Document:

Exhibit 10.2

 

 

SECOND LIEN TERM CREDIT AGREEMENT

 

dated as of

 

November 15, 2012

 

among

 

SANCHEZ ENERGY CORPORATION,

 

SEP HOLDINGS III, LLC

 

and

 

SN MARQUIS LLC,
 as Borrowers,

 

MACQUARIE BANK LIMITED,
 as Administrative Agent,
 Sole Lead Arranger and
 Sole Book Runner

 

and

 

THE LENDERS PARTY HERETO

 

 

 

TABLE OF CONTENTS

 

	
ARTICLE I Definitions and Accounting Matters
    	
1
    
	
Section   1.01
    	
Terms Defined Above
    	
1
    
	
Section   1.02
    	
Certain Defined Terms
    	
1
    
	
Section   1.03
    	
Terms Generally; Rules of   Construction
    	
25
    
	
Section   1.04
    	
Accounting Terms and   Determinations; GAAP
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE II The Term Loan Facility
    	
26
    
	
Section   2.01
    	
Commitments
    	
26
    
	
Section   2.02
    	
Term Loan
    	
26
    
	
Section   2.03
    	
Availability and Purpose of   Advances
    	
27
    
	
Section   2.04
    	
Development Plan
    	
27
    
	
Section   2.05
    	
Advance Procedure
    	
28
    
	
Section   2.06
    	
Term Notes
    	
29
    
	
Section   2.07
    	
Funding of Advances
    	
30
    
	
Section   2.08
    	
Presumption of Funding by   the Lenders
    	
30
    
	
Section   2.09
    	
Lender Obligations Several
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE III Payments of Principal and Interest; Prepayments;   Fees
    	
30
    
	
Section   3.01
    	
Repayment of Advances
    	
30
    
	
Section   3.02
    	
Interest
    	
30
    
	
Section   3.03
    	
Prepayments
    	
32
    
	
 
    	
 
    	
 
    
	
ARTICLE IV Payments; Pro Rata Treatment; Sharing of Set-offs
    	
32
    
	
Section   4.01
    	
Payments Generally; Pro   Rata Treatment; Sharing of Set-offs
    	
32
    
	
Section   4.02
    	
Presumption of Payment by   the Borrowers
    	
34
    
	
Section   4.03
    	
Certain Deductions by the   Administrative Agent
    	
34
    
	
Section   4.04
    	
Disposition of Proceeds
    	
34
    
	
 
    	
 
    	
 
    
	
ARTICLE V Increased Costs; Break Funding Payments; Taxes
    	
35
    
	
Section   5.01
    	
Increased Costs
    	
35
    
	
Section   5.02
    	
Break Funding Payments
    	
36
    
	
Section   5.03
    	
Taxes
    	
36
    
	
Section   5.04
    	
Designation of Different   Lending Office
    	
39
    
	
Section   5.05
    	
Illegality
    	
40
    
	
 
    	
 
    	
 
    
	
ARTICLE VI Conditions Precedent
    	
40
    
	
Section   6.01
    	
Conditions to Effectiveness
    	
40
    
	
Section   6.02
    	
Each Credit Event
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE VII Representations and Warranties
    	
43
    
	
Section   7.01
    	
Organization; Powers
    	
43
    
	
Section   7.02
    	
Authority; Enforceability
    	
43
    
	
Section   7.03
    	
Approvals; No Conflicts
    	
43
    
	
Section   7.04
    	
Financial Condition; No   Material Adverse Change
    	
44
    
	
Section   7.05
    	
Litigation
    	
44
    

 

i

 

	
Section   7.06
    	
Environmental Matters
    	
44
    
	
Section   7.07
    	
Compliance with the Laws   and Agreements; No Defaults
    	
45
    
	
Section   7.08
    	
Investment Company Act
    	
46
    
	
Section   7.09
    	
Taxes
    	
46
    
	
Section   7.10
    	
ERISA
    	
46
    
	
Section   7.11
    	
Disclosure; No Material   Misstatements
    	
46
    
	
Section   7.12
    	
Insurance
    	
47
    
	
Section   7.13
    	
Restriction on Liens
    	
47
    
	
Section   7.14
    	
Subsidiaries
    	
47
    
	
Section   7.15
    	
Location of Business and   Offices
    	
48
    
	
Section   7.16
    	
Properties; Titles, Etc.
    	
48
    
	
Section   7.17
    	
Maintenance of Properties
    	
49
    
	
Section   7.18
    	
Gas Imbalances, Prepayments
    	
49
    
	
Section   7.19
    	
Marketing of Production
    	
49
    
	
Section   7.20
    	
Swap Agreements
    	
50
    
	
Section   7.21
    	
Use of Advances
    	
50
    
	
Section   7.22
    	
Solvency
    	
50
    
	
Section   7.23
    	
Foreign Corrupt Practices
    	
50
    
	
Section   7.24
    	
Money Laundering
    	
50
    
	
Section   7.25
    	
OFAC
    	
51
    
	
Section   7.26
    	
Purchasers of Production
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII Affirmative Covenants
    	
51
    
	
Section   8.01
    	
Financial Statements;   Ratings Change; Other Information
    	
51
    
	
Section   8.02
    	
Notices of Material Events
    	
54
    
	
Section   8.03
    	
Existence; Conduct of   Business
    	
54
    
	
Section   8.04
    	
Payment of Obligations
    	
54
    
	
Section   8.05
    	
Performance of Obligations   under Loan Documents
    	
54
    
	
Section   8.06
    	
Operation and Maintenance   of Properties
    	
55
    
	
Section   8.07
    	
Insurance
    	
56
    
	
Section   8.08
    	
Books and Records;   Inspection Rights
    	
56
    
	
Section   8.09
    	
Compliance with Laws
    	
56
    
	
Section   8.10
    	
Environmental Matters
    	
56
    
	
Section   8.11
    	
Further Assurances
    	
57
    
	
Section   8.12
    	
Reserve Reports
    	
58
    
	
Section   8.13
    	
Title Information
    	
58
    
	
Section   8.14
    	
Additional Collateral
    	
59
    
	
Section   8.15
    	
ERISA Compliance
    	
59
    
	
Section   8.16
    	
New Subsidiary Requirements
    	
60
    
	
 
    	
 
    	
 
    
	
ARTICLE IX Negative Covenants
    	
60
    
	
Section   9.01
    	
Financial Covenants
    	
60
    
	
Section   9.02
    	
Debt
    	
61
    
	
Section   9.03
    	
Liens
    	
62
    
	
Section   9.04
    	
Dividends, Distributions   and Redemptions
    	
62
    
	
Section   9.05
    	
Investments, Loans and   Advances
    	
62
    
	
Section   9.06
    	
Nature of Business;   International Operations
    	
63
    

 

ii

 

	
Section   9.07
    	
Limitation on Leases
    	
63
    
	
Section   9.08
    	
Proceeds of Term   Notes/Advances
    	
64
    
	
Section   9.09
    	
Sale or Discount of   Receivables
    	
64
    
	
Section   9.10
    	
Mergers, Etc.
    	
64
    
	
Section   9.11
    	
Sale of Assets
    	
64
    
	
Section   9.12
    	
Environmental Matters
    	
66
    
	
Section   9.13
    	
Transactions with   Affiliates
    	
66
    
	
Section   9.14
    	
Subsidiaries
    	
66
    
	
Section   9.15
    	
Negative Pledge Agreements;   Dividend Restrictions
    	
66
    
	
Section   9.16
    	
Gas Imbalances, Take-or-Pay   or Other Prepayments
    	
67
    
	
Section   9.17
    	
Swap Agreements
    	
67
    
	
Section   9.18
    	
Sale and Leaseback   Transactions
    	
68
    
	
Section   9.19
    	
ERISA
    	
68
    
	
Section   9.20
    	
Change in Business
    	
68
    
	
 
    	
 
    	
 
    
	
ARTICLE X Events of Default; Remedies
    	
69
    
	
Section   10.01
    	
Events of Default
    	
69
    
	
Section   10.02
    	
Remedies
    	
71
    
	
 
    	
 
    	
 
    
	
ARTICLE XI The Administrative Agent
    	
72
    
	
Section   11.01
    	
Appointment; Powers
    	
72
    
	
Section   11.02
    	
Duties and Obligations of   Administrative Agent
    	
72
    
	
Section   11.03
    	
Action by Administrative   Agent
    	
73
    
	
Section   11.04
    	
Reliance by Administrative   Agent
    	
73
    
	
Section   11.05
    	
Subagents
    	
74
    
	
Section   11.06
    	
Resignation or Removal of   Administrative Agent
    	
74
    
	
Section   11.07
    	
Administrative Agent as   Lender
    	
74
    
	
Section   11.08
    	
No Reliance
    	
75
    
	
Section   11.09
    	
Authority to Release   Collateral and Liens
    	
75
    
	
Section   11.10
    	
Filing of Proofs of Claim
    	
76
    
	
 
    	
 
    	
 
    
	
ARTICLE XII Miscellaneous
    	
76
    
	
Section   12.01
    	
Notices
    	
76
    
	
Section   12.02
    	
Waivers; Amendments
    	
77
    
	
Section   12.03
    	
Expenses, Indemnity; Damage   Waiver
    	
78
    
	
Section   12.04
    	
Successors and Assigns
    	
80
    
	
Section   12.05
    	
Survival; Revival;   Reinstatement
    	
83
    
	
Section   12.06
    	
Counterparts; Integration;   Effectiveness
    	
84
    
	
Section   12.07
    	
Severability
    	
84
    
	
Section   12.08
    	
Right of Setoff
    	
84
    
	
Section   12.09
    	
GOVERNING LAW;   JURISDICTION; CONSENT TO SERVICE OF PROCESS
    	
85
    
	
Section   12.10
    	
Headings
    	
86
    
	
Section   12.11
    	
Confidentiality
    	
86
    
	
Section   12.12
    	
EXCULPATION PROVISIONS
    	
87
    
	
Section   12.13
    	
No Third Party   Beneficiaries
    	
87
    
	
Section   12.14
    	
US Patriot Act Notice
    	
87
    

 

iii

 

	
Section   12.15
    	
Interest Rate Limitation
    	
88
    
	
Section   12.16
    	
References to First Lien   Credit Agreement
    	
88
    
	
Section   12.17
    	
Intercreditor Agreement
    	
89
    
	
Section   12.18
    	
Termination and Release
    	
89
    

 

	
Annex   I
    	
 
    	
List   of Maximum Commitment Amounts
    
	
 
    	
 
    	
 
    
	
Exhibit   A
    	
 
    	
Form   of Term Note
    
	
Exhibit   B
    	
 
    	
Form   of Advance Request
    
	
Exhibit   C
    	
 
    	
Form   of Compliance Certificate
    
	
Exhibit   D
    	
 
    	
Form   of Assignment and Assumption
    
	
Exhibit   E
    	
 
    	
Form   of Notice of Continuation
    
	
Exhibit   F
    	
 
    	
U.S.   Tax Compliance Certificates (F-1 through F-4)
    
	
Exhibit   G
    	
 
    	
Form   of Guaranty
    
	
Exhibit   H
    	
 
    	
Form   of Joinder
    
	
 
    	
 
    	
 
    
	
Schedule   2.05(a)
    	
 
    	
Advance   Requests
    
	
Schedule   2.05(c)
    	
 
    	
Authorized   Signatories on Advance Requests
    
	
Schedule   7.01
    	
 
    	
Corporate   Organizational Chart
    
	
Schedule   7.05
    	
 
    	
Litigation
    
	
Schedule   7.14
    	
 
    	
Subsidiaries
    
	
Schedule   7.16
    	
 
    	
Title   Exceptions to Properties
    
	
Schedule   7.18
    	
 
    	
Gas   Imbalances
    
	
Schedule   7.19
    	
 
    	
Marketing   Contracts
    
	
Schedule   7.20
    	
 
    	
Swap   Agreements
    
	
Schedule   7.26
    	
 
    	
Purchasers   of Production
    
	
Schedule   9.02
    	
 
    	
Existing   Debt
    
	
Schedule   9.03
    	
 
    	
Liens
    
	
Schedule   9.05
    	
 
    	
Investments
    
	
Schedule   9.17
    	
 
    	
Existing   Shell Swap Agreements
    

 

iv

 

This Second Lien Term Credit Agreement, dated as of November 15, 2012, is among SANCHEZ ENERGY CORPORATION, a Delaware corporation (“Sanchez”), SEP HOLDINGS III, LLC, a Delaware limited liability company (“SEP”) and SN MARQUIS LLC, a Delaware limited liability company (“SN Marquis”, together with Sanchez and SEP, hereinafter collectively called the “Borrowers”, and each individually “Co-Borrower”), each of the Lenders from time to time party hereto, MACQUARIE BANK LIMITED (in its individual capacity, “Macquarie”), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

R E C I T A L S

 

A.                                    The Borrowers have requested that the Lenders make available to Borrowers a multiple advance term loan facility.

 

B.                                    The Lenders have agreed to make such loan facility available to Borrowers subject to the terms and conditions of this Agreement.

 

C.                                    In consideration of the mutual covenants and agreements herein contained and of the loans, extensions of credit and commitments hereinafter referred to, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING MATTERS

 

Section 1.01                            Terms Defined Above.

 

As used in this Agreement, each term defined above has the meaning indicated above.

 

Section 1.02                            Certain Defined Terms.

 

As used in this Agreement, the following terms have the meanings specified below:

 

“ABR Loan” means an Advance bearing interest at a rate, subject to Sections 3.02 and 12.15, equal to the Alternate Base Rate plus seven and one-half percent (7.5%).

 

“Administrative Agent” has the meaning given in the introductory paragraph.

 

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

 

“Advance” means an advance of funds under the Term Loan.

 

“Advance Fee” is defined in Section 2.05(e).

 

“Advance Request” means a written request by any Co-Borrower for an Advance in accordance with Section 2.05.

 

 

“Affected Loans” has the meaning assigned to such term in Section 5.05.

 

“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 Person specified.

 

“Aggregate Maximum Commitment Amounts” at any time shall equal the sum of the Maximum Commitment Amounts, as the same may be increased, reduced or terminated pursuant to Section 2.06.  The initial Aggregate Maximum Commitment Amount of the Lenders is $250,000,000.

 

“Agreement” means this Second Lien Term Credit Agreement, as the same may from time to time be amended, modified, supplemented or restated.

 

“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 and (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1%.  Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Annualized Consolidated EBITDA” means, for the purposes of calculating the financial ratios set forth in Section 9.01(b) and Section 9.01(c):

 

(i)                                     for the Rolling Period ending on September 30, 2012, the Consolidated EBITDA for such Rolling Period multiplied by 4;

 

(ii)                                  for the Rolling Period ending on December 31, 2012, the Consolidated EBITDA for such Rolling Period multiplied by 2; and

 

(iii)                               for the Rolling Period ending on March 31, 2013, the Consolidated EBITDA for such Rolling Period multiplied by 4/3.

 

“Annualized Consolidated Net Interest Expense” means, for the purposes of calculating the financial ratio set forth in Section 9.01(b):

 

(i)                                     for the Rolling Period ending on September 30, 2012, the Consolidated Net Interest Expense for such Rolling Period multiplied by 4;

 

(ii)                                  for the Rolling Period ending on December 31, 2012, the Consolidated Net Interest Expense for such Rolling Period multiplied by 2; and

 

(iii)                               for the Rolling Period ending on March 31, 2013, the Consolidated Net Interest Expense for such Rolling Period multiplied by 4/3.

 

“Applicable Margin” means eight and one-half percent (8.5%).

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Maximum Commitment Amount represented by such Lender’s Maximum

 

2

 

Commitment Amount as such percentage is set forth on Annex I or in an Assignment and Assumption Agreement, as the case may be.

 

“Approval” and “Consent” mean, with respect to any consent or approval sought by Borrowers and given by the Administrative Agent or the Lenders, as applicable, the written instruments executed by the Administrative Agent or the Lenders, as applicable, that (a) authorize Borrowers to take the action for which the consent or approval is sought and (b) set forth the conditions, if any, upon which the consent or approval is given by the Administrative Agent or the Lenders, as applicable.  “Approve” and “Approved” have the correlative meaning.

 

“Approved Counterparty” means any Person who at the time a Swap Agreement was entered into was (a) any First Lien Lender or any Affiliate of a First Lien Lender or any First Lien Lender’s Swap Designee, or (b) Shell Energy North America (US), L.P. or any other Person whose issuer rating or long term senior unsecured debt rating at the time of entry into the applicable Swap Agreement is A-/A3 by S&P or Moody’s (or their equivalent) or higher (or whose obligations under the applicable Swap Agreement are guaranteed by an Affiliate of such Person meeting such rating standards) and who is acceptable to First Lien Administrative Agent  in its sole discretion, provided, the obligations and liabilities owed by a Co-Borrower or a Restricted Subsidiary to any Person designed as an “Approved Counterparty” under this clause (b) shall be unsecured and any agreement documenting such obligations and liabilities shall not require the posting of any collateral or provide for margin calls.

 

“Approved Fund” means (a) a CLO or (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Approved Petroleum Engineers” means Ryder Scott Company or any other independent petroleum engineer proposed by the Borrowers and approved by the Administrative Agent.

 

“Arranger Fee” is defined in Section 6.01(a).

 

“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 12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit D or any other form approved by the Administrative Agent.

 

“Availability Period” means (i) with respect to Tranche A, January 31, 2013 and (ii) with respect to Tranche B, the Maturity Date.

 

“Bank Product” any of the following products, services or facilities extended to any Co-Borrower or its Subsidiary by a Lender or any of its Affiliates: (a) cash management services including but without limitation any services provided in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services; (b) commercial credit card and merchant card services; and (c) leases and other banking products or services as may be requested by any Co-Borrower or its Subsidiary.

 

3

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition.  The terms “Beneficially Owns” and “Beneficially Owned” have correlative meanings.

 

“Board” means the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority.

 

“Board of Directors” means:

 

(a)                                 with respect to a corporation, the board of directors of the corporation;

 

(b)                                 with respect to a partnership, the board of directors or body serving similar function of the general partner of the partnership;

 

(c)                                  with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Borrowers” has the meaning given in the introductory paragraph.

 

“Borrowing Base” has the meaning set forth in the First Lien Credit Agreement.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Houston, Texas, are authorized or required by law to remain closed; and if such day relates to an Advance or continuation of, a payment or prepayment of principal of or interest on, or a conversion of or into, or the Interest Period for, an Advance or a notice by the Borrowers with respect to any such Advance or continuation, payment, prepayment or Interest Period, any day which is also a day on which dealings in dollar deposits are carried out in the London interbank market.

 

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

 

“Capital One” means Capital One, National Association.

 

“Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Borrowers or any of their Subsidiaries having a fair market value in excess of $5,000,000.

 

“Change in Control” means the occurrence of any of the following:

 

4

 

(a)                                 the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (including Equity Interest) of a Co-Borrower and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act);

 

(b)                                 the adoption of a plan relating to the liquidation or dissolution of a Co-Borrower;

 

(c)                                  the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as that term is used in Section 13(d)(3) of the Exchange Act), other than one or more members of the Sanchez Group, becomes the Beneficial Owner, directly or indirectly, of more than twenty percent (20%) of the Equity Interest of a Co-Borrower other than, with respect to a merger or consolidation, a transaction in which the Equity Interest of such Co-Borrower outstanding immediately prior to such transaction is converted into or exchanged for Equity Interest (other than Disqualified Capital Stock) of the surviving or transferee Person (or any parent thereof) constituting a majority of the outstanding shares, units or the like, of such Equity Interest of such surviving or transferee Person (or any parent thereof) immediately after giving effect to such transaction; or

 

(d)                                 Antonio R. Sanchez, III, ceases, for any reason, to be the chief executive officer of Sanchez and Sanchez fails, within ninety (90) days thereof, to retain and hire a replacement reasonably acceptable to the First Lien Required Lenders.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 5.01(b)), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline 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 or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or any Governmental Authority with respect to the implementation of the Basel III Accord shall, in each case, be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued, including if such date is before a Lender became a party to this Agreement.

 

“CLO” means any Person (other than a natural Person) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.

 

“Co-Borrower” has the meaning given in the introductory paragraph.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.

 

5

 

“Collateral” means collectively, Property which is pledged to secure Debt pursuant to one or more Security Instruments.

 

“Commitment” means, subject to the terms of this Agreement, with respect to each Lender, the commitment of such Lender, if any, to make Advances under the Term Loan up to its Maximum Commitment Amount, as such Maximum Commitment Amount may be modified from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b), and “Commitments” means the commitments of all the Lenders hereunder.

 

“Consolidated EBITDA” for any period means, without duplication, the Consolidated Net Income for such period, plus the following, without duplication and to the extent deducted (and not added back) in calculating such Consolidated Net Income:

 

(a)                                 Consolidated Net Interest Expense;

 

(b)                                 Consolidated Income Tax Expense;

 

(c)                                  consolidated depletion and depreciation expense of the Borrowers and their Restricted Subsidiaries;

 

(d)                                 other non-cash charges to the extent not included in the foregoing clauses (a)-(c).

 

and minus all non-cash income to the extent included in determining Consolidated Net Income.

 

“Consolidated Income Tax Expense” means, with respect to any period, the provision for federal, state, local and foreign taxes (including state franchise taxes) based on income of the Borrowers and their Restricted Subsidiaries for such period as determined in accordance with GAAP, or (for any period in which a Co-Borrower is a partnership or limited liability company) the Tax Amount for such period.

 

“Consolidated Net Income” means, for any period, the aggregate net income (loss) of the Borrowers and their consolidated Subsidiaries determined in accordance with GAAP and before any reduction in respect of preferred stock dividends of such Person, less (for any period a Co-Borrower is a partnership or limited liability company) the Tax Amount for such period; provided, however, that there will not be included (to the extent otherwise included therein) in such Consolidated Net Income:

 

(a)                                 any net income (loss) of any Person (other than the Borrowers) if such Person is not a Restricted Subsidiary, except that:

 

(i)                                     subject to the limitations contained in clauses (c) and (d) below, the Borrowers’ equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Borrowers or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (b) below); and

 

6

 

(ii)                                  the Borrowers’ equity in a net loss of any such Person for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Borrowers or a Restricted Subsidiary during such period;

 

(b)                                 any net income (but not loss) of any Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Borrowers, except that:

 

(i)                                     subject to the limitations contained in clauses (c), (d) and (e) below, the Borrowers’ equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Borrowers or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

 

(ii)                                  the Borrowers’ equity in a net loss of any such Restricted Subsidiary for such period will be included in determining such Consolidated Net Income;

 

(c)                                  any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of any Co-Borrower or its consolidated Subsidiaries which is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any Equity Interest of any Person;

 

(d)                                 any extraordinary or nonrecurring gains or losses or nonrecurring other income or expenses, together with any related provision for taxes (and, without duplication, any Restricted Payment for taxes permitted in Section 9.04) on such gains or losses or other income or expenses and all related fees and expenses;

 

(e)                                  the cumulative effect of a change in accounting principles;

 

(f)                                   any asset impairment write-downs, including ceiling test writedowns, on oil and gas properties under GAAP or SEC guidelines;

 

(g)                                  any unrealized non-cash gains or losses or charges in respect of obligations under Swap Agreements (including those resulting from the application of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 815);

 

(h)                                 income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

 

(i)                                     all deferred financing costs written off, and premiums paid, in connection with any early extinguishment of Debt;

 

(j)                                    any depreciation, depletion and amortization expense in excess of capital expenditures; and

 

7

 

(k)                                 any non-cash compensation charge arising from any grant of stock, stock options or other equity based awards.

 

“Consolidated Net Interest Expense” means, for any period, the total consolidated interest expense of the Borrowers and their Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, plus, to the extent not included in such interest expense and without duplication:

 

(a)                                 interest expense for such period attributable to Capital Lease Obligations and the interest component of any deferred payment obligations;

 

(b)                                 amortization of debt discount and debt issuance cost (provided that any amortization of bond premium will be credited to reduce Consolidated Net Interest Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Net Interest Expense);

 

(c)                                  non-cash interest expense;

 

(d)                                 commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

 

(e)                                  the interest expense on Debt of another Person that is guaranteed by a Co-Borrower or one of its Restricted Subsidiaries or secured by a lien on assets of a Co-Borrower or one of its Restricted Subsidiaries, to the extent such guarantee becomes payable or such lien becomes subject to foreclosure;

 

(f)                                   costs associated with interest rate obligations under Swap Agreements (including amortization of fees); provided, however, that if such interest rate obligations under Swap Agreements result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Net Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income;

 

(g)                                  the consolidated interest expense of the Borrowers and their Restricted Subsidiaries that was capitalized during such period; and

 

(h)                                 all dividends paid or payable in cash, cash equivalents or Debt or dividends accrued during such period on any series of Disqualified Capital Stock of a Co-Borrower;

 

and minus, consolidated interest income and, to the extent included above, write-off of deferred financing costs (and interest) attributable to Dollar-Denominated Production Payments.

 

“Consolidated Subsidiaries” means each Subsidiary of a Person (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP.

 

“Contract Rate” is defined in Section 3.02(a).

 

8

 

“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.

 

“Convert,” “Conversion,” and “Converted” each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.05.

 

“Debt” means, for any Person, the sum of the following (without duplication):  (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable and all accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of Property or services excluding accounts payable incurred in the ordinary course of business with respect to which no more than 90 days have elapsed since the date of invoice; (d) all Capital Lease Obligations; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition) of others secured by a Lien on any Property of such Person, whether or not such Debt is assumed by such Person; (g) all Debt (as defined in the other clauses of this definition) of others guaranteed by such Person or in which such Person otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Debt or Property of others, in each case, intended as a means of credit enhancement for creditors of such others and not as a purchase and sale agreement; (i) obligations to deliver commodities, goods or services, including, without limitation, Hydrocarbons, in consideration of one or more advance payments, other than gas balancing arrangements in the ordinary course of business; (j) any Debt of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (k) Disqualified Capital Stock; (l) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment; and (m) any deferred put premiums owed under a Swap Agreement.  The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP.  For the sake of clarity, except as provided in clause (m) of the first sentence of this definition, obligations under Swap Agreements shall not constitute Debt.

 

“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.

 

“Default Rate” is defined in Section 3.02(a).

 

“Development Plan” means the comprehensive plan or plans in effect from time to time with respect to the development of the Properties and any other expenditures that have been approved by Administrative Agent.  A Development Plan shall provide for, among other things,

 

9

 

the location, timing and estimated cost of Wells to be drilled or recompleted as well as names of key personnel required to undertake those operations and their associated responsibilities.

 

“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, in each case at the option of the holder thereof) or upon the happening of any event, matures or is mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is convertible or exchangeable for Debt or redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is one year after the earlier of (a) the Maturity Date and (b) the date on which there are no Advances or other obligations hereunder outstanding and all of the Commitments are terminated.

 

“Dollar-Denominated Production Payments” means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in connection therewith.

 

“dollars,” “USD” or “$” refers to lawful money of the United States of America.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States of America or any state thereof or the District of Columbia.

 

“Effective Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with Section 12.02).

 

“Engineering Reports” is defined in the First Lien Credit Agreement.

 

“Engineered Value” means the value attributed to the Oil and Gas Properties in the applicable Reserve Report based upon the discounted present value of the estimated net cash flow to be realized from the production of Hydrocarbons from such Oil and Gas Properties as set forth in such applicable Reserve Report.

 

“Environmental Laws” means any and all Governmental Requirements pertaining in any way to health, safety, the environment or the preservation or reclamation of natural resources, in effect in any and all jurisdictions in which the Borrowers or any Subsidiary are conducting or at any time has conducted business, or where any Property of the Borrowers or any Subsidiary is located, including without limitation, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements.  The term “oil” shall have the meaning specified in OPA, the terms “hazardous substance” and “release” (or “threatened release”) have the meanings specified in CERCLA, the terms “solid waste” and “disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil

 

10

 

and gas waste” shall have the meaning specified in Section 91.1011 of the Texas Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which any Property of the Borrowers or any Subsidiary are located establish a meaning for “oil,” “hazardous substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning shall apply with respect to Property located in such state or other jurisdiction.

 

“Environmental Permit” means any permit, registration, license, notice, approval, consent, exemption, variance, or other authorization required under or issued pursuant to applicable Environmental Laws.

 

“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 such Equity Interest.

 

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

 

“ERISA Affiliate” means each trade or business (whether or not incorporated) that, together with a Co-Borrower or a Subsidiary is treated as a “single employer” under Section 414(b) or (c) of the Code, or solely for the proposes 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 existence with respect to any Plan of a failure to meet the minimum funding standards under Section 412 of 430 of the Code or Section 303 of ERISA; (c) the incurrence by any Co-Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (d) the receipt by any Co-Borrower 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; (e) the determination that any Plan is considered an “at risk” plan or a plan in endangered or critical status within the meaning of Section 430 of the Code or Section 303 of ERISA; (f) the incurrence by any Co-Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Co-Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Co-Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar Advance” means an Advance bearing interest based on the LIBO Rate.

 

“Event of Default” has the meaning assigned such term in Section 10.01.

 

11

 

“Excepted Liens” means (a) Liens for Taxes, assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens on pledges or deposits required in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) contractual Liens that arise in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits or agreements, and other agreements which are usual and customary in the oil and gas business and are for claims which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP, provided that any such Lien referred to in this clause does not materially impair the use of the Property covered by such Lien for the purposes for which such Property is held by the Borrowers or any Subsidiary or materially impair the value of such Property subject thereto; (e) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is intended by Borrowers or any of their Subsidiaries to provide collateral to the depository institution; (f) easements, rights-of-way, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any Property of the Borrowers or any Subsidiary for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, which in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Borrowers or any Subsidiary or materially impair the value of such Property subject thereto; (g) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business; (h) judgment and attachment Liens not giving rise to an Event of Default, provided that any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may

 

12

 

be initiated shall not have expired and no action to enforce such Lien has been commenced; (i) Liens arising from UCC financing statement filings regarding operating leases entered into by any Co-Borrower and its Subsidiaries in the ordinary course of business covering only the Property under lease; and (j) First Liens; provided, further that Liens described in clauses (a) through (e) shall remain Excepted Liens only for so long as no action to enforce such Lien has been commenced and no intention to subordinate the Lien granted in favor of the Administrative Agent and the Lenders is to be hereby implied or expressed by the permitted existence of such Excepted Liens.

 

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

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America or such other jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which a Co-Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 5.04(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 5.03(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts with respect to such withholding tax pursuant to Section 5.03(a) or Section 5.03(c), and (d) any federal withholding Taxes imposed under FATCA.

 

“Family” means (a) an individual, (b) such individual’s spouse, (c) any other natural person who is related to such individual or such individual’s spouse within the second degree of kinship and (d) any other natural person who has been adopted by such individual.

 

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

 

“FCPA” means the Foreign Corrupt Practices Act of 1977.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, New York or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such

 

13

 

transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Letter” means any letter agreement executed by the Borrowers and the Administrative Agent in connection herewith and/or with a syndication of this credit facility pertaining to certain fees payable to the Administrative Agent.

 

“Financial Officer” means, for any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.  Unless otherwise specified, all references herein to a Financial Officer means a Financial Officer of each Co-Borrower.

 

“Financial Statements” means the financial statement or statements of Sanchez and its Consolidated Subsidiaries (including the other Borrowers) referred to in Section 7.04(a).

 

“First Liens” has the meaning assigned such term in Section 9.03(b).

 

“First Lien Administrative Agent” means Capital One, and its successors and assigns, in its capacity as administrative agent under the First Lien Loan Documents.

 

“First Lien Credit Agreement” means, subject to Section 12.16, that certain Credit Agreement dated November 15, 2012 by and among the Borrowers, First Lien Administrative Agent and the First Lien Lenders, as amended or refinanced in accordance with the terms thereof and the terms of the Intercreditor Agreement.

 

“First Lien Lenders” means First Lien Administrative Agent and the lenders party thereto to the First Lien Loan Documents.

 

“First Lien Lender’s Swap Designee” means any “Lender’s Swap Designee” as defined in the First Lien Credit Agreement.

 

“First Lien Loan” means that certain $250,000,000 first lien revolving loan made or to be made by the First Lien Lenders to Borrowers pursuant to the First Lien Loan Documents, as amended, modified or refinanced in accordance with the terms thereof and the terms of the Intercreditor Agreement.

 

“First Lien Loan Documents” means, collectively, the First Lien Credit Agreement and the Notes, the other Loan Documents (as such terms are defined therein) and all other documents, instruments, and agreements now or hereafter executed and/or delivered by Borrowers in connection with the First Lien Loan, in each case, as amended, modified or replaced in accordance with the terms thereof and of the Intercreditor Agreement.

 

“First Lien Required Lenders” means the “Required Lenders” as defined in the First Lien Credit Agreement.

 

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Loan Parties are located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

14

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time subject to the terms and conditions set forth in Section 1.05.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government over the Borrowers, any Subsidiary, any of their Properties, the Administrative Agent or any Lender.

 

“Governmental Requirement” means any applicable law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter in effect, including, without limitation, Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.

 

“Guaranty” means the Guaranty to be executed by the Guarantors, substantially in the form of Exhibit G or any other form approved by the Administrative Agent.

 

“Guarantor” means all Restricted Subsidiaries of Borrowers.  As of the date hereof, there are no Guarantors.

 

“Hazardous Materials” means any substance regulated or as to which liability might arise under any applicable Environmental Law and including, without limitation:  (a) any chemical, compound, material, product, byproduct, substance or waste defined as or included in the definition or meaning of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar meaning or import found in any applicable Environmental Law; (b) Hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components, fractions, or derivatives thereof; and (c) radioactive materials, asbestos containing materials, polychlorinated biphenyls, or radon.

 

“Highest Lawful Rate” means, with respect to each Lender, the maximum non-usurious interest rate, if any (or, if the context so requires, an amount calculated at such rate), that at any time or from time to time may be contracted for, taken, reserved, charged, or received by such Lender under applicable laws with respect to an obligation, as such laws are presently in effect or, to the extent allowed by applicable law, as such laws may hereafter be in effect and which allow a higher maximum non-usurious interest rate than such laws now allow.  The determination of the Highest Lawful Rate shall, to the extent required by applicable law, take into account as interest paid, taken, received, charged, reserved or contracted for any and all relevant payments or charges under the Loan Documents.

 

“Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit

 

15

 

interests and production payment interests, including any reserved or residual interests of whatever nature.

 

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Intercreditor Agreement” means that certain intercreditor agreement dated of even date herewith by and among Administrative Agent, Lenders, First Lien Administrative Agent, First Lien Lenders and Borrowers.

 

“Interest Payment Date” means (a) with respect to any Eurodollar Advance, the last day of the Interest Period and, in the case of an Advance 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 (b) with respect to any ABR Loan, the last day of each calendar month.

 

“Interest Period” means the period commencing on the date of such Advance and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter, as the Borrowers may elect; provided, that (a) 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 immediately preceding Business Day and (b) any Interest Period 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.

 

“Interim Redetermination” is defined in the First Lien Credit Agreement.

 

“Investment” means, for any Person, any of the following: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person or any agreement to make any such acquisition (including, without limitation, any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such short sale) or any capital contribution to any other Person; (b) the making of any deposit with, or advance, loan or capital contribution to, assumption of Debt of, purchase or other acquisition of any other Debt or equity participation or interest in, or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person); or (c) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person.

 

“Lenders” means the Persons listed on Annex I and any Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

 

16

 

“LIBO Rate” means, with respect to any Advance for any Interest Period, the rate appearing on Reuters BBA Libor Rates LIBOR01 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to such Advance for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and, in each case, for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

 

“Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (b) royalties, production payments and the like payable out of Oil and Gas Properties.  The term “Lien” shall include easements, restrictions, servitudes, permits, conditions, covenants, encroachments, exceptions or reservations.  For the purposes of this Agreement, each Co-Borrower and its Subsidiaries shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.

 

“Loan Documents” means this Agreement, the Term Notes, the Security Instruments, the Guaranties, the Intercreditor Agreement, the Undertaking to Pay Directly, Fee Letter and all other agreements, instruments, documents and certificates, other than Swap Agreements, executed and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby.

 

“Loan Parties” means the Borrowers and each Subsidiary that is a party to any Loan Document.

 

“Macquarie” has the meaning given in the introductory paragraph.

 

“Market Disruption Notice” is defined in Section 3.02(d).

 

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, Property or condition (financial or otherwise) of any Co-Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under any Loan Document, (c) the validity or enforceability of any Loan Document or (d) the rights and remedies of or benefits available to the Administrative Agent, any Issuing Bank or any Lender under any Loan Document.

 

17

 

“Material Indebtedness” means (a) the First Lien Loan and (b) Debt (other than the Term Loan), or obligations in respect of one or more Swap Agreements, of any one or more Co-Borrower and its Subsidiaries in an aggregate principal amount exceeding $1,000,000.00.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrowers 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 a Co-Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

 

“Maturity Date” means May 16, 2016.

 

“Maximum Commitment Amount” means, as to each Lender, the amount set forth opposite such Lender’s name on Annex I under the caption “Maximum Commitment Amounts,” as the same may be modified from time to time pursuant to any assignment permitted by Section 12.04(b).

 

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

 

“Mortgaged Property” means any Property owned by any Co-Borrower or any Restricted Subsidiary that is subject to the Liens existing and to exist under the terms of the Security Instruments.

 

“Mortgages” means all mortgages and deeds of trust executed in connection herewith.

 

“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Notice of Continuation” means a notice of continuation of Eurodollar Advance in the form of the attached Exhibit E signed by Borrowers.

 

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

 

“Obligations” means, without duplication, (a) all Debt evidenced hereunder, (b) the obligation of the Loan Parties for the payment of the fees payable hereunder or under the other Loan Documents, (c) the obligations of the Loan Parties relating to Bank Products, and (d) all other obligations and liabilities (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Loan Parties to the Administrative Agent and the Lenders, in each case now existing or hereafter incurred under, arising out of or in connection with any Loan Document, and to the extent that any of the foregoing includes or refers to the payment of amounts deemed or constituting interest, only so much thereof as shall have accrued, been earned and which remains unpaid at each relevant time of determination.

 

“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts

 

18

 

and agreements, which relate to any of Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. Any reference herein to “Oil and Gas Properties” shall (a) be deemed to refer to Borrowers’ and their Subsidiaries’ Oil and Gas Properties unless the context requires otherwise and (b) in any event, include the “Mortgaged Properties” described in the Mortgages.

 

“Operator” means Sanchez Oil & Gas Corporation, a Delaware corporation.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement and any other Loan Document; “Other Taxes” shall not include Excluded Taxes.

 

“Participant” has the meaning set forth in Section 12.04(c)(i).

 

“Patriot Act” has the meaning set forth in Section 12.15.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions.

 

“PDNP Reserves” means Proved Reserves which are categorized as both “Developed” and “Non Producing” in the SPE/WPC Definitions.

 

“PDP Reserves” means Proved Reserves which are categorized as both “Developed” and “Producing” in the SPE/WPC Definitions.

 

“Permitted Preferred Stock Distributions” means dividends to holders of the Preferred Stock to the extent described and provided for by that certain Certificate of Designations of 4.875% Convertible Perpetual Preferred Stock, Series A of Sanchez dated September 17, 2012.

 

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

 

19

 

“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 which a Co-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.

 

“Preferred Stock” means the shares of the series of Sanchez’ preferred stock, par value $0.01, issued pursuant to that certain Certificate of Designations of 4.875% Convertible Perpetual Preferred Stock, Series A of Sanchez dated September 17, 2012.

 

“Pricing/Expense Assumptions” means a calculation utilizing the following assumptions:

 

(i)                                     Oil and gas pricing used will be determined by Administrative Agent and Lenders in their sole discretion, based in part on NYMEX market prices reduced by (A) historical average basis differential between the pricing employed by independent third-party over-the-counter counterparties compared to the prevailing wellhead prices at the production location and (B) any other adjustments as may be necessary including shrink, gathering, transportation and processing fees.

 

(ii)                                  All forecasted pricing will be adjusted for quality and location.

 

(iii)                               Average lease or other applicable operating expenses will be subject to Administrative Agent’s and Lenders’ reasonable Approval and shall reasonably correspond to historical operating expenses for Borrowers’ Oil and Gas Properties.

 

“Prime Rate” means the prime rate of interest published by the Wall Street Journal from time to time; each change in the Prime Rate shall be effective from and including the date such change is published as being effective.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.

 

“Proved Reserves” shall have the meaning given that term in the SPE/WPC Definitions.

 

“PUD Reserves” means Proved Reserves which are categorized as “Undeveloped” in the SPE/WPC Definitions.

 

“PV-10” means the present worth of future net income, discounted to present value at the simple interest rate of ten percent (10%) per year over the life of the reserves.

 

“Redemption” means with respect to any Debt, the repurchase, redemption, prepayment, repayment or defeasance (or the segregation of funds with respect to any of the foregoing) of such Debt.  “Redeem” has the correlative meaning thereto.

 

“Register” has the meaning assigned such term in Section 12.04(b)(iv).

 

20

 

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

 

“Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing.

 

“Remedial Work” has the meaning assigned such term in Section 8.10(a).

