proviso to Section 6.04(c) and  outstanding  intercompany  loans and   advances permitted under clause (B) to the proviso to Section 6.04(d)) shall not exceed $5,000,000 in the aggregate at any time outstanding (in each case determined without regard to any write-downs or write-offs);               (f)    loans  or  advances  made  to  employees,  officers  or  directors  on  an  arms-length basis in the ordinary course of business for (i) reasonable travel and entertainment expenses, relocation costs and similar purposes and (ii) for any other purpose up to a maximum of $500,000 to any employee, officer or director and up to a maximum of $3,000,000 in the aggregate at any one time outstanding;               (g)    Investments  consisting  of  extensions  of  credit  in  the  nature  of  accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and accounts receivable, notes payable, or stock or other securities issued by Account Debtors pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts obligations in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled Account Debtors to the extent reasonably necessary in order to prevent or limit loss or received in connection with the bankruptcy or reorganization of customers or suppliers, or settlement of disputes with suppliers, in each case in the ordinary course of business;               (h)    Investments in the form of Swap Agreements permitted by Section 6.07;               (i)    Investments of any Person existing at the time such Person becomes a Subsidiary of the Borrower or consolidates or merges with the Borrower or any of the Subsidiaries (including in connection with a permitted acquisition) so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;               (j)    Investments received in connection with the disposition of assets permitted by Section 6.05;               (k)    Investments  constituting  deposits  described  in  clauses (c)  and  (d)  of  the definition of the term “Permitted Encumbrances”;               (l)    Permitted  Acquisitions; provided,   that   during   the   Covenant   Relief   Period,   the Borrower and its Subsidiaries shall not be permitted to make any Permitted Acquisitions;               (m)    any other Investments so long as: (i) both before and after giving effect to such Investment, no Event of Default exists, will exist, or would result therefrom, and  (ii) during  the  Covenant Relief   Period,  at   the   time   of  and   after   giving   effect   to   the   consummation   of   such   Investment,   the aggregate   outstanding  amount  of  Investments  pursuant  to  this  clause  (m)  (together,  in  each  case,  with outstanding   investments   permitted   under   clause   (B)   to   the   proviso   to   Section   6.04(c),   outstanding intercompany   loans   and   advances   permitted   under   clause   (B)   to   the   proviso   to   Section   6.04(d),   and outstanding   Guarantees   permitted   under   clause   (i)   to   the   proviso   to   Section   6.04(e))   does   not   exceed $1,000,000, and (iii) other than during the Covenant Relief Period,  at the time of and after giving effect to the consummation of such Investment, the aggregate outstanding amount of Investments pursuant to this clause (m) does not exceed $15,000,000;  provided  that  no  Acquisition  may  be  made  in  reliance  on  this Section 6.04(m) during the Covenant Relief Period;               (n)    deposits,  prepayments,  advances  and  other  credits  to  suppliers,  vendors, customers, lessors and landlords or in connection with marketing promotions, such as sweepstakes, in each instance, made in the ordinary course of business;                                             102

 

             (o)    advances of payroll payments to employees in the ordinary course of business;               (p)    Investments  in  the  ordinary  course  of  business  consisting  of  UCC  Article  3 endorsements for collection or deposit;               (q)    solely  in  connection  with  the  Specified  Acquisition  and  solely  to  the  extent contemplated by Sections 2.01 and 2.02 of the Transition Services Agreement (but only for so long as the Transition Services Agreement is in force and effect), advances made by Buyer to Seller and/or any of its affiliates in an aggregate amount not to exceed $5,000,000 per fiscal month; and               (r)    the BFA Lease Guaranty.        Notwithstanding   the   foregoing,   during   the   Covenant   Relief   Period,   the   Borrower   and   its Subsidiaries  shall  not  be  permitted  to  merge  or  consolidate  into,  or  permit  the  Acquisition  or  creation  of any new Subsidiary or other Person, other than as permitted pursuant to Sections 6.03(a)(i), 6.03(a)(ii), or 6.03(a)(iii)  (or,  in  the  case  of  the  creation  of  a  new  Subsidiary,  which  Subsidiary  becomes  a  Loan  Party pursuant  to  the  requirements  of  Section 5.11  within  20  days  of  creation  (or  such  later  date  agreed  by  the Administrative Agent in its sole discretion)).         SECTION 6.05     Asset   Sales .   No  Loan  Party  will,  nor  will  it  permit  any  Subsidiary  to Dispose  of  any  asset,  including  any  Equity  Interest  owned  by  it,  nor  will  the  Borrower  permit  any Subsidiary  to  issue  any  additional  Equity  Interest in  such  Subsidiary  (other  than  to  the  Borrower  or another  Subsidiary  in  compliance  with  Section 6.04),  excluding  therefrom  the  payment  of  advances, customer  deposits,  trade  payables  and  other  accrued  expenses  and  liabilities  incurred  in  the  ordinary course of business, except:               (a)    Dispositions  of  (i)  Inventory  in  the  ordinary  course  of  business,  (ii)  used, obsolete, worn out or surplus equipment or property in the ordinary course of business and (iii) equipment or property no longer used or useful in the conduct of the business of the Borrower and their Subsidiaries;               (b)    Dispositions of assets to the Borrower or any Subsidiary, provided that any such Dispositions which are not solely among: (i) Loan Parties, or (ii) Subsidiaries that are not Loan Parties, shall be made in compliance with Section 6.09;               (c)    Dispositions  of  Accounts  in  connection  with  the  compromise,  settlement  or collection thereof;               (d)    Dispositions of Permitted Investments;               (e)    Sale and Leaseback Transactions permitted by Section 6.06;               (f)    Dispositions  resulting  from  any  casualty  or  other  insured  damage  to,  or  any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary;               (g)    Dispositions that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $5,000,000 during any fiscal year of the Company;               (h)    Dispositions  of  fixed  or  capital  assets  to  the  extent  that  (i)  such  property  is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of                                             103

 

thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred (a “Sale  and  Leaseback  Transaction ”), except for any such sale of any fixed or capital assets by the Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 180 days after the Borrower or such Subsidiary acquires or completes the construction of such fixed  or  capital  asset;  provided  that, notwithstanding the foregoing, nothing in this Section 6.06 shall prohibit any Disposition otherwise permitted under Section 6.05.         SECTION 6.07     Swap Agreements .  No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except Swap Agreements that are not speculative.        SECTION 6.08      Restricted Payments; Certain Payments of Indebtedness .               (a)    No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree  to  declare  or  make,  directly  or  indirectly,  any  Restricted  Payment,  or  incur  any  obligation (contingent or otherwise) to do so, except (i) the Borrower  and  its  Subsidiaries  may  declare  and  pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) any Subsidiary may declare or make a Restricted Payment to the Borrower and any  Subsidiary  which  is  not  a  Loan  Party  may  declare  or  make  a  Restricted  Payment  to  another Subsidiary, (iii) each of the Loan Parties may declare or make other Restricted Payments so long as:  (A) both  before  and  after  giving  effect  to  such  Restricted  Payment,  no  Default  exists  or  would  result therefrom, and (B) the Total Net Leverage Ratio is less than 2.50 to 1.00 immediately before and after giving effect (including giving effect on a pro forma basis) to such Restricted Payment (based on the most recently delivered financials under Section 5.01(a) or (b), as applicable (or, if prior to the date of the delivery of the first financial statements to be delivered pursuant to Section 5.01(a) or (b), the most recent financial  statements  referred  to  in  Section  3.04(a))),  (iv)  the  Company  may  declare  or  make  noncash repurchases  of  Equity  Interests  deemed  to  occur upon  the  exercise  of  stock  options  or  similar  equity incentive  awards  if  such  Equity  Interests  represent a portion of the exercise price of such options or similar equity incentive awards, (v) the Company may make cash payments in lieu of the issuance of fractional shares representing insignificant interests in the Company in connection with the exercise of warrants, options or other securities convertible into or exchangeable for shares of common stock in the Company, (vi) the Company may pay for the repurchase, retirement or other acquisition or retirement for value  of  Equity  Interests  of  the  Company  held  by  any  future,  present  or  former  employee,  director, consultant or distributor (or any spouses, former spouses,  successors,  executors,  administrators,  heirs, legatees or distributees of any of the foregoing) of the Company or any of its Subsidiaries upon the death, disability,  retirement  or  termination  of  employment  of  any  such  Person  or  otherwise  pursuant  to  any employee  or  director  equity  plan,  employee  or  director  stock  option  plan  or  any  other  employee  or director benefit plan or any agreement (including but not limited to the ESOP and including any stock subscription  or  shareholder  agreement)  with  any  employee,  director,  consultant  or  distributor  of  the Company or any of its Subsidiaries in an aggregate amount not to exceed $1,000,000 in any calendar year, (vii) the Company may make distributions or pay dividends to the ESOT in the amounts of regularly scheduled payments to be made on the ESOP Indebtedness in accordance with the terms of the ESOP Loan Documents in effect on the date hereof; provided , that, as to any such distribution or dividend, all proceeds received by the ESOT are used by the ESOT to repay the ESOP Indebtedness and (viii) unless an Event of Default has occurred and is continuing or would result therefrom, the Company may make Restricted Payments in an aggregate amount not to exceed $10,000,000 during any fiscal year of the Borrower.    Notwithstanding   the   foregoing   in   this   Section 6.08(a),   solely   during   the   Covenant   Relief Period,   (i) Restricted   Payments   made   in   reliance   on   Section 6.08(a)(ii)   shall   only   be   permitted   to   the extent  such  Restricted  Payment  is  made  to  a  Loan  Party,  (ii) Restricted  Payments  made  in  reliance  on Section 6.08(a)(v)  may  not  exceed  $100,000  in  the  aggregate,  (iii) Restricted  Payments  made  in  reliance                                            105

 

on  Section 6.08(a)(vii)  may  not  exceed  $1,000,000  during  any  fiscal  year  of  the  Borrower,  and  (iv) the Borrower   and   its   Subsidiaries   shall   not   be   permitted   to   make   any   Restricted   Payments   pursuant   to Section 6.08(a)(iii) or 6.08(a)(viii).               (b)    No  Loan  Party  will,  nor  will  it  permit  any  Subsidiary  to,  make,  directly  or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of  principal  of  or  interest  on  any  Subordinated  Indebtedness,  or  any  payment  or  other  distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of  the  purchase,  redemption,  retirement,  acquisition,  cancellation  or  termination  of  any  Subordinated Indebtedness, except:                      (i)   payment of regularly scheduled interest and principal payments as and when due in accordance with the subordination provisions thereof;                      (ii)   refinancings of Subordinated Indebtedness to the extent not prohibited by Section 6.01; and                      (iii)  the conversion of any Subordinated Indebtedness into common Equity Interests of the Company.         SECTION 6.09     Transactions   with   Affiliates .   No  Loan  Party  will,  nor  will  it  permit  any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire  any  property  or  assets  from,  or  otherwise  engage  in  any  other  transactions  with,  any  of  its Affiliates,  except  (a)  transactions  that  are  at  prices  and  on  terms  and  conditions  not  materially  less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated  third  parties,  (b) transactions  between  or  among  the  Loan  Parties  not  involving  any  other Affiliate,  (c) any  Investment  permitted  by  Sections 6.04(c),  6.04(d)  or  6.04(f),  (d)  any  Indebtedness permitted  under  Section  6.01(c),  (e) any  Restricted  Payment  permitted  by  Section 6.08,  (f) loans  or advances to employees permitted under Section 6.04, (g) the payment of reasonable fees to directors of the Borrower or any Subsidiary who are not employees of the Borrower or Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrower or its Subsidiaries in the ordinary course of business and (h) any issuances of  securities  or  other  payments,  awards  or  grants  in  cash,  securities  or  otherwise  pursuant  to,  or  the funding  of,  employment  agreements,  stock  options  and  stock  ownership  plans  approved  by  the Borrower’s board of directors.         SECTION 6.10     Restrictive   Agreements .   No  Loan  Party  will,  nor  will  it  permit  any Subsidiary  to,  directly  or  indirectly,  enter  into, incur  or  permit  to  exist  any  agreement  or  other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets (including, for the avoidance of doubt, any real property), or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided  that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule  6.10  (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary, or any assets of a Subsidiary, pending such sale, provided that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing  shall  not  apply  to  restrictions  or  conditions  imposed  by  any  agreement  relating  to  secured                                            106

 

Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in  leases  and  other  contracts  restricting  the  assignment  thereof,  (vi)  the  foregoing  shall  not  apply  to restrictions requiring minimum reserves of cash or other deposits or minimum net worth requirements imposed by customers under contracts entered into in the ordinary course of business and (vii) clause (b) of the foregoing shall not apply to any restrictions imposed by any agreement relating to Indebtedness incurred pursuant to Section  6.01  entered into after the Effective Date so long as such restrictions are not materially more burdensome on the Company’s Subsidiaries than the restrictions contained herein.        SECTION 6.11      Amendment  of  Material  Documents .  No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its  rights  under  (a) any  agreement  relating  to  any Subordinated  Indebtedness  unless  expressly  permitted  under  the  subordination  terms  relative  to  such Indebtedness, or (b) its charter, articles or certificate of incorporation or organization, by-laws, operating, management or partnership agreement or other organizational or governing documents, except in the case of each of this clause (b), such amendments, modifications, or waivers, which would not be materially adverse to the Lenders (taken as a whole).         SECTION 6.12     Financial Covenants .               (a)  Maximum   Total   Net   Leverage   Ratio .  The   Borrower   will   not   permit   the   Total   Net Leverage  Ratio,  determined  as  of  the  end  of  each  of  its  fiscal  quarters,  to  be  greater  than  the  maximum Total Net Leverage Ratio set forth opposite each such fiscal quarter as follows:             Fiscal Quarter Ending                Maximum Total Net Leverage Ratio                March 31, 2020                               3.50 to 1.00                 June 30, 2020                               4.00 to 1.00              September 30, 2020                             4.75 to 1.00              December 31, 2020                              5.25 to 1.00                March 31, 2021                               5.75 to 1.00                 June 30, 2021                               5.25 to 1.00              September 30, 2021                             4.75 to 1.00              December 31, 2021                              4.25 to 1.00              March 31, 2022 and                             3.50 to 1.00       each fiscal quarter ending thereafter               (a)    [Reserved].               (b)  Minimum   Interest  Coverage   Ratio.    The   Borrower   will   not   permit   the  Interest Coverage  Ratio,  determined  as  of  the  end  of  each  of  its  fiscal  quarters  ending  on  or  after  the  Effective Date, to be less than 3.00 to 1.00 for any such fiscal quarter.                                             107

 

             (b)    [Reserved].               (c)    [Reserved].               (d)    (c)  Minimum  Cumulative  EBITDA .  The Borrower will not permit cumulative EBITDA for any Test  Period  period  commencing  June  1,  2020  and  ending as of the end last  day  of any fiscal  quarter  of  the  Borrower  month  set forth below, determined as of the end last  day  of each such fiscal quarter month   by   reference   to   the   monthly   financial   statements   for   such   month   delivered   pursuant   to Section 5.01(d)  and calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with  GAAP,  to  be  less  than  the  minimum cumulative   EBITDA  set  forth  opposite  each  such Test Period month  as follows:      Test Month / Cumulative Period  Ending         Minimum  Cumulative  EBITDA                 June 30, 2020                          -$18,700,000 3,000,000             September 30, July 2020                    -$19,000,000 4,600,000                 August 2020                                 -$6,900,000          December 31, September 2020                   -$18,800,000 8,900,000                 October 2020                                -$9,800,000                November 2020                               -$10,200,000                December 2020                               -$10,300,000             March 31, January 2021                     -$18,500,000 10,100,000                 February 2021                               -$8,900,000              June 30, March 2021                       -$19,600,000 7,500,000            September 30, April 2021                    -$21,700,000 5,350,000             December 31, May 2021                      -$24,700,000 3,900,000                  June 2021                                  -$1,700,000               (e)    Minimum  Monthly  EBITDA.   The  Borrower  shall  not  permit  EBITDA  for  the month  of  July  2021  or  for  the  month  of  August  2021,  in  each  case,  determined  as  of  the  last  day  of  each such   month   by   reference   to   the   monthly  financial   statements  for   such   month  delivered   pursuant   to Section 5.01( d),  to   be  less   than   $2,000,000   for   each   such   month .   For   the   avoidance   of   doubt,  the Borrower  shall  not  be  required  to  comply  with  this  minimum  monthly  EBITDA  covenant  for  any  test period ending after August 31, 2021.               (f)    Fixed  Charge  Coverage  Ratio.   The  Borrower  will  not  permit  the  Fixed  Charge Coverage  Ratio  for  any  Test  Period , determined  as  of  the  end  of  each  of  its  fiscal  quarters  ending  on  or after  September   30,   2021,   by   reference   to   the   quarterly   financial   statements   delivered   pursuant   to Section 5.01(b) , to be less than 1.05  to 1.00.               (g)    Testing.    For  the  avoidance  of  doubt,  the Borrower   shall   not   be   required   to comply  with  this  Section  6.12(c)  for  any  Test  Period  ending  after  December  31,  2021. financial  covenants set   forth   in   Sections 6.12(a)   and   6.12(b)   of   this   Agreement   (prior   to   giving   effect   to   the   Third Amendment) shall not be tested for the fiscal quarter ended June 30, 2020.                                             108

 

      SECTION 6.13      Farmer  Trademark .  The Loan Parties shall maintain, defend and preserve the Farmer Trademark and its value, usefulness, merchantability and marketability in a manner consistent with past practices, and shall not sell, assign, transfer, encumber or license the Farmer Trademark to any Person (other than Liens created pursuant to the Loan Documents) without the prior written consent of the Required Lenders.         SECTION 6.14     Minimum  Liquidity .  The  Borrower  will  not  permit  Liquidity  to  be  less  than $10,000,000  as  of  the  last  Business  Day  of  any  calendar  week  (commencing  with  Friday,  July  31,  2020) (any  such  Business  Day,  a  “Liquidity  Testing  Date”);  provided  that  if,  as  of  any  such  Liquidity  Testing Date,  Liquidity  is  less  than  $10,000,000,  such  failure  to  maintain  the  minimum  Liquidity  requirement  as of  the  applicable  Liquidity  Testing  Date  shall  not  constitute  a  Default  or  Event  of  Default,  and  neither  a Default  nor  an  Event  of  Default  shall  occur  until  and  unless  Liquidity  is  less  than  $10,000,000  as  of  the third Business Day immediately following the applicable Liquidity Testing Date.         SECTION 6.15     Capital   Expenditures .   Solely   during   the   Covenant   Relief   Period,   the Borrower  will  not,  nor  will  it  permit  any  of  its  Subsidiaries  to,  incur  or  make  any  Capital  Expenditures  in an amount that exceeds $25,000,000 in the aggregate for the Borrower  and its Subsidiaries .                                       ARTICLE VII                                      Events of Default .         SECTION 7.01     Events of Default .  If any of the following events (“Events of Default ”) shall occur:               (a)    the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation  in  respect  of  any  LC  Disbursement when and  as  the  same  shall  become  due  and  payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;               (b)    the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in Section 7.01(a)) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days;               (c)    any  representation  or  warranty  made  or  deemed  made by  or  on  behalf  of any Loan Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate,  financial  statement  or  other  document furnished  pursuant  to  or  in  connection  with  this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made;               (d)    the   Borrower any   Loan   Party   shall  fail  to  observe  or  perform  any  covenant, condition or agreement contained in : (i)  Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or in Article VI of this Agreement;  or (ii) Section 5 to the Third Amendment (provided that, solely in the  case  of  paragraphs  2  and  4  of  Schedule 5  to  the  Third  Amendment,  no  Event  of  Default  shall  occur under  this  clause  (d)(ii)  so  long  as  such  failure  did  not  arise  from  any  act  of  (or  failure  to  cooperate  by) the  Borrower  or  any  of  its  Affiliates  or  any  of  their  respective  employees,  officers,  directors,  or  agents) ; or  (iii)  Sections  4.2(a),  (b)  and  (d),  4.3(a)  and  (b),  4.6,  4.7(c)  through  (e),  4.14,  4.15,  4.16  or  Article  VII of the Security Agreement;                                             109

 

             (e)    any  Loan  Party  shall  fail  to  observe  or  perform  any  covenant,  condition  or agreement contained in any Loan Document (other than those which constitute a default under another clause of this Section 7.01), and such failure shall continue unremedied for a period of 30 days after written notice thereof from the Administrative Agent (which notice will be given at the request of any Lender);               (f)    any  Loan  Party  or  Subsidiary  shall fail  to  make  any  payment  (whether  of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after any applicable grace period;               (g)    any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or  without  the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided  that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by Section 6.05 or any Indebtedness that becomes due as a result of any voluntary refinancing permitted under Section 6.01;               (h)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;               (i)    any  Loan  Party  shall  (i) voluntarily  commence  any  proceeding  or  file  any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 7.01(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;               (j)    any  Loan  Party  shall  become  unable,  admit  in  writing  its  inability  or  fail generally to pay its debts as they become due;               (k)    one or more judgments for the payment of money in an  aggregate  amount  in excess  of  $10,000,000  shall  be  rendered  against  any  Loan  Party,  any  Subsidiary  or  any  combination thereof  and  the  same  shall  remain  undischarged,  not  dismissed  and  unsatisfied  for  a  period  of  thirty (30) consecutive  days  during  which  execution  shall not  be  effectively  stayed,  or  any  action  shall  be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or Subsidiary to enforce any such judgment; provided , that any such amount shall be calculated after deducting from the sum so payable any amount of such judgment that is covered by a valid and binding policy of insurance in favor of the Borrower or such Subsidiary provided by a third party insurer (but only if the applicable insurer shall have been advised of such judgment and of the intent of the Borrower or such Subsidiary to make a claim in respect of any amount payable by it in connection therewith and such insurer shall not have disputed coverage);                                             110