 

“Required Lenders” means, at any time while no Advances are outstanding, Lenders having at least sixty-six and two thirds percent (66 2/3%) of the Aggregate Maximum Commitment Amounts; and at any time while any Advances are outstanding, Lenders holding at least sixty-six and two thirds percent (66 2/3%) of the outstanding aggregate principal amount of the Advances (without regard to any sale by a Lender of a participation in any Advance under Section 12.04(c)).

 

“Reserve Report” means a report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each January 1st or July 1st (or such other date in the event of an Interim Redetermination) the oil and gas reserves attributable to the proved Oil and Gas Properties of the Borrowers and the Restricted Subsidiaries, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the pricing assumptions consistent with SEC reporting requirements at the time, and reflecting Swap Agreements in place with respect to such production.

 

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the Chief Operating Officer, the President, any Financial Officer or any Vice President of such Person.  Unless otherwise specified, all references to a Responsible Officer herein shall mean a Responsible Officer of each Co-Borrower.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in any Person 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 any Person or any option, warrant or other right to acquire any such Equity Interests in any Person.

 

“Restricted Subsidiary” means any Subsidiary that is not an Unrestricted Subsidiary or a Co-Borrower.

 

“Rolling Period” means (a) for the fiscal quarters ending prior to June 30, 2013, the period commencing on June 30, 2012 and ending on the last day of such fiscal quarter and (b) for the fiscal quarter ending on June 30, 2013, and for each fiscal quarter thereafter, the period of four consecutive fiscal quarters ending on the last day of such fiscal quarter.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any successor thereto that is a nationally recognized rating agency.

 

21

 

“Sanchez Family” means (a) Antonio R. Sanchez, III and A.R. Sanchez, Jr., (b) any spouse or descendant of any individual named in (a), (c) any other natural person who is a member of the Family of any such individual referenced in (a)-(b) above and (d) any other natural person who has been adopted by any such individual referenced in (a)-(c) above.

 

“Sanchez Group” means (a) any member of the Sanchez Family, (b) the Operator, Sanchez Energy Partners I, LP and SEP Management I, LLC and (c) any Person Controlled by any one or more of the foregoing.

 

“SEC” means the U.S. Securities and Exchange Commission or any successor Governmental Authority.

 

“Second Lien Collateral Agent” is defined in Section 12.17.

 

“Security Agreement” means the Security and Pledge Agreement executed by Borrowers and the Guarantors of even date herewith.

 

“Security Instruments” means the mortgages, deeds of trust, security agreements, pledge agreements, deposit account control agreements, guaranty agreements and other agreements, instruments or certificates, and any and all other agreements, instruments, certificates or certificates now or hereafter executed and delivered by the Borrowers or any other Person (other than Swap Agreements or participation or similar agreements between any Lender and any other lender or creditor with respect to any Obligations pursuant to this Agreement) in connection with, or as security for the payment or performance of the Obligations, the Term Notes, or this Agreement, as such agreements may be amended, modified, supplemented or restated from time to time, including, without limitation, the Security Agreement, Mortgages and Transfer Letters.

 

“SPE/WPC Definitions” means the definitions promulgated by the Society of Petroleum Evaluation Engineers and the World Petroleum Congress and in effect from time to time.

 

“Subsidiary” means of a Person means (a) a corporation, partnership, joint venture, limited liability company or other business entity of which at least a majority of the outstanding Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, managers or other governing body of such Person (irrespective of whether or not at the time Equity Interests of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries, and (b) any partnership of which such Person or any of its Subsidiaries is a general partner.  Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of any Co-Borrower.

 

“Supporting Documentation” means a package containing data that is available to Borrowers sufficient to support the cost estimate and the justification for the proposed Development Plan project.  Upon request by Lenders, this package will include any or all of the following: (a) detailed work procedure, (b) before and after wellbore schematics, (c) detailed cost estimate plus bids on major items and other backup as appropriate, (d) reservoir structure and isopach maps, (e) log sections, core data, and directional survey for any well being worked on plus key offset wells, (f) notes showing Borrowers’ or Approved Petroleum Engineers’

 

22

 

reserves calculation, if available, (g) economic forecast and (h) any other data that Lenders reasonably deem necessary in order to make an informed decision on the merits of the project.

 

“Swap Agreement” means any transaction or agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise, 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, whether or not any such transaction is governed by or subject to any master agreement.  For the avoidance of doubt, (a) a Swap Agreement governed by a master agreement, including any master agreement published by the International Swaps and Derivatives Association, Inc., shall be deemed entered into when such individual Swap Agreement is entered into without regard to the date on which such master agreement is entered into, and (b) any hedge position or hedging arrangement of the type described in the immediately preceding sentence shall be considered a Swap Agreement regardless of whether a written agreement or written confirmation is entered into.

 

“Synthetic Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent thereunder and which were properly treated as Obligations for borrowed money for purposes of U.S. federal income taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination an amount in excess of, eighty percent (80%) of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease.

 

“Tax Amount” means, for any period, the combined federal, state and local income taxes, including estimated taxes, that would be payable by the Borrowers if it were a Texas corporation filing separate tax returns with respect to its Taxable Income for such period; provided that in determining the Tax Amount, the effect thereon of any net operating loss carry-forwards or other carry-forwards or tax attributes, such as alternative minimum tax carry-forwards, that would have arisen if any Co-Borrower were a Texas corporation shall be taken into account; provided, further, that, if there is an adjustment in the amount of the Taxable Income for any period, an appropriate positive or negative adjustment shall be made in the Tax Amount, and if the Tax Amount is negative, then the Tax Amount for succeeding periods shall be reduced to take into account such negative amount until such negative amount is reduced to zero. Notwithstanding anything to the contrary, Tax Amount shall not include taxes resulting from a Co-Borrower’s reorganization as, or change in the status to, a corporation for tax purposes.

 

“Taxable Income” means, for any period, the taxable income or loss of the Borrowers for such period for U.S. federal income tax purposes.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

 

“Term Loan” is defined in Section 2.01.

 

23

 

“Term Notes” means the promissory notes of the Borrowers described in Section 2.06 and being substantially in the form of Exhibit A, together with all amendments, modifications, replacements, extensions and rearrangements thereof.

 

“Termination Date” means the earliest of (a) the Maturity Date, (b) the date on which all of the Obligations under the Loan Documents are indefeasibly paid in full in cash (other than indemnity obligations and similar obligations that survive the termination of this Agreement) and Lenders have no further obligation to make any Advance, or (c) the date on which Administrative Agent, on behalf of the Lenders, notifies Borrowers of the acceleration of Obligations under this Agreement following an Event of Default.

 

“Total Adjusted Present Value” means the sum of the PV-10 of Borrowers’ Proved Reserves calculated using the most recently delivered Engineering Report; provided that the sum of the PV-10 of the PDNP Reserves and the PV-10 of the PUD Reserves shall not exceed fifty percent (50%) of the Total Adjusted Present Value.  In the event the sum of PV-10 of PDNP Reserves and PV-10 of the PUD Reserves would otherwise exceed fifty percent (50%) of the Total Adjusted Value, then the Total Adjusted Value shall be calculated as two hundred percent (200%) of the amount of PV-10 of the PDP Reserves. The calculation of Total Adjusted Present Value may, in Administrative Agent’s sole discretion, incorporate any acquisitions of Oil and Gas Properties or dispositions of Oil and Gas Properties from the most recently delivered Engineering Report since the date thereof and shall incorporate the Pricing/Expense Assumptions.

 

“Tranche A” is defined in Section 2.03(a).

 

“Tranche B” is defined in Section 2.03(b).

 

“Transactions” means the execution, delivery and performance by any Co-Borrower or any Guarantor of this Agreement and each other Loan Document to which it is a party, the borrowing of Advances, the use of the proceeds thereof and the grant of Liens by the Borrowers on Mortgaged Properties, other Properties and Collateral pursuant to the Security Instruments.

 

“Transfer Letters” means, collectively, the letters in lieu of transfer orders executed and delivered by the Borrowers or any other Person executing and delivering a Mortgage.

 

“Type,” when used in reference to any Advance refers to whether the rate of interest on such Advance is determined by reference to the Alternate Base Rate or the LIBO Rate.

 

“UCC” means the Uniform Commercial Code in effect from time to time in the State of Texas, or, where applicable as to specific Property, any other relevant state.

 

“Undertaking to Pay Directly” means the Undertaking to Pay Directly executed by Operator in favor of the Administrative Agent of even date herewith.

 

“Unproved Reserves” means Unproved Reserves which are categorized as “Probable Reserves” and “Possible Reserves” in the SPE/WPC Definitions.

 

24

 

“Unrestricted Subsidiary” means any Subsidiary of a Co-Borrower that is designated by the Board of Directors of such Co-Borrower as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

 

(1)                                 has no Debt other than Debt which is non-recourse to such Co-Borrower;

 

(2)                                 is not party to any agreement, contract, arrangement or understanding with any Co-Borrower or any Restricted Subsidiary of such Co-Borrower unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to such Co-Borrower or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of such Co-Borrower;

 

(3)                                 is a Person with respect to which neither such Co-Borrower nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

 

(4)                                 does not guarantee or otherwise directly or indirectly provide credit support for any Debt of such Co-Borrower or any of its Restricted Subsidiaries.

 

Any designation of a Subsidiary of a Co-Borrower as an Unrestricted Subsidiary shall be made in an officer’s certificate delivered to the Administrative Agent and containing a certification that such designation is in compliance with the terms of this definition.  If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Debt of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of such Co-Borrower as of such date and any Lien of such Subsidiary will be deemed to be incurred as of such date and, if such Debt is not permitted to be incurred pursuant to Section 9.02 hereof, or such Lien is not permitted to be incurred as of such date pursuant to Section 9.03 hereof, then in either case, the Borrowers will be in default of such covenant.

 

“U.S. Tax Compliance Certificate” has the meaning assigned such term in Section 5.03(e)(ii)(1)(C).

 

“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable law), on a fully-diluted basis, are owned by a Co-Borrower or one or more of the Wholly-Owned Subsidiaries or by a Co-Borrower and one or more of the Wholly-Owned Subsidiaries.

 

Section 1.03                            Terms Generally; Rules of Construction.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same

 

25

 

meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to the restrictions contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) with respect to the determination of any time period, the word “from” means “from and including” and the word “to” means “to and including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement.  No provision of this Agreement or any other Loan Document shall be interpreted or construed against any Person solely because such Person or its legal representative drafted such provision.

 

Section 1.04                            Accounting Terms and Determinations; GAAP.  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the Financial Statements except for changes in which the Borrowers’ independent certified public accountants concur and which are disclosed to Administrative Agent on the next date on which financial statements are required to be delivered to the Lenders pursuant to Section 8.01(a); provided that, unless the Borrowers and the Required Lenders shall otherwise agree in writing, no such change shall modify or affect the manner in which compliance with the covenants contained herein is computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods.

 

ARTICLE II

 

THE TERM LOAN FACILITY

 

Section 2.01                            Commitments.  Subject to the terms and conditions set forth herein, the Lenders agree to make available to the Borrowers during the Availability Period a secured, multiple advance term loan (the “Term Loan”) of up to the Aggregate Maximum Commitment Amount; provided that the Maximum Commitment Amount of any Lender shall never exceed its Applicable Percentage of the Aggregate Maximum Commitment.  If, however, the obligations of Borrowers under the Term Loan at any time exceed the Aggregate Maximum Commitment Amount, all amounts owing by Borrowers to Lenders under this Agreement will nevertheless constitute Obligations and be entitled to the benefit of Lenders’ Liens on the Collateral.

 

Section 2.02                            Term Loan.

 

(a)                                 All Amounts Due at Maturity.  All monetary Obligations will be fully due and payable on the Maturity Date.

 

26

 

(b)                                 No Revolving Credit.  Amounts repaid in respect of the Term Loan may not be reborrowed.

 

(c)                                  Joint and Several Obligations.  The Borrowers obligations to repay the Term Loan and the other Obligations are joint and several.

 

Section 2.03                            Availability and Purpose of Advances.  Beginning on the Effective Date and continuing through the applicable Availability Period:

 

(a)                                 Tranche A.  $50,000,000 of the Term Loan (“Tranche A”) may be used by Borrowers to (i) fund the development of the Properties as set forth in any Development Plan Approved by Lenders and (ii) with the Approval of Lenders, fund the acquisitions of additional Properties.

 

(b)                                 Tranche B.  Up to $200,000,000 of the Term Loan (“Tranche B”) may, with the Approval of Lenders, be used by Borrowers:

 

(i)                                     to fund the acquisition of additional Properties;

 

(ii)                                  to fund additional development activities included on any subsequent Development Plan Approved by Lenders;

 

(iii)                               to cure Borrowing Base deficiencies under the First Lien Credit Agreement;

 

(iv)                              to pay the Advance Fee for each Advance under this Tranche B; and

 

(v)                                 for any other purpose Approved by Lenders.

 

(c)                                  Tranche B Advances are Discretionary.  Notwithstanding any provision of this Agreement to the contrary, the decision to make (or not make) any Advance requested under Tranche B is in the sole and absolute discretion of Lenders, without regard to whether the applicable conditions set forth in this ARTICLE II and ARTICLE VI below have been satisfied.

 

Section 2.04                            Development Plan.

 

(a)                                 The initial Development Plan shall be the Development Plan submitted and Approved pursuant to Section 6.01(s).  Borrowers can propose modifications to the Development Plan from time to time, and those modifications will become effective when Approved by Administrative Agent.

 

(b)                                 Notwithstanding the Administrative Agent’s Approval of a Development Plan, Borrowers must nevertheless satisfy the conditions described in this ARTICLE II and ARTICLE VI below prior to the making of each Advance.

 

27

 

Section 2.05                            Advance Procedure.

 

(a)                                 Advance Requests.  To request an Advance, Borrowers will deliver an Advance Request to Administrative Agent by 12:00 noon Houston, Texas time, at least three Business Days prior to the date on which the Advance, if Approved, is to be made.  Each Advance Request will include invoices or other Supporting Documentation reasonably requested by Administrative Agent to support the amounts to be paid out of the requested Advance.  Each Advance Request shall specify an Interest Period (which shall be a period contemplated by the definition of “Interest Period”); provided that if no Interest Period is specified, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.  Upon Administrative Agent’s receipt of any Advance Request, the Administrative Agent shall advise each Lender of the details thereof and such Lender’s portion of each resulting Advance.  Unless Administrative Agent notifies Borrowers in writing within that three Business Day period that it objects or requires additional information with respect to the requested Advance (in which case, Administrative Agent will describe the objection or requested information in reasonable detail), then Lenders will process the Advance Request.  All Advances to Borrowers will be made to an account or accounts specified in Schedule 2.05(a).

 

(b)                                 Minimum Advance.  The minimum amount of any Advance under Tranche A and Tranche B will be in the amount of $250,000, unless a lesser amount remains available under the Term Loan or under a particular tranche of the Term Loan.

 

(c)                                  Authorized Signatories.  Schedule 2.05(c) identifies and contains a specimen signature of each Person authorized to request an Advance on behalf of Borrowers.  Unless otherwise noted on Schedule 2.05(c), only a single signatory is required on an Advance Request.

 

(d)                                 Unavailability of USD.  If any Lender determines that deposits in USD will not be readily available to it in the relevant interbank market to enable that Lender to fund its Applicable Percentage of a requested Advance, then (i) that Lender will give prompt notice of that fact to Borrowers and Administrative Agent, and (ii) the Advance Request will be deemed to have been withdrawn and Lenders will have no obligation to make the requested Advance.

 

(e)                                  Advance Fee.  Contemporaneously with the making of any Tranche B Advance Borrowers will pay to Administrative Agent, for the account of the Lenders, a non-refundable fee (as more particularly described in the Fee Letter, the “Advance Fee”).

 

(f)                                   Continuations.  Unless Administrative Agent has notified Borrowers of the Conversion of an Advance to an ABR Loan as provided herein, Borrowers may elect to continue any Advance as a Eurodollar Advance by delivering an irrevocable Notice of Continuation to Administrative Agent at Administrative Agent’s office no later than 12:00 noon Houston, Texas time on the date which is at least three Business Days in advance of the proposed continuation date.  Each such Notice of Continuation shall be in writing or by facsimile confirmed immediately in writing specifying the information required therein.  Promptly after receipt of a Notice of Continuation under this Section 2.05, Administrative Agent shall provide each Lender with a copy thereof.

 

28

 

(g)                                  Certain Limitations.  Notwithstanding anything to the contrary contained in Sections 2.05(a) and (f) above:

 

(i)                                     at no time shall there be more than four Interest Periods applicable to outstanding Advances and Borrowers may not request any Advances based on the LIBO Rate at any time that an Event of Default has occurred and is continuing;

 

(ii)                                  if any Lender shall, at least one Business Day before the date of any requested Advance or continuation, notify Administrative Agent of any event set forth in Section 5.05 making it unlawful for such Lender to perform its obligations under this Agreement to make Advances or to fund or maintain Advances based on the LIBO Rate, the right of Borrowers to select the LIBO Rate from such Lender shall be suspended until such Lender shall notify Administrative Agent that the circumstances causing such suspension no longer exist, and the Advance made by such Lender or continuation shall be an ABR Loan;

 

(iii)                               if Administrative Agent is unable to determine the LIBO Rate for any Advance, the right of Borrowers to select LIBO Rate for such Advance or for any subsequent Advance shall be suspended until Administrative Agent shall notify Borrowers and the Lenders that the circumstances causing such suspension no longer exist, and each Advance made or continued after such notice and before such time, if any, as the Administrative Agent shall have notified the Borrowers and Lenders that such suspension has ended, shall be an ABR Loan;

 

(iv)                              if any Lender shall, at least one Business Day before the date of any requested Advance, notify Administrative Agent that the LIBO Rate will not adequately reflect the cost to such Lenders as set forth in Section 5.01, for such Advance, the right of Borrowers to select the LIBO Rate for such Advance or for any subsequent Advance shall be suspended until Administrative Agent shall notify Borrowers and the Lenders that the circumstances causing such suspension no longer exist, and each Advance shall be an ABR Loan; and

 

(v)                                 Borrowers acknowledge and agree that they are not entitled to request any ABR Loans, and the advance of, or Conversion to, ABR Loans shall be solely for the purposes set forth in this Section 2.05(f), Market Disruption Notices and Section 5.05.

 

Section 2.06                            Term Notes.  Borrowers’ obligation to repay the Term Loan will be evidenced by a Term Note in favor of each Lender.  Each Lender will record on its books the date, amount and interest rate of each Advance made by such Lender, as well as a record of all principal payments made by Borrowers in respect of such Term Note.  If any Term Note is transferred to another holder, such Lender may prepare a schedule of that information and attach it to such Term Note.  However, neither an error in the recordation of that information on such Lender’s books nor the failure to prepare and attach a schedule of that information to such Term Note when it is transferred to another holder will affect such Lender’s or Borrowers’ rights and obligations in respect of such Term Note or the validity of any transfer of such Term Note to another holder.

 

29

 

Section 2.07                            Funding of Advances.  Each Lender shall make each Advance to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., Houston, Texas time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Advance available to the Borrowers by promptly crediting the amounts so received, in like funds, to an account of the Borrowers maintained with the Administrative Agent in Houston, Texas and designated by the Borrowers in the applicable Advance Request.

 

Section 2.08                            Presumption of Funding by the Lenders.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Advance that such Lender will not make available to the Administrative Agent such Lender’s share of such Advance, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with (a) and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Advance available to the Administrative Agent, then the applicable Lender and each Co-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 Borrowers but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrowers, 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 share of such Advance.

 

Section 2.09                            Lender Obligations Several.  The failure of any Lender to make its Advance shall not relieve any other Lender of its obligation, if any, to make its Advance on the date of such Advance (unless such failure is under Section 2.05(d)).  No Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Advance.

 

ARTICLE III

 

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

 

Section 3.01                            Repayment of Advances.

 

Each Co-Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Advance on the Termination Date.

 

Section 3.02                            Interest.

 

(a)                                 Except as otherwise provided in Sections 2.05 and 12.15, all Advances under the Term Loan will bear interest at the lesser of (i) the LIBO Rate plus the Applicable Margin and (ii) the Highest Lawful Rate (the “Contract Rate”) beginning on the date of each Advance and continuing until all Obligations are paid in full in accordance with this Agreement.  If an Event of Default exists, all amounts outstanding under the Term Loan will bear interest at a rate per

 

30

 

annum (the “Default Rate”) equal to the lesser of (i) the Highest Lawful Rate and (ii) the Contract Rate plus three percent (3%).  In addition, any amount owing by Borrowers under this Agreement or the other Loan Documents that is not paid when due, whether at stated maturity, upon acceleration or otherwise, will bear interest (both before and after judgment) at the Default Rate.

 

(b)                                 All interest will be computed on the actual number of days elapsed over a year composed of three hundred sixty (360) days, unless such computation would exceed the Highest Lawful Rate, in which case interest shall be computed on the basis of a year of three hundred and sixty-five (365) days (or three hundred and sixty-six (366) days in a leap year), 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 three hundred and sixty-five (365) days (or three hundred and sixty-six (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).  Interest is due and payable under this Agreement in arrears and in immediately available funds (i) on each Interest Payment Date prior to the Termination Date and (ii) in full on the Termination Date; provided that (i) interest accrued at the Default Rate shall be payable on demand, (i) in the event of any repayment or prepayment of any Advance, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, and (ii) in the event of any Conversion of any Advance as provided herein prior to the end of the current Interest Period therefor, accrued interest on such Advance shall be payable on the effective date of such conversion.

 

(c)                                  Lenders’ determination of the LIBO Rate as provided in this Agreement will, absent manifest error, be conclusive and binding on all parties.

 

(d)                                 If, on or before any date on which Administrative Agent is to determine the LIBO Rate:

 

(i)                                     Administrative Agent determines that adequate and fair means do not or will not exist for determining the LIBO Rate applicable to an Interest Period or, for any reason, Administrative Agent will not be able to determine the LIBO Rate for the applicable Interest Period; or

 

(ii)                                  Administrative Agent determines that the LIBO Rate determined in accordance with this Agreement does not accurately reflect the cost of funding, making or maintaining that Advance for the applicable Interest Period;

 

then Administrative Agent can give notice of that circumstance to Borrowers (a “Market Disruption Notice”), whereupon the obligation of the Lenders to make the requested Advance on the basis of the LIBO Rate will be suspended until such time as Administrative Agent notifies Borrowers that the circumstances described in the Market Disruption Notice no longer exist at which time Administrative Agent shall Convert the ABR Loans to Advances bearing interest at the Contract Rate.  If the Administrative Agent has issued a Market Disruption Notice, all Advances then outstanding will bear interest at the Alternate Base Rate plus seven and one-half percent (7.5%).

 

31

 

(e)                                  If a new Advance is made after another Interest Period has commenced, then the initial Interest Period applicable to the new Advance will end on the same date that that existing Interest Period ends.  The interest rate applicable to that new Advance will be the Contract Rate for a term equal to the number of days remaining in that existing Interest Period.

 

Section 3.03                            Prepayments.

 

(a)                                 Optional Prepayments.  The Borrowers shall have the right at any time and from time to time to prepay any Advance in whole or in part, subject to prior notice in accordance with Section 3.03(b).  Partial optional prepayments pursuant to this Section 3.03 shall be in an aggregate principal amount of $250,000 or any whole multiple of $50,000 in excess thereof.

 

(b)                                 Notice and Terms of Optional Prepayment.  The Borrowers shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder, not later than 12:00 noon Houston, Texas time, three (3) Business Days before the date of prepayment.  Such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Advance or portion thereof to be prepaid.  Promptly following receipt of any such notice relating to an Advance, the Administrative Agent shall advise the Lenders of the contents thereof.  Each prepayment of Advance shall be applied ratably and shall be accompanied by accrued interest to the extent required by Section 3.02.

 

(c)                                  Mandatory Prepayments.

 

(i)                                     Subject to the terms of the Intercreditor Agreement, Borrowers will promptly pay to Administrative Agent, for the ratable benefit of each Lender, any amounts required by Administrative Agent, in its sole discretion, in connection with any sale or other disposition of Oil and Gas Properties Consented to by Administrative Agent in accordance with Section 9.11(f).

 

(ii)                                  All prepayments received by Administrative Agent under this Section 3.03(c) will be immediately applied as a prepayment of the Term Loan.

 

(iii)                               Prepayments pursuant to this Section 3.03(c) shall be accompanied by accrued interest to the extent required by Section 3.02.

 

(d)                                 No Premium or Penalty.  Prepayments permitted or required under this Section 3.03 shall be without premium or penalty, except as required under Section 5.02.

 

ARTICLE IV

 

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

 

Section 4.01                            Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a)                                 Payments by the Borrowers.  The Borrowers shall make each payment required to be made by the Borrowers hereunder (whether of principal, interest or fees, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00 noon Houston, Texas time, on the date when due, in dollars that constitute immediately available

 

32

 

funds, without defense, deduction, recoupment, set-off or counterclaim.  Fees, once paid, shall not be refundable under any circumstances absent manifest error (e.g., as a result of a clerical mistake).  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 specified in Section 12.01, except that payments pursuant to Section 5.01, Section 5.02, Section 5.03 and Section 12.03 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)                                 Application of Insufficient Payments.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

 

(c)                                  Place of Payments.  All payments to be made by Borrowers to Administrative Agent under this Agreement will be made to the following account on the date due:

 

Account:                                              Bank of New York

New York, NY 10004

ABA # 021000018

 

Favour:                                                     Macquarie Bank Limited

Sydney

A/C No.:  8900055375

Chips UID:  236386

Reference:  Sanchez Energy Corporation

 

or to any other account that Administrative Agent may designate in writing to Borrowers from time to time.

 

(d)                                 Sharing of Payments by Lenders.  If the Administrative Agent or any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Advances resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Advances and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Advances of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Advances; provided that (i) if any such participations are purchased and all or any portion of the

 

33

 

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 Section 4.01(d) shall not be construed to apply to any payment made by the Borrowers 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 Commitment or Advances to any assignee or participant, other than to the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions of this Section 4.01(d) shall apply).  The Borrowers consent to the foregoing and agree, 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 Borrowers rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrowers in the amount of such participation.

 

(e)                                  If any Lender shall fail to make any payment required to be made by it pursuant to ARTICLE II, Section 4.02 or 12.03(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent to satisfy such Lender’s obligations under such Sections 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 under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

 

Section 4.02                            Presumption of Payment by the Borrowers.  Unless the Administrative Agent shall have received notice from the Borrowers prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due.  In such event, if the Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

Section 4.03                            Certain Deductions by the Administrative Agent.  If any Lender shall fail to make any payment required to be made by it pursuant to ARTICLE II or Section 4.02 then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

 

Section 4.04                            Disposition of Proceeds.  The Security Instruments contain an assignment by the Borrowers unto and in favor of the Administrative Agent for the benefit of the Lenders of all of the Borrowers’ interest in and to production and all proceeds attributable thereto that may be produced from or allocated to the Mortgaged Property, which assignment is subject to the

 

34

 

assignment to the First Lien Administrative Agent in the First Lien Loan Documents.  The Security Instruments further provide in general for the application of such proceeds to the satisfaction of the Obligations and other obligations described therein and secured thereby.  Notwithstanding the assignment contained in such Security Instruments, until the occurrence of an Event of Default and otherwise subject to the terms of the Intercreditor Agreement, (a) the Administrative Agent and the Lenders agree that they will neither notify the purchaser or purchasers of such production nor take any other action to cause such proceeds to be remitted to the Administrative Agent or the Lenders (including, without limitation, the sending of a Transfer Letter to the purchaser or purchasers of such production), but the Lenders will instead permit such proceeds to be paid to the Borrowers and their Restricted Subsidiaries and (b) the Lenders hereby authorize the Administrative Agent to take such actions as may be necessary to cause such proceeds to be paid to the Borrowers and/or such Restricted Subsidiaries.  Upon the expiration or termination of the Commitments and the payment and performance in full of the Obligations, the Administrative Agent shall, at the expense of the Borrowers, execute and deliver such documentation as any Co-Borrower shall reasonably request to re-convey to the relevant Co-Borrower or Guarantor any Property purportedly conveyed to the Administrative Agent under the Security Instruments.

 

ARTICLE V

 

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES

 

Section 5.01                            Increased Costs.

 

(a)                                 Changes in Law.  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; or

 

(ii)                                  impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Advances made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Advance (or of maintaining its obligation to make any such Advance) or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or any Advance made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender such

 

35

 

additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

(c)                                  Certificates.  A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company as specified in Section 5.01(a) or (b) and reasonably detailed calculations therefor shall be delivered to the Borrowers and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Effect of Failure or Delay in Requesting Compensation.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender pursuant to this Section 5.01 for any increased costs or reductions incurred more than ninety (90) days prior to the date that such Lender notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’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 90-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

Section 5.02                            Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Advance other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the failure to prepay any Eurodollar Advance on the date specified in any notice delivered pursuant hereto, or (c) the assignment of Eurodollar Advance other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrowers pursuant to Section 5.04(b), then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event.  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 Advance had such event not occurred for the period from the date of such event to the last day of the then current Interest Period therefor, 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 London interbank market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 5.02 and reasonably detailed calculations therefor shall be delivered to the Borrowers and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

Section 5.03                            Taxes.

 

(a)                                 Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrowers under any Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 5.03(a)), the

 

36

 

Administrative Agent or Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)                                 Payment of Other Taxes by the Borrowers.  The Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)                                  Indemnification by the Borrowers.  The Borrowers shall indemnify the Administrative Agent and each Lender, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 5.03) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate of the Administrative Agent or a Lender as to the amount of such payment or liability under this Section 5.03 shall be delivered to the Borrowers and shall be conclusive absent manifest error.

 

(d)                                 Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers 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.

 

(e)                                  Foreign Lenders.

 

(i)                                     Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Co-Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or any other Loan Document shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrowers as will permit such payments to be made without withholding or at a reduced rate.

 

(ii)                                  Without limiting the generality of the foregoing:

 

(1)                                 any Foreign Lender shall deliver to the Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), whichever of the following is applicable:

 

(A)                               in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to

 

37

 

payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(B)                               executed originals of IRS Form W-8ECI;

 

(C)                               in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit F-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any Co-Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

(D)                               to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W 8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on behalf of each such direct and indirect partner.

 

(2)                                 any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(f)                                   FATCA.  If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably

 

38

 

requested by the Borrowers or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrowers or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (f), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(g)                                  U.S. Lenders.  Any Lender that is a U.S. Person shall deliver to the Borrowers and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

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

 

(i)                                     Tax Refunds.  If the Administrative Agent or a Lender determines, in its reasonable discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section 5.03, it shall pay over such refund to the Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 5.03 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrowers, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section 5.03 shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.

 

Section 5.04                            Designation of Different Lending Office. If any Lender requests compensation under Section 5.01, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Advances 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 5.01 or Section 5.03, 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 Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

39

 

Section 5.05         Illegality.  Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its applicable lending office to honor its obligation to make or maintain Eurodollar Advances either generally or having a particular Interest Period hereunder, then (a) such Lender shall promptly notify the Borrowers and the Administrative Agent thereof and such Lender’s obligation to make such Eurodollar Advances shall be suspended (the “Affected Loans”) until such time as such Lender may again make and maintain such Eurodollar Advances and (b) all Affected Loans which would otherwise be made by such Lender shall be made instead as ABR Loans (and, if such Lender so requests by notice to the Borrowers and the Administrative Agent, all Affected Loans of such Lender then outstanding shall be automatically Converted into ABR Loans on the date specified by such Lender in such notice) and, to the extent that Affected Loans are so made as (or Converted into) ABR Loans, all payments of principal which would otherwise be applied to such Lender’s Affected Loans shall be applied instead to its ABR Loans.

 

ARTICLE VI

 

CONDITIONS PRECEDENT

 

Section 6.01         Conditions to Effectiveness.  This Agreement shall not become effective until the date (the “Effective Date”) on which each of the following conditions is satisfied (or waived in accordance with Section 12.02):

 

(a)           The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable, including, (i) to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder and (ii) a one-time arrangement fee for the account of the Lenders (as more particularly described in the Fee Letter, the “Arranger Fee”).

 

(b)           The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Loan Party setting forth (i) resolutions of its board of directors with respect to the authorization of such Loan Party to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Loan Party (y) who are authorized to sign the Loan Documents to which such Loan Party is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the Transactions, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Loan Party, certified as being true and complete.  The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrowers to the contrary.

 

(c)           The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of each Loan Party.

 

(d)           The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit C, duly and properly executed by a Responsible Officer and dated as of the date of Effective Date.

 

40

 

(e)           The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party.

 

(f)            The Administrative Agent shall have received duly executed Term Notes payable to the order of each Lender that has requested a Note in a principal amount equal to its Maximum Commitment Amount dated as of the date hereof.

 

(g)           The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments.

 

(h)           The Administrative Agent shall have received, in form and substance reasonably satisfactory to Administrative Agent, an opinion of Akin Gump Strauss Hauer & Feld LLP, counsel to the Loan Parties.

 

(i)            The Administrative Agent shall have received a certificate of insurance coverage of the Borrowers evidencing that the Borrowers are carrying insurance in accordance with Section 7.12.

 

(j)            The Administrative Agent shall have received a certificate of a Responsible Officer of each Co-Borrower certifying that the Borrowers have received all consents and approvals required by Section 7.03.

 

(k)           The Administrative Agent shall have received the financial statements referred to in Section 7.04(a).

 

(l)            The Administrative Agent shall have received title information acceptable to Administrative Agent setting forth the status of title to at least eighty percent (80%) of the total value of the proved Oil and Gas Properties evaluated in the Initial Reserve Report.

 

(m)          The Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrowers and their Subsidiaries.

 

(n)           The Administrative Agent shall have received the Initial Reserve Report accompanied by a certificate covering the matters described in Section 8.12(b).

 

(o)           The Administrative Agent shall have received appropriate judgment, tax, bankruptcy and UCC search certificates reflecting no prior judgment or taxes are outstanding or unpaid by the Borrowers or Liens encumbering the Properties of the Borrowers for each of the following jurisdictions: Louisiana, Texas, and any other jurisdiction requested by the Administrative Agent; other than those being assigned or released on or prior to the Effective Date or Liens permitted by Section 9.03.

 

(p)           The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Intercreditor Agreement.

 

41

 

(q)           The Administrative Agent shall have received all documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

(r)            The Administrative Agent shall have received copies of the fully executed First Lien Loan Documents.

 

(s)            The Administrative Agent shall have received and the Lenders shall have Approved the initial Development Plan.

 

(t)            The Administrative Agent shall have received a copy of the fully executed Undertaking to Pay Directly.

 

(u)           The Administrative Agent shall have received such other documents as the Administrative Agent or its special counsel may reasonably request.

 

Section 6.02         Each Credit Event.  The obligation of each Lender to make an Advance (including the initial funding) is subject to the satisfaction of the following conditions:

 

(a)           The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable, including, (i) to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder and (ii) if such Advance is a Tranche B Advance, the Advance Fee for such Tranche B Advance.

 

(b)           At the time of and immediately after giving effect to such Advance no Default shall have occurred and be continuing.

 

(c)           At the time of and immediately after giving effect to such Advance no event, development or condition that has or could reasonably be expected to have a Material Adverse Effect shall have occurred.

 

(d)           The representations and warranties of the Loan Parties set forth in this Agreement and in the other Loan Documents shall be true and correct on and as of the date of such Borrowing except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date of such Advance such representations and warranties shall continue to be true and correct as of such specified earlier date.

 

(e)           The making of such Advance would not conflict with, or cause any Lender to violate or exceed, any applicable Governmental Requirement, and no Change in Law shall have occurred, and no litigation shall be pending or threatened, which does or, with respect to any threatened litigation, seeks to, enjoin, prohibit or restrain, the making or repayment of any Advance, or any participations therein or the consummation of the transactions contemplated by this Agreement or any other Loan Document.

 

(f)            The receipt by the Administrative Agent of an Advance Request in accordance with Section 2.03.

 

42

 

(g)           The Administrative Agent shall have received and the Lenders shall have Approved a Development Plan.

 

(h)           In connection with the execution and delivery of the Security Instruments, the Administrative Agent shall be reasonably satisfied that the Security Instruments create perfected Liens (subject only to Excepted Liens identified in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of such definition) on at least eighty percent (80%) of the total value of the proved Oil and Gas Properties evaluated in the initial Reserve Report.

 

Each Advance Request shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in Section 6.02(a) through (e).

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

Each Co-Borrower represents and warrants to the Lenders that:

 

Section 7.01         Organization; Powers.  Each of the Borrowers and the Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority, and has all material governmental licenses, authorizations, consents and approvals necessary, to own its assets and to carry on its business as now conducted, and is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where failure to have such power, authority, licenses, authorizations, consents, approvals and qualifications could not reasonably be expected to have a Material Adverse Effect.  Schedule 7.01 is an accurate corporate organizational chart of Borrowers and their Subsidiaries and shows the ownership of all Equity Interests in such Persons.

 

Section 7.02         Authority; Enforceability.  The Transactions to be entered into by each Loan Party are within such Loan Party’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action (including, without limitation, any action required to be taken by any class of directors of such Loan Party or any other Person, whether interested or disinterested, in order to ensure the due authorization of the Transactions).  Each Loan Document to which any 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 7.03         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 or any other third Person (including shareholders or any class of directors, whether interested or disinterested, of any Loan Party or any other Person), nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document or the consummation of the transactions contemplated thereby, except such as have been obtained or made and are in full force and effect other than (i) the recording and filing

 

43

 

of any Security Instruments as required by the Loan Documents and (ii) those third party approvals or consents which, if not made or obtained, would not cause a Default hereunder, could not reasonably be expected to have a Material Adverse Effect or do not have an adverse effect on the enforceability of the Loan Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of any Co-Borrower or any Subsidiary or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Co-Borrower or any Subsidiary or its Properties, or give rise to a right thereunder to require any payment to be made by any Co-Borrower or such Subsidiary and (d) will not result in the creation or imposition of any Lien on any Property of any Co-Borrower or any Subsidiary (other than the Liens created by the Loan Documents or the First Lien Loan Documents).

 

Section 7.04         Financial Condition; No Material Adverse Change.

 

(a)           Sanchez has heretofore furnished to the Lenders its (i) audited consolidated balance sheet and statement of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2011, all reported on by BDO USA, LLP and (ii) unaudited 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 June 30, 2012, certified by a Financial Officer.  Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of Sanchez and its Consolidated Subsidiaries (including the other Borrowers) as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the unaudited quarterly financial statements.

 

(b)           Since June 30, 2012, (i) there has been no event, development or circumstance that has had or could reasonably be expected to have a Material Adverse Effect and (ii) the business of the Borrowers and their Subsidiaries has been conducted only in the ordinary course consistent with past business practices.

 

Section 7.05         Litigation.

 

(a)           Except as set forth on Schedule 7.05, there are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrowers, threatened in writing against or affecting any Co-Borrower or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve any Loan Document or the Transactions.

 

(b)           Since the date of this Agreement, there has been no change in the status of the matters disclosed in Schedule 7.05 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

 

Section 7.06         Environmental Matters.  Except as could not reasonably be expected to have a Material Adverse Effect (or with respect to (c), (d) and (e) below, where the failure to take such actions could not be reasonably expected to have a Material Adverse Effect), to the knowledge of Borrowers:

 

44

 

(a)           neither any Property of any Co-Borrower or any Subsidiary nor the operations conducted thereon violate any order or requirement of any court or Governmental Authority or any Environmental Laws.

 

(b)           no Property of any Co-Borrower or any Subsidiary nor the operations currently conducted thereon or by any prior owner or operator of such Property or operation, are in violation of or subject to any existing, pending or threatened action, suit, investigation, inquiry or proceeding by or before any court or Governmental Authority or to any remedial obligations under Environmental Laws.

 

(c)           all Environmental Permits, if any, required to be obtained or filed in connection with the operation or use of any and all Property of each Co-Borrower and each Subsidiary, including, without limitation, past or present treatment, storage, disposal or release of a hazardous substance, oil and gas waste or solid waste into the environment, have been duly obtained or filed, and each Co-Borrower and each Subsidiary are in compliance with the terms and conditions of all such Environmental Permits.

 

(d)           all hazardous substances, solid waste and oil and gas waste, if any, generated at any and all Property of the Borrowers or any Subsidiary have in the past been transported, treated and disposed of in accordance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and all such transport carriers and treatment and disposal facilities have been and are operating in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment, and are not the subject of any existing, pending or threatened action, investigation or inquiry by any Governmental Authority in connection with any Environmental Laws.

 

(e)           each Co-Borrower has taken all steps reasonably necessary to determine and has determined that no oil, hazardous substances, solid waste or oil and gas waste, have been disposed of or otherwise released and there has been no threatened Release of any oil, hazardous substances, solid waste or oil and gas waste on or to any Property of such Co-Borrower or any Subsidiary except in compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment to public health or welfare or the environment.

 

(f)            to the extent applicable, all Property of the Borrowers and each Subsidiary currently satisfies all design, operation, and equipment requirements imposed by the OPA, and the Borrowers do not have any reason to believe that such Property, to the extent subject to the OPA, will not be able to maintain compliance with the OPA requirements during the term of this Agreement.

 

(g)           neither the Borrowers nor any Subsidiary has any known contingent liability or Remedial Work in connection with any release or threatened release of any oil, hazardous substance, solid waste or oil and gas waste into the environment.

 

Section 7.07         Compliance with the Laws and Agreements; No Defaults.  Except as could not be reasonably be expected to have a Material Adverse Effect:

 

45

 

(a)           Each of the Borrowers and each Subsidiary is in compliance with all Governmental Requirements applicable to it or its Property and all agreements and other instruments binding upon it or its Property, and possesses all licenses, permits, franchises, exemptions, approvals and other governmental authorizations (other than Environmental Permits) necessary for the ownership of its Property and the conduct of its business, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

(b)           Neither the Borrowers nor any Subsidiary are in default nor has any event or circumstance occurred which, but for the expiration of any applicable grace period or the giving of notice, or both, would constitute a default or would require the Borrowers or a Subsidiary to Redeem or make any offer to Redeem under any indenture, note, credit agreement or instrument pursuant to which any Material Indebtedness is outstanding or by which the Borrowers or any Subsidiary or any of their Properties is bound.

 

(c)           No Default has occurred and is continuing.

 

Section 7.08         Investment Company Act.  Neither the Borrowers nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company,” within the meaning of, or subject to regulation under, the Investment Company Act of 1940, as amended.

 

Section 7.09         Taxes.  Each of the Borrowers and its respective Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrowers or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  The charges, accruals and reserves on the books of the Borrowers and their Subsidiaries in respect of Taxes and other governmental charges are, in the reasonable opinion of the Borrowers, adequate.  No Tax Lien relating to Taxes described in the first sentence of this Section 7.09 has been filed and, to the knowledge of the Borrowers, no claim is being asserted with respect to any such Tax or other such governmental charge.

 

Section 7.10         ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000.00 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000.00 the fair market value of the assets of all such underfunded Plans.

 

Section 7.11         Disclosure; No Material Misstatements.  The Borrowers have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other

 

46

 

restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  To the knowledge of Borrowers, taken as a whole, none of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrowers or any Subsidiary to the Administrative Agent or any Lender or any of their Affiliates in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any other Loan Document (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, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, prospect information, geological and geophysical data and engineering projections, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.  To the knowledge of Borrowers there is no fact peculiar to the Borrowers or any Subsidiary which could reasonably be expected to have a Material Adverse Effect or in the future is reasonably likely to have a Material Adverse Effect and which has not been set forth in this Agreement or the Loan Documents or the other documents, certificates and statements furnished to the Administrative Agent or the Lenders by or on behalf of the Borrowers or any Subsidiary prior to, or on, the date hereof in connection with the transactions contemplated hereby.  There are no statements or conclusions known to the Borrowers in any Reserve Report which are based upon or include misleading information or fail to take into account material information regarding the matters reported therein, it being understood that projections concerning volumes attributable to the Oil and Gas Properties and production and cost estimates contained in each Reserve Report are necessarily based upon professional opinions, estimates and projections and that the Borrowers and the Subsidiaries do not warrant that such opinions, estimates and projections will ultimately prove to have been accurate.

 

Section 7.12         Insurance.  The Borrowers have, and have caused all their respective Subsidiaries to have, (a) all insurance policies sufficient for the compliance by each of them with all material Governmental Requirements and all material agreements and (b) insurance coverage in at least amounts and against such risk (including, without limitation, public liability) that are usually insured against by companies similarly situated and engaged in the same or a similar business for the assets and operations of the Borrowers and their respective Subsidiaries.  The Administrative Agent and the Lenders have been named as additional insureds in respect of such liability insurance policies and the Administrative Agent has been named as loss payee with respect to Property loss insurance.

 

Section 7.13         Restriction on Liens.  Neither the Borrowers nor any of the Restricted Subsidiaries is a party to any material agreement or arrangement (other than the First Lien Loan Documents and the Intercreditor Agreement), or subject to any order, judgment, writ or decree, which either restricts or purports to restrict its ability to grant Liens to the Administrative Agent and the Lenders on or in respect of their Properties to secure the Obligations and the Loan Documents.

 

Section 7.14         Subsidiaries.  Schedule 7.14 sets forth the name of, and the ownership interest of each Co-Borrower in, each Subsidiary of such Co-Borrower.  As of the Effective Date there are no Unrestricted Subsidiaries.

 

47

 

Section 7.15         Location of Business and Offices.  Each Co-Borrower’s jurisdiction of organization is Delaware; the names of the Borrowers as listed in the public records of Delaware are Sanchez Energy Corporation, SEP Holdings III, LLC and SN Marquis LLC; and the organizational identification numbers of the Borrowers in Delaware are 5027889, 5027789 and 5061848, respectively (or, in each case, as set forth in a notice delivered to the Administrative Agent pursuant to Section 8.01(j) in accordance with Section 12.01).  Each Subsidiary’s jurisdiction of organization, name as listed in the public records of its jurisdiction of organization and organizational identification number in its jurisdiction of organization is stated on Schedule 7.14 (or as set forth in a notice delivered pursuant to Section 8.01(j)).

 

Section 7.16         Properties; Titles, Etc.

 

(a)           Except as disclosed in Schedule 7.16, each of the Borrowers and the Restricted Subsidiaries has good and defensible title to the proved Oil and Gas Properties evaluated in the most recently delivered Reserve Report (excluding, to the extent this representation and warranty is deemed to be made after the Effective Date, any such Oil and Gas Properties sold or transferred in compliance with Section 9.11) and good title to all its personal Properties, in each case, free and clear of all Liens except Liens permitted by Section 9.03.  After giving full effect to the Excepted Liens, each Co-Borrower or the Restricted Subsidiary specified as the owner owns the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate such Co-Borrower or such Restricted Subsidiary to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in the Borrower’s or such Restricted Subsidiary’s net revenue interest in such Property.

 

(b)           All material leases and agreements necessary for the conduct of the business of the Borrowers and the Subsidiaries are valid and subsisting, in full force and effect, and there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases, which could reasonably be expected to result in a Material Adverse Effect.

 

(c)           The rights and Properties presently owned, leased or licensed by the Borrowers and the Subsidiaries including, without limitation, all easements and rights of way, include all rights and Properties necessary to permit the Borrowers and the Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted prior to the date hereof.

 

(d)           All of the material Properties of the Borrowers and the Subsidiaries which are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards.

 

(e)           Each Co-Borrower and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual Property material to its business, and the use thereof by such Co-Borrower and such Subsidiary does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the

 

48

 

aggregate, could not reasonably be expected to result in a Material Adverse Effect.  Each Co-Borrower and its Subsidiaries either own or have valid licenses or other rights to use all databases, geological data, geophysical data, engineering data, seismic data, maps, interpretations and other technical information used in their businesses as presently conducted, subject to the limitations contained in the agreements governing the use of the same, which limitations are customary for companies engaged in the business of the exploration and production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a Material Adverse Effect.

 

Section 7.17         Maintenance of Properties.  Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and Properties unitized therewith) have been maintained, operated and developed in a good and workmanlike manner and in conformity with all Government Requirements and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties.  Specifically in connection with the foregoing, except for those as could not be reasonably expected to have a Material Adverse Effect, (a) no Oil and Gas Property is subject to having allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) and (b) to the knowledge of Borrowers,  none of the wells comprising a part of the Oil and Gas Properties (or Properties unitized therewith) is deviated from the vertical more than the maximum permitted by Government Requirements, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, such unitized Properties).  All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by a Co-Borrower or any of its Subsidiaries that are necessary to conduct normal operations are being maintained in a state adequate to conduct normal operations, and with respect to such of the foregoing that are operated by such Co-Borrower or any of its Subsidiaries, in a manner consistent with such Co-Borrower’s or its Subsidiaries’ past practices (other than those the failure of which to maintain in accordance with this Section 7.17 could not reasonably be expect to have a Material Adverse Effect).

 

Section 7.18         Gas Imbalances, Prepayments.  As of the date hereof, except as set forth on Schedule 7.18 or on the most recent certificate delivered pursuant to Section 8.12(c), on a net basis there are no gas imbalances, take or pay or other prepayments which would require any Co-Borrower or any of the Restricted Subsidiaries to deliver Hydrocarbons produced from the Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor.

 

Section 7.19         Marketing of Production.  Except for contracts listed and in effect on the date hereof on Schedule 7.19, and thereafter either disclosed in writing to the Administrative Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts each Co-Borrower represents that it or its Subsidiaries are receiving a price for all production sold thereunder which is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject Property’s delivery capacity), no material agreements exist which are not cancelable on 60 days’ notice or less without penalty or detriment for the sale of production from such Co-Borrower’s or

 

49

 

the Restricted Subsidiaries’ Hydrocarbons (including, without limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the date hereof.

 

Section 7.20         Swap Agreements.  Schedule 7.20, as of the date hereof, and after the date hereof, each report required to be delivered by the Borrowers pursuant to Section 8.01(d), sets forth, a true and complete list of all Swap Agreements of the Borrowers and each Subsidiary, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark to market value thereof, all credit support agreements relating thereto (including any margin required or supplied) and the counterparty to each such agreement.

 

Section 7.21         Use of Advances.  The proceeds of each Advance shall be used for the development of the Borrowers’ oil and gas assets and other purposes set forth in Section 2.03.  The Borrowers and their respective Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board).  No part of the proceeds of any Advance will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

 

Section 7.22         Solvency.  Before and after giving effect to the Transactions, (a) the aggregate assets, at a fair valuation, of the Borrowers and their Subsidiaries, taken as a whole, will exceed the aggregate debt of the Borrowers on a consolidated basis, (b) none of the Borrowers nor any Subsidiary has incurred or has intended to incur, debt beyond its ability to pay such debt as such debt matures and (c) none of the Borrowers nor any Subsidiary will have (nor will have any reason to believe that it will have thereafter) unreasonably small capital for the conduct of its business as such business is conducted and is now proposed to be conducted following the date hereof.  For purposes of this Section, “debt” shall have the meaning given such term under the U.S. Bankruptcy Code.

 

Section 7.23         Foreign Corrupt Practices.  Neither, the Borrowers nor any of the Subsidiaries, nor any director, officer, agent, employee or Affiliate of the Borrowers or any of the Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a material violation by such Persons of the FCPA, including without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and, the Borrowers, the Subsidiaries and their respective Affiliates have conducted their business in material compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

Section 7.24         Money Laundering.  The operations of the Borrowers and the Subsidiaries are and have been conducted at all times in material compliance with applicable financial recordkeeping and reporting requirements of the money laundering laws, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any

 

50

 

arbitrator involving the Borrowers or any of the Subsidiaries with respect to the money laundering laws is pending or, to the best knowledge of the Borrowers, threatened.

 

Section 7.25         OFAC.  Neither the Borrowers nor any of the Subsidiaries, nor any director, officer, agent, employee or Affiliate of the Borrowers or any of the Subsidiaries is currently subject to any material U.S. sanctions administered by OFAC, and the Borrowers will not directly or indirectly use the proceeds from the Term Loan or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

 

Section 7.26         Purchasers of Production.  Schedule 7.26 sets forth a complete and correct list of all of the Persons that are purchasers of production from the Mortgaged Properties (or otherwise receiving Borrowers’ share of proceeds of such production), as the date hereof, together with their addresses and other relevant information.

 

ARTICLE VIII

 

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and interest on each Advance and all fees payable hereunder and all other amounts payable under the Loan Documents shall have been paid in full, the Borrowers covenant and agree with the Lenders that:

 

Section 8.01         Financial Statements; Ratings Change; Other Information.  The Borrowers will furnish to the Administrative Agent and each Lender:

 

(a)           Annual Financial Statements.  As soon as available, but in any event in accordance with then applicable law and not later than one hundred and twenty (120) days after the end of each fiscal year of Sanchez, its audited consolidated (and, if there are any Unrestricted Subsidiaries, consolidating) 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 BDO USA, LLP or another firm of independent public accountants proposed by Sanchez and approved by the Administrative Agent (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Sanchez and its Consolidated Subsidiaries (including the other Borrowers) on a consolidated basis in accordance with GAAP consistently applied.

 

(b)           Quarterly Financial Statements.  As soon as available, but in any event in accordance with then applicable law and not later than forty-five (45) days after the end of each fiscal quarters of each fiscal year of Sanchez, its consolidated (and, if there are any Unrestricted Subsidiaries, consolidating) 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 the 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,

 

51

 

all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Sanchez and its Consolidated Subsidiaries (including the other Borrowers) on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.

 

(c)           Certificate of Financial Officer — Compliance.  Concurrently with any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer of each Co-Borrower in substantially the form of Exhibit C hereto (i) 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, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 8.13(b) and Section 9.01 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 7.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate.

 

(d)           Certificate of Financial Officer — Swap Agreements.  Concurrently with the delivery of financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer of each Co-Borrower, in form and substance reasonably satisfactory to the Administrative Agent, setting forth as of a recent date, a true and complete list of all Swap Agreements of such Co-Borrower and each Subsidiary, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value therefor, any new credit support agreements relating thereto not listed on Schedule 7.20, any margin required or supplied under any credit support document, and the counterparty to each such agreement.

 

(e)           Certificate of Insurer — Insurance Coverage.  Concurrently with any delivery of financial statements under Section 8.01(a), a certificate of insurance coverage from each insurer with respect to the insurance required by Section 8.07, in form and substance satisfactory to the Administrative Agent, and, if requested by the Administrative Agent or any Lender, all copies of the applicable policies.

 

(f)            Other Accounting Reports.  Promptly upon receipt thereof, a copy of each other report or letter (except standard and customary correspondence) submitted to any Co-Borrower or any of its Subsidiaries by independent accountants in connection with any annual, interim or special audit made by them of the books of such Co-Borrower or any such Subsidiary, and a copy of any response by any Co-Borrower or any such Subsidiary, or the board of directors of such Co-Borrower or any such Subsidiary, to such letter or report.

 

(g)           SEC and Other Filings; Reports to Shareholders.  Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Co-Borrower or any Subsidiary with the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be.

 

(h)           Lists of Purchasers.  Concurrently with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 8.12, a list of Persons purchasing Hydrocarbons from any Co-Borrower or any Subsidiary accounting for at least eighty percent (80%) of the revenues

 

52

 

resulting from the sale of all Hydrocarbons in the one year period prior to the “as of” date of such Reserve Report.

 

(i)            Notice of Casualty Events.  Prompt written notice, and in any event within five (5) Business Days, of the occurrence of any Casualty Event or the commencement of any action or proceeding that could reasonably be expected to result in a Casualty Event.

 

(j)            Information Regarding the Loan Parties.  Prompt written notice (and in any event within ten (10) Business Days prior thereto) of any change (i) in any Loan Party’s corporate name or in any trade name used to identify any Co-Borrower in the conduct of its business or in the ownership of its Properties, (ii) in any Loan Party’s identity or corporate structure or in the jurisdiction in which such Loan Party is incorporated or formed, (iii) in any Loan Party’s jurisdiction of organization or any Loan Party’s organizational identification number in such jurisdiction of organization, and (iv) in any Loan Party’s federal taxpayer identification number.

 

(k)           Production Report and Lease Operating Statements.  Within forty-five (45) days after the end of each fiscal quarter, a report setting forth, for each calendar month during the then current fiscal year to date, the volume of production and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for each such calendar month from the Oil and Gas Properties, and setting forth the related ad valorem, severance and production taxes and lease operating expenses attributable thereto and incurred for each such calendar month, are certified by a Responsible Officer of each Co-Borrower as presenting fairly in all respects the information contained therein, and to the extent applicable, all based on the actual lease operating statements for such Oil and Gas Properties.

 

(l)            Notices of Certain Changes.  Promptly, but in any event within five (5) Business Days after the execution thereof, copies of any amendment, modification or supplement to (i) the certificate or articles of incorporation, by-laws, any preferred stock designation or any other organizational document of any Co-Borrower or any Subsidiary, (ii) the Intercreditor Agreement or (iii) any First Lien Loan Document.

 

(m)          Updated Development Plan.  Until the Termination Date, contemporaneous with the delivery of each Reserve Report required to be delivered hereunder, an updated proposed Development Plan covering at least the next six (6) months and setting forth all capital expenditures for all development projects proposed for that period, the anticipated timing of those projects, the net cost of each of those projects to Borrowers and any other information that Administrative Agent may request. Each proposed modification to the Development Plan will be subject to the Approval of Administrative Agent, and Borrowers acknowledge that Administrative Agent is not required to Approve any proposed modification to the Development Plan.  Until Administrative Agent has Approved a revised Development Plan, the most recent Approved Development Plan (and all authorizations for expenditures Approved in connection with that most recently Approved Development Plan) will remain in effect.

 

(n)           Other Requested Information.  Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrowers or any Subsidiary (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA), or compliance with the terms

 

53

 

of this Agreement or any other Loan Document, as the Administrative Agent or any Lender may reasonably request.

 

Section 8.02         Notices of Material Events.  Promptly, and in any event within five (5) Business Days after any Responsible Officer of a Co-Borrower obtains knowledge thereof, such Co-Borrower will furnish to the Administrative Agent written notice of the following:

 

(a)           the occurrence of any Default or any “Default” under and as defined in the First Lien Credit Agreement;

 

(b)           the filing or commencement of, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before any arbitrator or Governmental Authority against any Co-Borrower or any Affiliate thereof not previously disclosed in writing to the Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration previously disclosed to the Lenders that, if adversely determined, could reasonably be expected to result in 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 result in a Material Adverse Effect; and

 

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

 

Each notice delivered under this Section 8.02 shall be accompanied by a statement of a Responsible Officer of such Co-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 8.03         Existence; Conduct of Business.  The Borrowers 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 its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business and maintain, if necessary, its qualification to do business in each other jurisdiction in which its Oil and Gas Properties are located or the ownership of its Properties requires such qualification, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 9.10.

 

Section 8.04         Payment of Obligations.  The Borrowers will, and will cause each Subsidiary to, pay its obligations, including Tax liabilities of the Borrowers and all of its Subsidiaries 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 and each Co-Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect or result in the seizure or levy of any material Property of any Co-Borrower or any Subsidiary.

 

Section 8.05         Performance of Obligations under Loan Documents.  The Borrowers will pay the Term Loan and the Term Notes according to the reading, tenor and effect thereof,

 

54

 

and the Borrowers will, and will cause each Subsidiary to, do and perform every act and discharge all of the obligations to be performed and discharged by them under the Loan Documents, including, without limitation, this Agreement, at the time or times and in the manner specified.

 

Section 8.06         Operation and Maintenance of Properties.  Each Co-Borrower, at its own expense, will, and will cause each Subsidiary to:

 

(a)           operate its Oil and Gas Properties and other material Properties or cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in compliance with all Governmental Requirements, including, without limitation, applicable pro ration requirements and Environmental Laws, and all applicable laws, rules and regulations of every other Governmental Authority from time to time constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom.

 

(b)           keep and maintain all Property material to the conduct of its business in good working order and condition (ordinary wear and tear and economic obsolescence excepted), preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear and economic obsolescence excepted) all of its material Oil and Gas Properties and other material Properties, including, without limitation, all equipment, machinery and facilities.

 

(c)           promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and obligations accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder.

 

(d)           promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties which are necessary for the operation of their business and ownership of its Oil and Gas and other material Properties.

 

(e)           operate its Oil and Gas Properties and other material Properties or cause or make reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements.

 

(f)            notwithstanding anything to the contrary in this Section 8.06, to the extent any Co-Borrower or one of its Subsidiaries is not the operator of any Property, such Co-Borrower shall not be obligated itself to perform or cause any of its Subsidiaries to perform the covenants in this Section 8.06, but shall use reasonable efforts to cause the operator to comply with this Section 8.06.

 

55

 

(g)           notwithstanding anything to the contrary in this Section 8.06, the Borrowers and their Subsidiaries shall not be required to maintain any lease or interest which is no longer capable of producing Hydrocarbons in paying quantities.

 

Section 8.07         Insurance.  The Borrowers will, and will cause each Subsidiary to, maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.  The loss payable clauses or provisions in said insurance policy or policies insuring any of the Collateral for the Advances shall be endorsed in favor of and made payable to the Administrative Agent as its interests may appear and such policies shall name the Administrative Agent and the Lenders as “additional insureds” and provide that the insurer will endeavor to give at least 30 days prior notice of any cancellation to the Administrative Agent.

 

Section 8.08         Books and Records; Inspection Rights.  The Borrowers will, and will cause each Subsidiary to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  The Borrowers will, and will cause each Subsidiary to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, 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 accountants, all at such reasonable times during normal business hours and as often as reasonably requested on an individual and aggregate basis.

 

Section 8.09         Compliance with Laws.  The Borrowers will, and will cause each Subsidiary to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to them or their Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

Section 8.10         Environmental Matters.

 

(a)           The Borrowers shall at its sole expense: (i) comply, and shall cause its Properties and operations and each Subsidiary and each Subsidiary’s Properties and operations to comply, with all applicable Environmental Laws, the breach of which could be reasonably expected to have a Material Adverse Effect; (ii) not dispose of or otherwise Release, and shall cause each Subsidiary not to dispose of or otherwise release, any oil, oil and gas waste, hazardous substance, or solid waste on, under, about or from any of the Borrowers’ or their Subsidiaries’ Properties or any other Property to the extent caused by any Co-Borrower’s or any of its Subsidiaries’ operations except in compliance with applicable Environmental Laws, the disposal or Release of which could reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or file, and shall cause each Subsidiary to timely obtain or file, all Environmental Permits, if any, required under applicable Environmental Laws to be obtained or filed in connection with the operation or use of any Co-Borrower’s or its Subsidiaries’ Properties, which failure to obtain or file could reasonably be expected to have a Material Adverse Effect; (iv) promptly commence and diligently prosecute to completion, and shall cause each Subsidiary to promptly commence and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair, restoration, remediation or other remedial obligations

 

56

 

(collectively, the “Remedial Work”) in the event any Remedial Work is required or reasonably necessary under applicable Environmental Laws because of or in connection with the actual or suspected past, present or future Release or threatened Release of any Hazardous Material on, under, about or from any of the Borrowers’ or their Subsidiaries’ Properties, which failure to commence and diligently prosecute to completion could reasonably be expected to have a Material Adverse Effect; (v) conduct, and cause each Subsidiary to conduct their respective operations and business in a manner that will not expose any Property or Person to Hazardous Materials in circumstances that could reasonably be expected to form the basis for a claim for damages or compensation; and (vi) establish and implement, and shall cause each Subsidiary to establish and implement, such reasonable procedures as may be necessary to assure that the Borrowers’ and their Subsidiaries’ obligations under this Section 8.10(a) are timely and fully satisfied, which failure to establish and implement could reasonably be expected to have a Material Adverse Effect.  To the extent that the Borrowers or one of their Subsidiaries is not the operator of any Property, the Borrowers shall use reasonable efforts to cause the operator to comply with this Section 8.10(a)

 

(b)           The Borrowers will promptly, but in no event later than five (5) Business Days of the occurrence of a triggering event, notify the Administrative Agent in writing of any threatened action, investigation or inquiry by any Governmental Authority or any threatened demand or lawsuit by any landowner or other third party against the Borrowers or their Subsidiaries or their Properties of which the Borrowers have knowledge in connection with any applicable Environmental Laws (excluding routine testing and corrective action) if the Borrowers reasonably anticipate that such action could reasonably result in a Material Adverse Effect.

 

(c)           The Borrowers will, and will cause each Subsidiary to, provide environmental assessments, audits and tests in accordance with the most current version of the American Society of Testing Materials standards upon request by the Administrative Agent and the Lenders and no more than once per year in the absence of any Event of Default (or as otherwise required to be obtained by the Administrative Agent or the Lenders by any Governmental Authority), in connection with any material acquisitions of producing Oil and Gas Properties or other Properties after the date hereof.

 

Section 8.11         Further Assurances.

 

(a)           Each Co-Borrower at its sole expense will, and will cause each Subsidiary to, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of such Co-Borrower or any Subsidiary, as the case may be, in the Loan Documents, including the Term Notes, or to further evidence and more fully describe the Collateral intended as security for the Obligations, or to correct any omissions in this Agreement or the Security Instruments, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate, in the sole discretion of the Administrative Agent, in connection therewith.

 

57

 

(b)           The Borrowers hereby authorize the Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Mortgaged Property.  A carbon, photographic or other reproduction of the Security Instruments or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

 

Section 8.12         Reserve Reports.

 

(a)           The Borrowers shall furnish to the Administrative Agent and the Lenders a copy of each Reserve Report and Engineering Report, as applicable, evaluating the Oil and Gas Properties of the Borrowers and their Subsidiaries as and when delivered to the First Lien Administrative Agent under the First Lien Credit Agreement.

 

(b)           With the delivery of each Reserve Report, the Borrowers shall provide to the Administrative Agent and the Lenders a certificate from a Responsible Officer from each Co-Borrower certifying that in all material respects: (i) the information contained in the Reserve Report and any other information delivered in connection therewith is true and correct, (ii) the Borrowers or their Subsidiaries owns good and defensible title to the Oil and Gas Properties evaluated in such Reserve Report and such Properties are free of all Liens except for Liens permitted by Section 9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments in excess of the volume specified in Section 7.18 with respect to its Oil and Gas Properties evaluated in such Reserve Report which would require the Borrowers or any Subsidiary to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) none of the Borrowers’ and their Subsidiaries’ Oil and Gas Properties have been sold since the date of the last Borrowing Base determination except as set forth on an exhibit to the certificate, which certificate shall list all of its proved Oil and Gas Properties sold and in such detail as reasonably required by the Administrative Agent, (v) attached to the certificate is a list of all marketing agreements entered into subsequent to the later of the date hereof or the most recently delivered Reserve Report which the Borrowers could reasonably be expected to have been obligated to list on Schedule 7.19 had such agreement been in effect on the date hereof and (vi) attached thereto is a schedule of the Oil and Gas Properties evaluated by such Reserve Report that are Collateral and that the Engineered Value of such Oil and Gas Properties represent at least eighty percent (80%) (by value) of all Oil and Gas Properties of the Loan Parties evaluated in the Reserve Report delivered to the Administrative Agent most recently prior to the Reserve Report attached to such certificate.

 

Section 8.13         Title Information.

 

(a)           The Borrowers will deliver to the Administrative Agent and the Lenders the title information delivered to First Lien Administrative Agent under the First Lien Credit Agreement.  The Borrowers will deliver title information in form and substance acceptable to the Administrative Agent covering enough of the Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that the Administrative Agent shall have received together with title information previously delivered, satisfactory title information on at least eighty percent (80%) of the Engineered Value of the Oil and Gas Properties evaluated by such Reserve Report.

 

58

 

(b)           If the Borrowers have provided title information for additional Properties under Section 8.13(a), the Borrowers shall, within sixty (60) days of notice from the Administrative Agent that title defects or exceptions exist with respect to such additional Properties, either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by Section 9.03 raised by such information, (ii) substitute acceptable Collateral which constitutes Oil and Gas Properties and with no title defects or exceptions except for Excepted Liens (other than Excepted Liens described in clauses (e), (g) and (h) of such definition) and First Liens having an equivalent value or (iii) deliver title information in form and substance acceptable to the Administrative Agent so that they shall have received, together with title information previously delivered, satisfactory title information on at least eighty percent (80%) of the value of the Oil and Gas Properties evaluated by such Reserve Report.

 

Section 8.14         Additional Collateral.  In connection with each redetermination of the Borrowing Base, the Borrowers shall review the Reserve Report and the list of current Mortgaged Properties (as described in Section 8.12(b)) to ascertain whether the Mortgaged Properties represent at least eighty percent (80%) of the Engineered Value of the Oil and Gas Properties owned by Borrowers and the Restricted Subsidiaries and evaluated in the most recently completed Reserve Report after giving effect to exploration and production activities, acquisitions, dispositions and production.  In the event that the Mortgaged Properties do not represent at least eighty percent (80%) of such Engineered Value, then the Borrowers shall, and shall cause its Restricted Subsidiaries to grant, within thirty (30) days of delivery of the certificate required under Section 8.12(b) to the Administrative Agent as security for the Obligations a first-priority Lien interest (subject only to (i) Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of such definition and (ii) First Liens) on additional Oil and Gas Properties not already subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged Properties will represent at least eighty percent (80%) of such Engineered Value.  All such Liens will be created and perfected by and in accordance with the provisions of mortgages, deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance satisfactory to the Administrative Agent and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes.

 

Section 8.15         ERISA Compliance.  In addition to and without limiting the generality of Section 8.09, the Borrowers shall and shall cause each of their respective Subsidiaries to (a) comply in all material respects with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all employee benefit plans (as defined in ERISA), (b) not take any action or fail to take action the result of which could be (i) a liability to the PBGC (other than liability for PBGC premiums) or (ii) a past due liability to any Multiemployer Plan, (c) not participate in any prohibited transaction that could result in any material civil penalty under ERISA or any tax under the Code, (d) operate each employee benefit plan in such a manner that will not incur any material tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code except to the extent such failure to comply could not reasonably be expected to have Material Adverse Effect and (e) furnish to the Administrative Agent upon the Administrative Agent’s request such additional information about any employee benefit plan as may be reasonably requested by the Administrative Agent.

 

59

 

Section 8.16         New Subsidiary Requirements.  Concurrently with the acquisition or formation of any subsidiary which is to be a Restricted Subsidiary and prior to any Co-Borrower’s advancing or contributing any amounts to or into such Restricted Subsidiary (other than the minimum organizational costs such as filing fees), such Co-Borrower shall cause to be delivered to the Administrative Agent for the benefit of the Lenders, (i) a Guaranty and a Joinder executed by such Restricted Subsidiary, (ii) all documents and instruments, including UCC Financing Statements (Form UCC-1), required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create or perfect the Liens intended to be created under such Security Agreement with the priority as set forth in the Intercreditor Agreement, (iii) UCC searches, all dated within fifteen (15) days of the date of the Joinder and in form and substance satisfactory to the Administrative Agent, and evidence reasonably satisfactory to the Administrative Agent that any Liens indicated in such UCC searches are Excepted Liens, First Liens or have been released, (iv) the corporate resolutions or similar approval documents of such Restricted Subsidiary approving the execution and delivery of the Joinder by such Restricted Subsidiary, (v) the corporate resolutions or similar approval documents of such Co-Borrower or other Loan Party approving the addition of the Equity Interests in such Restricted Subsidiary to the collateral pledged under the Security Agreement by such Co-Borrower or other Loan Party, and (vi) if requested, a legal opinion acceptable to the Administrative Agent, opining favorably on the execution, delivery and enforceability of the Joinder and otherwise being in form and substance reasonably satisfactory to the Administrative Agent.

 

ARTICLE IX

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and interest on each Advance and all fees payable hereunder and all other amounts payable under the Loan Documents have been paid in full, the Borrowers covenant and agree with the Lenders that:

 

Section 9.01         Financial Covenants.

 

(a)           Current Ratio.  The Borrowers will not permit, at any time, its ratio of (i) consolidated current assets of the Borrowers and the Restricted Subsidiaries (including the unused amount of the total “Commitments” under and as defined in the First Lien Credit Agreement, but excluding non-cash assets under FAS 133) to (ii) consolidated current liabilities of the Borrowers and the Restricted Subsidiaries (excluding outstanding Obligations hereunder and non-cash obligations under FAS 133) to be less than 1.0 to 1.0.

 

(b)           Interest Coverage Ratio.  The Borrowers will not permit, as of the last day of any fiscal quarter, the ratio of (i) Consolidated EBITDA of the Borrowers and the Restricted Subsidiaries for the Rolling Period ending on such day (or, in the case of any such Rolling Period ending before June 30, 2013, Annualized Consolidated EBITDA for such Rolling Period) to (ii) Consolidated Net Interest Expense paid by the Borrowers and the Restricted Subsidiaries during such Rolling Period (or, in the case of any such Rolling Period ending before June 30, 2013, Annualized Consolidated Net Interest Expense for such Rolling Period) to be less than 2.5 to 1.0.

 

60

 

(c)           Total Leverage Ratio.  The Borrowers will not permit, as of the last day of any fiscal quarter, the ratio of (i) total Debt of the Borrowers and the Restricted Subsidiaries as of such date to (ii) Consolidated EBITDA of the Borrowers and the Restricted Subsidiaries for the Rolling Period ending on such day (or, in the case of any such Rolling Period ending before June 30, 2013, Annualized Consolidated EBITDA for such Rolling Period) to exceed 4.25 to 1.00.

 

(d)           Adjusted Present Value Ratio.  Borrowers shall not permit the ratio of Total Adjusted Present Value to total Debt of the Borrowers and Restricted Subsidiaries to be less than (a) 1.25 to 1.00 at the end of the fiscal quarter ending December 31, 2012, (b) 1.50 to 1.00 at the end of the fiscal quarter ending March 31, 2013 and (c) 2.0 to 1.0 at the end of each fiscal quarter thereafter.

 

Section 9.02         Debt.  The Borrowers will not, and will not permit any Subsidiary to, incur, create, assume or suffer to exist any Debt, except:

 

(a)           the Term Notes or other Obligations arising under the Loan Documents or any guaranty of or suretyship arrangement for the Term Notes or other Obligations arising under the Loan Documents.

 

(b)           Debt of Borrowers and its Subsidiaries with respect to the First Lien Loan or other obligations and liabilities arising under Swap Agreements with any Person constituting an “Approved Counterparty” under clause (a) of the definition thereof in the First Lien Credit Agreement, as limited by Section 5.3(b)(vi) of the Intercreditor Agreement.

 

(c)           Debt of the Borrowers and their respective Subsidiaries existing on the date hereof that is reflected in the Financial Statements and described on Schedule 9.02.

 

(d)           Debt associated with worker’s compensation claims, performance, bid, surety or similar bonds or surety obligations required by Governmental Requirements or third parties, including, guarantees and obligations of the Borrowers and their respective Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed), in connection with the operation of the Oil and Gas Properties in the ordinary course of business.

 

(e)           intercompany Debt between any Co-Borrower and any Restricted Subsidiary or between Restricted Subsidiaries to the extent permitted by Section 9.05; provided that such Debt is not held, assigned, transferred, negotiated or pledged to any Person other than such Co-Borrower or one of its Restricted Subsidiaries.

 

(f)            endorsements of negotiable instruments for collection in the ordinary course of business.

 

(g)           Debt incurred in the ordinary course of Co-Borrower’s business in connection with Swap Agreements provided they are permitted under Section 9.17 of this Agreement.

 

(h)           Debt of Unrestricted Subsidiaries for which neither a Co-Borrower nor any Restricted Subsidiary shall be liable as an obligor, under any guarantee or otherwise.

 

61

 

(i)            unsecured Debt not otherwise permitted by the foregoing clauses of this Section 9.02; provided that the principal amount of such Debt shall not exceed five percent (5%) of the Borrowing Base then in effect.

 

Section 9.03         Liens.  The Borrowers will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any of its Properties (now owned or hereafter acquired), except:

 

(a)           Liens securing the payment of any Obligations.

 

(b)           Liens securing the First Lien Loan and the “Obligations” under and as defined in the First Lien Credit Agreement (collectively, the “First Liens”).

 

(c)           Excepted Liens.

 

(d)           Liens described on Schedule 9.03.

 

(e)           Liens in favor of any First Lien Lender to secure Swap Agreements.

 

(f)            Liens on the assets of Unrestricted Subsidiaries securing Debt permitted under Section 9.02(h).

 

Section 9.04         Dividends, Distributions and Redemptions.  The Borrowers will not, and will not permit any Restricted Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, return any capital to its stockholders or make any distribution of its Property to its Equity Interest holders, except (a) Restricted Subsidiaries may declare and pay dividends or distributions with respect to their Equity Interests payable solely in additional Equity Interests (other than Disqualified Capital Stock), (b) each Co-Borrower or Subsidiary of a Co-Borrower may make Restricted Payments to any other Co-Borrower and to any Subsidiary of such Co-Borrower that are Guarantors, (c) payments in connection with the satisfaction of employees’ (at any of the Borrowers, Restricted Subsidiaries or Operator) tax withholding obligations pursuant to employee benefit plans or outstanding awards (and payment of any requisite amounts to appropriate Governmental Authorities)  arising out of the sale of employees’ vested stock in Sanchez, which payments are made, directly or indirectly, from the proceeds of the sale of such vested stock and (d) Permitted Preferred Stock Distributions; provided, Restricted Payments made under this Section 9.04, other than (x) pursuant to clause (c) above and (y) Permitted Preferred Stock Distributions comprised solely of common stock of Sanchez, may be made only so long as no Default or Event of Default exists or will exist after giving effect to such Restricted Payment.

 

Section 9.05         Investments, Loans and Advances.  The Borrowers will not, and will not permit any Subsidiary to, make or permit to remain outstanding any Investments in or to any Person (other than Restricted Subsidiaries), except that the foregoing restriction shall not apply to:

 

(a)           Investments reflected in the Financial Statements or which are disclosed to the Lenders in Schedule 9.05.

 

62

 

(b)           accounts receivable arising in the ordinary course of business.

 

(c)           direct obligations of the United States or any agency thereof, or obligations guaranteed by the United States or any agency thereof, in each case maturing within one year from the date of creation thereof.

 

(d)           commercial paper maturing within one year from the date of creation thereof rated no lower than A1 or P1 by S&P or Moody’s.

 

(e)           deposits maturing within one year from the date of creation thereof with, including certificates of deposit issued by, any Lender or any office located in the United States of any other bank or trust company which is organized under the laws of the United States or any state thereof, has capital, surplus and undivided profits aggregating at least $100,000,000 (as of the date of such bank or trust company’s most recent financial reports) and has a short term deposit rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moody’s, respectively.

 

(f)            deposits in money market funds investing primarily in Investments described in Section 9.05(c), Section 9.05(d) or Section 9.05(e).

 

(g)           subject to the limits in Section 9.06, Investments in direct ownership interests in additional Oil and Gas Properties, gas gathering, processing and transportation systems and all other assets contemplated by the permitted business of a Co-Borrower located within the geographic boundaries of the United States of America.

 

(h)           entry into operating agreements, working interests, royalty interests, mineral leases, processing agreements, farm-out agreements, contracts for the sale, transportation or exchange of oil and natural gas, unitization agreements, pooling arrangements, area of mutual interest agreements, production sharing agreements or other similar or customary agreements, transactions, properties, interests or arrangements, and Investments and expenditures in connection therewith or pursuant thereto, in each case made or entered into in the ordinary course of the oil and gas business, excluding, however, Investments in other Persons;

 

provided, however, that none of the foregoing shall involve the incurrence of any Debt not permitted by Section 9.02.

 

Section 9.06         Nature of Business; International Operations.  The Borrowers will not, and will not permit any Subsidiary to, allow any material change to be made in the character of its business as an independent oil and gas exploration and production company.  From and after the date hereof, a Co-Borrower and its Subsidiaries will not acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas Properties not located within the geographical boundaries or territorial waters of the United States and will not acquire or form any Foreign Subsidiaries.

 

Section 9.07         Limitation on Leases.  The Borrowers will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases and leases of Hydrocarbon Interests), under leases or lease agreements which would cause the aggregate

 

63

 

amount of all payments made by any Co-Borrower and the Subsidiaries pursuant to all such leases or lease agreements, including, without limitation, any residual payments at the end of any lease, to exceed $1,000,000  in any period of twelve (12) consecutive calendar months during the life of such leases.

 

Section 9.08         Proceeds of Term Notes/Advances.  The Borrowers will not permit the Advances or the proceeds of the Term Loan to be used for any purpose other than those permitted by Section 7.21.  Neither the Borrowers nor any Person acting on behalf of the Borrowers has taken or will take any action which might cause any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Exchange Act or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect.  If requested by the Administrative Agent, the Borrowers will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to in Regulations U, T or X of the Board, as the case may be.

 

Section 9.09         Sale or Discount of Receivables.  Except for receivables obtained by the Borrowers or any Subsidiary out of the ordinary course of business or the settlement of joint interest billing accounts in the ordinary course of business or discounts granted to settle collection of accounts receivable or the sale of defaulted accounts arising in the ordinary course of business in connection with the compromise or collection thereof and not in connection with any financing transaction, neither the Borrowers nor any Subsidiary will discount or sell (with or without recourse) to any other Person that is not a Co-Borrower any of its notes receivable or accounts receivable.

 

Section 9.10         Mergers, Etc.  Neither the Borrowers nor any Subsidiary will merge into or with or consolidate with any other Person, or sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person (any such transaction, a “consolidation”); provided that (a) any Subsidiary may participate in a consolidation with a Co-Borrower (provided that a Co-Borrower shall be the continuing or surviving corporation) or any Restricted Subsidiary (provided that such Restricted Subsidiary shall be the continuing or surviving Person) and any Unrestricted Subsidiary may merge with another Unrestricted Subsidiary and (b) in the case of an Unrestricted Subsidiary merging into a Co-Borrower, no Default or Event of Default shall result.