 

                    (ii)   second ,  to  payment  of  that  portion  of  the  Secured  Obligations constituting  fees,  expenses,  indemnities  and  other amounts  (other  than  (x) principal,  reimbursement obligations in respect of LC Disbursements, interest and Letter of Credit fees and (y) in connection with Banking Services Obligations or Swap Agreement Obligations) payable to the Lenders and the Issuing Bank (including fees and disbursements and other charges of counsel to the Lenders and the Issuing Bank payable under Section 9.03) arising under the Loan Documents, ratably among them in proportion to the respective amounts described in this clause (ii) payable to them;                      (iii)  third , to payment of that portion of the Secured Obligations constituting accrued and unpaid Letter of Credit fees and charges and interest on the Loans and unreimbursed LC Disbursements, ratably among the Lenders and the Issuing Bank in proportion to the respective amounts described in this clause (iii) payable to them;                      (iv)  fourth ,  (A) to  payment  of  that  portion  of  the  Secured  Obligations constituting  unpaid  principal  of  the  Loans,  unreimbursed  LC  Disbursements  and  any  other  amounts owing with respect to Banking Services Obligations and Swap Agreement Obligations and (B) to cash collateralize  that portion of LC Exposure comprising the undrawn amount of Letters of Credit to the extent not otherwise cash collateralized by the Borrower pursuant to Section 2.06 or 2.20, ratably among the  Lenders,  the  Issuing  Bank  and  the  other  Secured  Parties  in  proportion  to  the  respective  amounts described in this clause (iv) payable to them; provided  that  (x) any  such  amounts  applied  pursuant to subclause (B) above shall be paid to the Administrative Agent for the ratable account of the applicable Issuing  Bank  to  cash  collateralize  Secured  Obligations  in  respect  of  Letters  of  Credit,  (y) subject  to Section 2.06  or  2.20,  amounts  used  to  cash  collateralize  the  aggregate  amount  of  Letters  of  Credit pursuant to this clause (iv) shall be used to satisfy drawings under such Letters of Credit as they occur and (z) upon the expiration of any Letter of Credit (without any pending drawings), the pro rata share of cash collateral  shall  be  distributed  to  the  other  Secured  Obligations,  if  any,  in  the  order  set  forth  in  this Section 7.02;                      (v)   fifth , to the payment in full of all other Secured Obligations, in each case ratably among the Administrative Agent, the Lenders, the Issuing Bank and the other Secured Parties based  upon  the  respective  aggregate  amounts  of  all such  Secured  Obligations  owing  to  them  in accordance with the respective amounts thereof then due and payable; and                      (vi)   finally ,  the  balance,  if  any,  after  all  Secured  Obligations  have  been indefeasibly paid in full, to the Borrower or as otherwise required by law.  If any amount remains on deposit as cash collateral after all Letters of Credit have either been fully drawn or expired (without any pending drawings), such remaining amount shall be applied to the other Secured Obligations, if any, in the order set forth above.                                       ARTICLE VIII                                  The Administrative Agent .        SECTION 8.01      Authorization and Action .               (a)    Each Lender  and , on  behalf  of  itself  and  any  of  its  Affiliates  that  are  Secured Parties, and  the Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent under the Loan Documents and each Lender and the Issuing Bank authorizes the Administrative Agent to take such actions  as  agent  on  its  behalf  and  to  exercise  such  powers  under  this  Agreement  and  the  other  Loan                                            113

 

Documents  as  are  delegated  to  the  Administrative  Agent  under  such  agreements  and  to  exercise  such powers as are reasonably incidental thereto. Without limiting the foregoing, each Lender and the Issuing Bank hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.               (b)    As  to  any  matters  not  expressly  provided  for  herein  and  in  the  other  Loan Documents  (including  enforcement  or  collection),  the  Administrative  Agent  shall  not  be  required  to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender and the Issuing Bank; provided , however, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification and is exculpated in a manner satisfactory to it from the Lenders and the Issuing Bank with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; provided , further , that the Administrative Agent may seek clarification or direction from the Required Lenders prior to  the  exercise  of  any  such  instructed  action  and  may  refrain  from  acting  until  such  clarification  or direction has been provided. Except as expressly set forth in the Loan Documents, the Administrative Agent  shall  not  have  any  duty  to  disclose,  and  shall  not  be  liable  for  the  failure  to  disclose,  any information  relating  to  the  Borrower,  any  Subsidiary  or  any  Affiliate  of  any  of  the  foregoing  that  is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.               (c)    In  performing  its  functions  and  duties  hereunder  and  under  the  other  Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders and the Issuing Bank (except  in  limited  circumstances  expressly  provided  for  herein  relating  to  the  maintenance  of  the Register),  and  its  duties  are  entirely  mechanical  and  administrative  in  nature.  Without  limiting  the generality of the foregoing:                      (i)   the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, Issuing Bank or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term “agent” (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and the transactions contemplated hereby;                      (ii)   where the Administrative Agent is required or deemed to act as a trustee in respect of any Equity  Interests  Collateral  over which a security interest has been created pursuant to a                                            114

 

Loan Document expressed to be governed by the laws of any country, or  is  required  or  deemed  to  hold any  Collateral  “on  trust”  pursuant  to  the  foregoing,  the obligations and liabilities of the Administrative Agent to the holders of the Secured Obligations in its capacity as trustee shall be excluded to the fullest extent permitted by applicable law; and                      (iii) nothing  in  this  Agreement  or  any  Loan  Document  shall  require  the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account.               (d)    The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities  pursuant  to  this  Agreement.  The  Administrative  Agent  shall  not  be  responsible  for  the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines  in  a  final  and  nonappealable  judgment  that  the  Administrative  Agent  acted  with  gross negligence or willful misconduct in the selection of such sub-agent.               (e)    None  of  the  Co-Syndication  Agents,  the  Co-Documentation  Agents  or  the Arranger shall have any obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but all such persons shall have the benefit of the indemnities provided for hereunder.               (f)    In case of the pendency of any proceeding with respect to any Loan Party under any  Federal,  state  or  foreign  bankruptcy,  insolvency,  receivership  or  similar  law  now  or  hereafter  in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any other obligation shall  then  be  due  and  payable  as  herein  expressed  or  by  declaration  or  otherwise  and  irrespective  of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:                      (i)    to  file  and  prove  a  claim  for  the  whole  amount  of  the  principal  and interest owing and unpaid in respect of the Loans, LC Disbursements and all other Secured  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, the Issuing Bank and  the  Administrative  Agent  (including  any  claim under Sections 2.12, 2.13, 2.15, 2.17 and 9.03) allowed in such judicial proceeding; and                      (ii)   to  collect  and  receive  any  monies  or  other  property  payable  or deliverable on any such claims and to distribute the same;  and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender and each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Bank or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent,  under  the  Loan  Documents  (including  under  Section 9.03).  Nothing  contained  herein  shall  be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting                                             115

 

the Secured  Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.               (g)    The provisions of this Article are solely for the benefit  of  the  Administrative Agent, the Lenders and the Issuing Bank, and, except solely to the extent of the Borrower’s rights to consent pursuant to and subject to the conditions set forth in this Article, none of the Borrower or any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the  Guarantees of the Secured  Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.         SECTION 8.02     Administrative Agent’s Reliance, Indemnification, Etc. .                (a)    Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any action taken or omitted to be taken by such party, the Administrative Agent or any of its Related Parties under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary,  or  as  the  Administrative  Agent  shall  believe  in  good  faith  to  be  necessary,  under  the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction  by  a  final  and  nonappealable  judgment)  or  (ii) responsible  in  any  manner  to  any  of  the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other  document  referred  to  or  provided  for  in,  or  received  by  the  Administrative  Agent  under  or  in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (including,  for the   avoidance   of   doubt,  in   connection   with   the  Administrative   Agent’s   reliance   on   any   Electronic Signature  transmitted  by  fax,  emailed  pdf.  or  any  other  electronic  means  that  reproduces  an  image  of  an actual  executed  signature  page)  or for any failure of any Loan Party to perform its obligations hereunder or thereunder.               (b)    The  Administrative  Agent  shall  be  deemed  not  to  have  knowledge  of  any (i) notice  of  any  of  the  events  or  circumstances  set  forth  or  described  in  Section  5.02  unless  and  until  written notice  thereof  stating  that  it  is  a  “notice  under  Section  5.02”  in  respect  of  this  Agreement  and  identifying the  specific  clause  under  said  Section  is  given  to  the  Administrative  Agent  by  the  Borrower,  or  (ii)  notice of  any  Default  or  Event  of  Default unless and until written notice thereof (stating that it is a “notice of default Default”  or  “notice  of  Event  of  Default ”) is given to the Administrative Agent by the Borrower, a Lender or the Issuing Bank, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default  or  Event  of  Default , (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be  such  items)  expressly  required  to  be  delivered  to  the  Administrative  Agent  or  satisfaction  of  any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.                                             116

 

             (c)    Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04, (ii) may rely on the Register to the extent set forth in Section 9.04( ab), (iii) may consult with legal counsel (including counsel to the Borrower), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance  with  the  advice  of  such  counsel,  accountants  or  experts,  (iv) makes  no  warranty  or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in  determining  compliance  with  any  condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).         SECTION 8.03     Intentionally Omitted .         SECTION 8.04     The   Administrative   Agent   Individually .   With  respect  to  its  Revolving Commitment, Loans (including Swingline Loans), Letter of Credit Commitments and Letters of Credit, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other  Lender  or  Issuing  Bank,  as  the  case  may  be.  The  terms  “Issuing  Bank”,  “Lenders”,  “Required Lenders”  and  any  similar  terms  shall,  unless  the  context  clearly  otherwise  indicates,  include  the Administrative  Agent  in  its  individual  capacity  as a  Lender,  Issuing  Bank  or  as  one  of  the  Required Lenders, as applicable.  The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or other business with, the Borrower, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders or the Issuing Bank.         SECTION 8.05     Successor Administrative Agent .               (a)    The  Administrative  Agent  may  resign  at  any  time  by giving  30  days’  prior written notice thereof to the Lenders, the Issuing Bank and the Borrower, whether or not a successor Administrative Agent has been appointed.  Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower and with the consent (such consent not to be unreasonably withheld,  delayed  or  conditioned)  of  the  Borrower  (unless  a  Specified  Event  of  Default  shall  have occurred  and  be  continuing),  to  appoint  a  successor  Administrative  Agent  (which  shall  not  be  an Ineligible  Institution).   If  no  successor  Administrative  Agent  shall  have  been  so  appointed  by  the Required  Lenders,  and  shall  have  accepted  such  appointment,  within  30  days  after  the  retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York or an Affiliate of any such bank (but in any event shall not be an Ineligible Institution). In either case, such appointment shall be subject to the prior written approval of the Borrower (which approval may not be unreasonably withheld and shall not be required while a Specified Event of Default has occurred and is continuing). Upon the acceptance of any appointment as                                            117

 

or  not  taking  action  under  or  based  upon  this  Agreement,  any  other  Loan  Document  or  any  related agreement or any document furnished hereunder or thereunder.               (b)    Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date.               (c)    Each   Lender   hereby   agrees   that:   (i)   it   has   requested   a   copy   of   each   Report prepared   by   or   on   behalf   of   the   Administrative   Agent;   (ii)   the   Administrative   Agent   (x)   makes   no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the  information  contained  therein  or  any  inaccuracy  or  omission  contained  in  or  relating  to  a  Report  and (y)   shall   not   be   liable   for   any   information   contained   in   any   Report;   (iii)   the   Reports   are   not comprehensive audits or examinations, and that any Person performing any field examination will inspect only  specific  information  regarding  the  Loan  Parties  and  will  rely  significantly  upon  the  Loan  Parties’ books   and   records,   as   well   as   on   representations   of   the   Loan   Parties’   personnel   and   that   the Administrative  Agent  undertakes  no  obligation  to  update,  correct  or  supplement  the  Reports;  (iv)  it  will keep  all  Reports  confidential  and  strictly  for  its  internal  use,  not  share  the  Report  with  any  Loan  Party  or any  other  Person  except  as  otherwise  permitted  pursuant  to  this  Agreement  (including  without  limitation Section  9.11);  and  (v)  without  limiting  the  generality  of  any  other  indemnification  provision  contained  in this  Agreement,  (x)  it  will  hold  the  Administrative  Agent  and  any  such  other  Person  preparing  a  Report harmless  from  any  action  the  indemnifying  Lender  may  take  or  conclusion  the  indemnifying  Lender  may reach  or  draw  from  any  Report  in  connection  with  any  extension  of  credit  that  the  indemnifying  Lender has   made   or   may   make   to   the   Borrower,   or   the   indemnifying   Lender’s   participation   in,   or   the indemnifying   Lender’s   purchase   of,   a   Loan   or   Loans,   and   (y)   it   will   pay   and   protect,   and   indemnify, defend,  and  hold  the  Administrative  Agent  and  any  such  other  Person  preparing  a  Report  harmless  from and   against,   the   claims,   actions,   proceedings,   damages,   costs,   expenses,   and   other   amounts   (including reasonable  attorneys’  fees)  incurred  by  the  Administrative  Agent  or  any  such  other  Person  as  the  direct  or indirect  result  of  any  third  parties  who  might  obtain  all  or  part  of  any  Report  through  the  indemnifying Lender  in  violation  of  this  Agreement;  provided  that  such  indemnity  shall  not  be  available  to  the  extent that  such  Liabilities  or  related  expenses  are  determined  by  a  court  of  competent  jurisdiction  by  final  and non-appealable   judgment   to   have   resulted   from   the   gross   negligence   or   willful   misconduct   of   the Administrative Agent or other applicable Person to be indemnified.         SECTION 8.07     Collateral Matters .               (a)    Except  with  respect  to  the  exercise  of  setoff  rights  in  accordance  with Section 9.08  or  with  respect  to  a  Secured  Party’s  right  to  file  a  proof  of  claim  in  an  insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof.   In  its  capacity,  the  Administrative  Agent  is  a “representative”  of  the  Secured  Parties  within  the  meaning  of  the  term  “secured  party”  as  defined  in  the UCC.   In  the  event  that  any  Collateral  is  hereafter  pledged  by  any  Person  as  collateral  security  for  the Secured   Obligations,   the   Administrative   Agent   is   hereby   authorized,   and   hereby   granted   a   power   of attorney,   to   execute   and   deliver   on   behalf   of   the   Secured   Parties   any   Loan   Documents   necessary   or appropriate  to  grant  and  perfect  a  Lien  on  such  Collateral  in  favor  of  the  Administrative  Agent  on  behalf of the Secured Parties.                                             119

 

Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations  assigned  to  the  acquisition  vehicle  exceeds  the  amount  of  Obligations  credit  bid  by  the acquisition  vehicle  or  otherwise),  such  Obligations  shall  automatically  be  reassigned  to  the  Secured Parties  pro  rata  with  their  original  interest  in  such  Obligations  and  the  equity  interests  and/or  debt instruments  issued  by  any  acquisition  vehicle  on  account  of  such  Obligations  shall  automatically  be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party  which  will  receive  interests  in  or  debt  instruments  issued  by  such  acquisition  vehicle)  as  the Administrative  Agent  may  reasonably  request  in  connection  with  the  formation  of  any  acquisition vehicle,  the  formulation  or  submission  of  any  credit  bid  or  the  consummation  of  the  transactions contemplated by such credit bid.         SECTION 8.09     Flood  Laws .  JPMorgan has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act  of  1994  and  related  legislation.   For  purposes of  this  Agreement,  “Flood   Laws ”  shall  mean, collectively, the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994, and the Biggert-Waters Flood Insurance Act of 2012, as such statutes may be amended or re-codified from time to time, any substitution therefor, any regulations promulgated thereunder, and all other Requirements of Law relating to flood insurance.  JPMorgan, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with  the  Flood  Laws.   However,  JPMorgan  reminds  each  Lender  and  Participant  in  the  facility  that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.                                        ARTICLE IX                                       Miscellaneous .         SECTION 9.01     Notices .  (a)                (a)    Except in the case of notices and other communications expressly permitted to be given  by  telephone  (and  subject  in  each  case  to  paragraph  (b)  below),  all  notices  and  other communications  provided  for  herein  shall  be  in  writing  and  shall  be  delivered  by  hand  or  overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:                      (i)    if to any Loan Party, to the Borrower at:                             Farmer Bros. Co.                            1912 Farmer Brothers Drive                           Northlake, TX 76262                            Attention: Legal Department                            Email:  LegalDepartment@farmerbros.com                                             121

 

                           with a copy to:                             Latham & Watkins LLP                            355 South Grand Avenue, Suite 100                            Los Angeles, CA 90071-1560                            Attention: Mark Morris                            Email: Mark.Morris@lw.com                      (ii)   if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn, Floor L2S, Chicago, IL 60603, Attention of Briahna Amos (Telecopy No. (844)490-5665; E- mail  jpm.agency.servicing.1@jpmorgan.com), and with a copy to JPMorgan Chase Bank, N.A., 10 South Dearborn,  Floor  36,  Chicago,  IL  60603,  Attention  of  Charles  W.  Shaw   (Email: charles.w.shaw@jpmorgan.com);                      (iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn,  Floor  L2S,  Chicago,  IL  60603,  Attention  of  LC  Agency  Activity  Team  (Telecopy No. (214)307-6874; E-mail Chicago.LC.Agency.Activity.Team@jpmchase.com;                      (iv)  if  to  the  Swingline  Lender,  to  it  at  JPMorgan  Chase  Bank,  N.A.,  10 South  Dearborn,  Floor L2S, Chicago, IL 60603, Attention  of  Briahna  Amos  (Telecopy  No. (844)490- 5665); E-mail jpm.agency.servicing.1@jpmorgan.com; and                      (v)   if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.  All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received, (ii) sent by facsimile shall be deemed to have been given when sent, provided  that if not given during normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (iii) delivered through Approved Electronic Platforms to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.               (b)    Notices  and  other  communications  to  the  Lenders  and  the  Issuing  Bank hereunder may be delivered or furnished by using Approved Electronic Platforms pursuant to procedures approved by the Administrative Agent; provided  that the foregoing shall not apply to notices pursuant to Article II  unless  otherwise  agreed  by  the  Administrative  Agent  and  the  applicable  Lender.   The Administrative  Agent  or  the  Borrower  may,  in  its  discretion,  agree  to  accept  notices  and  other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided  that approval of such procedures may be limited to particular notices or communications.  Unless the Administrative Agent otherwise prescribes, all such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at  its e-mail address as described in the foregoing clause (i),  of  notification  that  such  notice  or  communication  is  available  and  identifying  the  website address  therefor;  provided   that,  for  both  clauses  (i)  and  (ii)  above,  if  such  notice,  e-mail  or  other communication  is  not  sent  during  the  normal  business  hours  of  the  recipient,  such  notice  or                                            122

 

Issuing  Bank  by  means  of  electronic  communications pursuant  to  this  Section,  including  through  an Approved Electronic Platform.                      (iv)   Each Lender and Issuing Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall  constitute  effective  delivery  of  the  Communications  to  such  Lender  for  purposes  of  the  Loan Documents.  Each  Lender  and  Issuing  Bank  agrees  (i) to  notify  the  Administrative  Agent  in  writing (which could be in the form of electronic communication) from time to time of such Lender’s or Issuing Bank’s (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.                      (v)   Each of the Lenders, the Issuing Bank and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.                      (vi)  Nothing herein shall prejudice the right of the Administrative Agent, any Lender or the Issuing Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.         SECTION 9.02     Waivers; Amendments .  (a)                (a)    No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof,  nor  shall  any  single  or  partial  exercise  of  any  such  right  or  power,  or  any  abandonment  or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the  exercise  of  any  other  right  or power.   The  rights  and  remedies  of  the  Administrative  Agent,  the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the  purpose  for  which  given.   Without  limiting  the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.               (b)    Subject to Section 2.09 (with respect to any commitment increase or Incremental Term Loan Amendment), Section 2.14(b) and clauses (c) and (e) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (x) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower  and  the  Required  Lenders  or  (y)  in  the  case  of  any  other  Loan  Document,  pursuant  to  an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided  that no such agreement shall (i) increase the Revolving Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable  hereunder,  without  the  written  consent  of  each  Lender  (including  any  such  Lender  that  is  a Defaulting Lender) directly affected thereby, (except (1) in connection with the waiver of applicability of any  post-default  increase  in  interest  rates,  which waiver  shall  be  effective  with  the  consent  of  the Required Lenders and (2) that any amendment or modification of the Financial Covenants (or defined terms used in the Financial Covenants) shall not constitute a reduction in the rate of interest or fees for                                            124

 