 

Section 9.11         Sale of Assets.  The Borrowers will not, and will not permit any Subsidiary to, sell, assign, farm-out, convey or otherwise transfer any Property or to issue or sell any Equity Interests in a Co-Borrower or any of its Restricted Subsidiaries except (i) an issuance or sale of common stock or Preferred Stock of Sanchez, in each case whether as a Permitted Preferred Stock Distribution or otherwise and without regard to whether or not there is any Default or Event of Default or (ii) the following sales, assignments, farm-outs, conveyances and/or transfers, provided, no Default or Event of Default exists or will exist after giving effect to such sale, assignment, conveyance, farm-out or transfer:

 

(a)           a transfer of assets between or among a Co-Borrower and its Restricted Subsidiaries;

 

64

 

(b)                                 an issuance or sale of Equity Interests in a Restricted Subsidiary to a Co-Borrower or to another Restricted Subsidiary;

 

(c)                                  the sale, lease or other disposition of produced Hydrocarbons, equipment, inventory, accounts receivable or other properties or assets in the ordinary course of business, including, without limitation, any abandonment, farm-in, farm-out, lease or sublease of any oil and gas properties or the forfeiture or other disposition of such properties pursuant to standard form operating agreements, in each case in the ordinary course of business in a manner customary in the oil and gas business;

 

(d)                                 the sale or other disposition of cash or cash equivalents;

 

(e)                                  with respect to PDP Reserves and PDNP Reserves, the sale or other disposition (including Casualty Events) of any Oil and Gas Property or any interest therein or any Restricted Subsidiary owning Oil and Gas Properties; provided that

 

(1)           Borrowers shall provide the Administrative Agent at least ten (10) days prior written notice of any sale, assignment, conveyance or transfer hereunder,

 

(2)           100% of the consideration received in respect of such sale or other disposition shall be cash,

 

(3)           the consideration received in respect of such sale or other disposition shall be equal to or greater than the fair market value of the Oil and Gas Property, interest therein or the Restricted Subsidiary subject of such sale or other disposition (as reasonably determined by the board of directors of the Borrowers and, if requested by the First Lien Administrative Agent or the Administrative Agent, the Borrowers shall deliver a certificate of a Responsible Officer of each Co-Borrower certifying to that effect),

 

(4)           if such sale or other disposition of Oil and Gas Property requires the consent of the First Lien Administrative Agent in accordance with Section 9.11(e)(4) of the First Lien Credit Agreement, such sale or disposition shall also be subject to the written Consent of the Administrative Agent and each Lender, not to be unreasonably withheld, and

 

(5)           if any such sale or other disposition is of a Restricted Subsidiary owning Oil and Gas Properties, such sale or other disposition shall include all the Equity Interests of such Restricted Subsidiary; and

 

(f)                                   subject to the mandatory prepayment requirements in Section 3.03(c)(i), the sale or other disposition of Oil and Gas Properties constituting PUD Reserves or Unproved Reserves; provided that Borrowers shall, upon request of the Administrative Agent, deliver a certificate of a Responsible Officer of each Co-Borrower certifying to the Administrative Agent the consideration received in respect of any such sale or other disposition; and provided further that to the extent that the consideration received in respect of any such sale or other disposition exceeds (in the aggregate with all other sales or other dispositions of PUD Reserves and

 

65

 

Unproved Reserves occurring after the Effective Date) $5,000,000, then such sale or other disposition shall be subject to the written Consent of the Administrative Agent, not to be unreasonably withheld, conditioned or delayed.

 

Section 9.12         Environmental Matters.  The Borrowers will not, and will not permit any Subsidiary to, cause or permit any of its Property to be in violation of, or do anything or permit anything to be done which will subject any such Property to any Remedial Work under any applicable Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any, pertaining to such Property where such violations or remedial obligations could reasonably be expected to have a Material Adverse Effect.

 

Section 9.13         Transactions with Affiliates.  The Borrowers will not, and will not permit any Subsidiary to, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate unless such transactions are otherwise permitted under this Agreement and are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable arm’s length transaction with a Person not an Affiliate.

 

Section 9.14         Subsidiaries.  The Borrowers shall not, and shall not permit any Subsidiary to, create or acquire any additional Subsidiary without the prior written consent of the Administrative Agent and the Required Lenders, other than the creation or acquisition by a Co-Borrower of Subsidiaries in compliance with the definition of “Unrestricted Subsidiary” or Section 8.16.  The Borrowers shall not, and shall not permit any Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in any Subsidiary except in compliance with Section 9.11.  Neither the Borrowers nor any Subsidiary shall have any Foreign Subsidiaries.

 

Section 9.15         Negative Pledge Agreements; Dividend Restrictions.  The Borrowers will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any contract, agreement or understanding which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property in favor of the Administrative Agent and the Lenders, restricts any Loan Party from paying dividends or making distributions to any other Loan Party, restricts any Loan Party from making loans or advances to any other Loan Party, or restricts any Loan Party from transferring any of its properties or assets to any other Loan Party or which requires the consent of or notice to other Persons in connection therewith; provided, however, that the preceding restrictions will not apply to encumbrances or restrictions arising under or by reason of (a) this Agreement or the Security Instruments, (b) the First Lien Loan Documents, (c) applicable law, rule, regulation or order, (d) any instrument governing Debt or Equity Interests of a Person acquired by any Co-Borrower or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Debt or Equity Interests were incurred or issued in connection with such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of those instruments, provided that the amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend, distribution and

 

66

 

other payment restrictions than those contained in those instruments; provided, that, in the case of Debt, such Debt was permitted by the terms hereof to be incurred; (e) customary non-assignment provisions in contracts and leases entered into in the ordinary course of business and consistent with past practices; (f) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the transfer of any of its properties to any Loan Party, (g) any agreement for the sale or other disposition of a Restricted Subsidiary of a Co-Borrower that restricts distributions by that Restricted Subsidiary pending its sale or other disposition, (h) agreements governing other Debt of the Borrowers and one or more Restricted Subsidiaries permitted herein, provided that the restrictions in the agreements governing such Debt are not materially more restrictive, taken as a whole, than those provided herein, (i) Liens permitted to be incurred under Section 9.03 hereof that limit the right of the debtor to dispose of the assets subject to such Liens, (j) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, and stock sale agreements entered into in the ordinary course of business, and (k) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

 

Section 9.16         Gas Imbalances, Take-or-Pay or Other Prepayments.  The Borrowers will not allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrowers or any Restricted Subsidiary that would require the Borrowers or such Restricted Subsidiary to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor.

 

Section 9.17         Swap Agreements.  The Borrowers will not, and will not permit any Subsidiary to, enter into any Swap Agreements with any Person other than (a) Swap Agreements in respect of commodities (i) with an Approved Counterparty, (ii) with a maximum term of thirty-six (36) months and (iii) the notional volumes for which (when aggregated with other commodity Swap Agreements then in effect other than basis differential swaps on volumes already hedged pursuant to other Swap Agreements) do not exceed, as of the date such Swap Agreement is executed, 50% of the expected production from total Proved Reserves as represented in the most recently provided Reserve Report but in no event shall such amount exceed the amount of actual production from the prior month, for each month during the period during which such Swap Agreement is in effect for each of crude oil and natural gas, calculated separately, (b) Swap Agreements in respect of interest rates with an Approved Counterparty, as follows: (i) Swap Agreements effectively converting interest rates from fixed to floating, the notional amounts of which (when aggregated with all other Swap Agreements of the Borrowers and their Subsidiaries then in effect effectively converting interest rates from fixed to floating) do not exceed 50% of the then outstanding principal amount of the Borrowers’ Debt for borrowed money which bears interest at a fixed rate and (ii) Swap Agreements effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Swap Agreements of the Borrowers and their respective Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed 50% of the then outstanding principal amount of the Borrowers’ Debt for borrowed money which bears interest at a floating rate and (c) those certain Swap Agreements existing on the date hereof between SEP and Shell Energy North America (US), L.P. and described on Schedule 9.17.  In no event shall any Swap Agreement to which the Borrowers or any Subsidiary is a party contain any requirement, agreement or covenant for the Borrowers or any Subsidiary to post cash or other

 

67

 

collateral or margin to secure their obligations under such Swap Agreement or to cover market exposures.  In addition to the foregoing, no Swap Agreement that has been used in the calculation of the Borrowing Base may be cancelled, liquidated or “unwound” without the prior written consent of the Administrative Agent.

 

Section 9.18         Sale and Leaseback Transactions.  The Borrowers will not, and will not permit any of its Restricted Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.

 

Section 9.19         ERISA.  Except where non-compliance, in each case or in combination with all other instances of non-compliance with the provisions of this Section 9.19, could not reasonably be expected to result in a Material Adverse Effect, the Borrowers will not, and will not permit any of the Guarantors to, at any time:

 

(a)           engage in, or permit any ERISA Affiliate to engage in, any transaction in connection with which a Co-Borrower, any of its Subsidiaries or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to subsections (c), (i), (l) or (m) of Section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code.

 

(b)           fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, a Co-Borrower, any of its Subsidiaries or any ERISA Affiliate is required to pay as contributions thereto.

 

(c)           contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume an obligation to contribute to (i) any employee welfare benefit plan, as defined in Section 3(1) of ERISA, which may not be terminated by such entities in their sole discretion at any time without any material liability, including, without limitation, any such plan that is maintained to provide benefits to former employees of such entities, (other than benefits mandated by Title I, Part 6 of ERISA and Section 4980B of the Code), or (ii) any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code.

 

Section 9.20         Change in Business.

 

(a)           Each of the Co-Borrower and the Guarantors shall not, and shall not permit any Subsidiary of such Co-Borrower to, engage in any business or activity other than (i) the business of the exploration for, and development, acquisition, and the production of Oil and Gas Properties, (ii) the business of marketing, processing, treating, gathering, and upstream transportation of Oil and Gas Properties produced by such Co-Borrower and its Subsidiaries; (iii) developing raw land acquired or leased by such Co-Borrower or its Subsidiaries in conjunction with the activities described in clause (i) or (ii) above, and remediating such land for resale; and (iv) the business of providing services to support any of the Borrowers’ or their Subsidiaries’ activities described in clause (i), (ii) or (iii) above.  Each Co-Borrower shall not,

 

68

 

and shall not permit any of its Subsidiaries to engage in any activity or business, or acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas Properties or businesses, in any event, which are not located within the geographical boundaries of the United States or the offshore area in the Gulf of Mexico over which the United States of America asserts jurisdiction.

 

(b)           Each of the Borrowers and the Guarantors shall not, and shall not permit any Subsidiary of such Co-Borrower to, alter, amend or modify in any manner materially adverse to the Lenders any of its Organizational Documents.  In any event, a Co-Borrower shall not permit any of its Subsidiaries to (i) if such Subsidiary is a limited liability company, amend its limited liability company agreement to “opt in” to “security” status in accordance with Section 8.103 of the UCC or (ii) evidence its Equity Interests with a certificate without, in each case, the prior consent of the Administrative Agent.

 

(c)           Except as set forth in Section 1.05, the Borrowers and the Guarantors shall not, and shall not permit any of their respective Subsidiaries to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or change the fiscal year of the Borrowers or of any of its Subsidiaries.

 

ARTICLE X

 

EVENTS OF DEFAULT; REMEDIES

 

Section 10.01       Events of Default.  The occurrence and continuation of one or more of the following events shall constitute an “Event of Default”:

 

(a)           the Borrowers shall fail to pay any interest on or principal of any Advance or any fee or other amount when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof, by acceleration or otherwise.

 

(b)           any representation or warranty made or deemed made by or on behalf of the Borrowers or any Subsidiary in or in connection with any Loan Document or any amendment or modification of any Loan Document or waiver under such Loan Document, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made.

 

(c)           any Co-Borrower or any Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in Section 8.01, Section 8.02, Section 8.03, Section 8.12, Section 8.15, or ARTICLE IX.

 

(d)           any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in Section 10.01(a) or Section 10.01(c)) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) notice thereof from the Administrative Agent to the Borrowers (which notice will be given at the request of any Lender) or (ii) a

 

69

 

Responsible Officer of the Borrowers or such Subsidiary otherwise becoming aware of such default.

 

(e)           any Co-Borrower or any 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 the expiration of any applicable period of grace and/or notice and cure.

 

(f)            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 (other than the First Lien Loan) or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the Redemption thereof or any offer to Redeem to be made in respect thereof, prior to its scheduled maturity or require any Co-Borrower or any Subsidiary to make an offer in respect thereof.

 

(g)           an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Co-Borrower or any Subsidiary 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 Co-Borrower or any Subsidiary 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.

 

(h)           any Co-Borrower or any Subsidiary 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 10.01(g), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Co-Borrower or any Subsidiary 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.

 

(i)            any Co-Borrower or any Subsidiary shall become unable, admit in writing its inability, or fail generally to pay its debts as they become due.

 

(j)            one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000.00 (to the extent not covered by independent third party insurance provided by insurers of the highest claims paying rating or financial strength as to which the insurer does not dispute coverage and is not subject to an insolvency proceeding) shall be rendered against any Co-Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of sixty (60) 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 Borrowers or any Subsidiary to enforce any such judgment.

 

70

 

(k)           any Loan Document after delivery thereof shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with its terms against any Co-Borrower or a Guarantor party thereto or shall be repudiated by any of them, or cease to create a valid and perfected Lien of the priority required thereby on any of the Collateral purported to be covered thereby, except to the extent permitted by the terms of this Agreement, or any Co-Borrower, any Guarantor or any Subsidiary or any of their Affiliates shall so state in writing.

 

(l)            an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.

 

(m)          a Change in Control shall occur.

 

(n)           the occurrence of an event of default (as defined therein) under the First Lien Loan (other than with respect to Section 9.01 of the First Lien Credit Agreement) or the Undertaking to Pay Directly.

 

(o)           the Intercreditor Agreement shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with its terms against any party thereto or any holder of Debt covered thereby or shall be repudiated by any of them.

 

Section 10.02       Remedies.

 

(a)           In the case of an Event of Default other than one described in Section 10.01(g), Section 10.01(h) or Section 10.01(i), at any time thereafter during the continuance of such Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrowers, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Term Notes and the Advances then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Advances so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers and the Guarantors accrued hereunder and under the Term Notes and the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by the Borrowers and each Guarantor; and in case of an Event of Default described in Section 10.01(g), Section 10.01(h) or Section 10.01(i), the Commitments shall automatically terminate and the Term Note and the principal of the Advances then outstanding, together with accrued interest thereon and all fees and the other obligations of the Borrowers and the Guarantors accrued hereunder and under the Term Notes and the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers and each Guarantor.

 

(b)           In the case of the occurrence of an Event of Default, the Administrative Agent and the Lenders will have all other rights and remedies available at law and equity.

 

71

 

(c)           Subject to the terms of the Intercreditor Agreement, all proceeds realized from the liquidation or other disposition of Collateral or otherwise received after maturity of the Advances or the Term Notes, whether by acceleration or otherwise, shall be applied:  first, to payment or reimbursement of expenses and indemnities provided for in this Agreement and the Security Instruments; second, to accrued interest on the Advances; third, to fees; fourth, to any other Obligations; and any excess shall be paid to the Borrowers or as otherwise required by any Governmental Requirement.

 

ARTICLE XI

 

THE ADMINISTRATIVE AGENT

 

Section 11.01       Appointment; Powers.

 

Each of the Lenders hereby irrevocably (subject to Section 11.06) appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto.  Each of the Lenders hereby appoints Macquarie as its Second Lien Collateral Agent and authorizes the Second Lien Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Second Lien Collateral Agent by the terms hereof, any other Loan Documents and the Intercreditor Agreement, together with such actions and powers as are reasonably incidental thereto.

 

Section 11.02       Duties and Obligations of Administrative Agent.  The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing (the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law; rather, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties), (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except as provided in Section 11.03, and (c) except as expressly set forth herein, shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their Subsidiaries that is communicated to or obtained by the bank serving as the Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to it by the Borrowers or a Lender, and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in

 

72

 

ARTICLE VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to it or as to those conditions precedent specifically required to be to its satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the financial or other condition of the Borrowers and its Subsidiaries or any other obligor or guarantor, or (vii) any failure by the Borrowers or any other Person (other than itself) to perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein.  For purposes of determining compliance with the conditions specified in ARTICLE VI, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed closing date specifying its objection thereto.

 

Section 11.03       Action by Administrative Agent.  The Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that it is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) and in all cases it shall be fully justified in failing or refusing to act hereunder or under any other Loan Documents unless it shall (a) receive written instructions from the Required Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) specifying the action to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses which may be incurred by it by reason of taking or continuing to take any such action.  The instructions as aforesaid and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.  If a Default has occurred and is continuing, then the Administrative Agent shall take such action with respect to such Default as shall be directed by the requisite Lenders in the written instructions (with indemnities) described in this Section 11.03, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interests of the Lenders.  In no event, however, shall the Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, the Loan Documents or applicable law.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders or the Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02), and otherwise the Administrative Agent shall not be liable for any action taken or not taken by it hereunder or under any other Loan Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful misconduct.

 

Section 11.04       Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper

 

73

 

Person, and shall not incur any liability for relying thereon and each of the Borrowers, and the Lenders hereby waives the right to dispute the Administrative Agent’s record of such statement, except in the case of gross negligence or willful misconduct by the Administrative Agent.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.  The Administrative Agent may deem and treat the payee of any Term Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof permitted hereunder shall have been filed with the Administrative Agent.

 

Section 11.05       Subagents.  The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding Sections of this ARTICLE XI shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

Section 11.06       Resignation or Removal of Administrative Agent.  Subject to the appointment and acceptance of a successor Administrative Agent as provided in this Section 11.06, the Administrative Agent may resign at any time by notifying the Lenders and the Borrowers, and the Administrative Agent may be removed at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right, in consultation with and upon the approval of the Borrowers (so long as no Event of Default has occurred and is continuing), which approval shall not be unreasonably withheld, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation or removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders appoint a successor Administrative Agent which shall be a bank with an office in Houston, Texas, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, the retiring Administrative Agent shall execute such instruments as may be reasonably necessary to give effect to such succession, and the retiring Administrative Agent shall be discharged from any further duties and obligations hereunder.  The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this ARTICLE XI and Section 12.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

 

Section 11.07       Administrative Agent as Lender.  The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally

 

74

 

engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

 

Section 11.08       No Reliance.

 

(a)           Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and each other Loan Document to which it is a party.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder.  The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Borrowers or any of its Subsidiaries of this Agreement, the Loan Documents or any other document referred to or provided for herein or to inspect the Properties or books of the Borrowers or their Subsidiaries.  Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Borrowers (or any of its Affiliates) which may come into the possession of the Administrative Agent or any of its Affiliates.  In this regard, each Lender acknowledges that Porter Hedges LLP is acting in this transaction as special counsel to the Administrative Agent only, except to the extent otherwise expressly stated in any legal opinion or any Loan Document.  Each other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein.

 

(b)           The Lenders acknowledge that the Administrative Agent is acting solely in an administrative capacity with respect to structuring and syndication of this facility and has no duties, responsibilities or liabilities under this Agreement and the other Loan Documents other than its administrative duties, responsibilities and liabilities specifically as set forth in the Loan Documents and in its capacity as a Lender.  In structuring, arranging or syndicating this Agreement, each Lender acknowledges that the Administrative Agent may be an agent or lender under the Term Notes, other loans or other securities and waives any existing or future conflicts of interest associated with their role in such other debt instruments.  If in the administration of this facility or any other debt instrument, the Administrative Agent determines (or is given written notice by any Lender that a conflict exists), then it shall eliminate such conflict within ninety (90) days or resign pursuant to Section 11.06 and shall have no liability for action taken or not taken while such conflict existed.

 

Section 11.09       Authority to Release Collateral and Liens.  Each Lender hereby authorizes the Administrative Agent to release any collateral that is permitted to be sold or released pursuant to the terms of the Intercreditor Agreement and the other Loan Documents.  Each Lender hereby authorizes the Administrative Agent to execute and deliver to the Borrowers, at the Borrowers’ sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrowers in

 

75

 

connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of Section 9.11 or is otherwise authorized by the terms of the Loan Documents.

 

Section 11.10       Filing of Proofs of Claim.  Subject to the terms of the Intercreditor Agreement, in case of any Default or Event of Default under Section 10.01(f), Section 10.01(g) or Section 10.01(h), the Administrative Agent (regardless of whether the principal of any Advance shall then be due and payable and regardless of whether the Administrative Agent has made any demand on the Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)           to (i) file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect to the Advances and all other Obligations that is owing and unpaid and (ii) file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Administrative Agent under Section 3.03 and Section 12.03) allowed in such judicial proceeding; and

 

(b)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.

 

Each Lender hereby authorizes any custodian, receiver, assignee, trustee, conservator, sequestrator or other similar official in any such judicial proceeding: (i) to make such payments to the Administrative Agent; and (ii) if the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 3.03 and Section 12.03.  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 any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.  Each Lender retains its right to file and prove a claim separately.

 

ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01       Notices.

 

(a)           Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to Section 12.01(b)), 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 telecopy, as follows:

 

76

 

(i)            if to the Borrowers, to it at Sanchez Energy Corporation, 1111 Bagby Street, Suite 1800, Houston, Texas 77002, Attention: Alfredo Gutierrez (Telecopy No. (713) 756-2784), with a copy to Akin Gump Strauss Hauer & Feld LLP, 1111 Louisiana Street, 44th Floor, Houston, Texas 77002, Attention: David Elder (Telecopy No. (713) 236-0822);

 

(ii)           if to the Administrative Agent, to it at Macquarie Bank Limited, Level 15, No. 1 Martin Place, Sydney, New South Wales, 2000, Attention: Executive Director (+61 2 8232 3590) with a copy to Macquarie Bank Limited, Houston Representative Office, 500 Dallas Street, suite 3250, Houston, Texas 77002 Attention: Michael Sextro (Telecopy No. (713) 275-6222, with a copy to Porter Hedges LLP, 1000 Main Street, 36th Floor, Houston, Texas 77002, Attention: Ephraim del Pozo (Telecopy No. (713) 226-6260);

 

(iii)          if to any other Lender, in its capacity as such to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

 

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

 

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

 

Section 12.02       Waivers; Amendments.

 

(a)           No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege, or any abandonment or discontinuance of steps to enforce such right, power or privilege, under any of the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrowers therefrom shall in any event be effective unless the same shall be permitted by Section 12.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of an Advance shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

 

77

 

(b)           Neither this Agreement nor any provision hereof nor any Security Instrument nor any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or by the Borrowers and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment or the Maximum Commitment Amount of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Advance or reduce the rate of interest thereon, or reduce any fees payable hereunder, or reduce any other Obligations hereunder or under any other Loan Document, without the written consent of each Lender affected thereby, (iii) subject to the terms of the Intercreditor Agreement, postpone the scheduled date of payment of the principal amount of any Advance, or any interest thereon, or any fees payable hereunder, or any other Obligations hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, or postpone or extend the Termination Date without the written consent of each Lender affected thereby, (iv)change Section 4.01(b) or Section 4.01(d) in a manner that would alter the pro rata sharing of payments required thereby in a manner adverse to any Lender, without the written consent of each Lender, (v) waive or amend Section 8.14, without the written consent of each Lender, (vi) subject to the terms of the Intercreditor Agreement, release any Guarantor, release any of the Collateral (other than as provided in Section 11.09), or reduce the percentage set forth in Section 8.14 to less than eighty percent (80%), without the written consent of each Lender, or (vii) change any of the provisions of this Section 12.02(b) or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or under any other Loan Documents or make any determination or grant any consent hereunder or any other Loan Documents, without the written consent of each Lender; provided  further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Bank hereunder or under any other Loan Document without the prior written consent of the Administrative Agent.  Notwithstanding the foregoing, any supplement to Schedule 7.14 (Subsidiaries) shall be effective simply by delivering to the Administrative Agent a supplemental schedule clearly marked as such and, upon receipt, the Administrative Agent will promptly deliver a copy thereof to the Lenders.

 

Section 12.03       Expenses, Indemnity; Damage Waiver.

 

(a)           The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and their Affiliates, including, without limitation, the reasonable fees, charges and disbursements of counsel and other outside consultants for the Administrative Agent, the reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, and the cost of environmental audits and surveys and appraisals, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration (both before and after the execution hereof and including advice of counsel to the Administrative Agent as to the rights and duties of the Administrative Agent and the Lenders with respect thereto) of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and other charges incurred by the Administrative Agent or any Lender in connection with any filing, registration, recording or perfection of any security interest contemplated by this Agreement or any Security Instrument or any other document referred to

 

78

 

therein, (iii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Advances made hereunder, including, without limitation, all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Advances.

 

(b)           THE BORROWERS SHALL INDEMNIFY THE ADMINISTRATIVE AGENT 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 AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE OF ANY CO-BORROWER OR ANY OF THE GUARANTORS TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF ANY CO-BORROWER OR ANY OF THE GUARANTORS SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv) ANY ADVANCE OR THE USE OF THE PROCEEDS THEREFROM, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWERS AND THE GUARANTORS BY THE BORROWERS AND THE GUARANTORS, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWERS OR ANY OF THE GUARANTORS OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY THE BORROWERS OR ANY OF THE GUARANTORS WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWERS OR ANY OF THE GUARANTORS, (x) THE PAST OWNERSHIP BY THE BORROWERS OR ANY OF THE GUARANTORS OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL

 

79

 

OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWERS OR ANY OF THE GUARANTORS OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWERS OR ANY OF THE GUARANTORS, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWERS OR ANY OF THE GUARANTORS, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

(c)           To the extent that the Borrowers fail to pay any amount required to be paid by it to the Administrative Agent under Section 12.03(a) or Section 12.03(b), each Lender severally agrees to pay to the Administrative Agent such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such.

 

(d)           To the extent permitted by applicable law, the Borrowers and the Indemnified Parties shall not assert, and hereby waive, any claim against each other, 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 Advance or the use of the proceeds thereof.

 

(e)           All amounts due under this Section 12.03 shall be payable not later than ten (10) days after written demand therefor.

 

Section 12.04       Successors and Assigns.

 

(a)           The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the

 

80

 

Borrowers 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 any Co-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 12.04.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in Section 12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 (i)                                     Subject to the conditions set forth in Section 12.04(b)(ii), any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Advances at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:  (1) the Borrowers, provided that no consent of any Co-Borrower shall be required for an assignment (A) to an Approved Fund or (B) if an Event of Default has occurred and is continuing; and (2) the Administrative Agent (such consent not to be unreasonably withheld or delayed).

 

(ii)           Assignments shall be subject to the following additional conditions:  (1) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment, the amount of the Commitment 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 $2,500,000, and the Commitments of any assigning Lender remaining a party hereto after giving effect to the assignment shall be at least $2,500,000, unless, in each case, each of the Borrowers, the Administrative Agent otherwise consents;  (2) 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; (3) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; (4) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and shall deliver notice of the Assignment and Assumption to the Borrowers; and (5) in the case of an assignment to a CLO, the assigning Lender shall retain the sole right to approve any amendment, modification or waiver of any provision of this Agreement, provided that the Assignment and Assumption between such Lender and such CLO may provide that such Lender will not, without the consent of such CLO, agree to any amendment, modification or waiver described in the first proviso to Section 12.02 that affects such CLO.

 

(iii)          Subject to Section 12.04(b)(iv) and the acceptance and recording thereof, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease

 

81

 

to be a party hereto but shall continue to be entitled to the benefits of Section 5.01, Section 5.02, Section 5.03 and Section 12.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.04(c).

 

(iv)          The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Maximum Commitment Amount of, and principal amount of the Advances owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.  In connection with any changes to the Register, if necessary, the Administrative Agent will reflect the revisions on Annex I and forward a copy of such revised Annex I to the Borrowers and each Lender.

 

(v)           Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 12.04(b) and any written consent to such assignment required by Section 12.04(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 12.04(b).

 

(c)                                  (i)                                     Any Lender may, without the consent of the Borrowers or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Advances owing to it); provided that (1) such Lender’s obligations under this Agreement shall remain unchanged, (2) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (3) the Borrowers, the Administrative Agent 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 proviso to Section 12.02 that affects such Participant.  In addition such agreement must provide that the Participant be bound by the provisions of Section 12.03.  Subject to Section 12.04(c)(ii), the Borrowers agree that each Participant shall be entitled to the benefits of Section 5.01, Section 5.02 and Section 5.03 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.04(b).  To the extent permitted by law, each

 

82

 

Participant also shall be entitled to the benefits of Section 12.08 as though it were a Lender, provided such Participant agrees to be subject to Section 4.01(d) as though it were a Lender.

 

(ii)           A Participant shall not be entitled to receive any greater payment under Section 5.01 or Section 5.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.03 unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 5.03(e) as though it were a Lender.

 

(d)           Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 12.04(d) 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.

 

(e)           Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of any Lender or any grant of participations therein shall be permitted if such transfer, assignment or grant would require the Borrowers to file a registration statement with the SEC or to qualify the Advances under the “Blue Sky” laws of any state.

 

Section 12.05       Survival; Revival; Reinstatement.

 

(a)           All covenants, agreements, representations and warranties made by the Borrowers herein 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 this Agreement and the making of any Advances, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent 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 Advance or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated.  The provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and ARTICLE XI shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Advances, the expiration, termination or assignment of the Commitments or the termination of this Agreement, any other Loan Document or any provision hereof or thereof.

 

(b)           To the extent that any payments on the Obligations or proceeds of any collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law, common law or equitable cause, then to such extent, the Obligations so satisfied shall be revived

 

83

 

and continue as if such payment or proceeds had not been received and the Administrative Agent’s, and the Lenders’ Liens, security interests, rights, powers and remedies under this Agreement and each Loan Document shall continue in full force and effect.  In such event, each Loan Document shall be automatically reinstated and the Borrowers shall take such action as may be reasonably requested by the Administrative Agent or the Lenders to effect such reinstatement.

 

Section 12.06       Counterparts; Integration; Effectiveness.

 

(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.

 

(b)           This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof and thereof.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

(c)           Except as provided in Section 6.01(a), 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.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

 

Section 12.07       Severability.  Any provision of this Agreement or any other 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 hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

Section 12.08       Right of Setoff.  Subject to the terms of the Intercreditor Agreement, if an Event of Default shall have occurred and be continuing, each Lender and each of its 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) at any time held and other obligations (of whatsoever kind, including, without limitations obligations under Swap Agreements) at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers or any Subsidiary against any of and all the obligations of the Borrowers or any Subsidiary owed to such Lender now or hereafter existing under this Agreement or any other Loan Document, irrespective of whether or not such Lender shall have

 

84

 

made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured.  The rights of each Lender under this Section 12.08 are in addition to other rights and remedies (including other rights of setoff) which such Lender or its Affiliates may have.

 

Section 12.09       GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

 

(a)           THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION; PROVIDED, TO THE EXTENT ANY OF THE SECURITY INSTRUMENTS RECITE THAT THEY ARE GOVERNED BY THE LAW OF ANOTHER JURISDICTION, OR ANY ACTION OR EVENT TAKEN THEREUNDER (SUCH AS FORECLOSURE OF THE MORTGAGED PROPERTY) REQUIRES APPLICATION OF OR COMPLIANCE WITH THE LAW OF ANOTHER JURISDICTION, SUCH PROVISIONS AND CONCEPTS SHALL APPLY.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN HARRIS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.  THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.

 

(c)           EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.

 

(d)           EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY

 

85

 

LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.

 

Section 12.10       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 12.11       Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or self-regulatory body; provided Borrowers have been given reasonable advance notice thereof and been afforded an opportunity to limit or protest the disclosure, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; provided Borrowers have been given reasonable advance notice thereof and been afforded an opportunity to limit or protest the disclosure, (d) to any other party to this Agreement or any other Loan Document, (e) in connection with the exercise of any remedies hereunder or under 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 12.11, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any Swap Agreement relating to the Borrowers and their obligations, (g) with the consent of the Borrowers or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrowers.  For the purposes of this Section 12.11, “Information” means all information received from the Borrowers or any Subsidiary relating to the Borrowers or any Subsidiary and their businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrowers or a Subsidiary.  Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord 

 

86

 

to its own confidential information.  Notwithstanding anything herein to the contrary, any party hereto (and each employee, representative or other agent of such party) may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to that party relating to such tax treatment or tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transactions, as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the transactions contemplated hereby.

 

Section 12.12       EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS AND CONDITIONS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY RESULT, SUBJECT TO THE TERMS HEREOF AND THEREOF AND APPLICABLE LAW, IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

 

Section 12.13       No Third Party Beneficiaries.  This Agreement, the other Loan Documents, and the agreement of the Lenders to make Advances are solely for the benefit of the Borrowers, and no other Person (including, without limitation, any Subsidiary of a Co-Borrower, any obligor, contractor, subcontractor, supplier or materialmen) shall have any rights, claims, remedies or privileges hereunder or under any other Loan Document against the Administrative Agent or any Lender for any reason whatsoever.  There are no third party beneficiaries.

 

Section 12.14       US Patriot Act Notice.  Each Lender hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Patriot Act.

 

87

 

Section 12.15                     Interest Rate Limitation.  It is the intention of the parties hereto that each Lender shall conform strictly to usury laws applicable to it.  Accordingly, if the transactions contemplated hereby would be usurious as to any Lender under laws applicable to it (including the laws of the United States of America and the State of Texas or any other jurisdiction whose laws may be mandatorily applicable to such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan Documents or any agreement entered into in connection with or as security for the Term Notes, it is agreed as follows:  (a) the aggregate of all consideration which constitutes interest under law applicable to any Lender that is contracted for, taken, reserved, charged or received by such Lender under any of the Loan Documents or agreements or otherwise in connection with the Term Notes shall under no circumstances exceed the maximum non-usurious amount allowed by such applicable law, and any excess shall be canceled automatically and if theretofore paid shall be credited by such Lender on the principal amount of the Debt (or, to the extent that the principal amount of the Debt shall have been or would thereby be paid in full, refunded by such Lender to the Borrowers); and (b) in the event that the maturity of the Term Notes is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by such Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Lender on the principal amount of the Debt (or, to the extent that the principal amount of the Debt shall have been or would thereby be paid in full, refunded by such Lender to the Borrowers).  All sums paid or agreed to be paid to any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the stated term of the Term Loan evidenced by the Term Notes until payment in full so that the rate or amount of interest on account of any Advances hereunder does not exceed the maximum amount allowed by such applicable law.  If at any time and from time to time (a) the amount of interest payable to any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Lender pursuant to this Section 12.15 and (b) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Lender would be less than the amount of interest payable to such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of interest payable to such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Lender until the total amount of interest payable to such Lender shall equal the total amount of interest which would have been payable to such Lender if the total amount of interest had been computed without giving effect to this Section 12.15.  To the extent that Chapter 303 of the Texas Finance Code is relevant for the purpose of determining the Highest Lawful Rate applicable to a Lender, such Lender elects to determine the applicable rate ceiling under such Chapter by the weekly ceiling from time to time in effect.  Chapter 346 of the Texas Finance Code does not apply to a Co-Borrower’s obligations hereunder.

 

Section 12.16                     References to First Lien Credit Agreement.  Notwithstanding anything to the contrary in any First Lien Loan Documents or the Intercreditor Agreement, references to the First Lien Credit Agreement in this Agreement shall continue to be effective even if the First Lien Credit Agreement has been (i) terminated or assigned by the First Lien Lenders and/or (ii)

 

88

 

Refinanced (as defined in the Intercreditor Agreement), in each case references shall be to the First Lien Credit Agreement in its form immediately prior to termination, assignment or Refinancing thereof. For the avoidance of doubt, unless modified in writing by the Administrative Agent, the Required Lenders or the Lenders, as applicable, any references in this Agreement to the First Lien Credit Agreement with respect to (a) any Consent or Approval of the First Lien Administrative Agent, First Lien Lenders or First Lien Required Lenders (including, without limitation, the consent or Approval described in the definition of “Approved Counterparty” and Section 9.11 hereof) or (b) the delivery by Borrowers to the First Lien Administrative Agent, First Lien Lenders or First Lien Required Lenders of any certificates, Reserve Reports, Engineering Reports, title materials or other deliverables under the First Lien Credit Agreement (including, without limitation, deliveries described or required in Sections 8.12 and 8.13 hereof) shall, in each case, continue to be delivered to, or require the Consent or Approval of, the Administrative Agent, the Lenders or Required Lenders, correspondingly, following the termination, assignment and/or Refinancing of the First Lien Credit Agreement.

 

Section 12.17                     Intercreditor Agreement.  Notwithstanding anything herein to the contrary, the liens, security interests, and rights granted to the Administrative Agent in its capacity as collateral agent (in such capacity, the “Second Lien Collateral Agent”) pursuant to this Agreement and the Security Instruments and the exercise of any right or remedy by the Second Lien Collateral Agent or the Lenders hereunder or thereunder are subject to the provisions of the Intercreditor Agreement and, in accordance with the Intercreditor Agreement, the liens, security interests and rights of the First Lien Administrative Agent and the First Lien Lenders under the First Lien Loan Documents, and each representation, warranty and undertaking (including, without limitation, the delivery of Collateral) of the Loan Parties in this Agreement and the Security Instruments is qualified accordingly.  Except with respect to the First Liens and pursuant to the Intercreditor Agreement, there is no implied or expressed intent to subordinate the liens and security interests granted to Second Lien Collateral Agent pursuant to this Agreement and the Security Instruments to any present or future liens or security interests in favor of any other Person.  In an event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

 

Section 12.18                     Termination and Release.  To the extent that a Loan Document provides for the termination of such Loan Document or the release of any Lien thereunder upon the payment in full of the Obligations, or words of similar effect, notwithstanding anything to the contrary in such Loan Document, such Loan Document shall terminate and the Administrative Agent shall release such Liens upon payment in full of the Obligations other than contingent Obligations which are intended to survive the termination of such Loan Document and with respect to which the contingency giving rise to such Obligation has not occurred.

 

[Signatures Begin Next Page]

 

89

 

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	
 
    	
BORROWERS:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SANCHEZ ENERGY CORPORATION,
    
	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael G. Long
    
	
 
    	
 
    	
Michael G. Long
    
	
 
    	
 
    	
Senior Vice President – Chief Financial   Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SEP HOLDINGS III, LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael G. Long
    
	
 
    	
 
    	
Michael G. Long
    
	
 
    	
 
    	
Senior Vice President – Chief Financial   Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SN MARQUIS LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael G. Long
    
	
 
    	
 
    	
Michael G. Long
    
	
 
    	
 
    	
Senior Vice President – Chief Financial   Officer
    
				

 

Signature Page to Second Lien Term Credit Agreement

 

 

	
 
    	
ADMINISTRATIVE AGENT AND LENDER:
    
	
 
    	
 
    	
 
    
	
 
    	
MACQUARIE BANK LIMITED
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jonathan Rourke
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Jonathan Rourke
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Executive Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joel Outlaw
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Joel Outlaw
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Associate Director, Legal Risk Management
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
POA   No. 594/10 dated 25 November 2010, expiring 30 November 2012,   signed in London
    
				

 

Signature Page to Second Lien Term Credit Agreement

 

 

ANNEX I

 

LIST OF MAXIMUM COMMITMENT AMOUNTS

 

	
Name of Lender
    	
 
    	
Applicable Percentage
    	
 
    	
Maximum Commitment
   Amount
    	
 
    
	
Macquarie Bank Limited
    	
 
    	
100.00
    	
%
    	
$
    	
250,000,000.00
    	
 
    
	
TOTAL
    	
 
    	
100.00
    	
%
    	
$
    	
250,000,000.00
    	
 
    

 

Annex I-1

 

EXHIBIT A

 

FORM OF TERM NOTE

 

	
$[                  ]
    	
 
    	
, 20    
    

 

FOR VALUE RECEIVED, SANCHEZ ENERGY CORPORATION, a Delaware corporation, SEP HOLDINGS III, LLC, a Delaware limited liability company and SN MARQUIS LLC, a Delaware limited liability company (collectively, the “Borrowers”) hereby promises to pay to the order of [                                  ] (the “Lender”), the lesser of (i) [                              ] DOLLARS ($[                        ]) and (ii) the aggregate unpaid Loans made by the Lender pursuant to the Credit Agreement, as hereinafter defined), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement referred to below, on the dates and in the amounts set forth in the Credit Agreement.  All capitalized terms used herein and not otherwise defined that are defined in the Credit Agreement have the meanings as defined in the Credit Agreement.

 

The Borrowers promises to pay interest on the unpaid principal amount of this Note outstanding from time to time from the date hereof until such principal amount is paid in full, at the place and at such interest rates as are specified in the Credit Agreement.

 

This Note is one of the Term Notes referred to in, and the Note and all provisions herein are entitled to the benefits and are subject to the terms of, the Second Lien Term Credit Agreement, dated as of November 15, 2012, among the Borrowers, Macquarie Bank Limited, as Administrative Agent, and the lenders signatory thereto (including the Lender) (as the same may be amended or otherwise modified from time to time, the “Credit Agreement”).

 

The obligations of the Borrowers hereunder are secured by the Security Documents (subject to the limitations contained in the Security Documents and the Credit Agreement).  The Credit Agreement, among other things, (a) provides for the making of advances by the Lender and other Lenders to the Borrowers from time to time, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified, and for limitations on the amount of interest paid such that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of interest accruing at the Highest Lawful Rate.

 

The Borrowers waive grace, demand, presentment for payment, notice of dishonor or default, notice of intent to accelerate or acceleration, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto.

 

Exhibit A-1

 

This Note shall be governed by and construed under the laws of the State of Texas and the applicable laws of the United States of America.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SEP   HOLDINGS III, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit A-2

 

EXHIBIT B

 

FORM OF ADVANCE REQUEST

 

[                            ], 20[    ]

 

SANCHEZ ENERGY CORPORATION, a Delaware corporation, SEP HOLDINGS III, LLC, a Delaware limited liability company and SN MARQUIS LLC, a Delaware limited liability company (collectively, the “Borrowers”), pursuant to Section 2.03 of the Second Lien Term Credit Agreement dated as of November 15, 2012 (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”), among the Borrowers, Macquarie Bank Limited, as Administrative Agent and the lenders (the “Lenders”) which are or become parties thereto (unless otherwise defined herein, each capitalized term used herein is defined in the Credit Agreement), hereby requests a Borrowing as follows:

 

(i)                                     Aggregate amount of the requested Advance is from:

 

(a)                                 Tranche A $

 

(b)                                 Tranche B $

 

(ii)                              Date of such Advance is [                        ], 20[      ];

 

(iii)                               Less Tranche B Advance Fee and other unpaid fees due to Lenders ($                      );

 

(iv)                              Total principal amount currently outstanding (excluding this request) under:

 

(a)                                 Tranche A $

 

(b)                                 Tranche B $

 

The undersigned certifies that he/she is the [                        ] of each Co-Borrower, and that as such he/she is authorized to execute this certificate on behalf of the Borrowers.  The undersigned further certifies, represents and warrants on behalf of the Borrowers that:

 

(i)                                     The Borrowers are entitled to receive the requested Advance under the terms and conditions of the Credit Agreement;

 

(ii)                                  No Default or Event of Default exists;

 

(iii)                               Attached to this Advance Request as Exhibit A are all Approved authorizations for expenditure, invoices and/or other Supporting Documentation evidencing the amount to be paid out of the Advance;

 

(iv)                              The sum of (i) the principal amount outstanding under the Term Loan plus (ii) the amount of the Advance requested hereunder, does not exceed the Maximum Commitment;

 

Exhibit B-1

 

(v)                                 The amount of the Advance requested exceeds the minimum amount of two hundred fifty thousand dollars ($250,000) except to the extent a lesser amount remains available under the Term Loan [or the applicable Tranche]; and

 

(vi)                              The Advance is being made to an account set forth in Schedule 2.05(a) of the Credit Agreement unless otherwise agreed in writing by Lenders.

 

 

	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SEP   HOLDINGS III, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit B-2

 

EXHIBIT C

 

FORM OF
 COMPLIANCE CERTIFICATE

 

The undersigned hereby certifies that he/she is the [                        ] of SANCHEZ ENERGY CORPORATION, a Delaware corporation, SEP HOLDINGS III, LLC, a Delaware limited liability company, and SN MARQUIS LLC, a Delaware limited liability company (collectively, the “Borrowers”), and that as such he/she is authorized to execute this certificate on behalf of the Borrowers.  With reference to that certain Second Lien Term Credit Agreement dated as of November 15, 2012 (together with all amendments, restatements, supplements or other modifications thereto being the “Agreement”), among the Borrowers, MACQUARIE BANK LIMITED, as Administrative Agent and the lenders (the “Lenders”) which are or become a party thereto, the undersigned represents and warrants as follows (each capitalized term used herein having the same meaning given to it in the Agreement unless otherwise specified), to my knowledge after reasonable investigation:

 

(a)                                 The representations and warranties of the Borrowers contained in ARTICLE VII of the Agreement and in the Loan Documents and otherwise made in writing by or on behalf of the Borrowers pursuant to the Agreement and the Loan Documents were true and correct when made, and are repeated at and as of the time of delivery hereof and are true and correct in all material respects at and as of the time of delivery hereof, except to the extent such representations and warranties are expressly limited to an earlier date or the Required Lenders have expressly consented in writing to the contrary.

 

(b)                                 The Borrowers have performed and complied with all agreements and conditions contained in the Agreement and in the Loan Documents required to be performed or complied with by the Borrowers prior to or at the time of delivery hereof [or specify default and describe].

 

(c)                                  Since [                        ], 20[    ], no change has occurred, either in any case or in the aggregate, in the condition, financial or otherwise, of the Borrowers or any Subsidiary which could reasonably be expected to have a Material Adverse Effect [or specify event].

 

(d)                                 There exists no Default or Event of Default [or specify Default and describe].

 

(e)                                  Attached hereto as Exhibit A are the detailed computations necessary to determine whether the Borrowers are in compliance with Section 8.14 and Section 9.01 as of the end of the [fiscal quarter][fiscal year] ending [                        ].

 

Exhibit C-1

 

EXECUTED AND DELIVERED this [            ] day of [                        ], 20[    ].

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SEP   HOLDINGS III, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit C-2

 

FINANCIAL COVENANT CALCULATION WORKSHEET

 

Summary of Financial Ratios

Section 9.01 Financial Covenants

 

	
 
    	
 
    	
In Compliance?
    
	
Current   Ratio
    	
min.   1.0 to 1.0
    	
 
    
	
Interest   Coverage Ratio
    	
min.   2.5 to 1.0
    	
 
    
	
Total   Leverage Ratio
    	
max.   4.25 to 1.0
    	
 
    
	
Adjusted Present Ratio
    	
min.          to 1.0
    	
 
    

 

Current Ratio

 

	
 
    	
Consolidated Current   Assets (including unused Commitments)
    	
=
    	
$
    	
  =
    
	
 
    	
Consolidated Current   Liabilities (excluding Obligations)
    	
$
    

 

Interest Coverage Ratio

 

	
 
    	
Consolidated EBITDA
    	
=
    	
$
    	
  =
    
	
 
    	
Consolidated Net Interest   Expense
    	
$
    

 

Total Leverage Ratio

 

	
 
    	
Total Debt
    	
=
    	
$
    	
  =
    
	
 
    	
Consolidated EBITDA
    	
$
    

 

Adjusted Present Value Ratio

 

	
 
    	
Total Adjusted Present   Value
    	
=
    	
$
    	
  =
    
	
 
    	
Total Debt
    	
$
    

 

Section 8.14

	
 
    	
[Provide   details of compliance/non-compliance]
    	
 
    	
 
    	
 
    

 

Exhibit C-3

 

Current Ratio

Section 9.01 Financial Covenants

 

	
Consolidated   Current Assets
    	
 
    	
$
    	
 
    	
 
    
	
(+)   Unused Commitments
    	
 
    	
$
    	
 
    	
 
    
	
(-)   Non-cash assets under FAS 133
    	
 
    	
$
    	
 
    	
 
    
	
Total Consolidated Current Assets
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Consolidated   Current Liabilities
    	
 
    	
$
    	
 
    	
 
    
	
(-)   Outstanding Obligations
    	
 
    	
$
    	
 
    	
 
    
	
(-)   Non-cash obligations under FAS 133
    	
 
    	
$
    	
 
    	
 
    
	
Total Consolidated Current Liabilities
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Current Ratio
    	
 
    	
 
    	
 
    

 

Exhibit C-4

 

Interest Coverage Ratio

Section 9.01 Financial Covenants

 

	
Consolidated EBITDA
    	
 
    	
Q     20   
    	
 
    
	
Consolidated Net Income (the following to be   added, without duplication and to the extent deducted (and not added back) in   calculating such Consolidated Net Income)
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated Net Interest Expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated Income Tax Expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) consolidated depletion and depreciation   expense of the Borrowers and their Restricted Subsidiaries
    	
 
    	
$
    	
 
    	
 
    
	
(+) other non-cash charges to the extent not   included in the foregoing
    	
 
    	
$
    	
 
    	
 
    
	
(-) all-non-cash income to the extent included in   determining Consolidated Net Income
    	
 
    	
$
    	
 
    	
 
    
	
Total Consolidated EBITDA
    	
 
    	
$
    	
 
    	
 
    

 

Exhibit C-5

 

	
Consolidated Net Interest Expense
    	
 
    	
Q     20   
    	
 
    
	
Total consolidated interest expense of the   Borrowers and their Restricted Subsidiaries, determined on a consolidated   basis in accordance with GAAP (the following to be added, to the extent not   included in such interest expense and without duplication)
    	
 
    	
$
    	
 
    	
 
    
	
(+) interest expense for such period attributable   to Capital Lease Obligations and the interest component of any deferred   payment obligations
    	
 
    	
$
    	
 
    	
 
    
	
(+) amortization of debt discount and debt   issuance cost (provided that any amortization of bond premium will be   credited to reduce Consolidated Net Interest Expense unless, pursuant to   GAAP, such amortization of bond premium has otherwise reduced Consolidated   Net Interest Expense)
    	
 
    	
$
    	
 
    	
 
    
	
(+) non-cash interest expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) commissions, discounts and other fees and   charges owed with respect to letters of credit and bankers’ acceptance   financing
    	
 
    	
$
    	
 
    	
 
    
	
(+) the interest expense on Debt of another Person   that is guaranteed by any Co-Borrower or one of its Restricted Subsidiaries   or secured by a lien on assets of any Co-Borrower or one of its Restricted   Subsidiaries, to the extent such guarantee becomes payable or such lien   becomes subject to foreclosure
    	
 
    	
$
    	
 
    	
 
    
	
(+) costs associated with interest rate   obligations under Swap Agreements (including amortization of fees); provided,   however, that if such interest rate obligations under Swap Agreements result   in net benefits rather than costs, such benefits shall be credited to reduce   Consolidated Net Interest Expense unless, pursuant to GAAP, such net benefits   are otherwise reflected in Consolidated Net Income
    	
 
    	
$
    	
 
    	
 
    
	
(+) the consolidated interest expense of the   Borrowers and their Restricted Subsidiaries that was capitalized during such   period
    	
 
    	
$
    	
 
    	
 
    
	
(+) all dividends paid or payable in cash, cash   equivalents or Debt or dividends accrued during such period on any series of   Disqualified Capital Stock of the Borrowers
    	
 
    	
$
    	
 
    	
 
    
	
(-) consolidated interest income
    	
 
    	
$
    	
 
    	
 
    
	
(-) write-off of deferred financing costs (and   interest) attributable to Dollar-Denominated Production Payments (to the   extent included above)
    	
 
    	
$
    	
 
    	
 
    
	
Total Consolidated Net Interest   Expense
    	
 
    	
$
    	
 
    	
 
    

 

Interest Coverage Ratio

 

Exhibit C-6

 

Total Leverage Coverage Ratio

Section 9.01 Financial Covenants

 

	
Debt (without duplication)
    	
 
    	
Q     20   
    	
 
    
	
(a) all obligations of the Borrowers and   their Restricted Subsidiaries for borrowed money or evidenced by bonds,   bankers’ acceptances, debentures, notes or other similar instruments
    	
 
    	
$
    	
 
    	
 
    
	
(b) all obligations of the Borrowers and   their Restricted Subsidiaries (whether contingent or otherwise) in respect of   letters of credit, surety or other bonds and similar instruments
    	
 
    	
$
    	
 
    	
 
    
	
(c) all accounts payable and all accrued   expenses, liabilities or other obligations of Borrowers and their Restricted   Subsidiaries to pay the deferred purchase price of Property or services   excluding accounts payable incurred in the ordinary course of business with   respect to which no more than 90 days have elapsed since the date of invoice
    	
 
    	
$
    	
 
    	
 
    
	
(d) all Capital Lease Obligations of the   Borrowers and their Restricted Subsidiaries
    	
 
    	
$
    	
 
    	
 
    
	
(e) all obligations of the Borrowers and   their Restricted Subsidiaries under Synthetic Leases
    	
 
    	
$
    	
 
    	
 
    
	
(f) all Debt (as defined in the other clauses   of this definition) of others secured by a Lien on any Property of any   Co-Borrower and its Restricted Subsidiaries, whether or not such Debt is   assumed by such Person
    	
 
    	
$
    	
 
    	
 
    
	
(g) all Debt (as defined in the other clauses   of this definition) of others guaranteed by the Borrowers and their Restricted   Subsidiaries or in which such Person otherwise assures a creditor against   loss of the Debt (howsoever such assurance shall be made) to the extent of   the lesser of the amount of such Debt and the maximum stated amount of such   guarantee or assurance against loss 
    	
 
    	
$
    	
 
    	
 
    
	
(h) all obligations or undertakings of the   Borrowers and their Restricted Subsidiaries to maintain or cause to be   maintained the financial position or covenants of others or to purchase the   Debt or Property of others, in each case, intended as a means of credit   enhancement for creditors of such others and not as a purchase and sale   agreement
    	
 
    	
$
    	
 
    	
 
    
	
(i) all obligations the Borrowers and their   Restricted Subsidiaries to deliver commodities, goods or services, including,   without limitation, Hydrocarbons, in consideration of one or more advance   payments, other than gas balancing arrangements in the ordinary course of   business
    	
 
    	
$
    	
 
    	
 
    
	
(j) any Debt of a partnership for which any   Co-Borrower and its Restricted Subsidiaries is liable either by agreement, by   operation of law or by a Governmental Requirement but only to the extent of   such liability
    	
 
    	
$
    	
 
    	
 
    
	
(k) Disqualified Capital Stock
    	
 
    	
$
    	
 
    	
 
    
	
(l) the undischarged balance of any   production payment created by any Co-Borrower or its Restricted Subsidiaries   or for the creation of which such Person directly or indirectly received   payment
    	
 
    	
$
    	
 
    	
 
    
	
(m) any deferred put premiums owed by any   Co-Borrower or its Restricted Subsidiaries under a Swap Agreement
    	
 
    	
$
    	
 
    	
 
    
	
Total Debt
    	
 
    	
$
    	
 
    	
 
    

 

Exhibit C-7

 

	
Consolidated EBITDA
    	
 
    	
Q     20   
    	
 
    
	
Consolidated Net Income (the following to be   added, without duplication and to the extent deducted (and not added back) in   calculating such Consolidated Net Income)
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated Net Interest Expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) Consolidated Income Tax Expense
    	
 
    	
$
    	
 
    	
 
    
	
(+) consolidated depletion and depreciation   expense of the Borrowers and their Restricted Subsidiaries
    	
 
    	
$
    	
 
    	
 
    
	
(+) other non-cash charges to the extent not   included in the foregoing
    	
 
    	
$
    	
 
    	
 
    
	
(-) all-non-cash income to the extent included in   determining Consolidated Net Income
    	
 
    	
$
    	
 
    	
 
    
	
Total Consolidated EBITDA
    	
 
    	
$
    	
 
    	
 
    

 

Total Leverage Ratio

 

Exhibit C-8

 

Adjusted Present Value Ratio

Section 9.01 Financial Covenants

 

	
Total Adjusted Present Value
    	
 
    	
Q     20   
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    
	
(a) [PV-10 of Proved Reserves(1)] [200% of   PV-10 of PDP Reserves(2)]
    	
 
    	
$
    	
 
    	
 
    
	
Total Adjusted Present Value
    	
 
    	
$
    	
 
    	
 
    

 

	
Debt (without duplication)
    	
 
    	
Q     20   
    	
 
    
	
(a) all obligations of the Borrowers and   their Restricted Subsidiaries for borrowed money or evidenced by bonds,   bankers’ acceptances, debentures, notes or other similar instruments
    	
 
    	
$
    	
 
    	
 
    
	
(b) all obligations of the Borrowers and   their Restricted Subsidiaries (whether contingent or otherwise) in respect of   letters of credit, surety or other bonds and similar instruments
    	
 
    	
$
    	
 
    	
 
    
	
(c) all accounts payable and all accrued   expenses, liabilities or other obligations of Borrowers and their Restricted   Subsidiaries to pay the deferred purchase price of Property or services   excluding accounts payable incurred in the ordinary course of business with   respect to which no more than 90 days have elapsed since the date of invoice
    	
 
    	
$
    	
 
    	
 
    
	
(d) all Capital Lease Obligations of the   Borrowers and their Restricted Subsidiaries
    	
 
    	
$
    	
 
    	
 
    
	
(e) all obligations of the Borrowers and   their Restricted Subsidiaries under Synthetic Leases
    	
 
    	
$
    	
 
    	
 
    
	
(f) all Debt (as defined in the other clauses   of this definition) of others secured by a Lien on any Property of any   Co-Borrower and its Restricted Subsidiaries, whether or not such Debt is   assumed by such Person
    	
 
    	
$
    	
 
    	
 
    
	
(g) all Debt (as defined in the other clauses   of this definition) of others guaranteed by the Borrowers and their   Restricted Subsidiaries or in which such Person otherwise assures a creditor   against loss of the Debt (howsoever such assurance shall be made) to the   extent of the lesser of the amount of such Debt and the maximum stated amount   of such guarantee or assurance against loss 
    	
 
    	
$
    	
 
    	
 
    
	
(h) all obligations or undertakings of the   Borrowers and their Restricted Subsidiaries to maintain or cause to be   maintained the financial position or covenants of others or to purchase the   Debt or Property of others, in each case, intended as a means of credit   enhancement for creditors of such others and not as a purchase and sale   agreement
    	
 
    	
$
    	
 
    	
 
    
	
(i) all obligations the Borrowers and their   Restricted Subsidiaries to deliver commodities, goods or services, including,   without limitation, Hydrocarbons, in consideration of one or more advance   payments, other than gas balancing arrangements in the ordinary course of   business
    	
 
    	
$
    	
 
    	
 
    
	
(j) any Debt of a partnership for which any   Co-Borrower and its Restricted Subsidiaries is liable either by agreement, by   operation of law or by a Governmental Requirement but only to the extent of   such liability
    	
 
    	
$
    	
 
    	
 
    
	
(k) Disqualified Capital Stock
    	
 
    	
$
    	
 
    	
 
    
	
(l) the undischarged balance of any   production payment created by any Co-Borrower or its Restricted Subsidiaries   or for the creation of which such Person directly or indirectly received payment
    	
 
    	
$
    	
 
    	
 
    
	
(m) any deferred put premiums owed by any   Co-Borrower or its Restricted Subsidiaries under a Swap Agreement
    	
 
    	
$
    	
 
    	
 
    
	
Total Debt
    	
 
    	
$
    	
 
    	
 
    

 

Total Adjusted Present Value Ratio

 

(1)  Calculated using the most recently delivered Engineering Report.

(2)  In the event that the PV-10 of the PDNP Reserves and PV-10 of the PUD Reserves exceeds 50% of the Total Adjusted Value.

 

Exhibit C-9

 

EXHIBIT D

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

Reference is made to the Second Lien Term Credit Agreement, dated as of November 15, 2012 (as amended, restated, supplemented or otherwise modified from time to time and in effect on the date hereof, the “Credit Agreement”), among SANCHEZ ENERGY CORPORATION, a Delaware corporation, SEP HOLDINGS III, LLC, a Delaware limited liability company, and SN MARQUIS LLC, a Delaware limited liability company (collectively, the “Borrowers”), the Lenders named therein and MACQUARIE BANK LIMITED, as Administrative Agent for the Lenders.  Capitalized terms defined in the Credit Agreement are used herein with the same meanings.

 

The Assignor named below hereby sells and assigns, without recourse, to the Assignee named below, and the Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the Assignment Date set forth on the reverse hereof, the interests set forth on the reverse hereof (the “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement, including, without limitation, the interests set forth on the reverse hereof in the Commitment of the Assignor on the Assignment Date and Advances owing to the Assignor which are outstanding on the Assignment Date, but excluding accrued interest and fees to and excluding the Assignment Date.  The Assignee hereby acknowledges receipt of a copy of the Credit Agreement.  From and after the Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the Assigned Interest, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest, relinquish its rights and be released from its obligations under the Credit Agreement.

 

This Assignment and Assumption is being delivered to the Administrative Agent (with a copy to the Borrowers) together with (i) if the Assignee is a Foreign Lender, any documentation required to be delivered by the Assignee pursuant to Section 5.03 of the Credit Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee.  The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section 12.04(b) of the Credit Agreement.

 

This Assignment and Assumption shall be governed by and construed in accordance with the laws of the State of Texas.

 

Date of Assignment:

 

Legal Name of Assignor:

 

Legal Name of Assignee:

 

Assignee’s Address for Notices:

 

Effective Date of Assignment (“Assignment Date”):

 

Exhibit D-1

 

 

	
Facility
    	
 
    	
Principal Amount Assigned
    	
 
    	
Percentage Assigned of
   Facility/Commitment (set
   forth, to at least 8 decimals, as
   a percentage of the Facility
   and the aggregate
   Commitments of all Lenders
   thereunder)
    	
 
    
	
Commitment Assigned:
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    
	
Advances:
    	
 
    	
 
    	
 
    	
 
    	
 
    
							

 

The terms set forth above and on the reverse side hereof are hereby agreed to:

 

	
 
    	
[Name   of Assignor], as Assignor
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Name   of Assignee], as Assignee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit D-2

 

The undersigned hereby consent to the within assignment:(3)

 

	
SEP HOLDINGS III, LLC.
    	
 
    	
MACQUARIE   BANK LIMITED
    
	
a Delaware limited liability company
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
By:
    	
 
    	
 
    	
Name:
    	
 
    
	
Name:
    	
 
    	
 
    	
Title:
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SN MARQUIS LLC,
    	
 
    	
SANCHEZ   ENERGY CORPORATION
    
	
a Delaware limited liability company
    	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    

 

(3)           Consents to be included to the extent required by Section 12.04(b) of the Credit Agreement.

 

Exhibit D-3

 

EXHIBIT E

 

NOTICE OF CONTINUATION

 

I, the undersigned Financial Officer(s) of SANCHEZ ENERGY CORPORATION, a Delaware corporation, SEP HOLDINGS III, LLC, a Delaware limited liability company, and SN MARQUIS LLC, a Delaware limited liability company (each a “Borrower” and collectively, “Borrowers”), pursuant to Section 2.05(f) of the Second Lien Term Credit Agreement dated as of November 15, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Borrowers, MACQUARIE BANK LIMITED, a bank incorporated under the laws of Australia, as Administrative Agent (“Administrative Agent”), and the lenders party thereto from time to time, does hereby make the requests indicated below on this          day of                                     ,             :

 

1.             Continuation of Advance based on the LIBO Rate maturing on                           , 20      :

 

(a)                                 Amount to be continued as an Advance based on the LIBO Rate is $                              , with an Interest Period of              months;

 

2.             The undersigned hereby certifies, warrants and represents to the Administrative Agent on behalf of the Borrowers that:

 

(a)           the representations and warranties contained in Article VII of the Credit Agreement and the representations and warranties contained in the Security Instruments and each of the other Loan Documents are true and correct in all material respects on and as of the date of this continuation, before and after giving effect to this continuation, as though made on and as of this date, except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date;

 

(b)           all conditions precedent to the requested continuation under the terms and conditions of the Credit Agreement have been satisfied; and

 

(c)           no Default has occurred and is continuing or would result from the making of this continuation.

 

[Signature page follows]

 

Exhibit E-1

 

EXECUTED as of the date first written above.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SEP   HOLDINGS III, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit E-2

 

EXHIBIT F-1

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE
 (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Second Lien Term Credit Agreement dated as of November 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Sanchez Energy Corporation, SEP Holdings III, LLC, SN Marquis LLC, Macquarie Bank Limited, as Administrative Agent, and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Advance(s) (as well as any Term Note(s) evidencing such Advance(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrowers with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrowers and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                 ,   20[      ]
    	
 
    

 

Exhibit F-1

 

EXHIBIT F-2

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE
 (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Second Lien Term Credit Agreement dated as of November 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Sanchez Energy Corporation, SEP Holdings III, LLC, SN Marquis LLC, Macquarie Bank Limited, as Administrative Agent, and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code].

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                 ,   20[      ]
    	
 
    

 

Exhibit F-2

 

EXHIBIT F-3

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE
 (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Second Lien Term Credit Agreement dated as of November 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Sanchez Energy Corporation, SEP Holdings III, LLC, SN Marquis LLC, Macquarie Bank Limited, as Administrative Agent, and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                 ,   20[      ]
    	
 
    

 

Exhibit F-3

 

EXHIBIT F-4

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE
 (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Second Lien Term Credit Agreement dated as of November 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Sanchez Energy Corporation, SEP Holdings III, LLC, SN Marquis LLC, Macquarie Bank Limited, as Administrative Agent, and each lender from time to time party thereto.

 

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Advance(s) (as well as any Term Note(s) evidencing such Advance(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Advance(s) (as well as any Term Note(s) evidencing such Advance(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section (c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrowers with IRS Form W-81MY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-81MY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrowers and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Date:                 ,   20[      ]
    	
 
    

 

Exhibit F-4

 

EXHIBIT G

 

FORM OF GUARANTY

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (this “Guaranty”), dated as of                   , 20    , is made by each of the undersigned  Restricted Subsidiaries of the Borrowers  (as defined below) (each, a “Guarantor,” and collectively, the “Guarantors”), in favor of Macquarie Bank Limited, as Administrative Agent (the “Agent”) for the benefit of the Lenders pursuant to that certain Second Lien Term Credit Agreement dated November 15, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the Agent and the Lenders.

 

W  I  T  N  E  S  S  E  T  H

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make available a multiple advance term loan facility to Sanchez Energy Corporation, a Delaware corporation (“Sanchez”), SEP Holdings III, LLC, a Delaware limited liability company (“SEP”) and SN Marquis LLC, a Delaware limited liability company (“SN Marquis”, together with Sanchez and SEP, the “Borrowers”, and each individually, “Co-Borrower”) in a manner and upon the terms and conditions set forth therein;

 

WHEREAS, in accordance with the Credit Agreement, the Agent requires that the Guarantors execute a guaranty agreement guaranteeing the Obligations of the Borrowers;

 

NOW, THEREFORE, in consideration of the premises and agreements herein and in order to induce the Lenders to make the Advances and other extensions of credit pursuant to the Credit Agreement, the Guarantors hereby agree as follows:

 

Section 1.                                          Definitions.  Capitalized terms used and not otherwise defined herein shall have the respective meanings assigned thereto in the Credit Agreement.

 

Section 2.                                          Guaranty of Payment.  Each Guarantor (not merely as a surety or guarantor of collection) hereby jointly, severally, unconditionally and irrevocably, guarantees the punctual payment and performance when due, whether at stated maturity, as an installment, by prepayment or by demand, acceleration or otherwise, of all Obligations of each Co-Borrower heretofore or hereafter existing.  If any or all of the Obligations become due and payable under the Credit Agreement, the Guarantors jointly and severally and unconditionally promise to pay such Obligations, on demand, together with any and all expenses (including reasonable counsel fees and expenses), which reasonably may be incurred by the Agent in collecting any of the Obligations and in connection with the protection, defense and enforcement of any rights under the Credit Agreement or under any other Loan Document (the “Expenses”).  The Guarantors guarantee that the Obligations shall be paid strictly in accordance with the terms of the Credit Agreement.  The Obligations include, without limitation, interest accruing after the commencement of a proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates provided in the Credit Agreement.  The Agent shall not be required to exhaust any right or remedy or take any action against the Borrowers or any other person or entity or any collateral prior to any demand or other action hereunder against the Guarantors.  The Guarantors agree that, as between the Guarantors and the Agent, the Obligations may be declared to be due and payable for the purposes of this Guaranty notwithstanding any stay, injunction or other

 

Exhibit G-1

 

prohibition which may prevent, delay or vitiate any declaration as regards the Borrowers and that in the event of a declaration or attempted declaration, the Obligations shall immediately become due and payable by the Guarantors for the purposes of this Guaranty and each Guarantor shall forthwith pay the Obligations specified by the Agent to be paid as provided in the Credit Agreement without further notice or demand.  Notwithstanding anything contained herein or in the Credit Agreement, any Loan Document or any other document or any other agreement, security document or instrument relating hereto or thereto to the contrary, the maximum liability of each Guarantor hereunder shall never exceed the maximum amount that said Guarantor could pay without having such payment set aside as a fraudulent transfer or fraudulent conveyance or similar action under the U.S. Bankruptcy Code or applicable state or foreign law.

 

Section 3.                                          Guaranty Absolute.  The liability of each Guarantor under this Guaranty is absolute and unconditional irrespective of: (a) any change in the time, manner or place of payment of, or in any other term of, the Credit Agreement or the Obligations, or any other amendment or waiver of or any consent to departure from any of the terms of the Credit Agreement or the Obligations, including any increase or decrease in the rate of interest thereon; (b) any release or amendment or waiver of, or consent to departure from, any other guaranty or support document, or any exchange, release or non-perfection of any collateral, for the Credit Agreement or the Obligations; (c) any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of the Credit Agreement or the Obligations; (d) without being limited by the foregoing, any lack of validity or enforceability of the Credit Agreement or the Obligations; (e) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Credit Agreement or the transactions contemplated thereby (other than actual payment) which might constitute a legal or equitable defense available to, or discharge of, any Co-Borrower or the Guarantors and (f) any claim or assertion that any payment by any Guarantor hereunder should be set aside pursuant to Section 2 in connection with any stay, injunction or other prohibition or event, in which case each Guarantor shall be unconditionally required to pay all amounts demanded of it hereunder prior to any determination of the maximum liability of each Guarantor hereunder in accordance with Section 2 and the recipient of such payment, if so required by a court of competent jurisdiction by a final and non-appealable judgment, shall then be liable for the refund of any excess amounts.  If any such rebate or refund is ever required, then subject to the limitations of Section 2, all other Guarantors shall be fully liable for the repayment thereof to the maximum extent allowed by applicable law.

 

Section 4.                                          Guaranty Irrevocable.  This Guaranty is a continuing guaranty of the payment of all Obligations now or hereafter existing and shall remain in full force and effect until payment in full of all Obligations and other amounts payable under this Guaranty and until all Commitments of the Lenders shall be terminated in accordance with the terms of the Credit Agreement.  A Guarantor shall be automatically released from its obligations under this Guaranty upon it ceasing to be a “Guarantor” for purposes of the Credit Agreement (subject to the satisfaction of any conditions set forth therein).

 

Section 5.                                          Reinstatement.  This Guaranty shall continue to be effective, or be automatically reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Agent on the insolvency, bankruptcy,

 

Exhibit G-2

 

dissolution, liquidation or reorganization of any Co-Borrower, any Guarantor, or any other Person that is a party to the Loan Documents, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to any Co-Borrower, any Guarantor or any other Person that is a party to the Loan Documents, or otherwise, all as though the payment had not been made.

 

Section 6.                                          Subrogation.  Each Guarantor hereby agrees that it shall not exercise any rights which it may acquire by way of subrogation, by any payment made under this Guaranty or otherwise, until all the Obligations have been paid in full and all of the Commitments have been terminated and are no longer in effect.  Any amounts paid to a Guarantor on account of subrogation rights under this Guaranty at any time when all the Obligations have not been paid in full, shall be held in trust for the benefit of the Agent and shall promptly be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured or absolute or contingent, in accordance with the terms of the Credit Agreement.  If a Guarantor has made a payment to the Agent hereunder of all or any part of the Obligations and all the Obligations are paid in full and all of the Commitments have been terminated and are no longer in effect, the Agent shall, at such Guarantor’s request, execute and deliver to the Guarantor the appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from the payment.

 

Section 7.                                          Subordination.  Any liabilities owed by any Co-Borrower to the Guarantors in connection with any extension of credit or financial accommodation by the Guarantors to or for the account of such Co-Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the Obligations, and such liabilities of such Co-Borrower to the Guarantors, if the Agent so requests, shall be collected, enforced and received by the Guarantors as trustee for the Agent and shall be paid over to the Agent on account of the Obligations.

 

Section 8.                                          Certain Taxes.  The Guarantors further agree that all payments to be made hereunder shall be made without setoff or counterclaim and free and clear of, and without deduction for Taxes.  If any Taxes are required to be withheld from any amounts payable to the Agent hereunder, the amounts so payable to the Agent shall be increased to the extent necessary to yield to the Agent (after payment of all Taxes) the amounts payable hereunder in the full amounts so to be paid.  Whenever any Tax is paid by a Guarantor, as promptly as possible thereafter, such Guarantor shall send the Agent an official receipt showing payment thereof, together with such additional documentary evidence as may be required from time to time by the Agent.

 

Section 9.                                          Representations and Warranties.  Each of the Guarantors represents and warrants that: (a) this Guaranty (i) has been authorized by all necessary corporate or other organizational action; (ii) does not violate any agreement, instrument, law, regulation or order applicable to it; (iii) does not require the consent or approval of any Person, or any filing or registration of any kind; and (iv) is the legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency and other similar laws

 

Exhibit G-3

 

affecting creditors’ rights generally; and (b) in executing and delivering this Guaranty, such Guarantor has not relied and will not rely upon any representations or warranties of the Agent not embodied herein or any acts heretofore or hereafter taken by the Agent (including but not limited to any review by the Agent of the affairs of the Borrowers).

 

Section 10.                                   Remedies Generally.  The remedies provided in this Guaranty are cumulative and not exclusive of any remedies provided by law.

 

Section 11.                                   Setoff.  Each Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker’s lien or counterclaim the Agent or the Lenders may otherwise have, the Agent and each of the Lenders shall be entitled, at their option, to offset balances (general or special, time or demand, provisional or final) held by them for the account of such Guarantor at any of the Agent’s or any Lender’s offices, in U.S. dollars or in any other currency, against any amount payable by such Guarantor under this Guaranty which is not paid when due, in which case it shall promptly notify such Guarantor thereof; provided that the Agent’s or any Lender’s failure to give such notice shall not affect the validity thereof.

 

Section 12.                                   Formalities.  Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations, the Credit Agreement and this Guaranty and any liability to which the Credit Agreement and this Guaranty applies or may apply, and waives presentment, demand of payment, notice of intent to accelerate, notice of acceleration, notice of dishonor or nonpayment, and any requirement that the Agent institute suit, collection proceedings or take any other action to collect the Obligations, including any requirement that the Agent protect, secure, perfect or insure any security interest or Lien against any Property or exhaust any right or take any action against any Co-Borrower or any other Person (including the other Guarantors) or any Collateral (it being the intention of the Agent and each Guarantor that the obligations of such Guarantor under this Guaranty are to be a guaranty of payment and not of collection) or that any Co-Borrower or any other Person (including the other Guarantors) be joined in any action hereunder.  Each Guarantor hereby waives marshaling of assets and liabilities, notice by the Agent of the creation of any Obligation or liability to which it applies or may apply, any amounts received by the Agent, notice of disposition or substitution of Collateral and of the creation, advancement, increase, existence, extension, renewal, rearrangement and/or modification of the Obligations.

 

Section 13.                                   Amendments and Waivers.  No amendment or waiver of any provision of this Guaranty, nor consent to any release by any Guarantor therefrom, shall be effective unless it is in writing and signed by the Agent and such Guarantor, and then the waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  No failure on the part of the Agent to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any other right.

 

Section 14.                                   Expenses.  The Guarantors shall reimburse the Agent on demand for all Expenses without duplication of any reimbursements affected under the Credit Agreement.  The obligations of the Guarantors under this Section shall survive the termination of this Guaranty.

 

Exhibit G-4

 

Section 15.                                   Assignment.  This Guaranty shall be binding on, and shall inure to the benefit of the Guarantors, the Agent and their respective successors and assigns; provided that the Guarantors may not assign or transfer their respective rights or obligations under this Guaranty.  Without limiting the generality of the foregoing: (a) the obligations of the Guarantors under this Guaranty shall continue in full force and effect and shall be binding on any successor partnership and on previous partners and their respective estates if any of the Guarantors is a partnership, regardless of any change in the partnership as a result of death, retirement or otherwise; and (b) the Agent may assign, sell participations in or otherwise transfer its rights under the Credit Agreement to any other person or entity in accordance with the terms and conditions thereof, and the other person or entity shall then become vested with all the rights granted to the Agent in this Guaranty or otherwise.  Guarantor may merge into any Co-Borrower or another Guarantor as provided in the Credit Agreement.

 

Section 16.                                   Captions.  The headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction of this Guaranty.

 

Section 17.                                   Governing Law, Etc.  THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO ANY CHOICE-OF-LAW PROVISIONS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.  EACH GUARANTOR CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF TEXAS SITTING IN HARRIS COUNTY, TEXAS AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS.  SERVICE OF PROCESS BY THE AGENT IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT TO SUCH GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY SUCH GUARANTOR FROM TIME TO TIME.  EACH GUARANTOR (AND, BY ITS ACCEPTANCE HEREOF, THE AGENT) WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION.  TO THE EXTENT THAT ANY GUARANTOR 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 SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.

 

Section 18.                                   Integration; Effectiveness.  This Guaranty alone sets forth the entire understanding of the Guarantors and the Agent relating to the guarantee of the Obligations and constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  This Guaranty shall become effective when it shall have been executed and delivered by the Guarantors to the Agent.

 

Exhibit G-5

 

Section 19.                                   Credit Agreement; Intercreditor Agreement.  To the extent there are any conflicts or inconsistencies between this Guaranty and the Credit Agreement, the provisions of the Credit Agreement will control. Notwithstanding anything herein to the contrary, the guaranty given in favor of the Agent pursuant to this Guaranty and the exercise of any right or remedy by the Agent hereunder are subject to the provisions of the Intercreditor Agreement. If there is a conflict between the terms of the Intercreditor Agreement and this Guaranty, the terms of the Intercreditor Agreement will control.

 

Section 20.                                   Counterparts.  This Guaranty 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. Delivery of an executed signature page of this Guaranty by telecopy or electronic means shall be effective as delivery of a manually executed signature page of this Guaranty.

 

[Signature page follows]

 

Exhibit G-6

 

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

 

	
 
    	
GUARANTOR(S):
    
	
 
    	
 
    
	
 
    	
[By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Address   for Service of Process:
    
	
 
    	
 
    
	
 
    	
[                                    ]
    
	
 
    	
[                                    ]
    

 

Signature Page to Guaranty Agreement (Second Lien Term Credit Agreement)

 

 

EXHIBIT H

 

JOINDER

 

THIS JOINDER (this “Joinder”) dated as of                         , 20    , is among                                         , a                              (the “New Obligor”) and                           , a                            (“New Obligor Parent”) in favor of the Lenders (as defined in the Credit Agreement) and Macquarie Bank Limited, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”).

 

WHEREAS, the New Obligor Parent, together with  [insert names of other Co-Borrowers if New Obligor Parent is a Co-Borrower]  [Sanchez Energy Corporation, a Delaware corporation, SEP Holdings III, LLC, a Delaware limited liability company and SN Marquis, LLC, a Delaware limited liability company (the “Borrowers”)](4), the Guarantors party thereto, the Lenders, the Administrative Agent (collectively, the “Original Parties”) are parties to that certain Second Lien Term Credit Agreement dated November 15, 2012 (as the same has been or may be amended, modified or supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, the New Obligor Parent and the Guarantors are parties to that certain Security and Pledge Agreement, of even date with the Credit Agreement (as the same has been or may be amended, modified or supplemented from time to time, the “Security Agreement”);

 

WHEREAS, the New Obligor Parent and the New Obligor are required to execute this Joinder pursuant to Section 8.16 of the Credit Agreement;

 

WHEREAS, the New Obligor desires to become a party to the Security Agreement as a “Debtor” and to receive all of the benefits of and to become subject to the obligations thereof as a Guarantor and Debtor, respectively;

 

WHEREAS, as a condition to the New Obligor becoming a party to the Security Agreement, the New Obligor Parent is required to pledge its ownership interest in the New Obligor;

 

NOW THEREFORE, in consideration of the benefits to be derived by the New Obligor under the Credit Agreement and as a Guarantor under the Guaranty and for Ten Dollars ($10.00) and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the above-named parties agree as follows:

 

1.                                      Terms.  Capitalized terms used in the opening paragraph, the recitals and otherwise herein and not defined have the same meaning assigned to such terms in the Credit Agreement.

 

2.                                      Joinder to and Ratification of Credit Agreement and Security Agreement.  By executing and delivering this Joinder, the New Obligor hereby (i) becomes a party to the Security Agreement as a Debtor as if the New Obligor had originally signed such Security Agreement and (ii) expressly assumes all obligations and liabilities of a Debtor

 

(4)  To be used if the New Obligor Parent is not the Borrower.

 

Exhibit H-1

 

thereunder, as applicable.  The New Obligor hereby makes as of the date hereof each of the representations and warranties made by the Debtors in the Security Agreement except (a) any such representations and warranties that were made by the other Debtors as of an earlier specific date and (b) any such representations and warranties deemed to be made by the New Obligor are only made as to information, disclosures and matters as it relates to such New Obligor, and (c) any such representations and warranties made as to matters disclosed or set forth in a Schedule or an Annex to such documents are deemed to be made as to the corresponding Schedule or Annex attached hereto.  The New Obligor Parent hereby makes as of the date hereof each of the representations and warranties made by it in the Credit Agreement and the Security Agreement except (a) any such representations and warranties that were made with respect to the other Guarantors as of an earlier specific date and (b) any such representations and warranties deemed to be made by the New Obligor are only made as to information, disclosures and matters as it relates to such New Obligor, and (c) any such representations and warranties made as to matters disclosed or set forth in a Schedule or an Annex to such documents are deemed to be made as to the corresponding Schedule or Annex attached hereto.  After giving effect to this Joinder, the Security Agreement shall serve as security for the obligations of each New Obligor contained in the Credit Agreement.