             (e)    Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.         SECTION 9.03     Expenses; Limitation of Liability;  Indemnity; Damage Waiver .  (a)                (a)    Expenses.    The  Borrower  shall  pay  (i) all  reasonable  and  documented  out-of- pocket expenses of the Administrative Agent and the Arranger and their affiliates associated with the syndication and distribution of the credit facility provided for herein (including, without limitation, via the internet or through an electronic system) and the preparation, execution, delivery and administration of the Loan Documents and any amendment, modification or waiver with respect thereto (whether or not the transactions contemplated hereby or thereby shall  be  consummated)  (including  the  reasonable  and documented fees, disbursements and other charges of counsel (limited to one primary counsel, one local counsel  in  each  reasonably  necessary  jurisdiction, one  specialty  counsel  in  each  reasonably  necessary specialty  area,  and  one  or  more  additional  counsel if  one  or  more  actual  conflicts  of  interest  arise)), (ii) reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in connection with the  issuance,  amendment,  renewal  or  extension  of  any  Letter  of  Credit  or  any  demand  for  payment thereunder and (iii) all documented out-of-pocket expenses of the Administrative Agent, the Issuing Bank and the Lenders (including the fees, disbursements and other charges of counsel (limited to one primary counsel,  one  local  counsel  in  each  reasonably  necessary  jurisdiction,  one  specialty  counsel  in  each reasonably necessary specialty area, and one or more additional counsel if one or more actual conflicts of interest arise)) in connection with the enforcement, collection or protection of its rights in connection with the  Loan  Documents,  including  all  such  documented  out-of-pocket  expenses  incurred  during  any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.    Expenses   being reimbursed  by  the  Borrower  under  this  Section  include,  without  limiting  the  generality  of  the  foregoing, reasonable and documented out-of-pocket fees, costs and expenses incurred in connection with following, in   each   case,   to   the   extent   incurred   in   connection   with   the   Transactions   and   the   administration   of   the Facility contemplated hereunder:                      (i)    appraisals   (subject   to   the   limitations   set   forth   in   Section   5.13)   and insurance  reviews  (but  solely  to  the  extent  any  such  insurance  reviews  involve  a  third  party  insurance broker);                      (ii)   field   examinations   and   the   preparation   of   Reports   based   on   the   fees charged   by   a   third   party   retained   by   the   Administrative   Agent   or   the   reasonable   and   documented internally  allocated  fees  for  each  Person  employed  by  the  Administrative  Agent  with  respect  to  each  field examination  (subject to the limitation set forth  in Section 5.13);                      (iii)  Taxes,   fees   and   other   charges   for   (x)   lien   and   title   searches   and   title insurance   and   (y)   recording   the   Mortgages,   filing   financing   statements   and   continuations,   and   other actions  to  perfect,  protect,  and  continue  the  Administrative  Agent’s  Liens  as  contemplated  by  the  Loan Documents;                      (iv)   sums   paid   or   incurred   to   take   any   action   required   of   any   Loan   Party under the Loan Documents that such Loan Party fails to pay or take; and                      (v)    forwarding  loan  proceeds,  collecting  checks  and  other  items  of  payment, and  establishing  and  maintaining  the  accounts  and  lock  boxes,  and  costs  and  expenses  of  preserving  and protecting the Collateral.                                             127

 

All  of  the  foregoing  fees,  costs  and  expenses  may  be  charged  to  the  Borrower  as  Revolving  Loans  or  to another deposit account, all as described in Section 2.18(c).               (b)    [Reserved].               (c)    (b)  Indemnity .   The  Loan  Parties  shall,  jointly  and  severally,  indemnify  the Administrative  Agent,  the  Arranger,  each  Co-Syndication  Agent,  each  Co-Documentation  Agent,  the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being  called  an  “Indemnitee ”)  against,  and  hold  each  Indemnitee  harmless  from,  any  and  all losses, claims , damages Liabilities , penalties, incremental taxes, liabilities, costs and related expenses, including the  reasonable  and  documented  fees,  charges  and  disbursements  of  any  counsel  for  any  Indemnitee (limited to one primary counsel, one local counsel in each reasonably necessary jurisdiction, one specialty counsel in each reasonably necessary specialty area, and one or more additional counsel if one or more actual  conflicts  of  interest  arise),  incurred  by  or  asserted  against  any  Indemnitee  arising  out  of,  in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, (iv) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by a Loan Party for Taxes pursuant to  Section 2.17,  or  (v) any  actual  or  prospective claim,   litigation,   investigation,   arbitration   or proceeding Proceeding   relating  to  any  of  the  foregoing,  whether  or  not  such claim,   litigation, investigation,  arbitration  or  proceeding Proceeding  is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided  that such indemnity shall not,  as  to  any  Indemnitee,  be  available  to  the  extent  that  such losses,   claims,   damages,   penalties, liabilities Liabilities  or related expenses:  (A) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, (B) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from a material breach of this Agreement by such Indemnitee pursuant to proceedings initiated by any Person party to this Agreement, or (C) arise out of any dispute among Indemnitees that do not involve any acts or omissions of the Loan Parties or any of their Affiliates (other than claims against any of the Administrative Agent or the Lenders or any of their Affiliates in its capacity or in fulfilling its role as the Administrative Agent, the Issuing Lender, the Swingline Lender, an Arranger, a bookrunner or any similar role under the Loan Documents).  This Section 9.03( bc) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.               (d)    (c)  Lender   Reimbursement.    Each  Lender  severally  agrees  to pay any amount required to be paid by the Borrower under paragraph (a) or ( bc) of this Section 9.03 to the Administrative Agent,  the  Issuing  Bank  and  the  Swingline  Lender,  and  each  Related  Party  of  any  of  the  foregoing Persons  (each,  an  “Agent   Indemnitee ”)  (to  the  extent  not  reimbursed  by  the  Borrower  and  without limiting  the  obligation  of  the  Borrower  to  do  so), ratably  according  to  their  respective  Applicable Percentage in effect on the date on which indemnification such payment  is sought under this Section (or, if indemnification  is such  payment  is  sought after the date upon which the Revolving Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage  immediately  prior  to  such  date),  from  and  against  any  and  all losses,   claims,   damages, liabilities Liabilities   and  related  expenses,  including  the  fees,  charges and  disbursements  of  any  kind                                            128

 

whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred  by  or  asserted  against  such  Agent  Indemnitee  in  any  way  relating  to  or  arising  out  of  the Revolving  Commitments,  this  Agreement,  any  of  the  other  Loan  Documents  or  any  documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any of the foregoing; provided  that the unreimbursed expense or indemnified loss,  claim,  damage,  liability Liability  or related expense, as the case may be, was incurred by or asserted against such Agent Indemnitee in its capacity as such; provided  further  that no Lender shall be liable for the payment of any portion of such liabilities, obligations,   losses,   damages,   penalties,   actions,   judgments,   suits Liabilities ,  costs,  expenses  or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent Indemnitee’s gross negligence or willful misconduct.  The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.               (e)    (d)  To the extent permitted by applicable law, (i) no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee for any Liabilities  or  damages arising from the use by others of information or other materials (including,  without  limitation,  any  personal  data) obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities  or  other claim against any other party hereto, 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 or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided  that, nothing in this clause (d)(ii) shall relieve any Loan Party of any obligation it may have to indemnify an Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.               (f)    (e)  All amounts due under this Section shall be payable promptly after written demand therefor.         SECTION 9.04     Successors and Assigns .  (a)               (a)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.               (b)    (i)    Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:                                             129

 

                           (A)   the  Borrower,  provided   that  the  Borrower  shall  be  deemed  to have  consented  to  any  such  assignment  unless  it  shall  object  thereto  by  written  notice  to  the Administrative Agent within ten (10) Business Days after having received notice thereof, and provided further  that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if a Specified Event of Default has occurred and is continuing, any other assignee;                             (B)   the  Administrative  Agent;  provided   that  no  consent  of  the Administrative Agent shall be required for an assignment of any Revolving Commitment to an assignee that is a Lender (other than a Defaulting Lender) with a Revolving Commitment immediately prior to giving effect to such assignment;                             (C)   the Issuing Bank; and                             (D)   the Swingline Lender.                      (ii)   Assignments shall be subject to the following additional conditions:                             (A)   except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment or Loans of any Class, the amount of the Revolving Commitment or Loans of the assigning  Lender  subject  to  each  such  assignment  (determined  as  of  the  date  the  Assignment  and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if a Specified Event of Default has occurred and is continuing;                             (B)   each  partial  assignment  shall  be  made  as  an  assignment  of  a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Revolving Commitments or Loans;                            (C)    the  parties  to  each  assignment  shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500 and the tax forms required by Section 2.17(f); and provided   that,   in   the   case   of   any   assignment   made   pursuant   to   Section   9.02(d),   each   party   hereto agrees  that  (1)  such  assignment  may  be  effected  pursuant  to  an  Assignment  and  Assumption  executed  by the   Borrower,   the   Administrative   Agent   and   the   assignee   (or ,  to   the   extent   applicable,  an   agreement incorporating  an  Assignment  and  Assumption  by  reference  pursuant  to  an  Approved  Electronic  Platform as  to  which  the  Administrative  Agent  and  such  parties  are  participants),  and  (2)  the  Lender  required  to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed   to   have   consented   to   an   be   bound   by   the   terms   thereof;   provided   further   that,   following   the effectiveness  of  any  such  assignment,  the  other  parties  to  such  assignment  agree  to  execute  and  deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto; and                             (D)   the  assignee,  if  it  shall  not  be  a  Lender,  shall  deliver  to  the Administrative  Agent  an  Administrative  Questionnaire  in  which  the  assignee  designates  one  or  more credit  contacts  to  whom  all  syndicate-level  information  (which  may  contain  material  non-public                                            130

 

hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b)  of  this  Section,  the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided   that  if  either  the  assigning  Lender  or  the  assignee  shall  have  failed  to  make  any  payment required  to  be  made  by  it  pursuant  to  Section 2.05,  2.06(d)  or  (e),  2.07(b),  2.18(d)  or  9.03 (c) ,  the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.               (c)    Any  Lender  may,  without  the  consent  of,  or  notice  to,  the  Borrower,  the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities other than an Ineligible Institution (a “Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Revolving Commitment and the Loans owing to it); provided  that (A) such Lender’s obligations under this Agreement shall remain unchanged;  (B) such  Lender  shall  remain  solely  responsible  to  the  other  parties  hereto  for  the performance of such obligations; and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided  that such agreement or instrument may provide that such Lender will not, without the consent of the  Participant,  agree  to  any  amendment,  modification  or  waiver  described  in  the  first  proviso  to Section 9.02(b) that affects such Participant.  The Borrower agrees that each Participant shall be entitled to  the  benefits  of  Sections 2.15,  2.16  and  2.17  (subject  to  the  requirements  and  limitations  therein, including  the  requirements  under  Section 2.17(f)  and  (g)  (it  being  understood  that  the  documentation required  under Section 2.17(f) shall be delivered to  the  participating  Lender  and  the  information  and documentation required under Section 2.17(g) will be delivered to the Borrower and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided  that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 2.15 or 2.17, with respect to any participation, than its  participating  Lender  would  have  been  entitled  to  receive,  except  to  the  extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.               (d)    Each  Lender  that  sells  a  participation  agrees,  at  the  Borrower’s  request  and expense,  to  use  reasonable  efforts  to  cooperate  with  the  Borrower  to  effectuate  the  provisions  of Section 2.19(b) with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan Document (the  “Participant   Register ”);  provided  that no Lender shall have any obligation to disclose  all  or  any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Revolving Commitments, Loans, Letters of Credit or its other obligations under  any  Loan  Document)  to  any  Person  except  to  the  extent  that  such  disclosure  is  necessary  to establish that such Revolving Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is                                            132

 

recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.               (e)    Any Lender may at any time pledge or assign a security interest in all or any portion  of  its  rights  under  this  Agreement  to  secure  obligations  of  such  Lender,  including  without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided  that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.         SECTION 9.05     Survival .  All covenants, agreements, representations and warranties made by  the  Loan  Parties  in  the  Loan  Documents  and  in  the  certificates  or  other  instruments  delivered  in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents  and  the  making  of  any  Loans  and  issuance of  any  Letters  of  Credit,  regardless  of  any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Revolving Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect  regardless  of  the  consummation  of  the  transactions  contemplated  hereby,  the  repayment  of  the Loans,  the  expiration  or  termination  of  the  Letters  of  Credit  and  the  Revolving  Commitments  or  the termination of this Agreement or any other Loan Document or any provision hereof or thereof.         SECTION 9.06     Counterparts; Integration; Effectiveness; Electronic Execution .               (a)    (a)   This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent and (ii) the reductions of the Letter of Credit Commitment of the Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become  effective  when  it  shall  have  been  executed  by  the  Administrative  Agent  and  when  the Administrative  Agent  shall  have  received  counterparts  hereof  which,  when  taken  together,  bear  the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.               (b)    Delivery of an executed counterpart of a signature page of (x)  this Agreement  by telecopy ,  (y)   any   other   Loan   Document   and/or   (z)  any   document ,  amendment,   approval,   consent, information,  notice  (including,  for  the  avoidance  of  doubt,  any  notice  delivered  pursuant  to  Section  9.01), certificate,   request,   statement,   disclosure   or   authorization   related   to   this   Agreement,   any   other   Loan Document  and/or  the  transactions  contemplated  hereby  and/ or  thereby  (each  an  “Ancillary  Document”) that   is   an   Electronic   Signature   transmitted   by   fax ,  emailed  pdf ,.  or  any  other  electronic  means  that reproduces an image of the an  actual executed signature page shall be effective as delivery of a manually executed  counterpart  of  this  Agreement ,  such   other   Loan   Document   or   such   Ancillary   Document,   as applicable .   The  words  “execution,”  “signed,”  “signature,”  “delivery,” and words of like import in or relating  to any   document  to   be   signed   in   connection   with  this  Agreement   and  the   transactions                                            133

 

contemplated   hereby   or   thereby  ,  any   other   Loan   Document   and/or   any   Ancillary   Document   shall  be deemed  to  include  Electronic  Signatures,  deliveries or the keeping of records in any   electronic  form (including  deliveries  by  fax,  emailed  pdf.  or  any  other  electronic  means  that  reproduces  an  image  of  an actual  executed  signature  page) , each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof 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  nothing  herein  shall  require  the  Administrative  Agent  to  accept electronic signatures Electronic  Signatures  in any form or format without its prior written consent . and  pursuant  to procedures   approved   by   it;   provided,   further,   without   limiting   the   foregoing,   (i)   to   the   extent   the Administrative  Agent  has  agreed  to  accept  any  Electronic  Signature,  the  Administrative  Agent  and  each of  the  Lenders  shall  be  entitled  to  rely  on  such  Electronic  Signature  purportedly  given  by  or  on  behalf  of any  Loan  Party  without  further  verification  thereof  and  without  any  obligation  to  review  the  appearance or  form  of  any  such  Electronic  signature  and  (ii)  upon  the  request  of  the  Administrative  Agent  or  any Lender,   any   Electronic   Signature   shall   be   promptly   followed   by   a   manually   executed   counterpart. Without  limiting  the  generality  of  the  foregoing,  each  Loan  Party  hereby  (i)  agrees  that,  for  all  purposes, including   without   limitation,   in   connection   with   any   workout,   restructuring,   enforcement   of   remedies, bankruptcy  proceedings  or  litigation  among  the  Administrative  Agent,  the  Lenders  and  the  Loan  Parties, Electronic  Signatures  transmitted  by  fax,  emailed  pdf.  or  any  other  electronic  means  that  reproduces  an image  of  an  actual  executed  signature  page  and/or  any  electronic  images  of  this  Agreement,  any  other Loan   Document   and/or   any   Ancillary   Document   shall   have   the   same   legal   effect,   validity   and enforceability  as  any  paper  original,  (ii)  the  Administrative  Agent  and  each  of  the  Lenders  may,  at  its option,   create   one   or   more   copies   of   this   Agreement,   any   other   Loan   Document   and/or   any   Ancillary Document  in  the  form  of  an  imaged  electronic  record  in  any  format,  which  shall  be  deemed  created  in  the ordinary   course   of   such   Person’s   business,   and   destroy   the   original   paper   document   (and   all   such electronic  records  shall  be  considered  an  original  for  all  purposes  and  shall  have  the  same  legal  effect, validity  and  enforceability  as  a  paper  record),  (iii)  waives  any  argument,  defense  or  right  to  contest  the legal  effect,  validity  or  enforceability  of  this  Agreement,  any  other  Loan  Document  and/or  any  Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or  such  Ancillary  Document,  respectively,  including  with  respect  to  any  signature  pages  thereto  and (iv)  waives  any  claim  against  any  Indemnitee  for  any  Liabilities  arising  solely  from  the  Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including  any  Liabilities  arising  as  a  result  of  the  failure  of  any  Loan  Party  to  use  any  available  security measures in connection with the execution, delivery or transmission of any Electronic Signature.         SECTION 9.07     Severability .   Any  provision  of  any  Loan  Document  held  to  be  invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.        SECTION 9.08      Right   of   Setoff .   If  an  Event  of  Default  shall  have  occurred  and  be continuing, each Lender, the Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held, and other obligations at any time owing, by such Lender, such Issuing Bank or any such Affiliate, to or for the credit or the account of the Borrower or any Subsidiary Guarantor against any and all  of  the  Secured  Obligations  now  or  hereafter  existing  under  this  Agreement  or  any  other  Loan Document to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or                                            134

 

not such Lender, Issuing Bank or 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  office  or  Affiliate  of  such  Lender  or  such  Issuing  Bank  different  from  the  branch  office  or Affiliate  holding  such  deposit  or  obligated  on  such  indebtedness;  provided  that  in  the  event  that  any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately  to  the  Administrative  Agent  for  further  application  in  accordance  with  the  provisions  of Section 2.20 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have.  Each Lender and Issuing Bank agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.        NOTWITHSTANDING      THE  FOREGOING,   AT  ANY  TIME  THAT  ANY  OF  THE  SECURED OBLIGATIONS     SHALL   BE   SECURED   BY   REAL   PROPERTY   LOCATED   IN   CALIFORNIA,   NO LENDER   OR  OTHER  SECURED   PARTY  SHALL   EXERCISE  A  RIGHT  OF  SETOFF,  LENDER’S LIEN   OR   COUNTERCLAIM    OR   TAKE   ANY   COURT   OR   ADMINISTRATIVE   ACTION   OR INSTITUTE   ANY   PROCEEDING   TO   ENFORCE   ANY   PROVISION   OF   THIS   AGREEMENT   OR ANY   LOAN   DOCUMENT    UNLESS   IT   IS   TAKEN   WITH   THE   CONSENT   OF   THE   LENDERS REQUIRED    BY   SECTION   9.02   OF   THIS   AGREEMENT,   IF   SUCH   SETOFF   OR   ACTION   OR PROCEEDING    WOULD   OR  MIGHT  (PURSUANT   TO  SECTIONS  580a,  580b,  580d  AND  726  OF THE   CALIFORNIA   CODE   OF   CIVIL   PROCEDURE   OR   SECTION   2924   OF   THE   CALIFORNIA CIVIL   CODE,   IF   APPLICABLE,   OR   OTHERWISE)   AFFECT   OR   IMPAIR   THE   VALIDITY, PRIORITY,   OR   ENFORCEABILITY   OF   THE   LIENS   GRANTED   TO   ADMINISTRATIVE   AGENT PURSUANT     TO   THE   COLLATERAL   DOCUMENTS     OR   THE   ENFORCEABILITY   OF   THE SECURED OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OR  OTHER  SECURED   PARTY  OF  ANY  SUCH  RIGHT  WITHOUT  OBTAINING   SUCH  CONSENT OF   THE   PARTIES   AS   REQUIRED   ABOVE,   SHALL   BE   NULL   AND   VOID.   THIS   PARAGRAPH SHALL   BE   SOLELY   FOR   THE   BENEFIT   OF   EACH   OF   THE   LENDERS   AND   THE   OTHER SECURED PARTIES.         SECTION 9.09     Governing Law; Jurisdiction; Consent to Service of Process .  (a)               (a)    This Agreement and the other Loan Documents shall be construed in accordance with and governed by the law of the State of New York.               (b)    Each  of  the  Lenders  and  the  Administrative  Agent  hereby  irrevocably  and unconditionally  agrees  that,  notwithstanding  the  governing  law  provisions  of  any  applicable  Loan Document, any claims brought against the Administrative Agent by any Lender or Secured Party relating to this Agreement, any other Loan Document, the Collateral or the consummation or administration of the transactions contemplated hereby or thereby shall be construed in accordance with and governed by the law of the State of New York.               (c)    Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court for the Southern District  of  New  York  sitting  in  the  Borough  of  Manhattan  (or  if  such  court  lacks  subject  matter jurisdiction, the Supreme Court of the State of New York sitting in the Borough of Manhattan), and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement                                            135