 

3.                                      Security Interest (New Obligor).  As security for the Obligations, the New Obligor hereby grants to the Administrative Agent, for the benefit of the Lenders, to the maximum extent allowed by applicable law, a lien and security interest on all of the assets of the New Obligor described as Collateral in the Security Agreement, subject to the exclusions contained in the Security Agreement, whether now held or hereafter acquired, of any kind, pursuant to, and in accordance with the terms of the Security Agreement.

 

4.                                      Security Interest (New Obligor Parent).  As security for the Obligations, the New Obligor Parent hereby grants to the Administrative Agent, for the benefit of the Lenders, to the maximum extent allowed by applicable law, a lien and security interest on all of the Securities Collateral (as defined in the Security Agreement) of the New Obligor, including, without limitation, the Equity Interests of the New Obligor owned by the New Obligor Parent and identified on Annex 3 (as updated pursuant to this Joinder) whether now held or hereafter acquired, pursuant to, and in accordance with the terms of the Security Agreement.

 

5.                                      Authorization to Take Further Action.  The New Obligor hereby authorizes the Administrative Agent to file such financing statements and any amendments and extensions thereof as may be necessary or desirable in order to perfect the Liens under the Security Agreement or any modification, extension or ratification thereof.

 

6.                                      Reliance.  All parties hereto acknowledge that the Administrative Agent and the Lenders are relying on this Joinder, the accuracy of the statements herein contained and the performance of the conditions placed upon the New Obligor hereunder.

 

7.                                      Delivery of Certificates; Further Assurances.  Subject to the terms of the Intercreditor Agreement, concurrently with the execution and delivery of this Joinder, the New

 

Exhibit H-2

 

Obligor Parent shall deliver all membership or stock certificates, as applicable, of the New Obligor as described on Annex 3 to the Security Agreement (as updated pursuant to this Joinder) to the Administrative Agent together with related stock or membership powers, as applicable, executed in blank by the New Obligor Parent.  In addition to the foregoing, subject to the terms of the Intercreditor Agreement, the New Obligor Parent and New Obligor shall execute such further documents and undertake any such measure as may be reasonably necessary to effect and carry out the terms of this Joinder and the implementation thereof.

 

8.                                      Warranties.  The New Obligor (a) represents and warrants that it is legally authorized to enter into this Joinder, (b) confirms that it has received copies of the Credit Agreement, Guaranty and the Security Agreement and all related documents, and that on the basis of its review and analysis of this information has decided to enter into this Joinder and (c) confirms that it is a Subsidiary of the Borrower that it is required to enter into this Joinder pursuant to Section 8.16 of the Credit Agreement.

 

9.                                      Updated Information.  Concurrently with this Joinder, the New Obligor is delivering a completed New Obligor Information List, attached as Attachment A hereto.  Borrower and the New Obligor acknowledge and agree that Schedules 7.01 and 7.14, of the Credit Agreement and Annexes 1 through 16, inclusive, of the Security Agreement, have been updated with respect to the New Obligor only by the information contained in Attachment A hereto, and, with respect to the New Obligor only, are true, accurate and complete representations of the information described and referenced in the corresponding sections of the Credit Agreement and Security Agreement, as applicable, after giving effect to this Joinder.

 

10.                               Choice of Law.  This Joinder shall be governed by and construed under the laws of the State of Texas.

 

11.                               Ratification.  Except as modified hereby, the Credit Agreement and the Security Agreement remain in full force and effect according to their terms.

 

12.                               Intercreditor Agreement.    The matters set forth in Section 7.19 of the Security Agreement shall apply equally to this Joinder as they apply to the Security Agreement, mutatis mutandis.

 

12.                               Effectiveness.  Upon execution of this Joinder by the New Obligor, this Joinder shall become immediately effective and enforceable as to the New Obligor.

 

[Signatures on following pages]

 

Exhibit H-3

 

IN WITNESS WHEREOF, the parties have executed this Agreement and agreed to the provisions contained herein effective as of                                 , 20    .

 

	
 
    	
NEW   OBLIGOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
                                                                            ,
    
	
 
    	
a
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NEW   OBLIGOR PARENT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
                                                                            ,
    
	
 
    	
a
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADMINISTRATIVE   AGENT:
    
	
 
    	
 
    
	
 
    	
MACQUARIE   BANK LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Exhibit H-4

 

	
Acknowledged   for the purposes of Section 9:
    	
 
    
	
 
    	
 
    
	
SANCHEZ   ENERGY CORPORATION
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SEP   HOLDINGS III, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SN   MARQUIS LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

Exhibit H-5

 

ATTACHMENT A

 

ADDITIONAL INFORMATION REGARDING THE NEW OBLIGOR

 

1.                                      The following Schedules as described in the Credit Agreement:

 

Schedule 7.01                                                                                                                    Organization; Powers

Schedule 7.14                                                                                                                    Subsidiaries

 

2.                                      The following Annexes as described in the Security Agreement:

 

	
Annex   1
    	
Intellectual   Property Licenses
    
	
Annex   2
    	
Patent   Collateral
    
	
Annex   3
    	
Securities   Collateral
    
	
Annex   4
    	
Trademark   Collateral
    
	
Annex   5
    	
Filing   Offices
    
	
Annex   6
    	
Debtor   Information
    
	
Annex   7
    	
Previous   Names and Transactions
    
	
Annex   8
    	
Offices   and Locations of Records
    
	
Annex   9
    	
Locations   of Inventory and Equipment
    
	
Annex   10
    	
Deposit   Accounts
    
	
Annex   11
    	
Securities   Accounts and Commodity Accounts
    
	
Annex   12
    	
Instruments   and Tangible Chattel Paper
    
	
Annex   13
    	
Electronic   Chattel Paper
    
	
Annex   14
    	
Letters   of Credit
    
	
Annex   15
    	
Commercial   Tort Claims
    
	
Annex   16
    	
Third   Party Locations
    

 

Entity Documents

 

Provide a copy of all that apply:

 

Corporation:                          Filed Articles of Incorporation/Amendments and Bylaws/Resolutions with Incumbency Certificate

 

Partnership:                               Partnership Agreement and filed/recorded Certificate of Partnership

 

Limited Liability Company (LLC):                Article of Organization and Operating Agreement/Member or Manager Consent with Incumbency Certificate

 

Limited Liability Partnership (LLP):            Certificate of registered partnership and partnership agreement

 

Fictitious Name Filing: Trade Name-Entities doing business under fictitious name; if applicable

 

Exhibit H-6

 

SCHEDULE 2.05(a)

 

ADVANCE REQUESTS

 

SANCHEZ ENERGY CORPORATION

 

ACCOUNT/WIRING INTRUCTIONS FOR ADVANCE REQUESTS

 

Bank                  UBS-AG

 

ABA Routing Number                        26007993

 

Credit to                                                 UBS Financial Services, Inc.

 

Acct #             101-WA-258641-000

 

For further Credit To                                Sanchez Energy Corporation

 

Account #                                        CP-48450

 

 

SCHEDULE 2.05(c)

 

AUTHORIZED SIGNATORIES ON ADVANCE REQUESTS

 

	
Name and Position(s)
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Antonio R. Sanchez, III
    	
 
    	
 
    
	
President of each of the Borrowers
    	
 
    	
/s/ Antonio R. Sanchez, III
    
	
 
    	
 
    	
 
    
	
Michael G. Long 
    	
 
    	
 
    
	
Senior Vice President - Chief Financial Officer   of each of the Borrowers
    	
 
    	
/s/ Michael G. Long
    
	
 
    	
 
    	
 
    
	
Frank A. Guerra
    	
 
    	
 
    
	
Executive Vice President of each of the Borrowers
    	
 
    	
/s/ Frank A. Guerra
    
	
 
    	
 
    	
 
    
	
Kirsten A. Hink
    	
 
    	
 
    
	
Vice President - Principal Accounting Officer of   each of the Borrowers
    	
 
    	
/s/ Kirsten A. Hink
    

 

 

SCHEDULE 7.01

 

CORPORATE ORGANIZATIONAL CHART

 

 

 

SCHEDULE 7.05

 

LITIGATION

 

None.

 

 

SCHEDULE 7.14

 

SUBSIDIARIES

 

	
Name of Subsidiary
    	
 
    	
Ownership Interest of the Borrowers
    
	
SEP Holdings III, LLC
    	
 
    	
100% Membership Interest held by   Sanchez Energy Corporation
    
	
 
    	
 
    	
 
    
	
SN Marquis LLC
    	
 
    	
100% Membership Interest held by   Sanchez Energy Corporation
    

 

 

SCHEDULE 7.16

 

TITLE EXCEPTIONS TO PROPERTIES

 

None.

 

 

SCHEDULE 7.18

 

GAS IMBALANCES

 

None.

 

 

SCHEDULE 7.19

 

MARKETING CONTRACTS

 

None.

 

 

SCHEDULE 7.20

 

SWAP AGREEMENTS

 

Shell Energy North America (US), L.P. with SEP Holdings III, LLC

 

·                  Master Swap Agreement dated as of June 8, 2012

 

·                  Confirmation for Commodity Option Transaction dated April 5, 2012, Transaction No: 5923850, as revised

 

·                  Confirmation for Commodity Option Transaction dated April 5, 2012, Transaction No: 5923852, as revised

 

 

SCHEDULE 7.26

 

PURCHASERS OF PRODUCTION

 

	
Purchaser Name
    	
 
    	
Contract Type
    	
 
    	
County(ies)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Gulfmark Energy, Inc
    	
 
    	
Oil Purchase
    	
 
    	
Fayette
    
	
P O box 844, Houston, TX 77001
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Flint Hills Resources, LP
    	
 
    	
Oil Purchase
    	
 
    	
Zavala
    
	
20 East Greenway Plaza, Houston 77046-2002
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Enterprise Crude Oil, LLC
    	
 
    	
Oil Purchase
    	
 
    	
Zavala
    
	
1100 Louisiana, Houston, TX 77002
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ETC Texas Pipeline, Ltd
    	
 
    	
Gas Purchase and Process
    	
 
    	
Zavala
    
	
800 East   Sonterra Blvd, Ste 400, San Antonio, TX 78258
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Marathon Oil Company
    	
 
    	
Oil and Gas JOA
    	
 
    	
Gonzales
    
	
5555 San Felipe Street, Houston, TX 77056
    	
 
    	
 
    	
 
    	
 
    

 

 

SCHEDULE 9.02

 

EXISTING DEBT

 

None.

 

 

SCHEDULE 9.03

 

LIENS

 

None.

 

 

SCHEDULE 9.05

 

INVESTMENTS

 

None.

 

 

SCHEDULE 9.17

 

EXISTING SHELL SWAP AGREEMENTS

 

1.                                      Master Swap Agreement dated as of June 8, 2012 between SEP Holdings III, LLC and Shell Energy North America (US), L.P.

 

2.                                      Confirmation for Commodity Option Transaction dated April 5, 2012, Transaction No: 5923850 - Revised between SEP Holdings III, LLC and Shell Energy North America (US), L.P.

 

3.                                      Confirmation for Commodity Option Transaction dated April 5, 2012, Transaction No: 5923852 - Revised between SEP Holdings III, LLC and Shell Energy North America (US), L.P.Exhibit 10.21

 

 

 

FIRST LIEN CREDIT
AGREEMENT

 

among

 

WEB.COM GROUP,
INC.,

 

as Borrower,

 

The Several
Lenders from Time to Time Parties Hereto,

 

JPMORGAN CHASE
BANK, N.A.

 

and

 

DEUTSCHE BANK
SECURITIES INC.,

 

as Co-Syndication
Agents,

 

SUNTRUST BANK,

 

GOLDMAN SACHS
LENDING PARTNERS LLC,

 

CITIGROUP GLOBAL
MARKETS INC.

 

and

 

WELLS FARGO
BANK, N.A.

 

as Co-Documentation
Agents,

 

and

 

JPMORGAN CHASE
BANK, N.A.,

 

as Administrative
Agent

 

Dated as of
October 27, 2011

 

As Amended and
Restated as of November 20, 2012

 

 

 

J.P. MORGAN
SECURITIES LLC,

DEUTSCHE BANK
SECURITIES INC.,

SUNTRUST ROBINSON
HUMPHREY INC,

GOLDMAN SACHS
LENDING PARTNERS LLC,

CITIGROUP GLOBAL
MARKETS INC.

and

WELLS FARGO
SECURITIES, LLC,

as Joint Lead
Arrangers and Joint Bookrunners

 

    	 

    	 

    

 

TABLE OF
CONTENTS

 

	 	 	 	Page
	 	 	 	 
	SECTION 1.	 	DEFINITIONS	1
	 	 	 	 
	1.1.	 	Defined Terms	1
	1.2.	 	Other Definitional Provisions	31
	 	 	 	 
	SECTION 2.	 	AMOUNT AND TERMS OF COMMITMENTS	32
	 	 	 	 
	2.1.	 	Term Commitments	32
	2.2.	 	Procedure for Term Loan Borrowing	32
	2.3.	 	Repayment of Term Loans	32
	2.4.	 	Revolving Commitments	32
	2.5.	 	Procedure for Revolving Loan Borrowing	33
	2.6.	 	Swingline Commitment	34
	2.7.	 	Procedure for Swingline Borrowing; Refunding of Swingline Loans	34
	2.8.	 	Commitment Fees, etc	35
	2.9.	 	Termination or Reduction of Revolving Commitments	36
	2.10.	 	Optional Prepayments	36
	2.11.	 	Mandatory Prepayments	37
	2.12.	 	Conversion and Continuation Options	38
	2.13.	 	Limitations on Eurodollar Tranches	39
	2.14.	 	Interest Rates and Payment Dates	39
	2.15.	 	Computation of Interest and Fees	39
	2.16.	 	Inability to Determine Interest Rate	40
	2.17.	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	40
	2.18.	 	Requirements of Law	42
	2.19.	 	Taxes	43
	2.20.	 	Indemnity	46
	2.21.	 	Change of Lending Office	46
	2.22.	 	Mitigation Obligations; Replacement of Lenders	47
	2.23.	 	Defaulting Lenders	47
	2.24.	 	Incremental Facility	49
	2.25.	 	Extensions of Term Loans and Revolving Commitments	51
	2.26.	 	Prepayments Below Par	52
	 	 	 	 
	SECTION 3.	 	LETTERS OF CREDIT	55
	 	 	 	 
	3.1.	 	L/C Commitment	55
	3.2.	 	Procedure for Issuance and Amendment of Letter of Credit	56
	3.3.	 	Fees and Other Charges	56
	3.4.	 	L/C Participations	56
	3.5.	 	Reimbursement Obligation of the Borrower	57
	3.6.	 	Obligations Absolute	58
	3.7.	 	Letter of Credit Payments	58
	3.8.	 	Applications	58
	3.9.	 	Letters of Credit Issued for Subsidiaries	58
	 	 	 	 
	SECTION 4.	 	REPRESENTATIONS AND WARRANTIES	58

 

    	i

    	 

    

 

	4.1.	 	Financial Condition	58
	4.2.	 	No Change	59
	4.3.	 	Existence; Compliance with Law	59
	4.4.	 	Power; Authorization; Enforceable Obligations	60
	4.5.	 	No Legal Bar	60
	4.6.	 	Litigation	60
	4.7.	 	Insurance	60
	4.8.	 	Ownership of Property; Liens	60
	4.9.	 	Intellectual Property	60
	4.10.	 	Taxes	61
	4.11.	 	Federal Regulations	61
	4.12.	 	Labor Matters	61
	4.13.	 	ERISA	61
	4.14.	 	Investment Company Act; Other Regulations	62
	4.15.	 	Subsidiaries	62
	4.16.	 	Use of Proceeds	62
	4.17.	 	Environmental Matters	62
	4.18.	 	Accuracy of Information, etc	63
	4.19.	 	Security Documents	63
	4.20.	 	Solvency	64
	4.21.	 	Patriot Act	64
	 	 	 	 
	SECTION 5.	 	CONDITIONS PRECEDENT	64
	 	 	 	 
	5.1.	 	Conditions to Initial Extension of Credit	64
	5.2.	 	Conditions to Each Extension of Credit After the Closing Date	67
	5.3.	 	Conditions to Restatement Effective Date	67
	 	 	 	 
	SECTION 6.	 	AFFIRMATIVE COVENANTS	69
	 	 	 	 
	6.1.	 	Financial Statements	69
	6.2.	 	Certificates; Other Information	69
	6.3.	 	Payment of Obligations	71
	6.4.	 	Maintenance of Existence; Compliance	71
	6.5.	 	Maintenance of Property; Insurance	71
	6.6.	 	Inspection of Property; Books and Records; Discussions	71
	6.7.	 	Notices	71
	6.8.	 	Environmental Laws	72
	6.9.	 	Ratings	72
	6.10.	 	Further Assurances; Additional Collateral, etc	72
	6.11.	 	Designation of Subsidiaries	73
	6.12.	 	Post-Closing Covenants	74
	 	 	 	 
	SECTION 7.	 	NEGATIVE COVENANTS	74
	 	 	 	 
	7.1.	 	Consolidated First Lien Net Leverage Ratio	74
	7.2.	 	Indebtedness	75
	7.3.	 	Liens	77
	7.4.	 	Fundamental Changes	79
	7.5.	 	Disposition of Property	80
	7.6.	 	Restricted Payments	80

    	ii

    	 

    

 

	7.7.	 	Investments	81
	7.8.	 	Payments and Modifications of Certain Debt Instruments	83
	7.9.	 	Transactions with Affiliates	84
	7.10.	 	Sales and Leasebacks	84
	7.11.	 	Swap Agreements	84
	7.12.	 	Changes in Fiscal Periods	84
	7.13.	 	Negative Pledge Clauses	85
	7.14.	 	Clauses Restricting Subsidiary Distributions	85
	7.15.	 	Lines of Business	85
	 	 	 	 
	SECTION 8.	 	EVENTS OF DEFAULT	85
	 	 	 	 
	8.1.	 	Events of Default	85
	8.2.	 	Application of Proceeds	88
	 	 	 	 
	SECTION 9.	 	THE AGENTS	89
	 	 	 	 
	9.1.	 	Appointment	89
	9.2.	 	Delegation of Duties	89
	9.3.	 	Exculpatory Provisions	89
	9.4.	 	Reliance by Administrative Agent	89
	9.5.	 	Notice of Default	90
	9.6.	 	Non-Reliance on Agents and Other Lenders	90
	9.7.	 	Indemnification	91
	9.8.	 	Agent in Its Individual Capacity	91
	9.9.	 	Successor Administrative Agent	91
	9.10.	 	Agents	91
	 	 	 	 
	SECTION 10.	 	MISCELLANEOUS	92
	 	 	 	 
	10.1.	 	Amendments and Waivers	92
	10.2.	 	Notices	94
	10.3.	 	No Waiver; Cumulative Remedies	95
	10.4.	 	Survival of Representations and Warranties	95
	10.5.	 	Payment of Expenses and Taxes	95
	10.6.	 	Successors and Assigns; Participations and Assignments	96
	10.7.	 	Adjustments; Set-off	101
	10.8.	 	Counterparts	101
	10.9.	 	Severability	101
	10.10.	 	Integration	101
	10.11.	 	Governing Law	101
	10.12.	 	Submission To Jurisdiction; Waivers	101
	10.13.	 	Acknowledgements	102
	10.14.	 	Releases of Guarantees and Liens	102
	10.15.	 	Confidentiality	103
	10.16.	 	WAIVERS OF JURY TRIAL	103
	10.17.	 	Patriot Act	104
	10.18.	 	Usury Savings	104
	10.19.	 	Intercreditor Agreement	104
	10.20.	 	No Novation	104
	10.21.	 	Existing Credit Agreement	104

 

    	iii

    	 

    

 

SCHEDULES:

 

	1.1A	Commitments
	1.1B	Existing Letters of Credit
	1.1C	Rollover Letters of Credit
	3.1	Subsidiaries
	4.1	Liabilities and Dispositions
	4.15	Subsidiaries
	4.19	UCC Filing Jurisdictions; Intellectual Property Filings
	7.2(g)	Existing Indebtedness
	7.3(f)	Existing Liens
	7.7(n)	Existing Investments

 

EXHIBITS:

 

	A	Form of Guarantee and Collateral Agreement
	B	Form of Compliance Certificate
	C-1	Form of Closing Certificate for Borrower
	C-2	Form of Closing Certificate for Loan Parties
	D	Form of Assignment and Assumption
	E-1	Form of U.S. Tax Certificate
	E-2	Form of U.S. Tax Certificate
	E-3	Form of U.S. Tax Certificate
	E-4	Form of U.S. Tax Certificate
	F	Form of Borrowing Notice
	G	Form of Loan Conversion and Continuation Notice
	H-1	Form of Term Loan Note
	H-2	Form of Revolving Loan Note
	I	Form of Discounted Prepayment Option Notice
	J	Form of Lender Participation Notice
	K	Form of Discounted Voluntary Prepayment Notice
	L	Form of Intercreditor Agreement
	M	Form of Term Lender Addendum
	N	Form of Reaffirmation Agreement

 

    	iv

    	 

    

 

FIRST LIEN CREDIT
AGREEMENT (this “Agreement”), dated as of October 27, 2011, as amended and restated as of November 20, 2012,
among WEB.COM GROUP, INC., a Delaware corporation (the “Borrower”), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the “Lenders”), JPMORGAN CHASE BANK, N.A. and DEUTSCHE
BANK SECURITIES INC., as co-syndication agents (in such capacity, the “Co-Syndication Agents”), SUNTRUST BANK,
GOLDMAN SACHS LENDING PARTNERS LLC, CITIGROUP GLOBAL MARKETS INC. and WELLS FARGO BANK, N.A., as co-documentation agents (in such
capacity, the “Co-Documentation Agents”), and JPMORGAN CHASE BANK, N.A., as administrative agent.

 

RECITALS

 

WHEREAS, the Borrower
entered into the First Lien Credit Agreement, dated as of October 27, 2011 (the “Existing Credit Agreement”),
with the several lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and certain other parties; and

 

WHEREAS, the parties
have agreed to amend and restate the Existing Credit Agreement as provided in this Agreement, which Agreement shall become effective
upon the satisfaction of the conditions set forth in Section 5.3;

 

NOW, THEREFORE,
in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree
that on the Restatement Effective Date (as defined below) the Existing Credit Agreement shall be amended and restated in its entirety
as follows:

 

SECTION
1.          DEFINITIONS

 

1.1.          Defined
Terms.  As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth
in this Section 1.1.

 

“ABR”:
for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Federal Funds Rate in effect on such day plus 1⁄2 of 1% and (c) the Eurodollar Rate
that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect
of a proposed Eurodollar Loan with a one-month Interest Period plus 1.0% (provided, that for the avoidance of doubt,
the Eurodollar Rate for any day shall be based on the rate appearing on the Libor Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such page) at approximately 11:00 a.m. London time on such day). Any change in the ABR due to a change in
the Prime Rate, the Federal Funds Rate or such Eurodollar Rate shall be effective as of the opening of business on the day of
such change in the Prime Rate, the Federal Funds Rate or such Eurodollar Rate, respectively.

 

“ABR
Loans”: Loans the rate of interest applicable to which is based upon the ABR.

 

“Acceptable
Discount”: as defined in Section 2.26(c).

 

“Acceptance
Date”: as defined in Section 2.26(b).

 

“Acquisition”:
the acquisition of the Target by the Borrower pursuant to the Acquisition Agreement.

 

“Acquisition
Agreement”: the Purchase Agreement, dated August 3, 2011, by and among the Borrower, Net Sol Holdings LLC and the Target.

 

    	 

    	 

    

 

“Acquisition
Agreement Representations”: the representations and warranties made by the Target in the Acquisition Agreement as are
material to the interests of the Lenders, but only to the extent that the Borrower has the right to terminate its obligations
under the Acquisition Agreement, or to otherwise not consummate the Acquisition, as a result of the breach of such representations
and warranties.  

 

“Additional
Lender”: as defined in Section 2.24(b).

 

“Adjustment
Date”: as defined in the Applicable Pricing Grid.

 

“Administrative
Agent”: JPMorgan Chase Bank, N.A., together with its affiliates, as the arranger of the Commitments and as the administrative
agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors.

 

“Affiliate”:
as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of determining the Affiliates of the Borrower, “control” of a Person means the power,
directly or indirectly, either to direct or cause the direction of the management and policies of such Person, whether by contract
or otherwise.

 

“Affiliated
Debt Fund”: any Affiliate of the Borrower (i) that is a bona fide debt fund or an investment vehicle that is engaged
in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary
course and (ii) for which General Atlantic, LLC does not, directly or indirectly, possess the power to direct or cause the direction
of the investment policies of such Affiliate. 

 

“Affiliated
Lender”: any Affiliate of the Borrower other than (i) the Borrower or any Subsidiary of the Borrower and (ii) any natural
Person. 

 

“Agent
Indemnitee”: as defined in Section 9.7.

 

“Agents”:
the collective reference to the Co-Syndication Agents, the Co-Documentation Agents and the Administrative Agent.

 

“Aggregate
Exposure Percentage”: with respect to any Lender, the percentage of the total Commitments represented by such Lender’s
Commitment; provided, that in the case of Section 2.23 when a Defaulting Lender shall exist, “Aggregate Exposure
Percentage” shall mean the percentage of the total Commitments (disregarding any Defaulting Lender’s Commitment) represented
by such Lender’s Commitment. If the Commitments have terminated or expired, the Aggregate Exposure Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status
as a Defaulting Lender at the time of determination.

 

“Agreement”:
as defined in the preamble hereto.

 

“Applicable
Discount”: as defined in Section 2.26(c).

 

“Applicable
Margin”: for each Type of Loan, the rate per annum set forth under the relevant column heading below:

 

	 	Eurodollar Loans	ABR Loans
	 	 	 
	Revolving Loans and
 Swingline Loans	3.75%	2.75%
	Term Loans	4.25%	3.25%

 

    	2

    	 

    

 

“Applicable
Pricing Grid”: with respect to the Commitment Fee Rate, the table set forth below:

 

	Consolidated First

    Lien Net Leverage

    Ratio	 	Commitment
    Fee Rate
	Greater than 3.25:1.00	 	0.50%
	Less
        than or equal to

        3.25:1.00
        but greater than 2.50:1.00
	 	0.375%
	Less
        than or equal to

        2.50:1.00
	 	0.25%

 

For the purposes
of the Applicable Pricing Grid, changes in the Commitment Fee Rate resulting from changes in the Consolidated First Lien Net Leverage
Ratio shall become effective on the date (the “Adjustment Date”) that is three Business Days after the date
on which financial statements are delivered to the Lenders pursuant to Section 6.1 and shall remain in effect until the next change
to be effected pursuant to this paragraph. If any financial statements referred to above are not delivered within the time periods
specified in Section 6.1, then, until the date that is three Business Days after the date on which such financial statements are
delivered, the highest rate set forth in the table above shall apply. In addition, at all times while an Event of Default shall
have occurred and be continuing, the highest rate set forth in the table above shall apply. Each determination of the Consolidated
First Lien Net Leverage Ratio for purposes of the Applicable Pricing Grid shall be made in a manner consistent with the determination
thereof pursuant to Section 7.1.

 

“Application”:
an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.

 

“Approved
Fund”: as defined in Section 10.6(b).

 

“Asset
Sale”: any Disposition of property or series of related Dispositions of property (excluding any such Disposition permitted
by clause (a), (b), (c), (d), (e), (f), (g) or (h) of Section 7.5) that yields gross proceeds to the Borrower or any of its Restricted
Subsidiaries (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash proceeds) in excess of $1,000,000.

 

“Assignee”:
as defined in Section 10.6(b).

 

“Assignment
and Assumption”: an Assignment and Assumption, substantially in the form of Exhibit D.

 

“Available
Amount”: as of any date of determination, an amount equal to the sum of:

 

(a)          $5,000,000;

 

    	3

    	 

    

 

plus

 

(b)          the
sum of (without duplication):

 

(i)
the Cumulative Retained Excess Cash Flow Amount;

 

(ii)
the Net Cash Proceeds received after the Closing Date and on or prior to such date from any issuance of Capital Stock by the Borrower
(other than any such issuance to a Group Member), but excluding any issuance of Disqualified Stock;

 

(iii)
the net cash proceeds received after the Closing Date and on or prior to such date from any capital contribution to the Borrower
(other than any Specified Equity Contribution) or any Restricted Subsidiary; provided that any such capital contribution
is from a Person other than a Group Member;

 

(iv)
the aggregate amount received after the Closing Date and on or prior to such date by the Borrower or any Restricted Subsidiary
in cash from any dividend or other distribution by an Unrestricted Subsidiary;

 

(v)
the net cash proceeds received after the Closing Date and on or prior to such date by the Borrower or any Restricted Subsidiary
from the issuance of convertible or exchangeable debt securities that have been converted into or exchanged for Capital Stock
of a Group Member (other than Disqualified Stock);

 

(vi)
the aggregate amount received in cash or Cash Equivalents after the Closing Date and on or prior to such date by the Borrower
or any Restricted Subsidiary in connection with the sale, transfer or other disposition of its ownership interest in any then-existing
joint venture that is not a Subsidiary or in any Unrestricted Subsidiary, in each case, to the extent of the Investment in such
joint venture or Unrestricted Subsidiary (with the amount of such Investment being calculated in accordance with the last sentence
of Section 7.7);

 

(vii)
the aggregate amount received in cash or Cash Equivalents after the Closing Date and on or prior to such date by the Borrower
or any Restricted Subsidiary in connection with the sale, transfer or other disposition to a Person (other than a Group Member)
of any Investment made in reliance on Section 7.7(m) and repurchases and redemptions (other than by a Group Member) of such Investments
from the Borrower or its Restricted Subsidiaries and repayments of loans or advances (other than by a Group Member) that constitute
Investments made in reliance on Section 7.7(m); provided that such amount shall not exceed the amount of such initial Investment
made in reliance on Section 7.7(m); and

 

(viii)
the amount equal to the net reduction in Investments made by the Borrower or any Restricted Subsidiaries in any Person resulting
from the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries or the merger or consolidation of an Unrestricted
Subsidiary with and into the Borrower or any of its Restricted Subsidiaries not to exceed the amount of Investments previously
made by the Borrower or any Restricted Subsidiary in such Unrestricted Subsidiary (with the amount of such Investments being calculated
in accordance with the last sentence of Section 7.7);

 

    	4

    	 

    

 

minus

 

(c)          the
amount of any Investments made in reliance on Section 7.7(m) prior to such date, the consideration paid prior to such date in
reliance on Section 7.7(h)(iv) in respect of Persons that do not become Subsidiary Guarantors, any Restricted Payments made in
reliance on Section 7.6(f) prior to such date and any prepayments of Indebtedness made in reliance on Section 7.8(a)(ii) prior
to such date.

 

“Available
Revolving Commitment”: as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s
Revolving Commitment then in effect over (b) such Lender’s Revolving Extensions of Credit then outstanding; provided,
that in calculating any Lender’s Revolving Extensions of Credit for the purpose of determining such Lender’s Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount of Swingline Loans then outstanding shall be deemed
to be zero.

 

“Bankruptcy
Event”: with respect to any Lender or any Person that directly or indirectly controls such Lender (each, a “Distressed
Person”), as the case may be, a voluntary or involuntary case with respect to such Distressed Person under any debt
relief law, or a custodian, conservator, receiver or similar official is appointed for such Distressed Person or any substantial
part of such Distressed Person’s assets, or such Distressed Person or any person that directly or indirectly controls such
Distressed Person is subject to a forced liquidation, or such Distressed Person makes a general assignment for the benefit of
creditors or is otherwise adjudicated as, or determined by any governmental authority having regulatory authority over such Distressed
Person or its assets to be, insolvent or bankrupt; provided that a Bankruptcy Event shall not be deemed to have occurred
solely by virtue of the ownership or acquisition of any equity interests in any Lender or any person that directly or indirectly
controls such Lender by a governmental authority or an instrumentality thereof.  

 

“Benefitted
Lender”: as defined in Section 10.7(a).

 

“Board”:
the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

“Borrower”:
as defined in the preamble hereto.

 

“Borrowing
Date”: any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.

 

“Business
Day”: a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or
required by law to close; provided, that with respect to notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the
interbank eurodollar market.

 

“Canadian
Government Loan”: the principal amount of the Indebtedness of Register.com, Inc. under the Promissory Note, dated as
of June 9, 2008, issued in favor of Her Majesty the Queen in Right of the Province of Nova Scotia pursuant to the Letter of Offer,
dated March 27, 2008, from Nova Scotia Economic Development to Register.com, Inc.

 

    	5

    	 

    
 

“Capital
Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated
balance sheet of such Person and its Subsidiaries.

 

“Capital
Lease Obligations”: as to any Person, 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, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance
with GAAP.

 

“Capital
Stock”: with respect to any Person, any and all shares, interests, participations or other equivalents (however designated)
of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), any and
all warrants, rights or options to purchase any of the foregoing and any and all securities convertible into or exchangeable for
shares of the foregoing, whether voting or nonvoting, and whether or not such shares, warrants, options, rights or others interests
are outstanding on any date of determination.

 

“Capitalized
Software Development Expenses”: for any period, (a) $1,850,000 minus (b) the aggregate software development expenses
of the Target and its Subsidiaries that are capitalized during such period.

 

“Captive
Insurance Subsidiary”:  any Subsidiary that is subject to regulation as an insurance company (or any Subsidiary
thereof).

 

“Cash
Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government
or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of one year or less from the date of acquisition issued by any Lender or by any commercial bank organized under
the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by
Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing
within 270 days from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P
or A2 by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters
of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) money
market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this
definition; or (h) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company
Act of 1940, as amended from time to time, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets
of at least $5,000,000,000.

 

    	6

    	 

    

 

“Change
in Control”: (a)(i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or
“group” (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof),
other than any combination consisting solely of the Permitted Investors, of shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of the Borrower on a fully diluted basis and (ii)
the Permitted Investors shall own, directly or indirectly, beneficially or of record, less than such Person or “group”
on a fully diluted basis; (b) the Permitted Investors (or any “group” (within the meaning of the Exchange Act and
the rules of the SEC thereunder as in effect on the date hereof) which includes one or more Permitted Investors) shall acquire
or hold, directly or indirectly, beneficially or of record, shares representing more than 70% of the issued and outstanding Capital
Stock of the Borrower on a fully diluted basis; (c) the common stock of the Borrower shall cease to be listed and traded on a
nationally recognized stock exchange as a result of, or in connection with, any increase in the percentage of the issued and outstanding
Capital Stock of the Borrower owned or held by the Permitted Investors (or any “group” (within the meaning of the
Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) which includes one or more Permitted Investors);
or (d) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who
were neither (i) nominated by the board of directors of the Borrower or a Permitted Investor, (ii) appointed by directors so nominated
nor (iii) appointed by General Atlantic, LLC or one of its Affiliates.

 

“Class”:
when used in reference to (a) any Loan, refers to whether such Loan is a Revolving Loan, Term Loan or Swingline Loan, (b) any
Commitment, refers to whether such Commitment is a Revolving Commitment or Term Commitment and (c) any Lender, refers to
whether such Lender has a Loan or Commitment with respect to a particular Class of Loans or Commitments.

 

“Closing
Date”: the date on which the conditions precedent set forth in Section 5.1 were satisfied, which date is October 27,
2011.

 

“Closing
Date Material Adverse Effect”: a “Material Adverse Effect”, as such term is defined in the Acquisition Agreement
as of the date of signing thereof, but applied mutatis mutandis to the Borrower, the Target and their respective Subsidiaries
on a consolidated basis.

 

“Co-Documentation
Agents”: as defined in the preamble hereto.

 

“Co-Syndication
Agents”: as defined in the preamble hereto.

 

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

 

“Collateral”:
all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security
Document.

 

“Commitment”:
as to any Lender, the sum of the Term Commitment and the Revolving Commitment of such Lender.

 

“Commitment
Fee Rate”: 0.50% per annum; provided, that on and after the first Adjustment Date occurring after the completion
of the first full fiscal quarter of the Borrower after the Restatement Effective Date, the Commitment Fee Rate will be determined
pursuant to the Applicable Pricing Grid.

 

“Compliance
Certificate”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B.

 

    	7

    	 

    

 

“Conduit
Lender”: any special purpose corporation organized and administered by any Lender for the purpose of making Loans otherwise
required to be made by such Lender and designated by such Lender pursuant to an Assignment and Assumption; provided, that
the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a
Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and
not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested
under this Agreement with respect to its Conduit Lender; provided further, that no Conduit Lender shall (a) be entitled
to receive any greater amount pursuant to Section 2.18, 2.19, 2.20 or 10.5 than the designating Lender would have been entitled
to receive in respect of the extensions of credit made by such Conduit Lender or (b) be deemed to have any Commitment.

 

“Consolidated
Current Assets”: at any date, all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP,
be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of
the Borrower and its Restricted Subsidiaries at such date.

 

“Consolidated
Current Liabilities”: at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption
“total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and its Restricted
Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of the Borrower and its Restricted Subsidiaries
and (b) without duplication of clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline Loans to the extent
otherwise included therein.

 

    	8

    	 

    

 

“Consolidated
EBITDA”: for any period, Consolidated Net Income for such period plus, without duplication and (except with respect
to clauses (d), (h) and (i)) to the extent reflected as a charge in the statement of such Consolidated Net Income for such period,
the sum of (a) provision for taxes based on income (or similar taxes in lieu of income taxes), profits or capital (or equivalents),
including federal, foreign, state, local, franchise, excise and similar taxes and foreign withholding taxes of such Person paid
or accrued during such period (including penalties and interest related to taxes or arising from tax examinations), (b) interest
expense and, to the extent not reflected in interest expense, (i) any net losses on hedging obligations or other derivative instruments
entered into for the purpose of hedging interest rate risk, (ii) amortization or writeoff of debt discount, debt issuance costs,
commissions and discounts, (iii) costs of surety bonds obtained in connection with financing activities and (iv) other fees and
charges associated with Indebtedness (including the Loans and the loans made pursuant to the Second Lien Loan Documents), (c)
depreciation and amortization expense, impairment charges (including amortization of intangible assets (including goodwill) and
deferred financing fees), organization costs and amortization of unrecognized prior service costs and actuarial gains and losses
related to pensions and other post-employment benefits, (d) Capitalized Software Development Expenses (if positive) for any period
ending after the Closing Date, provided that, with respect to any Reference Period, the aggregate amount added in the calculation
of Consolidated EBITDA for such Reference Period pursuant to this clause (d) shall not exceed $7,400,000, (e) extraordinary losses
reducing Consolidated Net Income during any such period, (f) cost-savings, operating expense reductions and synergies projected
by the Borrower in good faith to be realized as a result of (i) the Acquisition (calculated on a pro forma basis as though such
cost savings, operating expense reductions and synergies had been realized on the first day of the relevant Reference Period),
net of the amount of actual benefits realized in respect thereof, provided that actions (or substantial steps) in respect
of such cost-savings, operating expense reductions and synergies have been taken (in the good faith determination of the Borrower)
within 12 months of the Closing Date and (ii) mergers and other business combinations, Permitted Acquisitions, divestitures, cost
savings initiatives and other similar initiatives consummated after the Closing Date, in each case permitted by this Agreement
(collectively, “Initiatives”) (calculated on a pro forma basis as though such cost savings, operating expense
reductions and synergies had been realized on the first day of the relevant Reference Period), net of the amount of actual benefits
realized in respect thereof; provided that actions (or substantial steps) in respect of such cost-savings, operating expense
reductions and synergies have been taken (in the good faith determination of the Borrower) within 12 months of the applicable
Initiative; provided further that, with respect to any Reference Period, the aggregate amount added in the calculation
of Consolidated EBITDA for such Reference Period pursuant to clauses (f) and (g) shall not exceed 15% of Consolidated EBITDA (calculated
prior to giving effect to any add-backs pursuant to clauses (f) and (g)), (g) unusual and non-recurring cash expenses recognized
for restructuring costs, including but not limited to severance costs, relocation costs and litigation expenses, in connection
with the Acquisition or any Initiative, provided that the aggregate amount of restructuring costs added in the calculation
of Consolidated EBITDA pursuant to this clause (g) (i) in respect of the Acquisition (x) shall not exceed $15,000,000 and (y)
shall be incurred within 12 months after the Closing Date and (ii) in respect of Initiatives (x) shall not exceed $7,500,000 in
any Reference Period and (y) shall be incurred within 12 months of the applicable Initiative; provided further that,
with respect to any Reference Period, the aggregate amount added in the calculation of Consolidated EBITDA for such Reference
Period pursuant to clauses (f) and (g) shall not exceed 15% of Consolidated EBITDA (calculated prior to giving effect to any add-backs
pursuant to clauses (f) and (g)), (h) the increase (if any) in the balance of the amount of deferred revenue as of the end of
any such period over the balance of the amount of deferred revenue as of the end of the immediately prior period, (i) the decrease
(if any) in the balance of prepaid registry fees as of the end of any such period below the balance of prepaid registry fees as
of the end of the immediately prior period, (j) non-cash stock-based or other equity-based compensation expenses, (k) other non-cash
expenses or losses reducing Consolidated Net Income during any such period (excluding any such losses or expenses that represent
an accrual or reserve for a cash expenditure for a future period), (l) Transaction Expenses in an aggregate amount not to exceed
$50,000,000 over the term of this Agreement, (m) other non-recurring transactional costs, fees or expenses (whether or not the
transaction is actually consummated) incurred or paid by any Group Member in connection with any incurrence, modification or repayment
of Indebtedness (including any amendments or waivers of the Loan Documents or the Second Lien Loan Documents), issuance of Capital
Stock, mergers and other consolidations, Dispositions, Permitted Acquisitions or Investments by any Group Member, in each case
permitted hereunder; provided that the aggregate amount added in the calculation of Consolidated EBITDA pursuant to this
clause (m) shall not exceed $2,000,000 over the term of this Agreement, (n) cash expenses relating to earn-outs and similar obligations;
provided that such earn-out or similar obligation is in effect for no longer than two years from the closing date of the
underlying transaction, (o) non-recurring charges, losses, lost profits, expenses or write-offs to the extent indemnified or insured
by a third party and actually reimbursed by such third party, (p) losses and expenses incurred in connection with the effect of
currency and exchange rate fluctuations on intercompany balances and other balance sheet items, provided that, with respect
to any Reference Period, the aggregate amount of cash losses and expenses added in the calculation of Consolidated EBITDA for
such Reference Period pursuant to this clause (p) shall not exceed $500,000, and (q) costs incurred in preparation for compliance
with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, minus,
(a) to the extent included in the statement of such Consolidated Net Income for such period, the sum of (i) interest income, (ii)
any extraordinary income or gains (including, whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash gains on the sales of assets outside the ordinary course of business, but excluding
any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item in any prior period),
(iii) income tax credits (to the extent not netted from income tax expense), (iv) any other non-cash income and (v) any gains
in connection with the effect of currency and exchange rate fluctuations on intercompany balances and other balance sheet items,
provided that, with respect to any Reference Period, the aggregate amount of cash gains subtracted in the calculation of
Consolidated EBITDA for such Reference Period pursuant to this clause (v) shall not exceed $500,000, (b) any cash payments made
during such period in respect of items described in clause (k) above subsequent to the fiscal quarter in which the relevant non-cash
expenses or losses were reflected in Consolidated Net Income to the extent such amounts were added back in any prior fiscal quarter,
all as determined on a consolidated basis, (c) the decrease (if any) in the balance of the amount of deferred revenue as of the
end of any such period below the balance of the amount of deferred revenue as of the end of the immediately prior period and (d)
the increase (if any) in the balance of prepaid registry fees as of the end of any such period above the balance of prepaid registry
fees as of the end of the immediately prior period. For the purposes of calculating Consolidated EBITDA for any period of four
consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated
Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition,
the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount
equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference
Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall
be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of
such Reference Period. As used in this definition, “Material Acquisition” means the Acquisition and any Permitted
Acquisition made pursuant to Section 7.7(h) that involves the payment of consideration by the Borrower and its Restricted Subsidiaries
in excess of $20,000,000; and “Material Disposition” means any Disposition of property or series of related Dispositions
of property to any Person that is not a Loan Party or a Restricted Subsidiary that yields gross proceeds to the Borrower or any
of its Restricted Subsidiaries in excess of $7,500,000.

 

    	9

    	 

    

 

The financial
results of Unrestricted Subsidiaries, joint ventures and variable interest entities shall be excluded in calculating “Consolidated
EBITDA” except that Consolidated EBITDA for any period shall be increased by the amount of cash dividends paid by such Unrestricted
Subsidiaries, joint ventures and variable interest entities to the Borrower or any of its Restricted Subsidiaries that are Wholly
Owned Subsidiaries.

 

Notwithstanding
anything to the contrary contained herein, for the purposes of determining Consolidated EBITDA under this Agreement for any period
that includes any of the fiscal quarters ended December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011, Consolidated
EBITDA for such fiscal quarters shall be $27,336,000, $36,297,000, $32,467,000 and $34,622,000, respectively.

 

“Consolidated
First Lien Debt”: at any date, Consolidated Total Debt that is secured by a first priority Lien on any of the assets
of the Borrower or any of its Restricted Subsidiaries.

 

“Consolidated
First Lien Net Leverage Ratio”: as of any date of determination, the ratio of (a) Consolidated First Lien Debt less
unrestricted cash and Cash Equivalents of the Loan Parties, in an aggregate amount not to exceed $50,000,000, in each case
as of such date to (b) (i) for purposes of Section 7.1, Consolidated EBITDA for the Reference Period ended as of such date and
(ii) otherwise, Consolidated EBITDA for the Reference Period most recently ended prior to such date for which financial statements
have been delivered.

 

“Consolidated
Net Income”: for any period, the consolidated net income (or loss) of the Borrower and its Restricted 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 Restricted Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Restricted Subsidiaries, (b) the income (or deficit) of any Person (other than a Restricted Subsidiary
of the Borrower) in which the Borrower or any of its Restricted Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by the Borrower or such Restricted Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Restricted Subsidiary of the Borrower to the extent that the declaration or payment
of dividends or similar distributions by such Restricted 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 Restricted Subsidiary.

 

    	10

    	 

    

 

“Consolidated
Total Debt”: at any date, the aggregate principal amount of all Indebtedness of the Borrower and its Restricted Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated
Total Net Leverage Ratio”: as of any date of determination, the ratio of (a) Consolidated Total Debt less unrestricted
cash and Cash Equivalents of the Loan Parties, in an aggregate amount not to exceed $50,000,000, in each case as of such date,
to (b) Consolidated EBITDA for the Reference Period most recently ended prior to such date for which financial statements have
been delivered.

 

“Consolidated
Working Capital”: at any date, the excess of Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.

 

“Contractual
Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of its property is bound (it being agreed that, for purposes
of Section 6.4, “Contractual Obligation” shall not include any Loan Document).

 

“Control”:
the possession, directly or indirectly, of the power either 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.  

 

“Credit
Party”: the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender.

 

“Cumulative
Retained Excess Cash Flow Amount”: at any date of determination, an amount (which may be negative) equal to the aggregate
cumulative sum of the Retained Percentage of Excess Cash Flow for the Excess Cash Flow Periods ended on or prior to such date;
provided that in calculating the Available Amount with respect to the Excess Cash Flow Period for the fiscal year ending
December 31, 2011, Cumulative Retained Excess Cash Flow Amount shall equal the proportionate share of the amount calculated for
such Excess Cash Flow Period based on the number of days elapsed since the Closing Date and a fiscal year of 365 days.

 

“Declined
Prepayment Amount”: as defined in Section 2.11(f).

 

“Default”:
any of the events specified in Section 8.1, whether or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

 

“Defaulting
Lender”: any Lender, as reasonably determined by the Administrative Agent, that (a) has refused (either verbally or
in writing and has not retracted such refusal) or failed to make available its portion of any incurrence of Revolving Loans or
reimbursement obligations required to be made by it, which refusal or failure is not cured within one Business Day after the date
of such refusal or failure (unless, with respect to any incurrence of any Revolving Loans, such Lender notifies the Administrative
Agent in writing that such failure is a 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 or waived), (b) has failed to pay
over to the Administrative Agent, any Issuing Lender or any other Lender any other amount required to be paid by it within one
Business Day of the date when due, (c) 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, (d) has failed,
within three Business Days after written request by a Credit Party, acting in good faith and based on the reasonable belief that
such Lender may not fulfill its funding obligation, to provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations to fund prospective Revolving Loans and participations in then outstanding Letters of
Credit and Swingline Loans under this Agreement, unless the subject of a good faith dispute (provided, that such Lender
shall cease to be a Defaulting Lender pursuant to this clause (d) upon such Credit Party’s receipt of such certification
in form and substance reasonably satisfactory to it and the Administrative Agent), or (e) has admitted in writing that it is insolvent
or has become the subject of a Bankruptcy Event.

 

    	11

    	 

    

 

“Discount
Range”: as defined in Section 2.26(b).

 

“Discounted
Prepayment Option Notice”: as defined in Section 2.26(b).

 

“Discounted
Voluntary Prepayment”: as defined in Section 2.26(a).

 

“Discounted
Voluntary Prepayment Notice”: as defined in Section 2.26(e).

 

“Disposition”:
with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Disqualified
Stock”: with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security
into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in
whole or in part, in each case prior to the date that is 91 days after the Final Maturity Date (as in effect on the date of the
incurrence of such Disqualified Stock); provided that if such Capital Stock is issued to any plan for the benefit of employees
of the Borrower or its Restricted Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the Borrower or its Restricted Subsidiaries in order
to satisfy applicable statutory or regulatory obligations.

 

“Disregarded
Domestic Subsidiary”: any Domestic Subsidiary that is (i) a direct or indirect Subsidiary of a Foreign Subsidiary or
(ii) a disregarded entity for United States federal income tax purposes if substantially all of such Domestic Subsidiary’s
directly or indirectly held assets consist of Capital Stock or Indebtedness of one or more Foreign Subsidiaries.    

“Dollars”
and “$”: dollars in lawful currency of the United States.

 

“Domestic
Subsidiary”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.

 

“ECF
Percentage”: (a) with respect to the fiscal year ending December 31, 2011, 75% and (b) thereafter, 50%; provided,
that, with respect to any fiscal year of the Borrower commencing with the fiscal year ending December 31, 2012, the ECF Percentage
shall be reduced to (a) 25% if the Consolidated First Lien Net Leverage Ratio as of the last day of such fiscal year is less than
2.00 to 1.00 but greater than or equal to 1.00 to 1.00 and (b) 0% if the Consolidated First Lien Net Leverage Ratio as of the
last day of such fiscal year is less than 1.00 to 1.00.

 

    	12

    	 

    

 

“Environmental
Claim”: any written or oral notice, claim, demand, order, action, suit, complaint, proceeding, request for information
or other communication by any person alleging liability or potential liability (including without limitation liability or potential
liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or resulting from (i) the presence, discharge, emission, release
or threatened release of any Materials of Environmental Concern at any location; (ii) circumstances forming the basis of any violation
or alleged violation of any Environmental Law or Environmental Permit or (iii) otherwise relating to obligations or liabilities
under any Environmental Laws.

 

“Environmental
Laws”: any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating
to or imposing liability or standards of conduct concerning pollution or protection of the environment or human health and safety.

 

“Environmental
Permits”: any and all permits, licenses, registrations, approvals, notifications, exemptions and any other authorization
required under any Environmental Law.

 

“Environmental
Report”: any report, study, assessment, audit, or other similar document that addresses any issue of actual or potential
noncompliance with, actual or potential liability under or cost arising out of, or actual or potential impact on business in connection
with, any Environmental Law or any proposed or anticipated change in or addition to Environmental Law.

 

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

 

“ERISA
Affiliate”: any trade or business (whether or not incorporated) which is under common control with a Group Member within
the meaning of Section 4001 of ERISA or is part of a group which includes any Group Member and which is treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code.

 

“ERISA
Event”: (a) any Reportable Event; (b) the existence with respect to any Plan of a Prohibited Transaction;
(c) any failure by any Pension Plan to satisfy the minimum funding standards (within the meaning of Section 412 or 430 of the
Code or Section 302 of ERISA) applicable to such Pension Plan, whether or not waived; (d) the filing pursuant to Section 412
of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any
Pension Plan, the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any
Pension Plan or the failure by any Group Member or any ERISA Affiliate to make any required contribution to a Multiemployer Plan
pursuant to Sections 431 or 432 of the Code or any installment payment with respect to Withdrawal Liability; (d) the occurrence
of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or the incurrence by any Group Member or any ERISA Affiliate of any liability under Title IV of ERISA
with respect to the termination of any Pension Plan, including but not limited to the imposition of any Lien in favor of the PBGC
or any Pension Plan; (e) a determination that any Pension Plan is, or is expected to be, in “at risk” status
(within the meaning of Section 430 of the Code or Section 303 of ERISA); (f) the receipt by any Group Member or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to terminate any Pension Plan or to appoint a trustee
to administer any Pension Plan under Section 4042 of ERISA; (g) the incurrence by any Group Member or any ERISA Affiliate of any
liability with respect to the withdrawal or partial withdrawal from any Pension Plan or Multiemployer Plan; (h) the receipt
by any Group Member or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Group Member or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, Insolvent, in Reorganization or in “endangered” or “critical” status, within
the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA or terminated (within the meaning of Section 4041A
of ERISA) or (i) the failure of any Plan to comply with any material provisions of ERISA and/or the Code (and applicable regulations
under either) or with the material terms of such Plan, other than any such failure that is capable of correction and is corrected
within a reasonable period of time following the later of its occurrence or its discovery and in all events before such failure
triggers any additional tax or penalty that is material.

 

    	13

    	 

    

 

“Eurodollar
Loans”: Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

 

“Eurodollar
Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such
Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M., London time, two Business Days prior to the beginning
of such Interest Period. In the event that such rate does not appear on such page (or otherwise on such screen), the “Eurodollar
Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which
the Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations
are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein. In no
event shall the Eurodollar Rate with respect to the Term Loans be less than 1.25%.

 

“Eurodollar
Tranche”: the collective reference to Eurodollar Loans under a particular Facility the then current Interest Periods
with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).

 

“Event
of Default”: any of the events specified in Section 8.1; provided, that any requirement for the giving of notice,
the lapse of time, or both, has been satisfied.

 

    	14

    	 

    

 

“Excess
Cash Flow”: for any fiscal year of the Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated
Net Income for such fiscal year, (ii) the amount of all non-cash charges (including depreciation and amortization) deducted in
arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital for such fiscal year, (iv) the aggregate
net amount of non-cash loss on the Disposition of property by the Group Members during such fiscal year (other than sales of inventory
in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income, (v) the increase (if
any) in the balance of the amount of deferred revenue of the Borrower and its Restricted Subsidiaries for such fiscal year, (vi)
the decrease (if any) in the balance of prepaid registry fees of the Borrower and its Restricted Subsidiaries for such fiscal
year and (vii) the decrease (if any) in the balance of the amount of deferred tax assets of the Borrower and its Restricted Subsidiaries
over deferred tax liabilities of the Borrower and its Restricted Subsidiaries for such fiscal year minus (b) the sum, without
duplication, of (i) the amount of all non-cash gains or credits included in arriving at such Consolidated Net Income (including
credits included in the calculation of deferred tax assets and liabilities), (ii) the aggregate amount actually paid by the Group
Members in cash during such fiscal year on account of Capital Expenditures and Permitted Acquisitions (to the extent not funded
with (A) the proceeds of Indebtedness or the issuance of Capital Stock, (B) the Reinvestment Deferred Amount or (C) the Available
Amount), (iii) to the extent not funded with the proceeds of Indebtedness, the net amount of Investments made during such period
pursuant to Section 7.7(k) and (l) (excluding Investments among the Group Members), (iv) to the extent not funded with (A) the
proceeds of Indebtedness or (B) the Available Amount, the aggregate amount of all scheduled principal repayments of Funded Debt
(other than the Term Loans and the Revolving Loans) of the Group Members made during such fiscal year (other than in respect of
any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), (v) to
the extent not funded with the proceeds of Indebtedness, the aggregate amount of all scheduled principal repayments of the Term
Loans made during such fiscal year, (vi) increases in Consolidated Working Capital for such fiscal year, (vii) the aggregate net
amount of non-cash gain on the Disposition of property by the Group Members during such fiscal year (other than sales of inventory
in the ordinary course of business), to the extent included in arriving at such Consolidated Net Income, (viii) non-recurring
cash fees and expenses incurred in connection with the Transactions or any Permitted Acquisition (whether or not consummated),
(ix) cash expenditures in respect of purchase price adjustments paid in connection with the Transactions, any Permitted Acquisition
or any other acquisition permitted hereunder, (x) the amount (determined by the Borrower) of such Consolidated Net Income (if
any) that is mandatorily prepaid or reinvested pursuant to this Agreement (or as to which a waiver of the requirements of such
Section applicable thereto has been granted thereunder) prior to the date of determination of Excess Cash Flow for such fiscal
year as a result of any Asset Sale or Recovery Event giving rise to such Consolidated Net Income, (xi) the aggregate amount of
any premium or penalty actually paid in cash that is required to be made in connection with any prepayment of Indebtedness, (xii) cash
expenditures in respect of Swap Agreements during such period to the extent not deducted in arriving at such Consolidated Net
Income, (xiii) the amount representing accrued expenses for cash payments (including with respect to retirement plan obligations)
that are not paid in cash in such fiscal year; provided, that such amounts will be added to Excess Cash Flow for the following
fiscal year to the extent not paid in cash during such following fiscal year (and no future deduction shall be made for purposes
of this definition when such amounts are paid in cash in any future period), (xiv) the decrease (if any) in the balance of the
amount of deferred revenue of the Borrower and its Restricted Subsidiaries for such fiscal year, (xv) the increase (if any) in
the balance of prepaid registry fees of the Borrower and its Restricted Subsidiaries for such fiscal year and (xvi) the increase
(if any) in the balance of the amount of deferred tax assets of the Borrower and its Restricted Subsidiaries over deferred tax
liabilities of the Borrower and its Restricted Subsidiaries for such fiscal year; provided that the aggregate amount subtracted
in the calculation of Excess Cash Flow pursuant to clauses (b)(ii) (in respect of Permitted Acquisitions), (b)(iii) and (b)(ix)
above shall not exceed (x) $35,000,000 in any fiscal year and (y) $50,000,000 over the term of this Agreement.

 

“Excess
Cash Flow Application Date”: as defined in Section 2.11(c).

 

“Excess
Cash Flow Period”: each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2012 and, solely
for purposes of determining the Available Amount, the fiscal year ending December 31, 2011.

 

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

 

“Existing
Credit Agreement”: as defined in the recitals hereto.

 

“Existing
Debt”: the Indebtedness under (a) the First Lien Credit Agreement, dated as of March 7, 2007, among the Target, Deutsche
Bank Trust Company Americas, as administrative agent and collateral agent, and Deutsche Bank Securities Inc. and Banc of America
Securities LLC, as joint lead arrangers and joint lead bookrunners, the lenders party thereto and the other party thereto, (b)
the Credit Agreement, dated as of April 17, 2007, among the Target and Woodbridge Penzugyi Szolgaltato KFT, Branch Office Zug,
as lender, and the other parties party thereto and (c) the Credit Agreement, dated as of July 30, 2010, among the Borrower, the
lenders party thereto, Wells Fargo Bank, as syndication agent and Royal Bank of Canada, as administrative agent.

 

    	15

    	 

    

 

“Existing
Letters of Credit”: the letters of credit identified on Schedule 1.1B.

 

“Existing
Revolving Lender”: a “Revolving Lender” under the Existing Credit Agreement.

 

“Existing
Revolving Loans”: “Revolving Loans” outstanding under the Existing Credit Agreement immediately prior to
the Restatement Effective Date.

 

“Existing
Term Lender”: a “Term Lender” under the Existing Credit Agreement.

 

“Existing
Term Loans”: “Term Loans” outstanding under the Existing Credit Agreement immediately prior to the Restatement
Effective Date.

 

“Extended
Revolving Commitment”: as defined in Section 2.25(a).

 

“Extended
Revolving Loans”: as defined in Section 2.25(a).

 

“Extended
Term Loans”: as defined in Section 2.25(a).

 

“Extension”:
as defined in Section 2.25(a).

 

“Extension
Offer”: as defined in Section 2.25(a).

 

“Facility”:
each of (a) the Term Commitments and the Term Loans made thereunder (the “Term Facility”) and (b) the Revolving
Commitments and the extensions of credit made thereunder (the “Revolving Facility”).

 

“FATCA”:
Sections 1471 through 1474 of the Code, any substantially similar amendments or successor statutes and any current or future regulations
or official interpretations thereof.

 

“Federal
Funds Rate”: for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve
Bank on the Business Day next succeeding such day; provided, that (a), if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the immediately preceding Business Day as so published on the next
succeeding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to the Administrative Agent on such day on such transactions as determined by the Administrative
Agent.

 

“Fee
Letter”: the Fee Letter, dated as of August 3, 2011, by and among the Borrower, JPMorgan Chase Bank, N.A., J.P. Morgan
Securities LLC, Deutsche Bank Securities Inc., Deutsche Bank Trust Company Americas, Goldman Sachs Lending Partners LLC, SunTrust
Bank and SunTrust Robinson Humphrey Inc.

 

“Fee
Payment Date”: (a) the third Business Day following the last day of each March, June, September and December and (b)
the last day of the Revolving Commitment Period.

 

“Final
Maturity Date”: as at any date, the latest to occur of (a) the Maturity Date, (b) the maturity date in respect of any
outstanding Extended Term Loans and (c) the maturity date in respect of any outstanding Incremental Term Loans.

 

    	16

    	 

    

 

“Final
Revolving Termination Date”: as at any date, the latest to occur of (a) the Revolving Termination Date, (b) the maturity
date in respect of any outstanding Extended Revolving Commitments and (c) the maturity date in respect of any outstanding Incremental
Revolving Facility.

 

“First
Lien Refinancing Indebtedness”: as defined in Section 7.2(a).

 

“Foreign
Benefit Arrangement”: any employee benefit arrangement mandated by non-US law that is maintained or contributed to by
any Group Member or any ERISA Affiliate, other than a Foreign Plan.

 

“Foreign
Plan”: each employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that
is not subject to US law and is maintained or contributed to by any Group Member or any ERISA Affiliate, other than a Foreign
Benefit Arrangement.

 

“Foreign
Plan Event”: with respect to any Foreign Benefit Arrangement or Foreign Plan, (a) the failure to make or, if applicable,
accrue in accordance with normal accounting practices, any employer or employee contributions required by applicable law or by
the terms of such Foreign Benefit Arrangement or Foreign Plan; (b) the failure to register or loss of good standing with applicable
regulatory authorities of any such Foreign Benefit Arrangement or Foreign Plan required to be registered; or (c) the material
and uncorrected failure of any Foreign Benefit Arrangement or Foreign Plan to comply with any material provisions of applicable
law and regulations or with the material terms of such Foreign Benefit Arrangement or Foreign Plan.

 

“Foreign
Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.

 

“Funded
Debt”: as to any Person, all Indebtedness of such Person that matures more than one year from the date of its creation
or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one
year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit
during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect
of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the
Borrower, Indebtedness in respect of the Loans and any Permitted Refinancings thereof and the loans under the Second Lien Credit
Agreement and any Permitted Refinancings thereof.

 

“Funding
Office”: the office of the Administrative Agent specified in Section 10.2 or such other office as may be specified from
time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

 

“GAAP”:
generally accepted accounting principles in the United States of America as in effect from time to time.

 

“Governmental
Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners), and the Internet Corporation for Assigned Names and Number, the Internet Assigned Number
Authority and any other Person that governs, regulates or administers the creation, ownership, registration and/or use of domain
names, URLs and Internet addresses, including all gTLDs and ccTLDs).

 

“Group
Member”: collectively, the Borrower and any of its Restricted Subsidiaries.

 

    	17

    	 

    

 

“Guarantee
and Collateral Agreement”: the Guarantee and Collateral Agreement to be executed and delivered by the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A.

 

“Guarantee
Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement,
counterindemnity or similar obligation, of the guaranteeing Person that guarantees or in effect guarantees, or which is given
to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees
or in effect guarantees, any Indebtedness, (the “primary obligations”) of any other third Person (the “primary
obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether
or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof; provided that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation
of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof
as determined by the Borrower in good faith.

 

“Immaterial
Subsidiary”: on any date, any Restricted Subsidiary that represented 1% or less of consolidated total assets and 1%
or less of annual consolidated revenues (for the most recent Reference Period for which financial statements are available) of
the Borrower and its Restricted Subsidiaries as reflected on the most recent financial statements delivered pursuant to Section
6.1(a) prior to such date; provided, that (i) at such time as any such Subsidiary becomes a party to this Agreement or
any other Loan Document or executes and delivers a guarantee, security agreement, mortgage or other similar agreement supporting
the Obligations, such Subsidiary shall at all times thereafter not be an Immaterial Subsidiary irrespective of the value of its
assets or its revenues and (ii) the aggregate assets and aggregate annual consolidated revenues (for the most recent Reference
Period for which financial statements are available) of all Immaterial Subsidiaries shall at no time exceed 5% of consolidated
total assets and 5% of annual consolidated revenues of the Borrower and its Restricted Subsidiaries, respectively (the “5%
Requirement”); provided further, that in the event that the designation of any Restricted Subsidiary as
an Immaterial Subsidiary would result in the failure to comply with the 5% Requirement, the Borrower shall notify the Administrative
Agent as to the Restricted Subsidiary or Restricted Subsidiaries which shall no longer be deemed Immaterial Subsidiaries, to the
extent required to ensure compliance with the 5% Requirement.

 

“Incremental
Facilities”: as defined in Section 2.24(a).

 

“Incremental
Facility Amendment”: as defined in Section 2.24(b).

 

“Incremental
Facility Closing Date”: as defined in Section 2.24(b).

 

“Incremental
Revolving Facility”: as defined in Section 2.24(a).

 

    	18

    	 

    

 

“Incremental
Term Facility”: as defined in Section 2.24(a).

 

“Indebtedness”:
of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary
course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person, (f) all obligations
of such Person, contingent or otherwise, as an account party or applicant under or in respect of bankers’ acceptances, letters
of credit, surety bonds or similar arrangements, (g) the liquidation value of all redeemable preferred Disqualified Stock of such
Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through
(g) above, and (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts
and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation,
valued at the lesser of (i) if recourse is limited to such property, the fair market value of such property or (ii) the amount
of the Indebtedness of such other Person; provided that Indebtedness shall not include earn-out obligations until such
obligations become a liability on the balance sheet of such Person in accordance with GAAP. 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 expressly provide that such Person is not liable therefor.

 

“Indemnified
Liabilities”: as defined in Section 10.5.

 

“Indemnitee”:
as defined in Section 10.5.

 

“Insolvent”:
with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Intellectual
Property”: the collective reference to all intellectual property and all rights, priorities and privileges relating
to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses
(each as defined in the Guarantee and Collateral Agreement), trade secrets, know-how and other proprietary information and related
documentation, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.

 

“Intercreditor
Agreement”: the Intercreditor Agreement, dated as of the date hereof, among the Loan Parties, the Administrative Agent
and the Second Lien Administrative Agent, substantially in the form of Exhibit L.

 

“Interest
Payment Date”: (a) as to any ABR Loan (other than any Swingline Loan), the first Business Day following the last day
of each March, June, September and December (or, if an Event of Default is in existence, the first Business Day following last
day of each calendar month) to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having
an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of
such Interest Period, (d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any Swingline Loan), the date
of any repayment or prepayment made in respect thereof and (e) as to any Swingline Loan, the day that such Loan is required to
be repaid.

 

    	19

    	 

    

 

“Interest
Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the
case may be, with respect to such Eurodollar Loan and ending one, two, three or six months (or, if agreed to by all Lenders under
the relevant Facility, nine or twelve months or a shorter period) thereafter, as selected by the Borrower in its notice of borrowing
or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months (or, if
agreed to by all Lenders under the relevant Facility, nine or twelve months or a shorter period) thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M., New York City time, on the date that is
three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all
of the foregoing provisions relating to Interest Periods are subject to the following:

 

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

 

(ii)         the
Borrower may not select an Interest Period under a particular Facility that would extend beyond the Revolving Termination Date
(or, with respect to any Extended Revolving Loans or any Loans under an Incremental Revolving Facility, the maturity date with
respect thereto) or beyond the date final payment is due on the Term Loans (or, with respect to any Extended Term Loans or any
Loans under an Incremental Term Facility, the maturity date with respect thereto);

 

(iii)        any
Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and

 

(iv)        the
Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.

 

“Investments”:
as defined in Section 7.7.

 

“Issuing
Lender”: (i) JPMorgan Chase Bank, N.A. or any affiliate thereof or any other Revolving Lender (or any affiliate thereof)
which agrees to be an Issuing Lender and is reasonably acceptable to the Borrower and the Administrative Agent, in their respective
capacity as issuer of any Letter of Credit and (ii) solely with respect to the Rollover Letters of Credit, Deutsche Bank Trust
Company Americas. Each reference herein to “the Issuing Lender” shall be deemed to be a reference to the relevant
Issuing Lender with respect to the relevant Letter of Credit.

 

“L/C
Commitment”: $15,000,000.

 

“L/C
Disbursement”: a payment made by an Issuing Lender pursuant to a Letter of Credit.

 

“L/C
Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed
pursuant to Section 3.5.

 

    	20

    	 

    

 

“L/C
Participants”: the collective reference to all the Revolving Lenders other than the Issuing Lender.

 

“Lead
Arrangers”: the collective reference to J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., SunTrust Robinson
Humphrey Inc., Goldman Sachs Lending Partners LLC, Citigroup Global Markets Inc. and Wells Fargo Securities, LLC.

 

“Lender
Participation Notice”: as defined in Section 2.26(c).

 

“Lenders”:
as defined in the preamble hereto; provided, that unless the context otherwise requires, each reference herein to the Lenders
shall be deemed to include any Conduit Lender.

 

“Letters
of Credit”: as defined in Section 3.1(a).

 

“Lien”:
any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease
having substantially the same economic effect as any of the foregoing).

 

“Loan”:
any loan made by any Lender pursuant to this Agreement.

 

“Loan
Documents”: this Agreement, the Security Documents, the Intercreditor Agreement, any amendment or supplement entered
into in connection with any Incremental Facility and any amendment, waiver, supplement or other modification to any of the foregoing.

 

“Loan
Parties”: the Borrower and each of its Subsidiaries that is a party to a Loan Document.

 

“Majority
Facility Lenders”: with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans or the Total Revolving Extensions of Credit, as the case may be, outstanding under such Facility (or, in the
case of the Revolving Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Total
Revolving Commitments).

 

“Management
Group”: the group consisting of the directors, executive officers and other management personnel of the Borrower on
the Closing Date together with (a) any new directors of the Borrower whose election by such Board of Directors or whose nomination
for election by the shareholders of the Borrower was approved by a vote of a majority of the directors of the Borrower then still
in office who were either directors on the Closing Date or whose election or nomination was previously so approved and (b) executive
officers and other management personnel of the Borrower hired at a time when the directors on the Closing Date together with the
directors so approved constituted a majority of the directors of the Borrower.

 

“Material
Adverse Effect”: a material adverse effect on (a) the business, operations, property, or financial condition of the
Group Members taken as a whole or (b) the validity or enforceability of this Agreement or any of the other Loan Documents
or the rights and remedies of the Administrative Agent or the Lenders hereunder or thereunder.

 

    	21

    	 

    

 

“Material
                                                                                     Restricted Subsidiary”: at any
                                                                                     date of determination, each Restricted Subsidiary
                                                                                     other than Immaterial Subsidiaries.  
                                                                                      

 

“Materials
of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products,
asbestos, polychlorinated biphenyls, urea-formaldehyde insulation or any hazardous, toxic or other substances, materials or wastes,
regulated pursuant to or that could give rise to liability under any Environmental Law.

 

“Maturity
Date”: October 27, 2017.

 

“Minimum
Extension Condition”: as defined in Section 2.25(b).

 

“Minimum
Tranche Amount”: as defined in Section 2.25(b).

 

“Mortgages”:
each of the mortgages and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Lenders, in form and substance reasonably satisfactory to the Administrative Agent.

 

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

 

“Net
Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash
and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of attorneys’ fees,
accountants’ fees, investment banking and other customary advisor fees, amounts required to be applied to the repayment
of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery
Event (other than any Lien pursuant to a Security Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements) and (b) in connection with any issuance or sale of Capital Stock or
any incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment
banking and other customary advisor fees, accountants’ fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.

 

“Non-Consenting
Lender”: as defined in Section 10.1.

 

“Non-Excluded
Taxes”: as defined in Section 2.19(a).

 

“Non-U.S.
Lender”: as defined in Section 2.19(e).

 

“Non-Wholly
Owned Subsidiary”:  any Domestic Subsidiary that is not a Wholly Owned Subsidiary.  

 

“Notes”:
the collective reference to any promissory note evidencing Loans, substantially in the form of Exhibit H-1 in the case of a Note
with respect to a Term Loan and substantially in the form of Exhibit H-2 in the case of a Note with respect to Revolving Loans.

 

    	22

    	 

    

 

“Obligations”:
the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the Borrower to the Administrative Agent or to any Lender (or,
in the case of (a) Specified Swap Agreements, a Person that is a Lender or an Affiliate of a Lender at the time such Specified
Swap Agreement is entered into (or, in respect of any Swap Agreement entered into prior to the Closing Date, any Person that is
a Lender or an Affiliate of a Lender on the Closing Date), notwithstanding whether such Person subsequently ceases at any time
to be a Lender or an Affiliate thereof under this Agreement for any reason, and (b) Specified Cash Management Agreements, any
Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit,
any Specified Swap Agreement, any Specified Cash Management Agreement or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.

 

“Offered
Loans”: as defined in Section 2.26(c).

 

“Orange
Soda Disposition”: the Disposition of all capital stock of OrangeSoda, Inc., a Nevada corporation, owned by Network
Solutions, LLC pursuant to that certain Stock Purchase Agreement, dated on or about May 31, 2012, by and among Deluxe Business
Operations, Inc. a Delaware corporation (or an affiliate thereof), Network Solutions, LLC and the other sellers party thereto
and Gregory Wong, Jay Bean, and Matthew Harty in their capacities as members of the Stockholders’ Committee (as defined
therein).

 

“Other
Taxes”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document, including any interest, additions to tax or penalties applicable thereto.

 

“Participant”:
as defined in Section 10.6(c).

 

“Participant
Register”: as defined in Section 10.6(c).

 

“Patriot
Act”: as defined in Section 10.17.

 

“PBGC”:
the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Pension
Plan”: any 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.

 

“Permitted
Acquisition”: as defined in Section 7.7(h).

 

“Permitted
Investors”: each of (a) General Atlantic, LLC and its Affiliates and (b) the Management Group.

 

    	23

    	 

    

 

“Permitted
Refinancing” shall mean, with respect to any Indebtedness of any person, any modification, refinancing, refunding, replacement,
renewal or extension of such Indebtedness, in whole or in part; provided, that (i) in the case of any modification, refinancing,
refunding, replacement, renewal or extension of Indebtedness assumed pursuant to Section 7.2(q), no person that is not an obligor
with respect to such Indebtedness immediately prior to such modification, refinancing, refunding, replacement, renewal or extension
shall be an obligor with respect to such Indebtedness after giving effect to such modification, refinancing, refunding, replacement,
renewal or extension, (ii) the final maturity and weighted average life to maturity of such Indebtedness shall not be shortened
as a result of such modification, refinancing, refunding, replacement, renewal or extension, (iii) in the case of any modification,
refinancing, refunding, replacement, renewal or extension of Indebtedness incurred pursuant Section 7.2(e), the other material
terms and conditions of such Indebtedness after giving effect to such modification, refinancing, refunding, replacement, renewal
or extension, taken as a whole, including the collateral if any securing such Indebtedness, shall not be materially more restrictive
as determined by the Borrower in good faith, (iv) the principal amount (or accreted value, if applicable) thereof does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, replaced, renewed
or extended except by an amount (such amount, the “Additional Permitted Amount”) equal to unpaid accrued interest
and premium thereon at such time plus reasonable fees and expenses incurred in connection with such modification, refinancing,
refunding, replacement, renewal or extension and (v) for the avoidance of doubt, the Indebtedness being so modified, refinanced,
refunded, replaced, renewed or extended is paid down (or commitments in respect thereof are reduced) on a dollar-for-dollar basis
by such Permitted Refinancing (other than by the Additional Permitted Amount).

 

“Permitted
Sale and Leaseback”: the sale and leaseback of the property located at 1425 North Washington Street, Spokane, Washington.

 

“Person”:
an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan”:
any employee benefit plan as defined in Section 3(3) of ERISA, including any employee welfare benefit plan (as defined in Section
3(1) of ERISA), any employee pension benefit plan (as defined in Section 3(2) of ERISA but excluding any Multiemployer Plan),
and any plan which is both an employee welfare benefit plan and an employee pension benefit plan, and in respect of which any
Group Member 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.

 

“Prime
Rate”: the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime
rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged
by JPMorgan Chase Bank, N.A. in connection with extensions of credit to debtors).

 

“Pro
Forma Balance Sheet”: as defined in Section 4.1(a).

 

“Pro
Forma Statement of Operations”: as defined in Section 4.1(a).

 

“Prohibited
Transaction”: as described in Section 406 of ERISA and Section 4975(c)(1) of the Code.

 

“Properties”:
as defined in Section 4.17(a).

 

“Proposed
Change”: as defined in Section 10.1.

 

“Proposed
Discounted Prepayment Amount”: as defined in Section 2.26(b).

 

“Qualifying
Lenders”: as defined in Section 2.26(d).

 

    	24

    	 

    

 

“Qualifying
Loans”: as defined in Section 2.26(d).

 

“Recovery
Event”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Borrower or any of its Restricted Subsidiaries.

“Refinancing”:
as defined in the recitals hereto.

 

“Refunded
Swingline Loans”: as defined in Section 2.7(b).

 

“Register”:
as defined in Section 10.6(b)(iv).

 

“Regulation
S-X”: Regulation S-X of the Securities Act of 1933, as amended from time to time.

 

“Regulation
U”: Regulation U of the Board as in effect from time to time.

 

“Reimbursement
Obligation”: the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.

 

“Reinvestment
Deferred Amount”: with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Restricted Subsidiaries in connection therewith that are not applied to prepay the Term Loans or reduce the Revolving
Commitments pursuant to Section 2.11(b) as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment
Event”: any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.

 

“Reinvestment
Notice”: a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing
and that the Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the
Net Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair assets useful in its business, other than current assets.

 

“Reinvestment
Prepayment Amount”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire or repair assets useful in the Borrower’s
business, other than current assets.

 

“Reinvestment
Prepayment Date”: with respect to any Reinvestment Event, the earlier of (a) the date occurring twelve months after
such Reinvestment Event (or, if the Borrower enters into a legally binding commitment to reinvest the Net Cash Proceeds from such
Reinvestment Event within such 12-month period, the date that is 180 days after the end of such 12-month period) and (b) the date
on which the Borrower shall have determined not to, or shall have otherwise ceased to, acquire or repair assets useful in the
Borrower’s business, other than current assets, with all or any portion of the relevant Reinvestment Deferred Amount.

 

“Reorganization”:
with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of
ERISA.

 

“Replaced
Revolving Facility”: as defined in Section 10.1.

 

    	25

    	 

    

 

“Replacement
Revolving Facility”: as defined in Section 10.1.

 

“Replaced
Term Loans”: as defined in Section 10.1.

 

“Replacement
Term Loans”: as defined in Section 10.1.

 

“Reportable
Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under the regulations issued pursuant to Section 4043(b) of ERISA.

 

“Required
Lenders”: the holders of more than 50% of the sum of (a) the aggregate unpaid principal amount of the Term Loans then
outstanding and (b) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the
Total Revolving Extensions of Credit then outstanding.

 

“Requirement
of Law”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is
subject.

 

“Responsible
Officer”: the chief executive officer, president or chief financial officer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer of the Borrower.

 

“Restatement
Effective Date”: the date on which the conditions specified in Section 5.3 have been satisfied, which date is November
20, 2012.

 

“Restricted
Payments”: as defined in Section 7.6.

 

“Restricted
Subsidiary”: any Subsidiary other than an Unrestricted Subsidiary.  

 

“Retained
Percentage”: with respect to any Excess Cash Flow Period, (a) 100% minus (b) the ECF Percentage with respect
to such Excess Cash Flow Period.

 

“Revolving
Commitment”: as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline
Loans and Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth under the heading
“Revolving Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption pursuant
to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The amount
of the Total Revolving Commitments on the Restatement Effective Date is $60,000,000.

 

“Revolving
Commitment Period”: the period from and including the Restatement Effective Date to the Revolving Termination Date.

 

“Revolving
Credit Exposure”: with respect to any Lender at any time, the sum of the outstanding principal amount of such Revolving
Lender's Revolving Loans and its L/C Obligations at such time.  

 

“Revolving
Extensions of Credit”: as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Loans held by such Lender then outstanding, (b) such Lender’s Revolving Percentage of the L/C Obligations
then outstanding and (c) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.

 

    	26

    	 

    

 

“Revolving
Lender”: each Lender that has a Revolving Commitment or that holds Revolving Loans.

 

“Revolving
Loans”: as defined in Section 2.4(a).

 

“Revolving
Percentage”: as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then
constitutes of the Total Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding; provided, that in the event that the Revolving Loans
are paid in full prior to the reduction to zero of the Total Revolving Extensions of Credit, the Revolving Percentages shall be
determined in a manner designed to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Revolving
Lenders on a comparable basis.

 

“Revolving
Termination Date”: October 27, 2016.

 

“Rollover
Letters of Credit”: the letters of credit identified on Schedule 1.1C.

 

“SEC”:
the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

 

“Second
Lien Administrative Agent”: JPMorgan Chase Bank, N.A., as second lien administrative agent under the Second Lien Loan
Documents, and its successors and assigns.