 

or  any  other  Loan  Document  or  the  transactions  relating  hereto  or  thereto,  or  for  recognition  or enforcement  of  any  judgment,  and  each  of  the  parties  hereto  hereby  irrevocably  and  unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such Federal (to the extent permitted by law) or New York State court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or  any  other  Loan  Document  against the Borrower, any Loan Party or its properties in the courts of any jurisdiction.               (d)    Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (c) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.               (e)    Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Each  Loan  Party  that  is  a Foreign  Subsidiary  irrevocably designates  and  appoints  the  Borrower,  as  its  authorized  agent,  to  accept  and  acknowledge  on  its  behalf, service of any and all process which may be served in any suit, action or proceeding of the nature  referred to  in  Section 9.09(c)  in  any  federal  or  New  York  State  court  sitting  in  New  York  City.   The  Borrower hereby  represents,  warrants  and  confirms  that  the  Borrower  has  agreed  to  accept  such  appointment  (and any  similar  appointment  by  a  Subsidiary  Guarantor  which  is  a  Foreign  Subsidiary).   Said  designation  and appointment   shall   be   irrevocable   by   each   such   Foreign   Subsidiary   until   the   earlier   of   (x)   indefeasible payment  in  full  in  cash  of  the  Secured  Obligations  and  the  termination  of  this  Agreement  (y)  the  release of  such  Foreign  Subsidiary  as  a  Loan  Party  pursuant  to  the  terms  of  this  Agreement.   Each  Loan  Party that  is  a  Foreign  Subsidiary  hereby  consents  to  process  being  served  in  any  suit,  action  or  proceeding  of the  nature  referred  to  in  Section 9.09(c)  in  any  federal  or  New  York  State  court  sitting  in  New  York  City by  service  of  process  upon  the  Borrower  as  provided  in  this  Section 9.09(e);  provided  that,  to  the  extent lawful  and  possible,  notice  of  said  service  upon  such  agent  shall  be  mailed  by  registered  or  certified  air mail,   postage   prepaid,   return   receipt   requested,   to   the   Borrower   and   (if   applicable   to)   such   Foreign Subsidiary  at  its  address  set  forth  in  this  Agreement  or  in  the  Joinder  Agreement  pursuant  to  which  such Subsidiary  became  a  Loan  Party  or  to  any  other  address  of  which  such  Foreign  Subsidiary  shall  have given  written  notice  to  the  Administrative  Agent  (with  a  copy  thereof  to  the  Borrower).   Each  Loan  Party that  is  a  Foreign  Subsidiary  irrevocably  waives,  to  the  fullest  extent  permitted  by  law,  all  claim  of  error by   reason   of   any   such   service   in   such   manner   and   agrees   that   such   service   shall   be   deemed   in   every respect  effective  service  of  process  upon  such  Foreign  Subsidiary  in  any  such  suit,  action  or  proceeding and  shall,  to  the  fullest  extent  permitted  by  law,  be  taken  and  held  to  be  valid  and  personal  service  upon and  personal  delivery  to  such  Foreign  Subsidiary.   To  the  extent  any  Foreign  Subsidiary  has  or  hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether from service or   notice,   attachment   prior   to   judgment,   attachment   in   aid   of   execution   of   a   judgment,   execution   or otherwise),  each  Loan  Party  that  is  a  Foreign  Subsidiary  hereby  irrevocably  waives  such  immunity  in respect   of   its   obligations   under   the   Loan   Documents.    Nothing  in  this  Agreement  or  any  other  Loan Document  will  affect  the  right  of  any party  to  this  Agreement  to  serve  process  in  any  other  manner permitted by law.               (f)    WAIVER OF JURY TRIAL   . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A                                            136

 

TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR  RELATING  TO  THIS  AGREEMENT,  ANY  OTHER  LOAN  DOCUMENT  OR  THE TRANSACTIONS  CONTEMPLATED  HEREBY  OR  THEREBY  (WHETHER  BASED  ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO  REPRESENTATIVE,  OTHER  AGENT  (INCLUDING  ANY  ATTORNEY)  OF  ANY  OTHER PARTY  HAS  REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT  SUCH  OTHER  PARTY WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING WAIVER  AND  (B) ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  PARTIES  HERETO  HAVE BEEN  INDUCED  TO  ENTER  INTO  THIS  AGREEMENT  BY,  AMONG  OTHER  THINGS,  THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.               (g)    References to the California Civil Code or the California Code of Civil Procedure shall not mean that California law is applicable to this Agreement.        SECTION 9.10      Headings .  Article and Section headings and the Table of Contents  used herein  are  for convenience of reference only, are not  part  of  this  Agreement  and  shall  not  affect  the construction of, or be taken into consideration in interpreting, this Agreement.         SECTION 9.11     Confidentiality .  Each of the Administrative Agent, the Issuing Bank and the Lenders  agrees  to  maintain  the  confidentiality  of  the  Information  (as  defined  below),  except  that Information  may  be  disclosed  (a) to  its  and  its  Affiliates’  directors,  officers,  employees  and  agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep  such  Information  confidential),  (b) to  the  extent  requested  by  any  Governmental  Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any  other  party  to  this  Agreement,  (e) in  connection  with  the  exercise  of  any  remedies  under  this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any  other  Loan  Document  or  the  enforcement  of  rights  hereunder  or  thereunder,  (f) subject  to  an agreement containing provisions substantially the same as those of this Section, to (1) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement  or  (2) any  actual  or  prospective  counterparty  (or  its  advisors)  to  any  swap  or  derivative transaction relating to the Loan Parties and their obligations, (g) on a confidential basis to (1) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided for herein  or  (2) the  CUSIP  Service  Bureau  or  any  similar  agency  in  connection  with  the  issuance  and monitoring of identification numbers with respect to the credit facilities provided for herein, (h) with the consent of the Borrower or (i) to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section or (2) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information ” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower and other than information pertaining to this Agreement routinely provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided  that, in the case of information received from the Borrower  after  the  date  hereof,  such  information  is  clearly  identified  at  the  time  of  delivery  as confidential.   Any  Person  required  to  maintain  the confidentiality  of  Information  as  provided  in  this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.                                             137

 

       SECTION 9.20     No Fiduciary Duty, etc. .                (a)    The  Borrower Each  Loan  Party  acknowledges and agrees, and acknowledges its Subsidiaries’  understanding,  that  no  Credit  Party  will  have  any  obligations  except  those  obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm’s length contractual counterparty to the Borrower Loan Parties  with respect to the Loan Documents  and  the  transactions  contemplated herein   and  therein  and  not  as  a  financial  advisor  or  a fiduciary to, or an agent of, the  Borrower any  Loan  Party  or any other person.  The  Borrower Each  Loan Party  agrees that it will not assert any claim against any  Credit  Party based  on  an  alleged breach  of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby by  the  Loan  Documents .  Additionally, the  Borrower each  Loan  Party  acknowledges and agrees that no Credit Party is advising the Borrower Loan  Parties  as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction.  The  Borrower Each  Loan  Party  shall consult with its own  advisors  concerning  such  matters  and  shall  be  responsible  for  making  its  own  independent investigation and appraisal of the transactions contemplated herein  or  in by  the other  Loan Documents, and the Credit Parties shall have no responsibility or liability to the  Borrower any  Loan  Party  with respect thereto.               (b)    The   Borrower Each   Loan   Party   further  acknowledges  and  agrees,  and acknowledges its Subsidiaries’ understanding, that each Credit Party, together with its Affiliates, is a full service  securities  or  banking  firm  engaged  in  securities  trading  and  brokerage  activities  as  well  as providing investment banking and other financial services.  In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, the  Borrower any  Loan  Party  or  its  Affiliates  and other companies with which it any Loan Party  may have commercial or other relationships.  With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.               (c)    In  addition, the   Borrower each   Loan   Party   acknowledges  and  agrees,  and acknowledges its Subsidiaries’ understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which the  Borrower a Loan  Party  or its Subsidiaries may have conflicting interests regarding the  transactions  described  herein  and  otherwise.   No  Credit  Party  will  use  confidential  information obtained from the Borrower by virtue of the transactions contemplated by the Loan Documents or its other relationships with the Borrower in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies.  The Borrower Each  Loan  Party  also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to the  Borrower any  Loan  Party , confidential information obtained from other companies.         SECTION 9.21     Prepayment   of   Loans   under   the   Existing   Credit   Agreement .   Each  of  the signatories hereto that is also a party to the Existing Credit Agreement hereby agrees that any and all required notice periods under the Existing Credit Agreement in connection with the prepayment (if any) on the Effective Date of any “Loans” under the Existing Credit Agreement are hereby waived and of no force and effect.                                             141

 

                                      ARTICLE X                                       Loan Guaranty.        SECTION 10.01     Guaranty .   Each  Loan  Guarantor  (other  than  those  that  have delivered  a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Guaranteed Obligations of such Loan Guarantor.  Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal.  All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.         SECTION 10.02    Guaranty of Payment         .  This Loan Guaranty is a guaranty of payment and not of collection.  Each Loan Guarantor waives  any  right  to  require  the  Administrative  Agent,  the  Issuing  Bank  or  any  Lender  to  sue  the Borrower, any Loan Guarantor, any other guarantor of, or any other Person obligated for, all or any part of the Guaranteed Obligations (each, an “Obligated  Party ”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.         SECTION 10.03    No Discharge or Diminishment of Loan Guaranty .               (a)    (a)  Except  as  otherwise  provided  for  herein,  the  obligations  of  each  Loan Guarantor  hereunder  are  unconditional  and  absolute and  not  subject  to  any  reduction,  limitation, impairment  or  termination  for  any  reason  (other  than  the  indefeasible  payment  in  full  in  cash  of  the Guaranteed Obligations as provided under Section 10.08(c)), including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate  existence, structure or ownership of the Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender or any other Person, whether in connection herewith or in any unrelated transactions.               (b)    The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.               (c)    Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by:  (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed  Obligations;  (ii)  any  waiver  or  modification  of  or  supplement  to  any  provision  of  any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any indirect  or  direct  security  for  the  obligations  of the  Borrower  for  all  or  any  part  of  the  Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect                                            143

 

to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations as provided under Section 10.08(c)).               (d)    Without  limiting  any  other  waiver  or  provision,  each  Loan  Guarantor  waives,  to the   maximum   extent   permitted   by   law,   (i) all   benefits   or   defenses   directly   or   indirectly   arising   under California  Civil  Code  §§  2787,  2799,  2808,  2815,  2819,  2820,  2821,  2822,  2838,  2839,  2847,  2848,  and 2855, Chapter 2 of Title 14 of the California Civil Code, and California Code of Civil Procedure §§ 580a, 580b,   580c,   580d,   and   726   or   any   similar   laws   of   any   other   applicable   jurisdiction,   (ii) all   rights   and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as   a   nonjudicial   foreclosure   with   respect   to   security   for   a   guaranteed   obligation,   has   destroyed   the guarantor’s   rights   of   subrogation   and   reimbursement   against   the   principal   by   the   operation   of   Section 580d  of  the  California  Code  of  Civil  Procedure  or  otherwise,  and  (iii)  any  defense  arising  by  reason  of  or deriving  from  (x)  any  claim  or  defense  based  upon  an  election  of  remedies  by  the  Secured  Parties  or  (y) any  election  by  the  Secured  Parties  under  the  Bankruptcy  Code  to  limit  the  amount  of,  or  any  collateral securing, its claim against any Loan Guarantor.         SECTION 10.04    Defenses  Waived .  To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or  the  cessation  from  any  cause  of  the  liability  of  the  Borrower,  any  Loan  Guarantor  or  any  other Obligated Party, other than the indefeasible payment in full in cash of the Guaranteed Obligations as provided under Section 10.08(c).  Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party or any other Person.  Each Loan Guarantor confirms that it is not a surety under  any  state  law  and  shall  not  raise  any  such  law  as  a  defense  to  its  obligations  hereunder.   The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent  the  Guaranteed  Obligations  have  been  fully  and  indefeasibly  paid  in  cash  as  provided  under Section 10.08(c).  To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.        SECTION 10.05     Rights  of  Subrogation .  No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification, that it has against any Obligated Party or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.        SECTION 10.06     Reinstatement;   Stay   of   Acceleration .  If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its                                            144

 

discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall  be  reinstated  at  such  time  as  though  the  payment  had  not  been  made  and  whether  or  not  the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms  of  any  agreement  relating  to  the  Guaranteed  Obligations  shall  nonetheless  be  payable  by  the  Loan Guarantors forthwith on demand by the Administrative Agent.        SECTION 10.07     Information .  Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the  Administrative  Agent,  the  Issuing  Bank  or  any  Lender  shall  have  any  duty  to  advise  any  Loan Guarantor of information known to it regarding those circumstances or risks.        SECTION 10.08     Release of Loan Guarantors .               (a)    A Subsidiary Guarantor shall automatically be released from its obligations under the Loan Guaranty upon the consummation of any transaction permitted by this Agreement as a result of which  such  Subsidiary  Guarantor  ceases  to  be  a  Subsidiary;  provided   that,  if  so  required  by  this Agreement, the Required Lenders shall have consented to such transaction and the terms of such consent shall not have provided otherwise.  In connection with any termination or release pursuant to this Section, the Administrative Agent shall (and is hereby irrevocably  authorized  by  each  Lender  to)  execute  and deliver  to  any  Loan  Party,  at  such  Loan  Party’s  expense,  all  documents  that  such  Loan  Party  shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.               (b)    Further,  the  Administrative  Agent  may  (and  is  hereby  irrevocably  authorized  by each  Lender  to),  upon  the  request  of  the  Borrower,  release  any  Subsidiary  Guarantor  from  its  obligations under   the   Loan   Guaranty   if   such   Subsidiary   Guarantor   is   no   longer   a   Material   Domestic Subsidiary. [Reserved].               (c)    At such time as the principal and interest on the Loans, all LC Disbursements, the fees, expenses and other amounts payable under the Loan Documents and the other Secured Obligations (other than Swap Agreement Obligations, Banking Services Obligations, and other Obligations expressly stated to survive such payment and termination) shall have been paid in full in cash, all Unliquidated Obligations shall have been cash collateralized in a manner satisfactory to each affected Lender, all of the Revolving Commitments shall have been terminated and no Letters of Credit shall be outstanding, the Loan Guaranty and all obligations (other than those expressly stated to survive such termination) of each Subsidiary Guarantor hereunder shall automatically terminate, all without delivery of any instrument or performance of any act by any Person.         SECTION 10.09    Taxes .  Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law.  If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such  withholding  (including  such  withholding  applicable  to  additional  amounts  payable  under  this                                             145

 

       IN  WITNESS  WHEREOF   , the  parties  hereto  have  caused  this  Agreement  to  be  duly  executed by their respective authorized officers as of the day and year first above written.                                          BORROWER    :                                          FARMER BROS. CO.   ,                                         a Delaware corporation, as  Borrower                                          By _________________________                                           Name:                                           Title:                        [Signature Pages on File with Administrative Agent]                                          OTHER LOAN PARTIES     :                                          CHINA MIST BRANDS, INC.   ,                                         a Delaware corporation                                         By _________________________                                           Name:                                           Title:                                         BOYD ASSETS CO.   ,                                         a Delaware corporation                                          By _________________________                                           Name:                                           Title:                                         COFFEE BEAN INTERNATIONAL, INC.      ,                                         an Oregon corporation                                          By _________________________                                           Name:                                            Title:                                          FBC FINANCE COMPANY      ,                                         a California corporation                                         By _________________________                                           Name:                                            Title:                                          COFFEE BEAN HOLDING CO., INC.     ,                                         a Delaware corporation                                         By _________________________                                           Name:                                           Title:   [Signature page to Credit Agreement]

 

              JPMORGAN CHASE BANK, N.A.     , as a Lender,               Administrative Agent, Issuing Bank, and Swingline               Lender                By  _________________________                  Name:                  Title:   [Signature page to Credit Agreement]                 149

 

              CITIBANK, N.A. , as a Lender                By  _________________________                  Name:                  Title:   [Signature page to Credit Agreement]                 150

 

              PNC BANK, NATIONAL ASSOCIATION       , as a               Lender                By  _________________________                  Name:                  Title:   [Signature page to Credit Agreement]                 151

 

              BANK OF AMERICA, N.A.   , as a Lender                By  _________________________                  Name:                  Title:   [Signature page to Credit Agreement]                 152

 

              REGIONS BANK    , as a Lender                By  _________________________                  Name:                  Title:   [Signature page to Credit Agreement]                 153

 

              SUNTRUST BANK    , as a Lender                By  _________________________                  Name:                  Title:   [Signature page to Credit Agreement]                 154

 

                                SCHEDULE 2.01A                            REVOLVING COMMITMENTS  LENDER                                                        REVOLVING                                                              COMMITMENT  JPMORGAN CHASE BANK, N.A.                                    $29,166,666.68 CITIBANK, N.A.                                               $20,833,333.33 PNC BANK, NATIONAL ASSOCIATION                               $20,833,333.33 BANK OF AMERICA, N.A.                                        $20,833,333.33 REGIONS BANK                                                 $20,833,333.33 SUNTRUST BANK    ADVANTAGE CAPITAL                           $12,500,000.00 MANAGEMENT LLC - HAYMARKET INSURANCE COMPANY  AGGREGATE REVOLVING COMMITMENTS                              $125,000,000.00

 

                                         EXHIBIT B                            FORM OF COMPLIANCE CERTIFICATE   To:    The Lenders party to the         Credit Agreement described below         This Compliance Certificate (this “Certificate”), for the period ended [____], is furnished pursuant  to that certain Amended and Restated Credit Agreement dated as of November 6, 2018 (as amended,  modified, renewed or extended from time to time, the “Agreement”) among Farmer Bros. Co., a Delaware  corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto from time to  time and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders and as Issuing Bank and  Swingline Lender.  Unless otherwise defined herein, capitalized terms used in this Certificate have the  meanings ascribed thereto in the Agreement.         THE UNDERSIGNED HEREBY CERTIFIES AS OF THE DATE HEREOF THAT:    1.     I am the [____] of the Borrower and I am authorized to deliver this Certificate on behalf of the        Borrower;   2.     I have reviewed the terms of the Agreement and I have made, or have caused to be made under my         supervision, a detailed review of the compliance of the Borrower with the Agreement during the         accounting period covered by the attached financial statements (the “Relevant Period”) [for        quarterly financial statements add: and such financial statements present fairly in all material        respects the financial condition and results of operations of the Borrower and its consolidated        Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to        normal year-end audit adjustments and the absence of footnotes];   3.     The examinations described in paragraph 2 did not disclose and I have no knowledge of [(except         as set forth below)] the existence of any condition or event which constitutes a Default during or at         the end of the Relevant Period or as of the date of this Certificate;   4.     Schedule I attached hereto sets forth financial data and computations demonstrating the Borrower’s        compliance with Section 6.12 of the Agreement;1 and         [Described below are the exceptions, if any, referred to in paragraph 3 hereof by listing, in detail,  the nature of the condition or event, the period during which it has existed and the action which the Borrower  has taken, is taking, or proposes to take with respect to each such condition or event:         ______________________________________________________________________________        ______________________________________________________________________________        _____________________________________________________________________________]         The foregoing certifications, together with the computations set forth in Schedule I and Schedule  II hereto and the financial statements delivered with this Certificate in support hereof, are made and  delivered this      day of               ,        .                               1 NTD: Prior to 09/30/2021, the only financial covenants that will be subject to computations required by paragraph  4 of this compliance certificate are those set forth in Section 6.12(d) and (e) of the Credit Agreement.     

 

                                  By:                                          Name:                                     Title:                                                  

 

                               Schedule I to Compliance Certificate                                  Compliance as of [____] with                           Provisions of Section 6.12 of the Agreement   The computations set forth in this Schedule I are designed to facilitate the calculation of financial covenants  and certain other provisions in the Agreement relating to the information set forth in the Borrower’s  consolidated financial statements delivered with this Certificate.  The computations set forth in this  Schedule I have been made in accordance with GAAP.  The use of abbreviated terminology and/or  descriptions in the computations below are not in any way intended to override or eliminate the more  detailed descriptions for such computations set forth in the relevant provisions of the Agreement, all of  which shall be deemed to control.  In addition, the failure to identify any specific provisions or terms of the  Agreement in this Schedule I does not in any way affect their applicability during the periods covered by  such financial statements or otherwise, which shall in all cases be governed by the Agreement.                                                                           A.  EBITDA for the relevant Test Period1                                                                                                                     With reference to any period:                                                                                                                   (i) Net Income for such period                            $____________                                                                                                       plus, without duplication and to the extent deducted in                determining Net Income for such period, the sum of:                                                                                                                           (ii) Consolidated Interest Expense for such period      + $____________                                                                                                       (iii) income tax expense for such period net of tax refunds for                such period                                             + $____________                                                                                                       (iv) depreciation expense for such period               + $____________                                                                                                       (v) amortization expense for such period                + $____________                                                                                                       (vi) any unusual or non-recurring non-cash charges for such                period                                                  + $____________                (vii) any other non-cash charges for such period (but excluding                any non-cash charge in respect of an item that was included in                Net Income in a prior period and any non-cash charge that relates                to the write-down or write-off of inventory)            + $____________                               1 To be calculated by reference to the most recently delivered financial statements under the Credit Agreement.     

 

                                                                                          (viii) non-cash exchange, translation, or performance losses  relating to any hedging transactions or foreign currency  fluctuations                                            + $____________                                                                           (ix) unusual or non-recurring cash charges, expenses or losses not  described in A.(x) below                                + $____________                                                                           (x) unusual or non-recurring cash charges, expenses or losses  related to strategic initiatives, business optimization and  restructurings in connection with Project Evolution (including,  without limitation, severance costs, relocation costs (including the  relocation of the Borrower’s corporate headquarters from the  Torrance Facility), integration costs, opening, pre-opening,  closing and transition costs for facilities and distribution centers,  signing costs, retention or completion bonuses, restructuring  charges, systems establishment costs, curtailments or  modifications to pension and retirement benefit plans and contract  termination costs                                       + $____________                                                                           (xi) [reserved]                                                                                                                                    (xii) any equity-based or non-cash compensation charge or  expense, including any such charge or expense arising from the  grants of stock appreciation or similar rights, stock options,  restricted stock, profits interests or other rights or equity-based  incentive programs (“equity incentives”) or any other equity- based compensation and any one-time cash charges or expenses  associated with the equity incentives or other long-term incentive  compensation plans (including under deferred compensation  arrangements)                                           + $____________                                                                           (xiii) any fees and expenses incurred during such period  (including, without limitation, any premiums, make-whole or  penalty payments), or any amortization thereof for such period, in  connection with any Permitted Acquisition or amendment or  other modification of any Loan Document (in each case,  including (1) any such transaction consummated on or prior to the  Third Amendment Effective Date, but excluding any Permitted  Acquisition that is not consummated, and (2) advisory fees, field  examiner expenses, appraiser expenses, mortgage related fees and  expenses, and similar fees and expenses, in each case incurred in  connection with the performance of the obligations of the Loan  Parties hereunder and under the other Loan Documents, whether  incurred by a Loan Party or, to the extent actually reimbursed (or                                                          + $____________  required to be reimbursed under the Agreement or the other                  

 

                 Loan Documents, without duplication of any amounts actually  reimbursed) by the Borrower and its Subsidiaries, by the  Administrative Agent or a Lender) and any charges or non- recurring merger costs incurred during such period as a result of  any such consummated Permitted Acquisition                                                                           (xiv) the amount of any restructuring charges or reserves, equity- based or non-cash compensation charges or expenses, including  any such charges or expenses arising from grants of stock  appreciation or similar rights, stock options, restricted stock or  other rights, retention charges (including charges or expenses in  respect of incentive plans), start-up or initial costs for any project  or new production line, division or new line of business or other  business optimization expenses or reserves including, without  limitation, costs or reserves associated with improvements to  information technology and accounting functions, integration and  facilities opening costs or any one-time costs, in each case  incurred in connection with acquisitions, divestitures, other  specified transactions, restructurings, cost savings initiatives and  other initiatives occurring after the Effective Date    + $____________                                                                           (xv) solely in the case of any Test Period ending on or prior to  September 30, 2020, the amount of “run rate” cost savings,  operating enhancements, operating expense reductions and  synergies (collectively, the “Cost Savings”) related to Permitted  Acquisitions, restructurings, cost savings initiatives and other  initiatives occurring after the Effective Date, in each case,  projected by the Borrower in good faith to result from actions  which have been taken or with respect to which substantial steps  have been taken or are expected to be taken (in the good faith  determination of the Borrower) within twelve (12) months after  such transaction or initiative is consummated (which Cost  Savings shall be calculated on a pro forma basis as though such  Cost Savings had been realized on the first day of the applicable  Test Period), net of the amount of actual benefits realized during  such Test Period from such actions; provided that a Financial  Officer of the Borrower shall have certified to the Administrative  Agent that, in the good faith determination of the Borrower, such  Cost Savings are (x) reasonably identifiable and factually  supportable and (y) reasonably anticipated to result from actions  which have been taken or with respect to which substantial steps  have been taken or are expected to be taken within twelve (12)  months after such transaction or initiative is consummated;  provided, further, that such Cost Savings added back to EBITDA  pursuant to this clause (xv) for any Test Period ending March 31,  2020, June 30, 2020 or September 30, 2020 shall not exceed an  aggregate amount equal to the least of (x) 15% of EBITDA,  calculated prior to giving effect to this clause (xv), for such Test                                                          + $____________  Period, (y) an amount equal to the amount of Cost Savings                  

 

                 actually realized by the Borrower and its Subsidiaries during such                Test Period and (z) (A) for the Test Period ending March 31,                2020, $2,000,000, (B) for the Test Period ending June 30, 2020,                $600,000 and (C) for the Test Period ending September 30, 2020,                $50,000, as applicable (it being understood and agreed that no                amounts may be added back to EBITDA pursuant to this clause                (xv) for any Test Period ending after September 30, 2020)                                                                                                       minus, without duplication and to the extent included in Net                Income for such period,                                                                                                                                                       (xvi) any cash payments made during such period in respect of                non-cash charges described in A.(vii) taken in a prior period – $____________                                                                                                       (xvii) any unusual or non-recurring cash gains and any non-cash                items of income for such period                         – $____________                                                                                                       (xviii) exchange, translation, or performance gains relating to any                hedging transactions or foreign currency fluctuations   – $____________                                                                                                       (xix) EBITDA for such Test Period (aggregate of A.(i) through                A.(xviii))2                                             = $____________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  B.  Fixed Charge Coverage Ratio                                                                     (i) expenses for taxes paid in cash during such Test Period $____________                                                                                                                       2 For purposes of the Fixed Charge Coverage Ratio, EBITDA (x) for the Test Period ending September 30, 2021 shall  be computed by multiplying EBITDA for the period beginning July 1, 2021 and ending September 30, 2021 by four  (4), (y) for the Test Period ending December 31, 2021 shall be computed by multiplying EBITDA for the period  beginning July 1, 2021 and ending December 31, 2021 by two (2), and (z) for the Test Period ending March 31, 2022  shall be computed by multiplying EBITDA for the period beginning July 1, 2021 and ending March 31, 2022 by four  thirds (4/3).     

 

                   (ii) 50% of depreciation for such Test Period                                                            $____________      (iii) Restricted Payments made in cash during such Test Period                                                            $____________  (iv) EBITDA for the relevant Test Period (from A.(xix) above) $____________                                                                           (v) Fixed Charges for such Test Period                    $____________                                                                           (vi) Numerator (B.(iv), minus B.(i), minus B.(ii), minus B.(iii)) $____________                                                                           (vii) Fixed Charge Coverage Ratio (ratio of (x) B.(vi) to     ___ to 1.00  (y) B.(v))                                                                           Minimum Fixed Charge Coverage Ratio permitted under          1.05 to 1.00  Section 6.12(a) then in effect                                                                           In compliance?                                             Yes/No (select                                                                     one)                                   

 

                        EXHIBIT C   Credit Agreement Schedules         [See attached.]                   

 

                                                                                                            SCHEDULE 1.01F                                               Farmer Bros. Co. Trademarks      FARMER BROTHERS  (Stylized in Football Logo)                                                   United                                    08-                                                              Farmer                                            18-Sep-    Renewal due:                                   Registered     States of                77060582        Dec-     3293093                                                               Bros. Co.                                            2007    9/18/2027                                                  America                                  2006      FARMER BROTHERS  COFFEE (Stylized)                                                       United                                    05-                                                              Farmer                                             04-Oct-   Renewal due:                                   Registered     States of                78323502        Nov-     3003644                                                               Bros. Co.                                            2005    10/4/2025                                                  America                                  2003                                                                                                                                                                                                                                                                               United                                    02-                             Renewal due:                                   Registered                  Farmer                                           25-Aug- FARMER BROTHERS                                 States of                86270545        May-    4797825                  8/25/2025                                                               Bros. Co.                                        2015                                                  America                                  2014                                   

 

                                                                     SCHEDULE 3.06                             Disclosed Matters   1.  On August 31, 2012, Council for Education and Research on Toxics (“CERT”) filed an     amendment to a private enforcement action adding a number of companies as defendants,     including  the  Borrower’s  subsidiary,  Coffee  Bean  International,  Inc.,  an  Oregon     corporation, which sell coffee in California under the State of California's Safe Drinking     Water  and  Toxic  Enforcement  Act  of  1986,  also  known  as  Proposition  65.  The  suit     alleges  that  the  defendants  have  failed  to  issue  clear  and  reasonable  warnings  in     accordance with Proposition 65 that the coffee they produce, distribute, and sell contains     acrylamide. This lawsuit was filed in Los Angeles Superior Court (the “Court”). CERT     has demanded that the alleged violators remove acrylamide from their coffee or provide     Proposition 65 warnings on their products and pay $2,500 per day for each and every     violation while they are in violation of Proposition 65.     The Borrower has joined a Joint Defense Group (the “JDG”), and, along with the other     co-defendants,  has  answered  the  complaint,  denying,  generally,  the  allegations  of  the     complaint, including the claimed violation of Proposition 65 and further denying CERT’s     right to any relief or damages, including the right to require a warning on products. The     JDG  contends  that  based  on  proper  scientific  analysis  and  proper  application  of  the     standards set forth in Proposition 65, exposures to acrylamide from the coffee products     pose no significant risk of cancer and, thus, these exposures are exempt from Proposition     65’s warning requirement.          This  Schedule  3.06  is  qualified  in  its  entirety  by reference  to  the  Borrower’s  public     filings, including with respect to litigation, which are hereby incorporated by reference.                                                                                                                                                             

 

                                                                         SCHEDULE 3.15                               Capitalization and Subsidiaries       Subsidiary        Type of    Jurisdiction Subsidiary          Ownership                        Entity                 Guarantor                                                          100% owned by Farmer Bros. Co., a  FBC Finance Company  Corporation  California  Yes                                                         Delaware corporation  Coffee Bean Holding                                    100% owned by Farmer Bros. Co., a                      Corporation  Delaware    Yes  Co., Inc.                                              Delaware corporation                                                         100% owned by Farmer Bros. Co., a  China Mist Brands, Inc.  Corporation  Delaware  Yes                                                         Delaware corporation                                                         100% owned by Farmer Bros. Co., a  Boyd Assets Co.     Corporation  Delaware    Yes                                                         Delaware corporation                      Limited  Coffee Bean                                            100% owned by Farmer Bros. Co., a                      Liability   Delaware     No  International LLC                                      Delaware corporation                      Company   Coffee Bean                                            100% owned by Coffee Bean Holding                      Corporation  Oregon      Yes  International, Inc.                                    Co., Inc., a Delaware corporation     

 

                                                                                      SCHEDULE 6.01                                   Existing Indebtedness                                        Remaining                                      Payments as of      Borrower          Lender           6/30/20       Maturity Date     Description                                                                      Farmer Bros. Co.  Penske         8,844                    8/31/2020  Vehicles                                                                  Farmer Bros. Co.  VideoJet       145,419                  9/30/2024  Label printer                                                                    Farmer Bros. Co.  VideoJet       61,130                  10/31/2024  Label printer                                                                    Farmer Bros. Co.  VideoJet       88,996                   1/31/2025  Label printer                   

 

                                                                     SCHEDULE 6.02                              Existing Liens   1.  Security  interest  in  favor  of  Dell  Financial  Services  L.L.C.,  recorded  June  11,  2009,     against all computer equipment, peripherals, and other equipment leased by Farmer Bros.     Co.     2.  Security interest in favor of Cisco Systems Capital Corporation, recorded March 31, 2016     against certain computer equipment leased by Farmers Bros. Co.     3.  Security  interest  in  favor  of  Wells  Fargo  Bank,  N.A.,  recorded  September  13,  2017     against certain equipment leased by Farmer Bros. Co.     4.  Security interest in favor of IBM Credit LLC, recorded February 12, 2019 against certain     equipment leased by Farmer Bros. Co.                  

 

                                                                     SCHEDULE 6.04                            Existing Investments   1.  The Investments set forth on Schedule 3.15 are herein incorporated by reference.   2.  That certain Broker Agreement and Note, dated as of April 1, 2019, by and between the     Borrower and Florida Seminole Coffee Company, Inc.                               

 

                           EXHIBIT D   Form of Borrowing Base Certificate            [See attached.]                                     

 

                                                                                                                                                                                                                                                       Borrowing Base Certificate                                                                                                                                                                                                                                                        As of:                                                                                                                                  BORROWER NAME        Line                                                        Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.                                                               Line                                                                                                                                       ACCOUNTS        (1)      GROSS BOOK VALUE OF ACCOUNTS                                                                                                                                                                                                            (1)                   Less: Ineligible Accounts (enter as positive $ amounts)       (2)           Accounts more than 90 days past the due date in applicable invoice, in excess of $5,000,000 in the aggregate                                                                                                                       (2)       (3)           Accounts from any one Account Debtor to the extent such Accounts constitute more than 25% of all Eligible Accounts                                                                                                                 (3)       (4)           Accounts of any Account Debtor whenever more than 50% of the total amount outstanding for such Account Debtor is in Accounts                      unpaid for more than 90 days past the due date in the applicable invoice                                                                                                                                                           (4)       (5)           Accounts due from affiliates or which do not arise in the ordinary course of business                                                                                                                                              (5)       (6)           Accounts subject to claims, defenses, setoff or advance for the benefit of the Account Debtor, to the extent thereof                                                                                                               (6)       (7)           Accounts for which a reduction was made or were partially paid and unpaid portion is evidenced by a new receivable                                                                                                                 (7)       (8)           Accounts which relate to payments of interest, finance charges, or late charges                                                                                                                                                    (8)       (9)           Accounts owned by foreign Account Debtors (outside of United States and Canada) or owed in foreign currency                                                                                                                        (9)      (10)           Accounts for which a final and complete invoice has not been sent to the applicable Account Debtor or which have been billed more than once                                                                                       (10)      (11)           Accounts for which amounts due are for performance which is incomplete or for goods in which a third party has an ownership interest                                                                                              (11)      (12)           Accounts owed by U.S. or foreign governments/agencies unless specified conditions met                                                                                                                                             (12)      (13)           Accounts from debtors which law precludes Bank/Borrower from doing business                                                                                                                                                       (13)      (14)           Accounts of Account Debtors who have ceased operations, sold substantiall all assets, or have become subject of insolvency proceedings                                                                                            (14)      (15)           Other Ineligible Accounts                                                                                                                                                                                                         (15)      (16)         Total Ineligible Accounts                                                                                                                                                                                                           (16)      (17)      ELIGIBLE ACCOUNTS                                                                                                                                                                                                                      (17)      (18)         Borrowing base accounts receivable percentage                                                                                                                                                                               85%     (18)      (19)      ELIGIBLE ACCOUNTS BORROWING BASE                                                                                                                                                                                                       (19)     $                            -                                                                                                                                        INVENTORY                                                                                                                                                                             U.S. In Transit         Raw Materials           Finished Goods      (20)      INVENTORY                                                                                                                                                                                                                              (20)      (21)         Less: Ineligible Inventory (enter as a positive $ amount)                                                                                                                                                                           (21)      (22)           Inventory in transit in U.S. in excess of $5,000,000 (or otherwise not meeting specified conditions)                                                                                                                              (22)      (23)           Slow moving, discontinued, expired, obsolete, unsalable or unfit for further processing                                                                                                                                           (23)      (24)           Inventory which consists of spare parts, work in progress or otherwise not for sale in the ordinary course of business (exclusion                                                                                                 (24)                     does not apply to coffee brewing equipment) or which have been damaged, returned or reposessed      (25)           Subject to consignment or ownership interest of any third party                                                                                                                                                                   (25)      (26)           Located in any leased location, third party site or with a bailee (unless specified conditions met)                                                                                                                               (26)      (27)           Located outside of the U.S. (subject to line 21)                                                                                                                                                                                  (27)      (28)           Containing licensed intellectual property rights (subject to exceptions)                                                                                                                                                          (28)      (29)           Inventory consisting of equipment other than brewed and liquid coffee equipment                                                                                                                                                   (29)      (30)           Produced or acquired in violation of law or regulation                                                                                                                                                                            (30)      (31)           Other Ineligible Inventory                                                                                                                                                                                                        (31)      (32)         Total Ineligible Inventory                                                                                                                                                                                                          (32)      (33)      ELIGIBLE INVENTORY                                                                                                                                                                                                                     (33)      (34)         Borrowing base inventory percentage                                                                                                                                      50%                    50%                         50%     (34)      (35)      ELIGIBLE INVENTORY BORROWING BASE                                                                                                                                                                                                      (35)     $                            -                                                                                                                                           OTHER      (36)      OTHER                                                                                                                                                                                                                                  (36)                   Less: Ineligible Other (enter as a positive $ amount)      (37)           Other Ineligible (Example)                                                                                                                                                                                                        (37)      (38)      ELIGIBLE OTHER                                                                                                                                                                                                                        - (38)      (39)         Borrowing base inventory percentage                                                                                                                                                                                         50%     (39)      (40)      ELIGIBLE OTHER BORROWING BASE                                                                                                                                                                                                         - (40)    $                            -                                                                                                                           BORROWING BASE SUMMARY       (41)      BORROWING BASE SUBTOTAL                                                                                                                                                                                                                (41)                                  -       (43)         Plus: Maximum Overadvance Amount                                                                                                                                                                                                    (43)      (44)         Less: Rent reserve to be deducted, if applicable (enter as a positve $ amount)                                                                                                                                                      (44)      (45)         Less: Other amount(s) to be deducted from Borrowing Base, if any (enter as a positve $ amount)                                                                                                                                      (45)      (46)      BORROWING BASE                                                                                                                                                                                                                         (46)       (47)      Maximum Facility Amount                                                                                                                                                                                                                (47)      (48)      Maximum Available Amount              (Regardless of Borrowing Base, cannot exceeded Maximum Facility Amount)                                                                                                                          (48)      (49)         Outstanding principal as of date above                                                                                                                                                                                              (49)      (50)         Letters of Credit outstanding, and unreimbursed draws                                                                                                                                                                               (50)      (51)         Aggregate Outstanding Amount                                                                                                                                                                                                        (51)      (52)      BORROWING BASE AVAILABILITY (DEFICIENCY)                                                                                                                                                                                               (52)  The undersigned hereby certifies to JPMorgan Chase Bank, N.A. ("Bank") that (a) the information provided herein is true, correct, complete, and accurate as of the date above, and is prepared in a manner consistent with the Borrowing Base provisions of the Credit  Agreement and the other loan documents, (b) Borrower is currently in compliance with all terms, covenants, and conditions in the Credit Agreement between Bank and Borrower and in each of the other  loan documents, and all of Borrower's representations and  warranties in the Credit Agreement and the other loan documents are currently true and correct, and (c) no default or event of default has occurred and is currently continuing under the Credit Agreement or any of the other loan documents, or will occur after giving  effect to any Advance requested herewith.   Borrower hereby ratifies, confirms and affirms all of the terms, covenants, and conditions in the Credit Agreement between Bank and borrower and in each of the other loan documents.                  The undersigned agrees that in  the event of any conflict between this Borrowing Base Certificate and related provisions of the Credit Agreement and the other loan documents, the terms of the Credit Agreement and the other loan documents shall control.                                                                                                                                                                                                               Borrower:                                                                                                                                                                                                                     By:                                                                                                                                                                                                                            Printed Name                                                  Title                                                                                                                                                                                                         Date Signed: 

 

                           EXHIBIT E   Amendments to Security Agreement            [See attached.]                   

 

                                                                   CONFORMED COPY                          Incorporating Amendment No. 2 to Credit Agreement, dated March 5, 2020                                                                              EXHIBIT E                                                                     CONFORMED COPY                                       Incorporating Amendment No. 2, dated March 5, 2020; and                                                       Amendment No. 3, dated July 23, 2020            AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT         THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as the same may  be  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  this  “Security Agreement ”)  is  entered  into  as  of  November  6,  2018  by  and  among  Farmer  Bros.  Co.,  a  Delaware corporation  (the  “Borrower ”),  Boyd  Assets  Co.,  a  Delaware  corporation  (“Boyd   Assets ”),  China  Mist Brands,  Inc.,  a  Delaware  corporation  (“China   Mist ”),  Coffee  Bean  International,  Inc.,  an  Oregon corporation (“Coffee Bean ”), FBC Finance Company, a California corporation (“FBC ”), and Coffee Bean Holding Co., Inc., a Delaware corporation (“Coffee   Bean   Holdings ”, and together with the Borrower, Boyd Assets, China Mist, Coffee Bean, and FBC, each an “Initial  Grantor ”; the Initial Grantors, together with any additional Subsidiaries, whether now existing or hereafter formed or acquired which become parties  to  this  Security  Agreement  from  time  to  time,  in  accordance  with  the  terms  of  the  Credit Agreement (as defined below), by executing a Supplement hereto in substantially the form of Annex  I (each, a “Security  Agreement  Supplement ”), collectively, the “Grantors ”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative  Agent ”) for itself and for the Secured Parties (as defined in the Credit Agreement identified below).                               PRELIMINARY STATEMENTS         WHEREAS,  the  Initial  Grantors,  the  Lenders  party  thereto  and  the  Administrative  Agent  are entering into an Amended and Restated Credit Agreement dated as of November 6, 2018 (as the same may  be  amended,  restated,  supplemented  or  otherwise  modified  from  time  to  time,  the  “Credit Agreement ”), which  Credit  Agreement  amends  and  restates  in  its  entirety  the  Existing  Credit  Agreement (as defined in the Credit Agreement) ;         WHEREAS,   the  Credit  Agreement,  among  other  things,  re-evidences  the  Borrower’s  outstanding obligations   under   the   Existing   Credit   Agreement   and  provides,  subject  to  the  terms  and  conditions thereof, for extensions of credit and other financial accommodations to be made by the Lenders to or for the benefit of the Borrower ;         WHEREAS,    as   a   condition   precedent   to   the   effectiveness   of   the   Existing   Credit   Agreement, certain  of  the  Initial  Grantors  entered  into  the  Pledge  and  Security  Agreement,  dated  as  of  March  2,  2015 with  the  Administrative  Agent  (as  amended,  restated,  supplemented  or  otherwise  modified  prior  to  the date hereof, the “ Existing Security Agreement ”); and         WHEREAS, the Initial Grantors wish to reaffirm their obligations under the Existing Security Agreement, amend and restate the Existing Security Agreement and continue to secure their obligations to the Secured Parties pursuant to the terms of this Security Agreement;         ACCORDINGLY, to induce the Administrative Agent and the Lenders to enter into and extend credit to the Borrower under the Credit Agreement, the Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:   - 254669812v.1ACTIVE 254669812v.9

 

                                      ARTICLE I                                     DEFINITIONS        1.1.   Terms  Defined  in  Credit  Agreement .  All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.        1.2.   Terms  Defined  in  UCC .  The following terms are used herein as defined in Article 9 of the UCC:  Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Farm Products, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights,  Supporting  Obligations  and  Tangible  Chattel  Paper.   The  terms  “Securities”  and  “Securities Accounts” are used herein as defined in Article 8 of the UCC.         1.3.  Definitions   of   Certain   Terms   Used   Herein .   As  used  in  this  Security  Agreement,  in addition to the terms defined above and in the Preliminary Statements, the following terms shall have the following meanings:         “Article ”  means  a  numbered  article  of  this  Security  Agreement,  unless  another  document  is specifically referenced.         “Collateral ” shall have the meaning set forth in Article II .        “Collateral   Access   Agreement ”  means  any  landlord  waiver  or  other  agreement,  in form  and substance reasonably  satisfactory  to  the  Administrative  Agent   in   its   Permitted   Discretion ,  among  the Administrative  Agent,  the  applicable  Grantor  and  any  third  party  (including  any  bailee,  consignee, customs  broker,  or  other  similar  Person)  in  possession  of  any  Collateral  or  any  landlord  of  any  real property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, supplemented or otherwise modified from time to time.         “Collateral  License ” means any written inbound license or agreement under which a Grantor is authorized to use intellectual property in connection with any manufacture, marketing, distribution or disposition of Inventory.        “Collateral  Report ” means any certificate  (including  any  Borrowing  Base  Certificate) , report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.         “Control ” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.         “Copyright  Security  Agreement ” means each Copyright Security Agreement, substantially in the form  attached  as  Exhibit J ,  executed  and  delivered  by  the  Grantors,  or  any  of  them,  and  the Administrative Agent.         “Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:  (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright  registrations,  and  copyright  applications;  (b) all  renewals  of  any  of  the  foregoing;  (c) all income,  royalties,  damages,  and  payments  now  or  hereafter  due  and/or  payable  under  any  of  the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.                                             2- -

 

       “Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.         “Deposit  Account  Control  Agreement ” means an agreement, in form and substance reasonably satisfactory  to  the  Administrative  Agent   in   its   Permitted   Discretion ,  among  any  Grantor,  a  banking institution holding such Grantor’s funds, and the Administrative  Agent  with  respect  to  collection  and control of all deposits and balances held in a deposit  account  maintained  by  such  Grantor  with  such banking institution.         “Excluded  Accounts ” means  a , collectively,  Deposit Account Accounts  and/ or Securities Account containing not more than $50,000 at any one time; provided , however , that the aggregate amount of funds and  the  fair  market  value  of  all  other  assets  contained  in  Accounts  having  a  30-day  average  balance  of less  than  $100,000  in  the  aggregate  for  all such Deposit Accounts and/ or Securities Accounts  referred  to above shall not exceed $ 250,000 at any one time .         “Excluded  Collateral ” means, collectively, (a) [intentionally  omitted],  (b)  Intentionally Omitted, (b)  voting  Equity  Interests  of  any  CFC  or  Domestic  Subsidiary  HoldCo,  solely  to  the  extent  that  (i)  such Equity   Interests   represent   more   than   65%   of   the   outstanding   voting   Equity   Interests   of   such   CFC   or Domestic  Subsidiary  HoldCo,  and  (ii)  pledging  or  hypothecating  more  than  65%  of  the  total  outstanding voting   Equity   Interests   of   such   CFC   or   Domestic   Subsidiary   HoldCo   would   result   in   adverse   tax consequences  (as  reasonably  determined  by  the  Borrower  in  consultation  with  the  Administrative  Agent ) or the costs to any of the Grantors of providing such pledge are unreasonably excessive (as determined by the   Administrative   Agent   in  consultation   with   the   Borrower)   in   relation   to   the   benefits   to   the Administrative  Agent,  the  other  Lenders  of  the  security  afforded  thereby  (which  pledge,  if  reasonably requested   by   the   Administrative   Agent,   shall   be   governed   by   the   laws   of   the   jurisdiction  of   such Subsidiary); (c) any rights or interest in any contract, lease, permit, license, or license agreement covering real or personal property if under the terms of such contract, lease, permit, license, or license agreement, or  applicable  law  with  respect  thereto, the grant of a security interest or lien therein is prohibited  or restricted  as  a  matter  of  law  or  under  the  terms  of  such  contract,  lease,  permit,  license,  or  license agreement, or would invalidate any such contract, lease, permit, license or license agreement, and such prohibition or restriction has not been waived or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided  that, (i) the foregoing exclusions of this clause (c) shall in no way be construed (A) to apply to the extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC or other applicable law, or  (B) to  apply  to  the  extent  that  any  consent  or  waiver  has  been  obtained  that  would  permit  the Administrative Agent’s security interest or lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement and (ii) the foregoing exclusions of clauses  (b)  and this  clause  (c) shall in no way be construed to limit, impair, or otherwise affect any of the Administrative Agent’s or any Lender’s continuing security interests in and liens upon any rights or interests  of  any  Grantor  in  or  to  (A) monies  due  or  to  become  due  under  or  in  connection  with  any described contract, lease, permit, license, license agreement, or Equity Interests (including any Accounts or Equity Interests), or (B) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, or Equity Interests); (d) any United States intent-to-use trademark or service mark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of a registration issuing from such intent-to-use  trademark  or  service  mark  applications  under  applicable  federal  law,  provided  that  upon submission and acceptance by the United States Patent and Trademark Office of an amendment to allege use pursuant to 15 U.S.C. Section 1051(c) or a statement of use pursuant to 15 U.S.C. Section 1051(d) (or any successor provisions), such intent-to-use trademark or service mark application shall be considered                                             3- -

 

Collateral; (e) [intentionally omitted]; (f) motor vehicles, aircraft and other assets subject to certificates of title; (g) Excluded Deposit and Securities Accounts; and (h) margin stock (as defined in Regulation U).         “Excluded   Deposit   and   Securities   Accounts ”  means  the  collective  reference  to:  (a) Deposit Accounts of Grantors specially and exclusively used for payroll, payroll taxes, trust or fiduciary purposes and other employee wage and benefit payments to or for  the  Grantors’  employees  (provided   that  the amount  on deposit in such accounts does not exceed the then current amount of such payroll, payroll taxes  and  other  employee  wage  and  benefit  obligations),  and  (b) Deposit  Accounts  specially  and exclusively used for taxes, including sales taxes (provided  that the amount on deposit in such accounts does not exceed the then current amount of such tax obligations).         “Exhibit ”  refers  to  a  specific  exhibit  to  this  Security  Agreement,  unless  another  document  is specifically referenced.        “Fixtures ” shall have the meaning set forth in Article 9 of the UCC.         “Gem  Note”  means  that  certain  Broker  Agreement  and  Note  dated  as  of  April  1,  2019 , by  and between  the Borrower and Florida Seminole Coffee Company, Inc.         “Lenders ” means the lenders party to the Credit Agreement and their successors and assigns.         “Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to  (a) any  and  all  written  licensing  agreements  or other  grants  of  rights  with  respect  to  its  Patents, Copyrights, or Trademarks, (b) 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 (c) all rights to sue for past, present, and future breaches thereof.         “Patent   Security   Agreement ”  shall  mean  each  Patent  Security  Agreement,  substantially  in  the form  attached  as  Exhibit K ,  executed  and  delivered  by  the  Grantors,  or  any  of  them,  and  the Administrative Agent.         “Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to:  (a) any and all patents and patent applications; (b) all inventions and improvements claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) 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 infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.        “Pledged   Collateral ”  means  all  Instruments,  Securities  and  other  Investment  Property  of  the Grantors to the extent constituting Collateral, whether or not physically delivered to the Administrative Agent pursuant to this Security Agreement.         “Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.         “Section ”  means  a  numbered  section  of  this  Security  Agreement,  unless  another  document  is specifically referenced.        “Stock   Rights ”  means  all  dividends,  instruments  or  other  distributions  and  any  other  right  or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever                                            4- -

 

invoices  and  Collateral  Reports  with  respect  thereto  furnished  to  the  Administrative  Agent  by  such Grantor from time to time.               (b)    As of the Effective Date, no Grantor has any Collateral evidenced or represented by any Tangible Chattel Paper in excess of $250,000 individually or $500,000 in the aggregate other than the Tangible Chattel Paper listed on Exhibit C .  All action required under Section 4.4  of this Security Agreement has been duly taken by such Grantor.               (c)    As   to   Accounts   of  the   Borrower  and   the   Domestic   Subsidiary   Guarantors included   as   Eligible   Accounts  in   the  Borrowing   Base   Certificate   most   recently  delivered   to   the Administrative  Agent  pursuant  to  Section  5.01(h)  of  the  Credit  Agreement,  except  (x)  as  disclosed  on  the most  recent  Collateral  Report  and  (y)  as  it  relates  to  any  eligibility  criteria  subject  to  the  Administrative Agent’s  discretion,  (i) to  each  Grantor’s  knowledge,  such  Accounts  are  Eligible  Accounts  and  (ii) such Accounts   represent   bona fide   sales   of   Inventory   or   rendering   of   services   to   Account   Debtors   in   the ordinary course of such Grantor’s business.               (d)    In  addition,  to  each  Grantor’s  knowledge,  with  respect  to  all  of  its  Accounts,  the amounts  shown  on  all  invoices,  statements  and  Collateral  Reports  with  respect  thereto  are  actually  and absolutely owing to such Grantor as indicated thereon and are not  in any way contingent.        3.9.   Inventory .  All Inventory of such Grantor (i) is of good and merchantable quality and free from known defects (other than defects arising in the ordinary course of such Grantor’s business) except , solely in the case of (x) any Inventory that was not identified by the Borrower as Eligible Inventory in the most  recent  Collateral  Report  and  (y)  as  it  relates  to  any  eligibility  criteria  subject  to  the  Administrative Agent’s  discretion,  to the extent the failure of which would not reasonably be expected to have a Material Adverse Effect, (ii) as of the Effective Date, is (other than Inventory in transit) located at one of such Grantor’s  locations  set  forth  on  Exhibit A   or  at  any  other  location  permitted  by  Section 4.1(g) ,  and (iii) has been produced in all material respects in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.        3.10.  Intellectual  Property .  As of the Effective Date, such Grantor does not have any interest in, or title to, any registered Patent, Trademark or Copyright (or application for such registration) except as  set  forth  in  Exhibit D .   This  Security  Agreement  and  each  Copyright  Security  Agreement,  Patent Security Agreement and Trademark Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H , Copyright Security Agreements with the United States Copyright Office,  and  Patent  Security  Agreements  and  Trademark Security Agreements with the United States Patent and Trademark Office, perfected first priority security interests (subject only to Liens permitted by Section 4.1(e) ) in favor of the Administrative Agent on such Grantor’s  United  States  Patents,  Trademarks  and  Copyrights  and  such  perfected  security  interests  are enforceable in accordance with their terms as such as against any and all creditors of and purchasers from such Grantor subject to applicable bankruptcy law and general principles of equity.         3.11. Filing  Requirements .  None of the Collateral owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except:  (a) for Patents, Trademarks and  Copyrights  held  by  such  Grantor  and  described  in  Exhibit D ;  (b) for  Patents,  Trademarks  and Copyrights  acquired  after  the date   hereof Effective   Date   and  disclosed  to  Administrative  Agent  in accordance  with  Section 4.7(c) ;  and  (c) to  the  extent  notified  in  writing  to  the Administrative  Agent within  five  (5) Business  Days  of  any  Grantor  acquiring  any  such  assets.   Notwithstanding  anything contained in the Loan Documents to the contrary, no Grantor shall be required to take any action required                                             8- -

 

                                     ARTICLE IV                                      COVENANTS        From  the  date  of  this  Security  Agreement  and  thereafter  until  this  Security  Agreement  is terminated pursuant to the terms hereof, each of the Initial Grantors agrees that, and from and after the effective date of any Security Agreement Supplement applicable to any Grantor (and after giving effect to supplements to each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Security Agreement Supplement) and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each such subsequent Grantor agrees that:         4.1.  General .               (a)    Collateral Records .  Such Grantor will maintain complete and accurate books and records  with  respect  to  the  Collateral  owned  by  it consistent  with  past  practices,  and  furnish  to  the Administrative Agent, with sufficient copies for each of the Secured Parties, such reports relating to such Collateral as the Administrative Agent shall from time to time reasonably request.               (b)    Authorization  to  File  Financing  Statements;  Ratification .  Such Grantor hereby authorizes the Administrative Agent to file, and if requested (subject to the exceptions and qualifications otherwise set forth herein and in any other Loan Document) will deliver to the Administrative Agent, all financing  statements  and  other  documents  and  take  such  other  actions  as  may  from  time  to  time reasonably  be  requested  by  the  Administrative  Agent  in  order  to  maintain  a  first  priority  perfected security interest in and, if applicable, Control of, the Collateral owned by such Grantor, subject to Liens permitted under Section 4.1(e) , provided  that nothing herein shall be deemed to constitute an agreement to subordinate any of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise  permitted  under  Section 4.1(e) .  Any financing statement filed by the Administrative  Agent may  be  filed  in  such  offices  as  the  Administrative Agent  reasonably  determines  to  be  appropriate  to perfect  the  security  interest  of  the  Administrative  Agent  under  this  Security  Agreement  and  may (i) indicate  or  describe  such  Grantor’s  Collateral (1) as all assets of such Grantor or words of similar effect,  regardless  of  whether  any  particular  asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment,  including  whether  such  Grantor  is  an  organization,  and  the  type  of  such  Grantor’s organization.   Such  Grantor  also  agrees  to  furnish any  such  information  described  in  the  foregoing sentence to the Administrative Agent promptly upon request.  Such Grantor also ratifies its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof Effective Date .               (c)    Further   Assurances .   Such  Grantor  also  agrees  to  take  any  and  all  actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder.               (d)    Disposition  of  Collateral .  Such Grantor will not sell, lease or otherwise dispose of the Collateral owned by it except for Dispositions specifically permitted pursuant to Section 6.05 of the Credit Agreement.               (e)    Liens .  Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Security Agreement, and (ii) other Liens  permitted  under  Section 6.02  of  the  Credit  Agreement;  provided ,  that  nothing  herein  shall  be                                            10 - -

 

deemed to constitute an agreement to subordinate any of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise permitted under Section 6.02 of the Credit Agreement.               (f)    Other  Financing  Statements .  Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except for  financing  statements  (i) naming  the  Administrative  Agent  on  behalf  of  the  Secured  Parties  as  the secured party, and (ii) in respect to other Liens permitted by Section 4.1(e) .  Such Grantor acknowledges that it is not authorized to file any financing statement covering all or any portion of the Collateral, or any amendment  or  termination  statement  with  respect  to any  financing  statement  referred  to  in  clause (i), above, without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.               (g)    Locations.    Such   Grantor   will   not   (i) maintain   any   Collateral   (other   than Collateral  in  transit  in  the  ordinary  course  of  business)  owned  by  it  in  an  amount  in  excess  of  $1,000,000 in   value   for   all   such   Collateral   at   any   location   other   than   (x) those   locations   listed   on   Exhibit A   and (y) any  locations  notified  to  the  Administrative  Agent  in  a  report  delivered  at  the  time  of  submission  to the   Administrative   Agent   of   the   next   Borrowing   Base   Certificate  in   accordance   with   the   terms   of   the Credit  Agreement  ( and  such  Grantor  will  concurrently  therewith  obtain  a  Collateral  Access  Agreement for each such location to the extent required by Section 4.13), (ii) change its principal place of business or chief  executive  office  from  the  location  identified  on  Exhibit A,  other  than  as  permitted  by  Section 4.15 or (iii) maintain any tangible Collateral  at any locations outside of the United States.         4.2.  Receivables .               (a)    Certain   Agreements   on   Receivables .  Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept  in  satisfaction  of  a  Receivable  less  than  the  original  amount  thereof,  except  that,  prior  to  the occurrence of an Event of Default  that  is  continuing , such Grantor may reduce the amount of Accounts arising from the sale of Inventory or the rendering of services in accordance with its present policies and in the ordinary course of business and as otherwise permitted under the Credit Agreement.               (b)    Collection   of   Receivables .   Except  as  otherwise  provided  in  this  Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor under the Receivables owned by it in accordance with past practice and in the ordinary course of business.               (c)    Electronic   Chattel   Paper .   Such  Grantor  shall  take  all  steps  requested  by  the Administrative  Agent  in  its  reasonable  discretion  to  grant  the  Administrative  Agent  Control  of  all electronic chattel paper valued in excess of $500,000 in the aggregate for all such electronic chattel paper in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.               (d)    Delivery   of   Invoices.    Such   Grantor   will   deliver   to   the   Administrative   Agent promptly   upon   its   request   after   the   occurrence   and   during   the   continuation   of   an   Event   of   Default duplicate  invoices  with  respect  to  each  Account  owned  by  it  and,  after  acceleration  of  the  Obligations, bearing such language of assignment  as the Administrative Agent shall specify.               (e)    Disclosure   of   Counterclaims   on   Receivables.    If   (i)   any   discount,   credit   or agreement  to  make  a  rebate  or  to  otherwise  reduce  the  amount  owing  on  any  Receivable  (to  the  extent constituting   an   Eligible   Account)   owned   by   such   Grantor   exists   or   (ii)   if,   to   the   knowledge   of   such Grantor,  any  dispute,  setoff,  claim,  counterclaim  or  defense  exists  or  has  been  asserted  or  threatened  with respect  to  any  such  Receivable  (to  the  extent  constituting  an  Eligible  Account),  then,  in  each  case,  such                                            11 - -

 

Grantor   will,   at   the   time   of   submission   to   the   Administrative   Agent   of   the   next   Borrowing   Base Certificate  in  accordance  with  the  terms  of  the  Credit  Agreement , disclose  such  fact  to  the  Administrative Agent in writing.         4.3.  Intentionally Omitted Inventory .               (a)    Maintenance  of  Goods.   Such  Grantor  will  do  all  things  necessary  to  maintain, preserve,  protect  and  keep  its  Eligible  Inventory  in  good  and  saleable  condition,  except  for  damaged  or defective goods arising in the ordinary course of such Grantor’s business.               (b)    Returned  Inventory.   Such  Grantor  shall  promptly  report  to  the  Administrative Agent   any   return   of   Inventory   (to   the   extent   constituting   Eligible   Inventory)   involving   an   amount   in excess  of  $1,000,000.   Each  such  report  shall  indicate  the  reasons  for  the  returns  and  the  locations  and condition  of  such  returned  Inventory.   Each  such  report  shall  indicate  the  reasons  for  the  returns  and  the locations  and  condition  of  the  returned  Inventory.   In  the  event  any  Account  Debtor  returns  Inventory  to such  Grantor  when  an  Event  of  Default  has  occurred  and  is  continuing , such  Grantor , upon  the  request  of the  Administrative  Agent,  shall:   (i) hold  the  returned  Inventory  in  trust  for  the  Administrative  Agent; (ii) segregate  all  returned  Inventory  from  all  of  its  other  property;  (iii) dispose  of  the  returned  Inventory solely   according   to   the   Administrative   Agent’s   written   instructions;   and   (iv) not   issue   any   credits   or allowances  with  respect  thereto  without  the  Administrative  Agent’s  prior  written  consent.   All  returned Inventory shall be subject to the Administrative Agent’s Liens thereon.  Whenever any Eligible Inventory is   returned,   the   related   Account   shall   be   deemed   ineligible   to   the   extent   of   the   amount   owing   by   the Account  Debtor  with  respect  to  such  returned  Inventory  and  such  returned  Inventory  shall  not  be  Eligible Inventory.               (c)    Inventory   Count;   Perpetual   Inventory   System.    Such   Grantor   will   conduct   a physical   count   of   its   Inventory   at   least   once   per   fiscal   year,   and   upon  the   occurrence  and   during   the continuation  of   an   Event   of   Default ,  at   such   other   times   as   the   Administrative   Agent   requests.    Such Grantor,  at  its  own  expense,  shall  deliver  to  the  Administrative  Agent  the  results  of  such  physical  count once  per  fiscal  year,  and  upon  the  occurrence  and  during  the  continuation  of  an  Event  of  Default,  the results   of   any   additional   physical   counts   requested   by  the   Administrative   Agent .   Such   Grantor   will maintain a perpetual inventory reporting system at all times.         4.4.  Delivery   of   Instruments,   Securities,   Chattel   Paper   and   Documents .  Such Grantor will (a) deliver to the Administrative Agent promptly upon execution of this Security Agreement the originals of all Tangible Chattel Paper, Securities (to the extent certificated) and Instruments constituting Collateral owned by it (if any then exist), in each case solely to the extent such item of Tangible Chattel Paper, Security, or Instrument exceeds $250,000 individually or $500,000 in the aggregate, (b) hold in trust for the Administrative Agent upon receipt and promptly thereafter deliver to the Administrative Agent any such Chattel Paper, Securities (to the extent certificated) and Instruments (other  than  the  Gem  Note  to  the extent   the   aggregate   outstanding   principal   amount   thereunder   does  not   exceed   $ 300,000)   constituting Collateral, in each case solely to the extent such item of Chattel Paper, Security, or Instrument exceeds $250,000  individually  or  $500,000  in  the  aggregate and  (c) upon  the  Administrative  Agent’s  request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and promptly deliver to the Administrative Agent) any Document evidencing or constituting Collateral.         4.5.  Uncertificated  Pledged  Collateral .  Such Grantor will permit the Administrative Agent from  time  to  time  to  cause  the  appropriate  issuers (and,  if  held  with  a  securities  intermediary,  such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated  securities  or  other  types  of  Pledged  Collateral  not  represented  by  certificates  and  all                                            12 - -

 

a first priority security interest (subject only to Liens permitted by Section 4.1(e) ) in such commercial tort claim.        4.9.   Letter-of-Credit Rights .  If such Grantor is or becomes the beneficiary of a letter of credit not constituting a Supporting Obligation in respect of any Collateral (other than any such letters of credit not in excess of $250,000 individually or $500,000 in the aggregate), it shall promptly, and in any event within five (5) Business Days after becoming a beneficiary, notify the Administrative Agent thereof and upon the reasonable request of the Administrative Agent, use commercially reasonable efforts to cause the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Administrative  Agent  and  (ii) agree  to  direct  all  payments  thereunder  to  a  Deposit  Account  at  the Administrative Agent or subject to a Deposit Account Control Agreement for application to the Secured Obligations,  in  accordance  with  Section 2.18  of  the  Credit  Agreement,  all  in  form  and  substance reasonably satisfactory to the Administrative Agent.         4.10. Federal,   State   or   Municipal   Claims .   Such  Grantor  will  promptly  notify  the Administrative Agent of any Collateral with a face value in excess of $250,000 individually or $500,000 in  the  aggregate  which  constitutes  a  claim  against the United States government or any state or local government  or  any  instrumentality  or  agency  thereof,  the  assignment  of  which  claim  is  restricted  by federal, or, to the knowledge of such Grantor, state or municipal law.        4.11.  Intentionally Omitted .         4.12. Insurance .               (a)  In   the   event   any  Collateral   is   located  in   any  area   that   has   been   designated   by   the Federal  Emergency  Management  Agency  as  a  “Special  Flood  Hazard  Area” , such  Grantor  shall  purchase and  maintain  flood  insurance  on  such  Collateral  (including  any  personal  property  which  is  located  on  any real  property  leased  by  such  Grantor  within  a  “Special  Flood  Hazard  Area”).   The  minimum  amount  of flood  insurance  required  by  this  Section  shall  be  in  an  amount  equal  to  the  lesser  of  the  aggregate  of  all Lenders’ Commitments or the total replacement cost value of such Collateral.               (a)    [Reserved].               (b)    All insurance policies required hereunder and under Section 5.10 of the Credit Agreement shall, within 45 days of the date  hereof Effective  Date  (or such longer period as agreed by the Administrative  Agent  in  its  sole  discretion),  name the  Administrative  Agent  (for  the  benefit  of  the Administrative  Agent  and  the  Secured  Parties)  as  an  additional  insured  or  as  lender  loss  payee,  as applicable, and shall contain lender loss payable clauses, through endorsements in form and substance reasonably satisfactory to the Administrative Agent, which provide that:  (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner  of  the  property  described  in  such  policy;  and (iii) such policy and lender loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days’ prior written notice given to the Administrative Agent.               (c)    All premiums on any such insurance shall be paid when due (subject to any grace periods provided by the terms of such policy) by such Grantor, and copies of the policies delivered to the Administrative  Agent.   If  such  Grantor  fails  to  obtain  any  insurance  as  required  by  this  Section,  the Administrative  Agent  may  obtain  such  insurance  at  the  Borrower’s  expense.   By  purchasing  such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from any Grantor’s failure to maintain such insurance or pay any premiums therefor.                                             15 - -

 

       4.13. Collateral   Access   Agreements .   After  the  occurrence  of  an  Event  of  Default  that  is continuing, upon request by the Administrative Agent, such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement from the lessor of each leased property, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or converter facility or other location where Inventory in excess of $ 5,000,000 1,000,000  is stored or located, which agreement or letter  shall  provide  access  rights,  contain  a  waiver  or  subordination  of  all  Liens  or  claims  that  the landlord,  mortgagee,  bailee  or  consignee  may  assert  against  the  Inventory  at  that  location,  and  shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent.         4.14. Deposit Account Control Agreements .  After the occurrence of an Event of Default that is continuing, such Such  Grantor will provide to the Administrative Agent promptly upon the Administrative Agent’s   reasonable   request,  a  Deposit  Account  Control  Agreement  or  a  securities  account  control agreement (in each case in form and substance reasonably  satisfactory to the Administrative Agent  in  its Permitted   Discretion ),  as  applicable,  duly  executed  on  behalf  of  each  financial  institution  holding  a Deposit Account or Securities Account of such Grantor as set forth in this Security Agreement; provided , however , that no such Deposit Account Control Agreement or securities account control agreement shall be required (a)  in respect of any Excluded Account or any Excluded Deposit and Securities Account ., (b) for   the   60   day   period   (or   such   longer   period   as   agreed   by  the   Administrative   Agent  in   its   sole discretion)  after  the  Third  Amendment  Effective  Date  in  respect  of  any  Deposit  Account  or  Securities Account (other than any Excluded Account or any Excluded Deposit and Securities Account) in existence on  the  Third  Amendment  Effective  Date,  or  (c) for  the  60  day  period  (or  such  longer  period  as  agreed  by the   Administrative   Agent   in  its   sole   discretion)   after   (x) the   establishment   thereof   in   respect   of   any Deposit  Account  or  Securities  Account  (other  than  any  Excluded  Account  or  any  Excluded  Deposit  and Securities  Account)  not  in  existence  on  the  Third  Amendment  Effective  Date,  (y) the  date  any  Grantor becomes  a  party  to  this  Agreement  pursuant  to  Section  5.11  of  the  Credit  Agreement  in  respect  of  any Deposit  Account  or  Securities  Account  (other  than  any  Excluded  Account  or  any  Excluded  Deposit  and Securities  Account)  of  such  Grantor,  or  (z)  the  date  the  applicable  Deposit  Account  or  Securities  Account is no longer an Excluded Account or an Excluded Deposit Account or Securities Account.         4.15. Change  of  Name  or  Location .  Such Grantor shall not (a) change its name as it appears in official  filings  in  the  state  of  its  incorporation or  organization,  (b) change  its  chief  executive  office, principal place of business, mailing address, corporate offices, or the location of its records concerning the Collateral as set forth in this Security Agreement, (c) change the type of entity that it is, (d) change its federal employer identification number or organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least ten (10) days’ prior written notice of such change  and  the  Administrative  Agent  shall  have  acknowledged (such   acknowledgment   not   to   be unreasonably withheld or delayed by Administrative Agent)  in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral) or will be taken within any time period reasonably specified by the Administrative Agent, provided  that, any new location shall be in the continental U.S.         4.16. Securities .  Each Grantor shall ensure that any Equity Interest which is included within the Collateral shall at no time constitute a Security and the issuer of any such Equity Interest shall at no time  take  any  action  to  have  such  interests  treated  as  a  Security  unless  (i) all  certificates  or  other documents constituting such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a control                                            16 - -

 

records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay any Grantor for such use and occupancy;               (c)    Intentionally omitted;               (d)    take,  or  cause  an  issuer  of  Pledged  Collateral  to  take,  any  and  all  actions necessary to enable the Administrative Agent to consummate a sale or other disposition of the Pledged Collateral;  provided , that, no Grantor shall be required to take any actions  to  register  or  qualify  any Pledged Collateral under any federal or state securities laws or any other similar or equivalent rules or regulations; and               (e)    at  its  own  expense,  cause  the  independent  certified  public  accountants  then engaged by each Grantor to prepare and deliver to the Administrative Agent and each Secured Party, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the applicable Grantor:  (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.         5.4.  Grant  of  Intellectual  Property  License .  For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V  at such time as the Administrative Agent shall  be  lawfully  entitled  to  exercise  such  rights and  remedies,  each  Grantor  hereby  (a) grants  to  the Administrative  Agent,  for  the  benefit  of  the  Administrative  Agent  and  the  other  Secured  Parties,  an irrevocable  (subject  to  termination  under  Section 8.14 ),  nonexclusive  license  (exercisable  without payment of royalty or other compensation or charge to any Grantor) or other right to use, license or sublicense, following the occurrence and during the continuance of an Event of Default, each Grantor’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade names, Trademarks, service marks, customer lists, advertising matter and any other intellectual property rights or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral, now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored  and  to  all  computer  software  and  programs  used  for  the  compilation  or  printout  thereof  and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any  person,  including  without  limitation  persons  who  have  previously  purchased  such  Grantor’s Inventory  from  such  Grantor  and  in  connection  with any  such  sale  or  other  enforcement  of  the Administrative  Agent’s  rights  under  this  Security  Agreement,  may  sell  Inventory  which  bears  any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may (but shall have no obligation to) finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.                                       ARTICLE VI                ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY         6.1.  Account Verification .  The Administrative Agent may at any time during the continuance of  an  Event  of  Default,  in  the  Administrative  Agent’s  own  name,  in  the  name  of  a  nominee  of  the Administrative  Agent,  or  in  the  name  of  any  Grantor  communicate  (by  mail,  telephone,  facsimile  or otherwise) with the account  debtors Account  Debtors  of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.                                             19 - -

 

       6.2.  Authorization for Administrative Agent to Take Certain Action .                (a)   Subject  to  paragraph (b)  below,  each  Grantor  irrevocably  authorizes  the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent  and  appoints  the  Administrative  Agent  as  its attorney  in  fact  (i) to  execute  on  behalf  of  such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole  discretion  to  perfect  and  to  maintain  the  perfection  and  priority  of  the  Administrative  Agent’s security  interest  in  the  Collateral,  (ii) when  an  Event  of  Default  has  occurred  and  is  continuing,  to endorse  and  collect  any  cash  proceeds  of  the  Collateral,  (iii) to  file  a  carbon,  photographic  or  other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing  statement  or  amendment  of  a  financing  statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative  Agent’s  security  interest  in  the  Collateral,  (iv) to  contact  and  enter  into  one  or  more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities  intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative  Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the  Administrative Agent to the Secured Obligations as provided in Section 7.2 , (vi) to discharge past due  taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are specifically permitted hereunder), (vii) to contact account  debtors Account  Debtors  for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor  and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the  Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables,  drafts  against  any account   debtor Account   Debtor   of  such  Grantor,  assignments  and  verifications  of  Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the  Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables,  (xii) to  settle,  adjust  or  compromise  any  legal  proceedings  brought  to  collect  Receivables,  (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against  any account  debtor Account  Debtor  of such Grantor, (xiv) to prepare, file and sign such Grantor’s name  on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the  Receivables, (xv) to change the address for delivery of mail addressed to such Grantor to such address as  the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such  Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and  such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any  expense incurred by the Administrative Agent in connection with any of the foregoing; provided  that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement, the Credit Agreement or any other Loan Document.               (b)    All  acts  of  said  attorney  or  designee  are  hereby  ratified  and  approved.   The powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, under this Section 6.2  are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise  any  such  powers.   The  Administrative  Agent  agrees  that,  except  for  the  powers  granted  in Section 6.2(a)(i) -(v)   and  Section 6.2(a)(xvi) , it shall not exercise any power or authority granted  to  it unless an Event of Default has occurred and is continuing.         6.3.  Proxy .   EACH  GRANTOR  HEREBY  IRREVOCABLY  CONSTITUTES  AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH  IN  SECTION 6.2    ABOVE)  WITH  RESPECT  TO  ITS  PLEDGED  COLLATERAL, INCLUDING  THE  RIGHT  TO  VOTE  ANY  OF  THE  PLEDGED  COLLATERAL,  WITH  FULL POWER OF SUBSTITUTION TO DO SO.  IN ADDITION TO THE RIGHT TO VOTE ANY OF THE                                            20 - -

 

PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL  WOULD  BE  ENTITLED  (INCLUDING  GIVING  OR  WITHHOLDING  WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS           OF SHAREHOLDERS AND VOTING  AT  SUCH  MEETINGS).   SUCH  PROXY  SHALL BE EFFECTIVE,  AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT  THEREOF),  UPON  THE  OCCURRENCE  AND  DURING  THE      CONTINUATION  OF  AN EVENT OF DEFAULT.         6.4.  Nature   of   Appointment;   Limitation   of   Duty .   THE  APPOINTMENT  OF  THE  ADMINISTRATIVE  AGENT  AS  PROXY  AND  ATTORNEY-IN-FACT        IN  THIS  ARTICLE VI   IS  COUPLED  WITH  AN  INTEREST  AND  SHALL  BE  IRREVOCABLE  UNTIL  THE  DATE  ON  WHICH  THIS  SECURITY  AGREEMENT  IS  TERMINATED  IN  ACCORDANCE  WITH  SECTION 8.14 .   NOTWITHSTANDING  ANYTHING  CONTAINED  HEREIN,  NONE         OF  THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER SECURED PARTY, ANY OF THEIR RESPECTIVE  AFFILIATES,  OR  ANY  OF  THEIR  OR  THEIR  AFFILIATES’  RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR  ANY  DELAY  IN  DOING  SO,  EXCEPT  IN  RESPECT  OF  DAMAGES  ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY  A  COURT  OF  COMPETENT  JURISDICTION  IN  A  FINAL  AND  NON-APPEALABLE JUDGMENT; PROVIDED      THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.                                       ARTICLE VII  COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS         7.1.  Collection   of   Receivables .   The  Administrative  Agent  may  at  any  time  after  the occurrence  and  during  the  continuance  of  an  Event  of  Default,  by  giving  each  Grantor  prior  written notice, elect to require that the Receivables be paid directly to the Administrative Agent for the benefit of the Secured Parties.  In such event, each Grantor shall, and shall permit the Administrative Agent to, promptly notify the account  debtors Account  Debtors  or obligors under the Receivables owned by such Grantor of the Administrative Agent’s interest therein and direct such account debtors or Account Debtors or  obligors to make payment of all amounts then or thereafter due under such Receivables directly to the Administrative Agent.  Upon receipt of any such notice from the Administrative Agent, each Grantor shall thereafter hold in trust for the Administrative Agent, on behalf of the Secured Parties, all amounts and proceeds received by it with respect to the Receivables and immediately and at all times thereafter deliver  to  the  Administrative  Agent  all  such  amounts  and  proceeds  in  the  same  form  as  so  received, whether by cash, check, draft or otherwise, with any necessary endorsements.  The Administrative Agent shall hold and apply funds so received as provided by the terms of Section 7.2  hereof.         7.2.  Application   of   Proceeds;   Deficiency .   The  Administrative  Agent  may require all cash proceeds of the Collateral to be deposited in a special non-interest bearing cash collateral account with the Administrative Agent and held there as security for the Secured Obligations.  No Grantor shall have any control  whatsoever  over  such  cash  collateral  account.   Any  such  proceeds  of  the  Collateral  shall  be applied  in  the  order  set  forth  in  Sections 2.18  and  7.02  of  the  Credit  Agreement  unless  a  court  of competent jurisdiction shall otherwise direct.  The balance, if any, after all of the Secured Obligations                                            21 - -

 

have been satisfied and applied in accordance with Sections 2.18 and 7.02 of the Credit Agreement, shall be  deposited  by  the  Administrative  Agent  into  such Grantor’s  general  operating  account  with  the Administrative Agent or as instructed in writing by such Grantor. The Grantors shall remain liable, jointly and  severally,  for  any  deficiency  if  the  proceeds  of  any  sale  or  disposition  of  the  Collateral  are insufficient to pay all Secured Obligations, including any attorneys’ fees and other expenses incurred by the Administrative Agent or any other Secured Party to collect such deficiency.                                      ARTICLE VIII                                 GENERAL PROVISIONS         8.1.  Waivers .  Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX , at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To  the  maximum  extent  permitted  by  applicable  law, each  Grantor  waives  all  claims,  damages,  and demands against the Administrative Agent or any other Secured Party arising out of the repossession, retention  or  sale  of  the  Collateral,  except  such  as  arise  solely  out  of  the  gross  negligence  or  willful misconduct  of  the  Administrative  Agent  or  such  other  Secured  Party  as  determined  by  a  court  of competent jurisdiction in a final and non-appealable judgment.  To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any other Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise.  Except as otherwise specifically provided herein, each  Grantor  hereby  waives  presentment,  demand,  protest  or  any  notice  (to  the  maximum  extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.  Without  limiting  any  other  waiver  or  provision , each  Grantor  waives,  to  the  maximum  extent  permitted by  law,  (a)  all  benefits  or  defenses  directly  or  indirectly  arising  under  California  Civil  Code  §§  2787, 2799,  2808,  2815,  2819,  2820,  2821,  2822,  2838,  2839,  2847,  2848,  and  2855,  Chapter  2  of  Title  14  of the  California  Civil  Code,  and  California  Code  of  Civil  Procedure  §§  580a,  580b,  580c,  580d,  and  726  or any  similar  laws  of  any  other  applicable  jurisdiction,  (b)  all  rights  and  defenses  arising  out  of  an  election of  remedies  by  the  creditor,  even  though  that  election  of  remedies,  such  as  a  nonjudicial  foreclosure  with respect  to  security  for  a  guaranteed  obligation,  has  destroyed  the  guarantor’s  rights  of  subrogation  and reimbursement   against   the   principal   by   the   operation   of   Section   580d   of   the   California   Code   of   Civil Procedure  or  otherwise  and  (c)  any  defense  arising  by  reason  of  or  deriving  from  (i)  any  claim  or  defense based   upon   an   election   of   remedies   by   the  Secured   Parties  or   (ii)   any   election   by  the  Secured  Parties under   the   Bankruptcy   Code,   to   limit   the   amount   of,   or   any   collateral   securing,   its   claim   against   any Grantor.         8.2.  Limitation  on  Administrative  Agent’s  and  Other  Secured  Parties’  Duty  with  Respect  to the  Collateral .  The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale.  The Administrative Agent and each other Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.  Neither the Administrative Agent nor any other Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such other Secured Party, or  any  income  thereon  or  as  to  the  preservation  of rights  against  prior  parties  or  any  other  rights pertaining  thereto.   To  the  extent  that  applicable law  imposes  duties  on  the  Administrative  Agent  to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is                                            22 - -

 

commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected  or  disposed  of,  (iii) to  fail  to  exercise  collection  remedies  against account   debtors Account Debtors  or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against account  debtors Account  Debtors  and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the  Collateral  is  of  a  specialized  nature,  (viii) to  dispose  of  Collateral  by  utilizing  Internet  sites  that provide  for  the  auction  of  assets  of  the  types  included  in  the  Collateral  or  that  have  the  reasonable capacity of doing so, or that match buyers and sellers  of assets, (ix) to dispose of assets in wholesale rather  than  retail  markets,  (x) to  disclaim  disposition  warranties,  such  as  title,  possession  or  quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 8.2  is to provide non-exhaustive indications of  what  actions  or  omissions  by  the  Administrative Agent  would  be  commercially  reasonable  in  the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2 .  Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 8.2 .         8.3.  Compromises  and  Collection  of  Collateral .  The Grantors and the Administrative Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable.  In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine  or  abandon  any  Receivable,  and  any  such  action  by  the  Administrative  Agent  shall  be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action.         8.4.  Secured  Party  Performance  of  Debtor  Obligations .  Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any amounts  paid  by  the  Administrative  Agent  pursuant  to  this  Section 8.4 .   The  Grantors’  obligation  to reimburse the Administrative Agent pursuant to the preceding  sentence  shall  be  a  Secured  Obligation payable on demand.                                             23 - -

 

setoff), is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.         8.10. Benefit   of   Agreement .  The terms and provisions of this Security Agreement  shall  be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the other Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent.  No sales of participations, assignments, transfers, or other dispositions of any agreement  governing  the  Secured  Obligations  or  any portion  thereof  or  interest  therein  shall  in  any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, hereunder.         8.11. Survival of Representations .  All representations and warranties of the Grantors contained in this Security Agreement shall survive the execution and delivery of this Security Agreement.         8.12. Taxes  and  Expenses .  Any taxes (including income taxes) payable or ruled payable by Federal or State authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any.  The Grantors shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees  and  reasonable  time  charges  of  attorneys,  paralegals,  auditors  and  accountants  who  may  be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection with the  preparation,  execution,  delivery,  administration,  collection  and  enforcement  of  this  Security Agreement and in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral).  Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.         8.13. Headings .   The  title  of  and  section  headings  in  this  Security  Agreement  are  for convenience of reference only, and shall not govern the interpretation of any of the terms and provisions of this Security Agreement.         8.14. Termination .  This Security Agreement shall continue in effect (notwithstanding the fact that  from  time  to  time  there  may  be  no  Secured  Obligations  outstanding)  until  (i) any  and  all commitments to extend credit under the Loan Documents have terminated, and the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured Obligations have been paid in cash and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or at the discretion of  the  Administrative  Agent,  a  back-up  standby  Letter  of  Credit  reasonably  satisfactory  to  the Administrative Agent and the Issuing Bank, has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative Agent or the other Secured Parties which would give rise to any Secured Obligations are outstanding.        8.15.  Entire   Agreement .   This  Security  Agreement  embodies  the  entire  agreement  and understanding  between  the  Grantors  and  the  Administrative  Agent  relating  to  the  Collateral  and supersedes all prior agreements and understandings between the Grantors and the Administrative Agent relating to the Collateral.         8.16. CHOICE   OF  LAW .  THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.                                             25 - -

 

References  to  the  California  Civil  Code  or  the  California  Code  of  Civil  Procedure  shall  not  mean that California law is applicable to  this Security Agreement.         8.17. CONSENT    TO  JURISDICTION  .  EACH GRANTOR HEREBY IRREVOCABLY SUBMITS,  FOR  ITSELF  AND  ITS  PROPERTY,  TO  THE  EXCLUSIVE  JURISDICTION  OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING  IN  THE  BOROUGH  OF  MANHATTAN  (OR  IF  SUCH  COURT  LACKS  SUBJECT MATTER  JURISDICTION,  THE  SUPREME  COURT  OF  THE  STATE  OF  NEW YORK SITTING  IN  THE  BOROUGH  OF  MANHATTAN),  AND  ANY  APPELLATE  COURT  FROM ANY THEREOF IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS  SECURITY  AGREEMENT  OR  ANY  OTHER  LOAN  DOCUMENT,  OR  FOR RECOGNITION  OR  ENFORCEMENT  OF  ANY  JUDGMENT,  AND  EACH  GRANTOR HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY  AGREES  THAT              ALL  CLAIMS  IN RESPECT OF SUCH ACTION OR PROCEEDING MAY (AND ANY SUCH CLAIMS, CROSS- CLAIMS  OR  THIRD  PARTY  CLAIMS  BROUGHT  AGAINST  THE  ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES MAY ONLY) BE HEARD AND DETERMINED IN  SUCH  FEDERAL  (TO  THE  EXTENT  PERMITTED  BY  LAW)  OR  NEW YORK  STATE COURT,  AND  IRREVOCABLY  AND  UNCONDITIONALLY  WAIVES,            TO  THE  FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR  HEREAFTER  HAVE  AS  TO  THE  VENUE  OF  ANY  SUCH  SUIT,  ACTION  OR PROCEEDING  BROUGHT  IN  SUCH  A  COURT  OR  THAT  SUCH  COURT  IS  AN INCONVENIENT  FORUM.   EACH  OF  THE  PARTIES  HERETO  AGREES  THAT  A  FINAL JUDGMENT  IN  ANY  SUCH  ACTION  OR  PROCEEDING  SHALL  BE         CONCLUSIVE  AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE  JUDGMENT  OR  IN ANY  OTHER  MANNER  PROVIDED  BY  LAW.   NOTHING  HEREIN  OR  IN  ANY  OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK, OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR  PROCEEDING  RELATING  TO  THIS  SECURITY  AGREEMENT  AGAINST  ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.         8.18. WAIVER     OF   JURY   TRIAL .   EACH  GRANTOR,  THE  ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS  SECURITY  AGREEMENT,  ANY  OTHER  LOAN  DOCUMENT  OR  THE TRANSACTIONS  CONTEMPLATED  HEREBY  OR  THEREBY  (WHETHER  BASED  ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH GRANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER  AND  (B) ACKNOWLEDGES  THAT  IT  AND  THE  OTHER  GRANTORS  PARTY HERETO  HAVE  BEEN  INDUCED  TO  ENTER  INTO  THIS  SECURITY  AGREEMENT  BY, AMONG  OTHER  THINGS,  THE  MUTUAL  WAIVERS  AND  CERTIFICATIONS  IN  THIS SECTION.         8.19. Service   of   Process .   Each  party  to  this  Security  Agreement  irrevocably  consents  to service of process in the manner provided for notices in Article IX of this Security Agreement, and each of the Grantors hereby appoints the Borrower as its agent for service of process.  Nothing in this Security Agreement or any other Loan Document will affect the right of any party to this Security Agreement to serve process in any other manner permitted by law.                                            26 - -

 

                         EXHIBIT F   Exhibit A to Security Agreement          [See attached.]                  

 

                                                                                                                                EXHIBIT A                    (See Sections 3.2, 3.3, 3.4, 3.9 and 9.1 of Security Agreement)                           NOTICE ADDRESS FOR ALL GRANTORS                           FARMER BROS. CO.                          1912 Farmer Brothers Drive                          Northlake, Texas 76262                          Attention:  Scott Drake                          E-mail: sdrake@farmerbros.com             INFORMATION AND COLLATERAL LOCATIONS OF FARMER BROS. CO.   I.     Name of Grantor :  Farmer Bros. Co.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  3742785   V.    Federal Identification Number :  95-0725980   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake   VII.   Locations of Collateral :            (a)   Properties Owned by the Grantor:                See Attachment I.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                See Attachment I.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                            Warehouse            Address             City     State   Zip                        Operator/ Bailee                                           Code                    1.  Goodson Bros.  4700 Industrial Park Drive  Lenior City  TN  37771                        Coffee Co.                    2.  Millard        730 Spreckles Ave        Manteca     CA    95336                        Refrigerated                        Service                    3.  DBA J&D        12300 SE Carpenter Dr.   Clackamas   OR    97015                        Refrigerated                        Services Inc.      US-DOCS\116984916.3 

 

4.   Americold        1415 North Raymond Avenue   Anaheim       CA     92801       Anaheim  5.   TransDock Cold   350 Garden Acres Dr         Fort Worth    TX     76140       Storage  6.   Cadeco Industries 5610 Clinton Dr            Houston       TX      77020  7.   Cadeco Industries 5800 Clinton Dr            Houston       TX      77020  8.   Cadeco Industries 200 Emile Street           Houston       TX      77020  9.   Dupuy Storage,       LLC              4300 Jourdan Rd             New Orleans   LA      70126  10.  Dupuy Storage,       LLC              7703 Cannon St.             Houston       TX      77021  11.  Costa Oro       International    4901 NE 185th Dr.           Portland      OR      97230  12.  East Bay Logistics  1900 West Winton Ave     Hayward       CA      94545  13.  East Bay Logistics  1800 Merced St           San Leandro   CA      94577  14.  East Bay Logistics  25503 Industrial Blvd    Hayward       CA      94545  15.  East Bay Logistics  4800 East Valley         Sumner        WA      98390  16.  East Bay Logistics  18924 S. Laurel Park Rd  Compton       CA      90220  17.  Green Room Inc   1302 29th Street NW         Auburn        WA      98001  18.  Royal Coffee     6201 Coliseum Way, Unit A   Oakland       CA      94621  19.  RPM Warehouse    1500 Rahway Ave             Avenel        NJ       7001  20.  RPM Warehouse    2900 Woodbridge Ave         Edison        NJ       8837  21.  RPM Warehouse    201 Dexter St. West         Chesapeake    VA      23324  22.  All Jays       Warehouse        600 N Union Ave             Hillside      NJ       7205  23.  Annex  Warehouse  1951 B Fairway Dr          San Leandro   CA      94577  24.  Annex  Warehouse  1345 A Doolittle Dr        San Leandro   CA      94577  25.  Continental       Terminals Inc    200 Middlesex Ave           Carteret      NJ       7008  26.  Continental       Terminals Inc    1032 Cavalier Blvd          Chesapeake    VA      23323  27.  Continental       Terminals Inc    201 Luken Rd                Goose Creek   SC      29445                                  

 

                                                                    ATTACHMENT I – OWNED AND LEASED PROPERTIES                       FARMER BROS. CO       . – OWNED and LEASED PROPERTIES         Owned = O   Bran     Warehouse               Address               City      State   Zip        Leased = L  ch #                                                                     Code   28.  O          2      San Diego        7855 Ostrow St.             San Diego     CA     92111   29.  O          3      Lake Havasu      1105 Aviation Dr            Lake Havasu   AZ     86404   30.  L           4     Hayward          20677 Corsair Blvd.         Hayward       CA     94545   31.  L           5     Tempe (Phoenix)  455 W. Diamond Drive        Tempe         AZ     85282   32.  O          6      Tucson           3818 S. Evans Blvd.         Tucson        AZ     85714   33.  L           7     San Luis Obispo    3450 Broad St   Suite  109   San Luis   CA     93401                                                                       Obispo   34.  O          8      Stockton         4243 Arch Rd.               Stockton      CA     95215   35.  O          9      Fresno           4576 N. Bendel Lane         Fresno        CA     93722   36.  O          10     Sacramento       2450 Boatman Ave.           Sacramento    CA     95691   37.  O          11     Bakersfield      8802 Swigert Ct.            Bakersfield   CA     93311   38.  L           12    Eureka           417 W. Wabash Ave.          Eureka        CA     95501   39.  Storage     14    Santa Rosa       3001 S. State Street        Ukiah         CA     95482   40.  O          15     Castroville      11460 Commercial Pkwy.      Castroville   CA     95012   41.  O          16     Idaho Falls      805 S. Saturn Ave.          Idaho Falls   ID     83402   42.  Storage     16    Idaho Falls      3400 South Hwy 89, Unit #30  Jackson      WY     83001   43.  O          17     Carson City      3880 Technology Way         Carson City   NV     89706   44.  O          18     Albuquerque      5911 Office Blvd.           Albuquerque   NM     87109   45.  O          19     Chico (Leased to 480 Ryan Ave. Ste. 100      Chico         CA     95973                          Little Red Hen                          Nursery)   46.  O          20     Valley           9373 Remick Ave.            Arleta        CA     91331   47.  O          22     Flagstaff        2385 N. Walgreen St.        Flagstaff     AZ     86004   48.  O          24     Victorville      17190 Yuma St.              Victorville   CA     92395   49.  O          26     Salt Lake City   2230 So. 2000 West          Salt Lake City  UT   84119   50.  L           28    Springfield      3430 Constitution  Dr.      Springfield   IL     62711   51.  O          30     El Paso          1325 Don Haskins Dr.        El Paso       TX     79936   52.  O          31     Bishop           324 E. Clarke St.           Bishop        CA     93514   53.  L           32    Medford          777 E. Vilas Rd.            Central Point  OR    97502   54.  L           33    Amarillo         2100 SE 10th Ave            Amarillo      TX     79101   55.  L           34    Roswell          710 E. College              Roswell       NM     88201   56.  L           36    Little Rock      7630 Hardin Dr.             Little Rock   AR     72117   57.  L           37    Bismarck         2001 3rd  Street SE         Mandan        ND     58554   58.  O          38     Santa Ana        3921 W. Segerstrom Ave.     Santa Ana     CA     92704   59.  O          39     Billings         2625 Enterprise Ave.        Billings      MT     59102   60.  L           41    Odessa           2017 W. 7 th  Street        Odessa        TX     79763   61.  L           42    Kent             19815 85th Avenue South     Kent          WA     98031   62.  L           43    Moline           2950 38th Ave.              Moline        IL     61265   63.  O          44     Spokane          E 10915 Montgomery Dr.      Spokane       WA     99206   64.  O          46     Yakima           2301 S. 18th St.            Union Gap     WA     98903   65.  Storage     46    Yakima           5031 W Clearwater Avenue    Kennewick     WA     99336   66.  L           47    Eugene           2495 Unit C Prairie Road    Eugene        OR     97402   67.  L           49    Madison                      4021     Owl Creek Drive   Madison  WI  53718   68.  O          50     Portland         7515 NE 33rd Dr.            Portland      OR     97211                                                       US-DOCS\116984916.3 

 

    69.  O          52     Elko             P.O.Box 67 89803 460 S. A St.  Elko       NV     89801    70.  O          53     Grand Junction   2848 Chipeta                Grand Junction  CO   81501   71.  O          55     Omaha            3217 Nebraska Ave.          Council Bluffs  IA   51501   72.  L           56    Fargo            710 38th St. N.W. Unit B. C. D  Fargo     ND     58102    73.  L           57    Casper           2080 Fairgrounds, Ste 6     Casper        WY     82604   74.  L           58    Denver           5595 Joliet St.             Denver        CO     80239   75.  Storage     58    N. Platte ( Denver)  603 Sioux Meadow        North Platte  NE     69101   76.  L           59    Corpus Christi   3909 Wow Rd.                Corpus Christi  TX   78413   77.  L           60    Boise            7235 Bethel Street          Boise         ID     83704   78.  L           62    Wichita Falls    1404 Beverly Drive          Wichita Falls  TX    76309   79.  Storage     62    Wichita Falls-   4209 Spindletop Drive Unit 34  Abilene    TX     79602                          Abilene   80.  O          63     Memphis          5753 E. Shelby Dr. Ste. 1   Memphis       TN     38141   81.  O          66     San Antonio      4930 Center Park Blvd.      San Antonio   TX     78218   82.  O          67     Palm Springs     72205 Corporate Way         Thousand      CA     92276                                                                       Palms   83.  L           69    Rochester        7700 Air Commerce Dr #104   Rochester     MN     55902    84.  O          72     St. Louis        12832 Pennridge Dr.         Bridgeton     MO     63044   85.  O          73     Rapid City       2030 Creek Drive            Rapid City    SD     57703   86.  O          74     Kansas City      9 N.E. Skyline Dr.          Lee's Summit  MO     64086   87.  O          75     Blaine           3074 84 th Lane N.E.        Blaine        MN.    55449   88.  O          81     Austin (Round    2004 Lamar Drive            Round Rock    TX     78664                          Rock)   89.  L           83    Shreveport       4113 Metro Dr.              Shreveport    LA     71109   90.  O          85     McAllen          1312 E. Laurel              McAllen       TX     78501   91.  L           88    Springdale                   543      Madison  Street  Springdale   AR  72762   92.  L           101   Missoula         2720 Palmer St. Unit E      Missoula      MT     59808   93.  L           105   Sioux Falls      926 West Cherokee           Sioux Falls   SD     57104   94.  L           108   Evansville       1905 N. Kentucky Ave.       Evansville    IN     47711   95.  L           111   Duluth           4314 Enterprise Cr.         Duluth        MN     55811   96.  O          117    Santa Fe Springs   9901 Bell Ranch Dr.       Sante Fe      CA     90670                                                                       Springs   97.  O          124    Rialto           2751 S. Lilac Ave.          Bloomington   CA     92316   98.  L           140   Houston          6300 West by NW Blvd, Ste. 400  Houston   TX     77040   99.  L           204   Northlake-DC (Br 120 Whitehall Ave           Northlake     IL     60164                          137)                   100.  L          210   Moonachie-DC     75 State Street             Moonachie     NJ     07074                          (Br 134)   101.  L          213   Merrillville –   1503 E. 91st Drive          Merrillville  IN     46410                          Truck Storage   102.  L          216   Little Chute     1004 Randolph Drive         Little Chute  WI     54140                          (Weston move)   103.  L          218   Grand Rapids   / 3322 Lousma Southeast Ste. 503 Wyoming    MI     49548                          Wyoming          & 504   104.  L          219   Saginaw          3691 Fashion Square Blvd.   Saginaw       MI     48603   105.  L          222   Grand Forks      2402 N. 43rd  St.           Grand Forks   ND     58201   106.  L          226   Lima             1658 West Breese            Lima          OH     45806   107.  L          229   Tulsa            11529-31 E. Pine            Tulsa         OK     74128   108.  L          230   Wichita          427 S. Washington           Wichita       KS     67202      US-DOCS\116984916.3 

 

    109.  L          240   Springfield      540 A N. Cederbrook         Springfield   MO     65802   110.  L          245   Pewaukee         W 232 N 2960 Roundy Circle  Pewaukee      WI     53072                                           West   111.  L          247   Indianapolis (Indy)  5777 Decatur Blvd, Ste 250  Indianapolis  IN  46241    112.  L          255   E. Syracuse      6838  Ellicott Drive, Ste. 4  E. Syracuse  NY    13057   113.  L          256   Waterbury                54 Great Hills  Road   Naugatuck  CT     06770-                                                                                           2224   114.  L          259   Medley           9021 NW 105th Way           Medley        FL     33178   115.  L          265   Lakeland         3810 Drane Field Rd         Lakeland      FL     33811   116.  L          266   Atlanta          1400 Northbrook Pkwy  Ste. 370  Suwanee   GA     30024   117.  L          272   Las Vegas        1051 Mary Crest, Ste. J     Henderson     NV     89074   118.  L          276   Runnemede        190 Ninth Ave   Unit B      Runnemede     NJ     08078   119.  O         278    Oklahoma City            13131           N. Broadway Ext.  Oklahoma City  OK  73114   120.  Truck      285   Houston          5800 Clinton Drive          Houston       TX     77020   121.  L          286   Houston-Plant    235 North Norwood Street    Houston       TX     77011   122.  L          302   Cleveland        9200 Market Place, Building B  Broadview  OH     44147                                                                       HTC   123.  L          303   Plymouth         9260 General                Plymouth      MI     48170   124.  L          304   Pittsburgh       215 Commerce Park Dr.       Cranberry     PA     16066                          (Cranberry )                                 Twnshp   125.  L          305   Baltimore (Jessup)  8268 Preston Court     Unit  H  Jessup  MD    20794    126.  L          306   Columbus         2543 Westbelt Drive         Columbus      OH     43228   127.  L          311   Boston           29 Esquire Road  Unit B     North Billerica  MA  01862   128.  O         503/   NTX Distribution 1916/1912 Farmer Brothers Drive  Northlake  TX   76262                    509   Center  and                          Manufacturing                          Plant   129.  L          520   Portland-PLANT         9120         NE       Alderwood  Road  Portland   OR  97220   130.  O         789    Fort Worth - HQ  1912 Farmer Brothers Drive  Northlake     TX     76262   131.  Retail     5007  Public Domain            603    SW Broadway Street    Portland   OR  97205   132.  L – West    7003  Hillsboro       21400 N.W. Mauzey Rd.       Hillsboro     OR     97124       Cost Coffee       -Plant   133.  L – West   7003  Eugene           3843 W. 11th (Units 31,33, & 35)  Eugene   OR    97402       Coast Coffee       property    134.  L – West   7003  Fortuna          608 L. Street               Fortuna       CA     95540       Coast Coffee       property    135.  L – West   7003  Livermore        2416 Research Dr.           Livermore     CA     94550       Coast Coffee       property    136.  L – West   7003  Woodland         1250 Harter Ave. Ste. B     Woodland      CA     95776       Coast Coffee       property    137.  L – West   7003  Las Vegas        6625 S. Valley View Blvd.   Las Vegas     NV     89118       Coast Coffee       property    138.  L – West   7003  Bakersfield      4205 Resnik Ct. Ste. #3b    Bakersfield   CA     93313       Coast Coffee       property    139.  L          9002  Gastonia - CBE   935 N. New Hope Rd #C21112  Gastonia      NC     28054                          Coffee Equipment      US-DOCS\116984916.3 

 

    140.  L          9003  La Crosse (Coffee 1629 Caledonia St. Bldg.-21,Unit La Crosse  WI  54603                          Equipment)       #6-Q4                             Owned building that are vacant and (1) vacant parcel   141.     O        24      Victorville          17190 Yuma St.         Victorville   CA.  92395      US-DOCS\116984916.3 

 

                                               INFORMATION AND COLLATERAL LOCATIONS OF COFFEE BEAN INTERNATIONAL, INC.   1.    Name of Grantor:  COFFEE BEAN INTERNATIONAL, INC.       II.   State of Incorporation or Organization:  Oregon    III.   Type of Entity:  Corporation    IV.   Organizational Number assigned by State of Incorporation or Organization:  129369-10    V.    Federal Identification Number:  93-0714098   VI.    Place  of  Business (if  it  has  only  one) or  Chief  Executive  Office (if  more  than  one  place  of        business) and Mailing Address:         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake     VII.   Locations of Collateral:            (a)   Properties Owned by the Grantor:                None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                 9120 NE Alderwood Road               Portland, OR 97220               Name of Landlord:  Kidder Mathews                                                       US-DOCS\116984916.3 

 

          INFORMATION AND COLLATERAL LOCATIONS OF FBC FINANCE COMPANY   I.     Name of Grantor:  FBC FINANCE COMPANY      II.    State of Incorporation or Organization:  California    III.   Type of Entity:  Corporation    IV.    Organizational Number assigned by State of Incorporation or Organization:  0905697    V.     Federal Identification Number:  95-3428785    VI.    Place  of  Business (if  it  has  only  one) or  Chief  Executive  Office (if  more  than  one  place  of        business) and Mailing Address:         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake     VII.   Locations of Collateral:           (a)   Properties Owned by the Grantor:                None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                None.           (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                None.      US-DOCS\116984916.3 

 

   INFORMATION AND COLLATERAL LOCATIONS OF COFFEE BEAN HOLDING CO., INC.    I.     Name of Grantor :  COFFEE BEAN HOLDING CO., INC.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  3781157   V.    Federal Identification Number :  56-2488947   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake    VII.  Locations of Collateral:           (a)    Properties Owned by the Grantor:                 None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                 None.         US-DOCS\116984916.3 

 

   INFORMATION AND COLLATERAL LOCATIONS OF CHINA MIST BRANDS, INC.    I.     Name of Grantor :  CHINA MIST BRANDS, INC.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  61339189   V.    Federal Identification Number :  81-3861172   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :          1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake    VII.  Locations of Collateral:            (a)   Properties Owned by the Grantor:                 None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.           (c)  Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                None.                                      US-DOCS\116984916.3 

 

   INFORMATION AND COLLATERAL LOCATIONS OF BOYD ASSETS CO.    I.     Name of Grantor :  BOYD ASSETS CO.   II.    State of Incorporation or Organization :  Delaware   III.   Type of Entity :  Corporation   IV.    Organizational Number assigned by State of Incorporation or Organization :  6498468   V.    Federal Identification Number :  82-2659061   VI.    Place  of  Business   (if  it  has  only one) or  Chief  Executive  Office  (if  more  than one place of        business) and Mailing Address :         1912 Farmer Brothers Drive        Northlake, Texas 76262        Attention:  Scott Drake          VII.  Locations of Collateral:            (a)   Properties Owned by the Grantor:                 None.          (b)   Properties Leased by the Grantor (include Landlord’s Name):                 None.          (c)   Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements               (include name of Warehouse Operator or other Bailee or Consignee):                 None.       US-DOCS\116984916.3 

 

                         EXHIBIT G   Exhibit G to Security Agreement          [See attached.]                   

 

                                                                                    EXHIBIT G            (See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”)       LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY                                          STOCKS    Name of Grantor    Issuer     Certificate Number of    Class of Stock   Percentage of                                 Number(s)     Shares                   Outstanding Shares   Farmer Bros. Co.  FBC Finance 1          10,000        Common         100%                  Company  Farmer Bros. Co.  Coffee Bean 10         1,000         Common         100%                  Holding Co.,                  Inc.  Coffee Bean     Coffee Bean   1          100           Common         100%  Holding Co., Inc. International,                  Inc.  Farmer Bros. Co.   Boyd Assets 2         100           Common         100%                  Co.  Farmer Bros. Co.  China Mist  C-01       100           Common         100%                  Brands, Inc.   Farmer Bros. Co.  Coffee Bean N/A        N/A           Membership     100%                   International                          interests                   LLC                                             BONDS    Name of Grantor    Issuer      Number    Face Amount    Coupon Rate       Maturity   None.                                                                                    GOVERNMENT SECURITIES    Name of Grantor    Issuer      Number     Type   Face Amount   Coupon Rate   Maturity   None.                                                                OTHER SECURITIES OR OTHER INVESTMENT PROPERTY                           (CERTIFICATED AND UNCERTIFICATED)       Name of Grantor           Issuer        Description of Collateral  Percentage Ownership                                                                           Interest  None.                                                                                 INSTRUMENTS       Name of Grantor                              Description  Farmer Bros. Co.      Broker Agreement and Note, dated as of April 1, 2019, by and between Florida                        Semoinole Coffee Company, Inc. and Farmer Bros. Co.

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