 

“Second
Lien Credit Agreement”: the Second Lien Credit Agreement, dated as of the date hereof, among the Borrower, the lenders
party thereto, the Second Lien Administrative Agent and the other agents party thereto.

 

“Second
Lien Guarantee and Collateral Agreement”: the Second Lien Guarantee and Collateral Agreement, dated as of the date hereof,
among the Loan Parties and the Second Lien Administrative Agent.

 

“Second
Lien Loan Documents”: collectively, (a) the Second Lien Credit Agreement, (b) the Second Lien Security Documents, (c)
any promissory note evidencing the loans under the Second Lien Credit Agreement, and (d) any amendment, waiver, supplement or
other modification to any of the documents described in clauses (a) through (c).

 

“Second
Lien Security Documents”: (a) the Second Lien Guarantee and Collateral Agreement, (b) any mortgages executed by any
Loan Party which provide the Second Lien Administrative Agent, for the benefit of the lenders under the Second Lien Credit Agreement,
a second priority lien on the properties subject to Mortgages, and (c) all other security documents delivered after the date hereof
to the Second Lien Administrative Agent granting a lien on any property of any Person to secure the obligations and liabilities
of any Loan Party under any Second Lien Loan Document.

 

    	27

    	 

    

 

“Secured
Parties”: the collective reference to the Administrative Agent, the Swingline Lender, the Issuing Lender, the Lenders
and any Affiliate of any Lender to which Obligations are owed by any Loan Party (including, with respect to Specified Swap Agreements,
any Person that is a Lender or an Affiliate of a Lender at the time such Specified Swap Agreement is entered into (or, in respect
of any Swap Agreement entered into prior to the Closing Date, any Person that is a Lender or an Affiliate of a Lender on the Closing
Date), notwithstanding whether such Person subsequently ceases at any time to be a Lender or an Affiliate thereof under this Agreement
for any reason).

 

“Security
Documents”: the collective reference to the Guarantee and Collateral Agreement, any Mortgages and all other security
documents hereafter delivered to the Administrative Agent granting a Lien on any property of any Person to secure the obligations
and liabilities of any Loan Party under any Loan Document.

 

“Solvent”: when
used with respect to any Person, means that, as of any date of determination, (a) the amount of the “fair value” of
the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”,
as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations
of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured
as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency
of debtors, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt”
means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured.

 

“Specified
Cash Management Agreement”: any agreement providing for treasury, depositary, purchasing card or cash management services,
or bank card products or services provided in connection therewith, including in connection with any automated clearing house
transfers of funds or any similar transactions between any Loan Party and any Lender or an Affiliate thereof, which has been designated
by such Lender and the Borrower, by notice to the Administrative Agent not later than 90 days after the execution and delivery
by such Loan Party, as a “Specified Cash Management Agreement”.

 

“Specified
Equity Contribution”: as defined in Section 7.1.

 

“Specified
Swap Agreement”: any Swap Agreement in respect of interest rates, currency exchange rates or commodity prices entered
into by any Loan Party and any Person that is a Lender or an Affiliate of a Lender at the time such Swap Agreement is entered
into (or, in respect of any Swap Agreement entered into prior to the Closing Date, any Person that is a Lender or an Affiliate
of a Lender on the Closing Date), notwithstanding whether such Person subsequently ceases at any time to be a Lender or an Affiliate
thereof under this Agreement for any reason.

 

“Subordinated
Indebtedness”: any Indebtedness of any Group Member that is subordinated in right of payment to the Obligations; provided
that, for the avoidance of doubt, Indebtedness under the Second Lien Credit Agreement shall not be considered Subordinated
Indebtedness.

 

    	28

    	 

    

 

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

 

“Subsidiary
Guarantor”: each direct or indirect Material Restricted Subsidiary of the Borrower (other than any Foreign Subsidiary,
Disregarded Domestic Subsidiary, Non-Wholly Owned Subsidiary or Captive Insurance Subsidiary) that becomes a party to the Guarantee
and Collateral Agreement pursuant to Section 5.1(a) or 6.10(c).

 

“Swap Agreement”: any agreement with respect
to any swap, forward, future 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 any of its Restricted Subsidiaries shall be a “Swap
Agreement”.

 

“Swingline
Commitment”: the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $5,000,000; provided, that such amount may be adjusted downward
should the Borrower exceed the Revolving Commitment (less the Swingline Commitment) and may be adjusted back up if any repayments
or prepayments of Revolving Loans are made so as to result in availability under the Revolving Commitment (less the Swingline
Commitment).

 

“Swingline
Exposure”: 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 its Applicable Exposure Percentage of the total Swingline Exposure at such time.

 

“Swingline
Lender”: JPMorgan Chase Bank, N.A. or any of its Affiliates, in its capacity as the lender of Swingline Loans.

 

“Swingline
Loans”: as defined in Section 2.6.

 

“Swingline
Participation Amount”: as defined in Section 2.7(c).

 

“Target”:
GA-Net Sol Parent LLC.

 

“Term
Commitment”: as to any Lender, the obligation of such Lender, if any, to make a Term Loan to the Borrower hereunder
and/or in the case of Existing Term Lenders, convert its Existing Term Loan into a Term Loan hereunder, in each case on the Restatement
Effective Date, expressed as an amount representing the maximum principal amount of the Term Loan to be made or converted by such
Lender hereunder. The amount of each Term Lender’s Term Commitment on the Restatement Effective Date is as set forth on
its Term Lender Addendum. The aggregate amount of the Term Commitments on the Restatement Effective Date is $629,500,000.

 

“Term
Commitment Conversion Amount”: with respect to any Term Lender, as defined on such Lender’s Term Lender Addendum
as its “Term Commitment Conversion Amount”.

 

    	29

    	 

    

 

“Term
Commitment Funding Amount”: as to any Lender, the portion (if any) of its Term Commitment that appears under the heading
“Term Commitment Funding Amount” on its Term Lender Addendum.

 

“Term
Converting Lender”: any Term Lender with a Term Commitment Conversion Amount (in its capacity as such).

 

“Term
Funding Lender”: any Term Lender with a Term Commitment Funding Amount (in its capacity as such).

 

“Term
Lender Addendum”: either a “Term Converting Lender” Addendum or a “Term Funding Lender” Addendum,
substantially in the form of Exhibit M-1 or Exhibit M-2 respectively.

 

“Term
Lenders”: each Lender that has a Term Commitment or that holds a Term Loan.

 

“Term
Loan”: the Loans made pursuant to Section 2.1.

 

“Term
Percentage”: as to any Term Lender at any time, the percentage which such Lender’s Term Commitment then constitutes
of the aggregate Term Commitments (or, at any time after the Restatement Effective Date, the percentage which the aggregate principal
amount of such Lender’s Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then
outstanding).

 

“Total
Revolving Commitments”: at any time, the aggregate amount of the Revolving Commitments then in effect.

 

“Total
Revolving Extensions of Credit”: at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving
Lenders outstanding at such time.

 

“Transaction
Expenses”: any non-recurring fees or expenses incurred or paid by any Group Member in connection with the Transactions.

 

“Transactions”:
the Acquisition, the Refinancing, the entering into of the Loan Documents and the initial borrowings hereunder, the entering into
of the Second Lien Loan Documents and the borrowings thereunder and the payments of fees, commissions and expenses in connection
with each of the foregoing.

 

“Transferee”:
any Assignee or Participant.

 

“Type”:
as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

“United
States”: the United States of America.

 

“Unrestricted
Subsidiary”: any Subsidiary of the Borrower designated by the board of directors of the Borrower as an Unrestricted
Subsidiary pursuant to Section 6.11.

 

“Wholly
Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’
qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

“Withdrawal
Liability”: any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are described in Sections 4203 and 4205, respectively, of ERISA.

  

    	30

    	 

    

 

1.2.          Other
Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)          As
used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to the Borrower or any of its Restricted Subsidiaries not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP (provided,
that except as expressly specified in the definition of Consolidated EBITDA, notwithstanding anything to the contrary herein,
all accounting or financial terms used herein shall be construed, and all financial computations pursuant hereto shall be made,
without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting
Standard having a similar effect) to value any Indebtedness or other liabilities of the Borrower or any of its Restricted Subsidiaries
at “fair value”, as defined therein), (ii) the words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and
“incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including
cash, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, and (v) references to agreements
or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations
as amended, supplemented, restated or otherwise modified from time to time. In the event that any Accounting Change (as defined
below) shall occur and such change results in a change in the method of determination or calculation under this Agreement, then
the Borrower and the Administrative Agent agree to enter into good faith negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Change with the desired result that the criteria for evaluating the Borrower
and its Restricted Subsidiaries consolidated financial condition shall be the same after such Accounting Change as if such Accounting
Change had not been made.  Until such time as such an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all accounting determinations and computations made hereunder (including under
Section 7.1 and the definitions used in such calculation) shall continue to be calculated or construed as if such Accounting Change
had not occurred.  “Accounting Change” refers to any change in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.  Unless otherwise expressly provided, Section 7.1 and all defined financial
terms shall be computed on a consolidated basis for the Borrower and its Restricted Subsidiaries, in each case without duplication.
Notwithstanding anything in this Agreement or any other Loan Document to the contrary, for the purposes of calculating compliance
with any covenant in this Agreement or any other Loan Document, no effect shall be given to any change in GAAP arising out of
a change described in the Proposed Accounting Standards Update to Leases (Topic 840) dated August 17, 2010 or a substantially
similar pronouncement.

 

(c)          The
words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement,
shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

 

(d)          The
meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

    	31

    	 

    

 

SECTION
2.          AMOUNT AND TERMS OF COMMITMENTS

 

2.1.          Term
Commitments. Subject to the terms and conditions hereof, each Term Lender severally agrees to (i) make a term loan to
the Borrower on the Restatement Effective Date in an amount equal to its Term Commitment Funding Amount and/or (ii) convert its
Existing Term Loans into Term Loans in an amount equal to its Term Commitment Conversion Amount. The Term Loans may from time
to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance
with Sections 2.2 and 2.12.

 

2.2.          Procedure
for Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice in the form of Exhibit
F (which notice must be received by the Administrative Agent prior to 12:00 Noon, New York City time, (a) two Business Days prior
to the anticipated Restatement Effective Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the anticipated
Restatement Effective Date, in the case of ABR Loans) requesting that the Term Lenders make the Term Loans and/or convert their
Existing Term Loans to Term Loans on the Restatement Effective Date and specifying the amount to be borrowed. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Lender thereof. On the Restatement Effective Date, the Existing
Term Loans of each Term Converting Lender shall be converted into a Term Loan in an amount equal to such Term Lender’s Term
Commitment Conversion Amount. Not later than 9:00 A.M., New York City time, on the Restatement Effective Date each Term Funding
Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to
the Term Loan or Term Loans to be made by such Lender; provided, that if any Term Funding Lender has not funded its Term
Loan by 9:00 A.M., New York City time on the Restatement Effective Date and has not indicated to the Administrative Agent that
it will not be funding its Term Loan, the Administrative Agent is authorized to advance such Term Lender’s Term Loan; provided
further, that such Term Lender shall fund its Term Loan no later than 12:00 Noon, New York City time on the Restatement Effective
Date. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by the Term Funding Lenders in immediately available
funds.

 

2.3.          Repayment
of Term Loans. The Term Loan of each Lender shall mature in consecutive quarterly installments on the last day of each
fiscal quarter (or, in the case of the last installment, on the Maturity Date), commencing on December 31, 2012, each of which
installments shall be in an aggregate principal amount equal to 0.25% of the original aggregate principal amount of the Term Loans
on the Restatement Effective Date; provided that with respect to the installment payable on the Maturity Date, such installment
shall be in an amount equal to the then outstanding principal amount of the Term Loans.

 

2.4.          Revolving
Commitments. (a) Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans (“Revolving Loans”) to the Borrower from time to time during the Revolving Commitment Period in
an aggregate principal amount at any one time outstanding which, when added to such Lender’s Revolving Percentage of the
sum of (i) the L/C Obligations then outstanding and (ii) the aggregate principal amount of the Swingline Loans then outstanding,
does not exceed the amount of such Lender’s Revolving Commitment. During the Revolving Commitment Period the Borrower may
use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as determined
by the Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.12.

 

(b)          The
Borrower shall repay all outstanding Revolving Loans on the Revolving Termination Date.

 

    	32

    	 

    

 

2.5.          Procedure
for Revolving Loan Borrowing. The Borrower may borrow under the Revolving Commitments during the Revolving Commitment
Period on any Business Day; provided, that the Borrower shall give the Administrative Agent irrevocable notice in the form
of Exhibit F (which notice must be received by the Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans (or, in the case of a borrowing on the Restatement
Effective Date, two Business Days prior to the anticipated Restatement Effective Date), or (b) one Business Day prior to the requested
Borrowing Date, in the case of ABR Loans) (provided, that any such notice of a borrowing of ABR Loans under the Revolving
Facility to finance payments required by Section 3.5 may be given not later than 10:00 A.M., New York City time, on the date
of the proposed borrowing), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing
Date and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of
the initial Interest Period therefor. Each borrowing under the Revolving Commitments shall be in an amount equal to (x) in the
case of ABR Loans, $500,000 or a whole multiple thereof (or, if the then aggregate Available Revolving Commitments are less than
$500,000, such lesser amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a whole multiple of $500,000 in excess thereof;
provided, that the Swingline Lender may request, on behalf of the Borrower, borrowings under the Revolving Commitments
that are ABR Loans in other amounts pursuant to Section 2.7. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 noon, New York City time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative
Agent. Notwithstanding the foregoing, solely with respect to the Revolving Loans made on the Closing Date, not later than 9:00
A.M., New York City time, on the Closing Date each Revolving Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to its pro rata share of such Revolving Loans; provided,
that if any Revolving Lender has not funded its pro rata share of such Revolving Loans by 9:00 A.M., New York City
time on the Closing Date and has not indicated to the Administrative Agent that it will not be funding its pro rata
share of such Revolving Loans, the Administrative Agent is authorized to advance such Revolving Lender’s pro
rata share of such Revolving Loans; provided further, that such Revolving Lender shall fund its pro
rata share of such Revolving Loans no later than 12:00 Noon, New York City time on the Closing Date. Such borrowing will
then be made available to the Borrower by the Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds
as received by the Administrative Agent. On the Restatement Effective Date, all Existing Revolving Loans shall be deemed repaid
(including for purposes of Section 2.20 of the Existing Credit Agreement) and such portion thereof that were ABR Loans shall be
reborrowed as ABR Loans by the Borrower and such portion thereof that were Eurodollar Loans shall be reborrowed as Eurodollar
Loans by the Borrower (it being understood that for each tranche of Existing Revolving Loans that were Eurodollar Loans, (x) the
initial Interest Period for the relevant reborrowed Eurodollar Loans shall equal the remaining length of the Interest Period for
such tranche and (y) the Eurodollar Rate for the relevant reborrowed Eurodollar Loans during such initial Interest Period shall
be the Eurodollar Rate for such tranche immediately prior to the Restatement Effective Date) and any Revolving Lenders that are
not Existing Revolving Lenders shall advance funds to the Administrative Agent no later than 12:00 Noon, New York City time on
the Restatement Effective Date as shall be required to repay the Revolving Loans of Existing Revolving Lenders such that each
Revolving Lender’s share of outstanding Revolving Loans on the Restatement Effective Date is equal to its Revolving Percentage
(after giving effect to the Restatement Effective Date).

  

    	33

    	 

    

 

2.6.          Swingline
Commitment. (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit
otherwise available to the Borrower under the Revolving Commitments from time to time during the Revolving Commitment Period by
making swing line loans (“Swingline Loans”) to the Borrower; provided, that (i) the aggregate principal
amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect (notwithstanding that
the Swingline Loans outstanding at any time, when aggregated with the Swingline Lender’s other outstanding Revolving Loans,
may exceed the Swingline Commitment then in effect) and (ii) the Borrower shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving
Commitments would be less than zero. During the Revolving Commitment Period, the Borrower may use the Swingline Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans
only.

 

(b)          The
Borrower shall repay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Revolving
Termination Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made; provided, that on each date that a Revolving Loan is borrowed,
the Borrower shall repay all Swingline Loans then outstanding.

 

(c)          If
the maturity date shall have occurred in respect of any tranche of Revolving Commitments at a time when another tranche or tranches
of Revolving Commitments is or are in effect with a longer maturity date, then on the earliest occurring maturity date all then
outstanding Swingline Loans shall be repaid in full on such date (and there shall be no adjustment to the participations in such
Swingline Loans as a result of the occurrence of such maturity date); provided that if on the occurrence of such earliest
maturity date (after giving effect to any repayments of Revolving Loans and any reallocation of Letter of Credit participations
as contemplated in Section 3.1(c)), there shall exist sufficient unutilized Extended Revolving Commitments so that the respective
outstanding Swingline Loans could be incurred pursuant to the Extended Revolving Commitments which will remain in effect after
the occurrence of such maturity date, then there shall be an automatic adjustment on such date of the participations in such Swingline
Loans and the same shall be deemed to have been incurred solely pursuant to the relevant Extended Revolving Commitments, and such
Swingline Loans shall not be so required to be repaid in full on such earliest maturity date.

 

2.7.          Procedure
for Swingline Borrowing; Refunding of Swingline Loans. (a) Whenever the Borrower desires that the Swingline Lender make
Swingline Loans it shall give each of the Swingline Lender and the Administrative Agent irrevocable fax or .pdf notice signed
by the authorized signatories (which written notice must be received by each of the Swingline Lender and the Administrative Agent
not later than 1:00 P.M., New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii)
the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the
Swingline Commitment shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not later than
3:00 P.M., New York City time, the Swingline Lender shall make the proceeds of such Swingline Loan available to the Borrower on
the requested Borrowing Date by depositing such proceeds in the account of the Borrower on such Borrowing Date in immediately
available funds.

 

    	34

    	 

    
 

(b)          The
Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Borrower (which
hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day’s notice given by the Swingline
Lender no later than 12:00 Noon, New York City time, to the Administrative Agent, who shall then request each Revolving Lender
to make, and each Revolving Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender’s
Revolving Percentage of the aggregate amount of the Swingline Loans (the “Refunded Swingline Loans”) outstanding
on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., New York
City time, one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available
by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline
Loans. The Borrower irrevocably authorizes the Swingline Lender, following notice by the Swingline Lender to the Administrative
Agent, to charge the Borrower’s accounts (up to the amount available in each such account) in order to immediately pay the
amount of such Refunded Swingline Loans to the extent amounts received from the Revolving Lenders are not sufficient to repay
in full such Refunded Swingline Loans.

 

(c)          If
prior to the time a Revolving Loan would have otherwise been made pursuant to Section 2.7(b), one of the events described in Section
8.1(f) shall have occurred and be continuing with respect to the Borrower or if for any other reason, as determined by the Swingline
Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.7(b), each Revolving Lender shall,
on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.7(b), purchase for cash
an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender (through the Administrative
Agent) an amount (the “Swingline Participation Amount”) equal to (i) such Revolving Lender’s Revolving
Percentage times (ii) the sum of the aggregate principal amount of Swingline Loans then outstanding that were to have been
repaid with such Revolving Loans. 

 

(d)          Whenever,
at any time after the Swingline Lender has received from any Revolving Lender (through the Administrative Agent) such Lender’s
Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute (through the Administrative Agent) to such Lender its Swingline Participation Amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion
of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided
that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Lender will
return (through the Administrative Agent) to the Swingline Lender any portion thereof previously distributed to it by the Swingline
Lender.

 

(e)          Each
Revolving Lender’s obligation to make the Loans referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Revolving Lender or the Borrower may have against the Swingline Lender,
the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default
or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the condition (financial
or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party
or any other Revolving Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the
foregoing.

 

2.8.          Commitment
Fees, etc. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment
fee for the period from and including the date hereof to the last day of the Revolving Commitment Period, computed at the Commitment
Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment
is made, payable quarterly in arrears on each Fee Payment Date, commencing on the first such date to occur after the date hereof.

 

    	35

    	 

    

 

(b)          The
Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in any fee agreements
with the Administrative Agent and to perform any other obligations contained therein.

 

2.9.          Termination
or Reduction of Revolving Commitments. The Borrower shall have the right, upon not less than three Business Days’
notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the
Revolving Commitments; provided, that no such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Commitments. Each notice delivered by the Borrower pursuant
to this Section 2.9 shall be irrevocable; provided, that such notice may state that it is conditioned upon the effectiveness of
other credit facilities, settlement of an offering of securities or a Change in Control, in each case, which such notice may be
revoked by the Borrower (by notice to the Administrative Agent no later than 10:00 A.M., New York City time, on the specified
effective date) if such condition is not satisfied. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.

 

2.10.         Optional
Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium
or penalty, upon notice delivered to the Administrative Agent no later than 12:00 Noon, New York City time, three Business Days
prior thereto, in the case of Eurodollar Loans, and no later than 12:00 Noon, New York City time, one Business Day prior thereto,
in the case of ABR Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.20; provided further that
in the event of any prepayment of Term Loans made on or prior to the first anniversary of the Restatement Effective Date (i) with
the proceeds of any secured term loans (including any new or additional term loans under this Agreement) having a lower effective
yield (taking into account applicable interest rate, including floors, original issue discount (“OID”) and fees, with
OID and fees being equated to interest rate based on a four-year life to maturity) than the effective yield (taking into account
applicable interest rate, including floors, OID and fees, with OID and fees being equated to interest rate based on a four-year
life to maturity) for the Term Loans or (ii) pursuant to any repricing amendment in connection with the Term Loans or any refinancing
of the Term Loans resulting in the total yield (as so calculated) payable thereon on the date of such amendment being lower than
the total yield (as so calculated) with respect to the Term Loans, the Borrower shall pay to the applicable Lenders with respect
to such Term Loans a prepayment premium equal to 1% of the principal amount of the Term Loans so prepaid or refinanced or, in
the case of a repricing amendment, 1% of the aggregate amount of the Term Loans outstanding immediately prior to such amendment.
Each notice delivered by the Borrower pursuant to this Section 2.10 shall be irrevocable; provided, that such notice may state
that it is conditioned upon the effectiveness of other credit facilities, which such notice may be revoked by the Borrower (by
notice to the Administrative Agent no later than 10:00 A.M., New York City time, on the specified effective date) if such condition
is not satisfied. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.
If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans shall be in an aggregate principal amount of $1,000,000 (or, if the Term Loans then
outstanding are less than $1,000,000, such lesser amount). Partial prepayments of Swingline Loans shall be in an aggregate principal
amount of $100,000 (or, if the Swingline Loans then outstanding are less than $100,000, such lesser amount). Amounts to be applied
in connection with prepayments and Commitment reductions made pursuant to this Section 2.10 shall be applied, in the case of Term
Loans, to the prepayment of the Term Loans in accordance with Section 2.17(b) and as directed by the Borrower (or, absent such
direction, in direct order of maturity) and, in the case of Commitment reductions, to reduce permanently the Revolving Commitments.

 

    	36

    	 

    
 

2.11.        Mandatory
Prepayments. (a) If any Indebtedness shall be incurred by the Borrower or any of its Restricted Subsidiaries (excluding
any Indebtedness permitted by Section 7.2 (other than First Lien Refinancing Indebtedness)), an amount equal to 100% of the Net
Cash Proceeds thereof shall be applied within one Business Day of the date of such issuance or incurrence toward the prepayment
of the Term Loans as set forth in Section 2.11(d).

 

(b)          If
on any date the Borrower or any of its Restricted Subsidiaries shall have received Net Cash Proceeds of at least $5,000,000 in
the aggregate from any Asset Sales or Recovery Events then, unless a Reinvestment Notice shall be delivered in respect thereof,
such Net Cash Proceeds shall be applied within one Business Day of such date toward the prepayment of the Term Loans as set forth
in Section 2.11(d); provided, that notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal
to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of
the Term Loans as set forth in Section 2.11(d).

 

(c)          If,
for any fiscal year of the Borrower commencing with the fiscal year ending December 31, 2012, there shall be Excess Cash Flow,
the Borrower shall, on the relevant Excess Cash Flow Application Date, prepay an aggregate amount of Term Loans in an amount equal
to (A) the ECF Percentage of Excess Cash Flow for the fiscal year covered by the financial statements for such fiscal year (such
prepayment to be applied as set forth in Section 2.11(d) below), minus (B) solely to the extent not funded with the proceeds
of Indebtedness, (x) the aggregate amount of all optional prepayments of the Term Loans pursuant to Section 2.10 or Section 2.26
made during such fiscal year (provided that with respect to any prepayment pursuant to Section 2.26, the aggregate amount
of such prepayment for purposes of this clause shall be the amount of the Borrower’s cash payment in respect of such prepayment)
to the extent not otherwise deducted previously pursuant to this clause, (y) with respect to the Excess Cash Flow Period ending
on December 31, 2012, the aggregate amount of all optional repayments of Revolving Loans (not to exceed the amount of Revolving
Loans drawn as of the Closing Date, and only to the extent not reborrowed prior to the end of such Excess Cash Flow Period) pursuant
to Section 2.10 made during such fiscal year to the extent not otherwise deducted previously pursuant to this clause (provided
that in no event shall the deduction pursuant to this clause (y) exceed the lesser of (i) $12,000,000 and (ii) an amount equal
to 25% of Excess Cash Flow calculated without giving effect to this clause (y)) and (z) with respect to the Excess Cash Flow Period
ending on December 31, 2013 and each Excess Cash Flow Period ending thereafter, the aggregate amount of all optional repayments
of Revolving Loans pursuant to Section 2.10 made during such fiscal year that are accompanied by an equivalent permanent reduction
in the Revolving Commitments to the extent not otherwise deducted previously pursuant to this clause. Each such prepayment shall
be made on a date (an “Excess Cash Flow Application Date”) no later than five Business Days after the earlier
of (i) the date on which the financial statements of the Borrower referred to in Section 6.1(a), for the fiscal year with respect
to which such prepayment is made, are required to be delivered to the Lenders and (ii) the date such financial statements are
actually delivered.

 

(d)          Partial
prepayments of the Term Loans pursuant to Section 2.11 shall be applied in accordance with Section 2.17(b) first, to the
next eight installments thereof scheduled to be paid in direct order, and second, to the remaining installments on a pro
rata basis (other than the repayment to be made on the Maturity Date). The application of any prepayment pursuant to Section 2.11
shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Loans under Section
2.11 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

 

    	37

    	 

    

 

(e)          Notwithstanding
any other provisions of Section 2.11, to the extent any or all of the Net Cash Proceeds of any Asset Sale by a Foreign Subsidiary,
the Net Cash Proceeds of any Recovery Event received by a Foreign Subsidiary or Excess Cash Flow attributable to Foreign Subsidiaries,
are prohibited or delayed by any applicable local law (including, without limitation, financial assistance, corporate benefit
restrictions on upstreaming of cash intra group and the fiduciary and statutory duties of the directors of such Foreign Subsidiary)
from being repatriated or passed on to or used for the benefit of the Borrower or any applicable Domestic Subsidiary or if the
Borrower has determined in good faith that repatriation of any such amount to the Borrower or any applicable Domestic Subsidiary
would have material adverse tax consequences (including a material acceleration of the point in time when such earnings would
otherwise be taxed) with respect to such amount, the portion of such Net Cash Proceeds or Excess Cash Flow so affected will not
be required to be applied to prepay the Term Loans at the times provided in this Section 2.11 but may be retained by the applicable
Foreign Subsidiary so long, but only so long, as the applicable local law will not permit repatriation or the passing on to or
otherwise using for the benefit of the Borrower or the applicable Domestic Subsidiary, or the Borrower believes in good faith
that such material adverse tax consequence would result, and once such repatriation of any of such affected Net Cash Proceeds
or Excess Cash Flow is permitted under the applicable local law or the Borrower determines in good faith such repatriation would
no longer have such material adverse tax consequences, such repatriation will be promptly effected and such repatriated Net Cash
Proceeds or Excess Cash Flow will be promptly (and in any event not later than five Business Days after such repatriation) applied
(net of additional taxes payable or reasonably estimated to be payable as a result thereof) to the prepayment of the Term Loans
pursuant to Section 2.11 (provided that no such prepayment of the Term Loans pursuant to Section 2.11 shall be required
in the case of any such Net Cash Proceeds or Excess Cash Flow the repatriation of which the Borrower believes in good faith would
result in material adverse tax consequences, if on or before the date on which such Net Cash Proceeds so retained would otherwise
have been required to be applied to reinvestments or prepayments pursuant to a Reinvestment Notice (or such Excess Cash Flow would
have been so required if it were Net Cash Proceeds), the Borrower applies an amount equal to the amount of such Net Cash Proceeds
or Excess Cash Flow to such reinvestments or prepayments as if such Net Cash Proceeds or Excess Cash Flow had been received by
the Borrower rather than such Foreign Subsidiary, less the amount of additional taxes that would have been payable or reserved
against if such Net Cash Proceeds or Excess Cash Flow had been repatriated (or, if less, the Net Cash Proceeds or Excess Cash
Flow that would be calculated if received by such Foreign Subsidiary).  

 

(f)          Notwithstanding
anything to the contrary contained in this Section 2.11, if any Term Lender shall notify the Administrative Agent (i) on the date
of such prepayment, with respect to any prepayment under Section 2.11(a) or (b) or (ii) at least one Business Day prior to the
date of a prepayment under Section 2.11(c) that it wishes to decline its share of such prepayment, such share (the “Declined
Prepayment Amount”) may be retained by the Borrower.

 

2.12.       Conversion
and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by
giving the Administrative Agent prior irrevocable notice in the form of Exhibit G of such election no later than 11:00 A.M., New
York City time, on the Business Day preceding the proposed conversion date; provided, that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to
convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice in the form of Exhibit G of
such election no later than 11:00 A.M., New York City time, on the third Business Day preceding the proposed conversion date (which
notice shall specify the length of the initial Interest Period therefor); provided, that no ABR Loan under a particular
Facility may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing and the Administrative
Agent or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit
such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

    	38

    	 

    

 

(b)          Any
Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower
giving irrevocable notice to the Administrative Agent in the form of Exhibit G, in accordance with the applicable provisions of
the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to
such Loans; provided, that no Eurodollar Loan under a particular Facility may be continued as such when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations; provided further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant
to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest
Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

2.13.       Limitations
on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such
elections so that no more than ten Eurodollar Tranches shall be outstanding at any one time.

 

2.14.       Interest
Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with
respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

 

(b)          Each
ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c)          (i)
If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding overdue Loans and Reimbursement Obligations shall bear interest
at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section plus 2.0% or (y) in the case of Reimbursement Obligations, the rate applicable to
ABR Loans under the Revolving Facility plus 2.0%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to
ABR Loans under the relevant Facility plus 2.0% (or, in the case of any such other amounts that do not relate to a particular
Facility, the rate then applicable to ABR Loans under the Revolving Facility plus 2%), in each case, with respect to clauses
(i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

 

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

 

2.15.       Computation
of Interest and Fees. (a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year
for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of
the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurodollar
Rate shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such
change in interest rate.

 

    	39

    	 

    
 

(b)          Each
determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive
and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of
the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest
rate pursuant to Section 2.14(a).

 

2.16.       Inability
to Determine Interest Rate. If prior to the first day of any Interest Period:

 

(a)          the
Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower in the absence
of manifest error) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or

 

(b)          
the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

 

the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice
is given (x) any Eurodollar Loans under the relevant Facility requested to be made on the first day of such Interest Period shall
be made as ABR Loans, (y) any Loans under the relevant Facility that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans under the relevant
Facility shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn
by the Administrative Agent, no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall
the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

 

2.17.       Payments
Generally; Pro Rata Treatment; Sharing of Set-offs. (a) Each borrowing by the Borrower from the Lenders hereunder,
each payment by the Borrower on account of any commitment fee and any reduction of the Commitments of the Lenders shall be made
pro rata according to the respective Term Percentages or Revolving Percentages, as the case may be, of the relevant
Lenders.

 

(b)          Each
payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro
rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Lenders. The amount
of each principal prepayment of the Term Loans shall be applied to reduce the then remaining installments of the Term Loans, pro
rata based upon the respective then remaining principal amounts thereof. Except as otherwise may be agreed by the Administrative
Agent and the Required Lenders, any prepayment of Loans shall be applied to the then outstanding Term Loans on a pro rata basis
regardless of Type. Amounts prepaid on account of the Term Loans may not be reborrowed. For the avoidance of doubt, no payment
made to any Lender pursuant to Section 2.26 shall be subject to this Section 2.17(b).

 

(c)           Each
payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made
pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving
Lenders.

 

    	40

    	 

    

 

(d)          All
payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise,
shall be made without setoff or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof
to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds.
The Administrative Agent shall distribute such payments to each relevant Lender promptly upon receipt in like funds as received,
net of any amounts owing by such Lender pursuant to Section 9.7. If any payment hereunder (other than payments on the Eurodollar
Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension
of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable
rate during such extension.

 

(e)          Unless
the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon, at a rate equal to the greater of (i) the Federal Funds Rate and (ii) a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share of
such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable
to ABR Loans under the relevant Facility, on demand, from the Borrower.

 

(f)          Unless
the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may
assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative
Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding
sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

 

(g)          If
any Lender shall fail to make any payment required to be made by it pursuant to Sections 2.4, 2.6, 3.1, 2.17(e), 2.17(f) or 9.7,
then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts
thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent, the
Swingline Lender or the Issuing Lender to satisfy such Lender’s obligations to it under such Section 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 under any such Section, in the case of each of clauses (i) and (ii) above, in
any order as determined by the Administrative Agent in its discretion.

 

    	41

    	 

    
 

2.18.       Requirements
of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:

 

(i)          shall
subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for the
excluded taxes described in the first sentence of Section 2.19, taxes imposed pursuant to FATCA and changes in the rate of tax
on the overall net income of such Lender);

 

(ii)         shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition
of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate; or

 

(iii)        shall
impose on such Lender any other condition;

 

and the result of any of the foregoing
is to increase the cost to such Lender, by an amount that such Lender deems to be material, of making, converting into, continuing
or maintaining Eurodollar Loans (or, in the case of (i), any Loan) or issuing or participating in Letters of Credit, or to reduce
any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, within
10 days after receipt of an invoice therefor, any additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

 

(b)          If
any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in
the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request
or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent
to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital
as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s
or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation
for such reduction.

 

(c)          Notwithstanding
anything herein to the contrary, (i) all requests, rules, guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States
or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, in each case shall
be deemed to be a change in a Requirement of Law, regardless of the date enacted, adopted or issued. 

 

    	42

    	 

    

 

(d)          A
certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy
to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in
this Section, the Borrower shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more
than nine months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation
therefor; provided, that if the circumstances giving rise to such claim have a retroactive effect, then such nine-month
period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section
shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.19.       Taxes.
(a) All payments made by or on behalf of any Loan Party under this Agreement or any other Loan
Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes, franchise taxes (imposed
in lieu of net income taxes), branch-level income tax and branch profits taxes imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any other Loan Document); provided, that if
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable to the Administrative Agent or any
Lender as determined in good faith by the applicable withholding agent, (i) such amounts shall be paid to the relevant
Governmental Authority in accordance with applicable law and (ii) the amounts so payable by the applicable Loan Party to the
Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement as if such withholding or deduction had not been made; provided further,
that the Borrower shall not be required to increase any such amounts payable to the Administrative Agent or any Lender with
respect to any Non-Excluded Taxes (w) that are attributable to such Lender’s failure to comply with the requirements of
paragraph (e) or (f) of this Section (x) that are United States withholding taxes imposed on amounts payable to such Lender
at the time such Lender becomes a party to this Agreement, or designates a new lending office except to the extent that such
Lender (or its assignor if any) was entitled, at the time of such change in lending office (or assignment), to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph or (y) that are
imposed pursuant to FATCA.

 

(b)          In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)          Whenever
any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send
to the Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment thereof. If (i) the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority, (ii) the Borrower fails to remit to the Administrative Agent
the required receipts or other required documentary evidence or (iii) any Non-Excluded Taxes or Other Taxes are imposed directly
upon the Administrative Agent or any Lender, the Borrower shall indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure,
in the case of (i) and (ii), or any such direct imposition of tax, excluding interest and penalties caused by the willful misconduct
or gross negligence of the Administrative Agent or any Lender, in the case of (iii).

 

    	43

    	 

    
 

(d)          Each
Lender shall indemnify the Administrative Agent for the full amount of any taxes, levies, imposts, duties, charges, fees, deductions,
withholdings or similar charges imposed by any Governmental Authority that are attributable to such Lender and that are payable
or paid by the Administrative Agent, together with all interest, penalties, reasonable costs and expenses arising therefrom or
with respect thereto, as determined by the Administrative Agent in good faith. 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.

 

(e)          Any
Lender that is entitled to an exemption from or reduction of withholding tax or backup withholding tax under the law of any applicable
jurisdiction with respect to payments under the Loan Documents shall deliver to the Borrower and the Administrative Agent at any
time or times reasonably requested by such Borrower or the Administrative Agent, such properly completed and executed documentation
as prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent to permit such payments to
be made without such withholding tax or backup withholding tax or at a reduced rate.

 

Without
limiting the generality of the foregoing, any Lender that is not a “United States person” as defined in Section 7701(a)(30)
of the Code (a “Non-U.S. Lender”) shall, to the extent it is legally entitled to do so, deliver to the Borrower
and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which
such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower
or the Administrative Agent, but only if such Non-U.S. Lender is legally entitled to do so), whichever of the following is applicable:

 

(i)          duly
completed signed originals of Internal Revenue Service Form W-8BEN (or any successor forms) claiming eligibility for benefits
of an income tax treaty to which the United States is a party,

 

(ii)          duly
completed signed originals of Internal Revenue Service Form W-8ECI (or any successor forms),

 

(iii)         in
the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code,
(x) a signed original certificate, in substantially the form of Exhibit E-1, or any other form approved by the Administrative
Agent and the Borrower, to the effect that such Non-U.S. Lender is not (A) a “bank” within the meaning of Section
881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, and that no
payments in connection with the Loan Documents are effectively connected with such Non-U.S. Lender’s conduct of a United
States trade or business and (y) duly completed signed originals of Internal Revenue Service Form W-8BEN (or any successor forms),

 

    	44

    	 

    
 

(iv)         to
the extent a Non-U.S. Lender is not the beneficial owner (for example, where the Non-U.S. Lender is a partnership or participating
Lender granting a typical participation), a signed original Internal Revenue Service Form W-8IMY, accompanied by a signed original
Form W-8ECI, W-8BEN, a certificate in substantially the form of Exhibit E-2, Exhibit E-3 or Exhibit E-4,
as applicable, Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that,
if the Non-U.S. Lender is a partnership (and not a participating Lender) and one or more partners of such Non-U.S. Lender are
claiming the portfolio interest exemption, such Non-U.S. Lender may provide a certificate, in substantially the form of Exhibit
E-3, on behalf of such beneficial owner(s), or

 

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

 

Any
Lender that is a “United States person” (within the meaning of Section 7701(a)(30) of the Code) shall deliver to the
Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and
from time to time thereafter as prescribed by applicable law or upon the request of the Borrower or the Administrative Agent),
duly executed and properly completed copies of Internal Revenue Service Form W-9 certifying that it is not subject to backup withholding.

 

Each
Lender shall, from time to time after the initial delivery by Lender of the forms described above, whenever a lapse in time or
change in such Lender’s circumstances renders such forms, certificates or other evidence so delivered obsolete, expired
or inaccurate, promptly (1) deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested
by the recipient) renewals, amendments or additional or successor forms, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption required in order to confirm or establish such Non-U.S. Lender’s
status or that such Lender is entitled to an exemption from or reduction in withholding tax or backup withholding tax with respect
to payments under any Loan Document or (2) notify the Administrative Agent and the Borrower of the invalidity of any previously
delivered forms, certifications, or other evidence (including invalidity due to a change in the Lender’s status as the beneficial
owner (for United States tax purposes) of any payments (or portions thereof) due under the Loan Documents) and its inability to
deliver any such forms, certificates or other evidence.

 

Each
Lender on or prior to the date on which such Lender becomes a Lender hereunder and from time to time thereafter, either upon the
request of the Borrower or the Administrative Agent or its agents or upon the expiration or obsolescence of any previously delivered
documentation, shall furnish to the Borrower and the Administrative Agent any documentation that is required under FATCA to enable
the Borrower or the Administrative Agent to determine and execute its obligations, duties and liabilities with respect to FATCA,
including but not limited to any taxes it may be required to withhold in respect of FATCA.

 

(f)          A
Lender that is entitled to an exemption from or reduction of non-United States withholding tax with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed
by applicable law as will permit such payments to be made without withholding or at a reduced rate; provided, that such
Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s judgment such completion,
execution or submission would not materially prejudice the legal position of such Lender.

 

    	45

    	 

    
 

(g)          If
the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Non-Excluded Taxes
or Other Taxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amounts
pursuant to this Section 2.19, it shall pay over such refund to such Loan Party (but only to the extent of indemnity payments
made, or additional amounts paid, by such Loan Party under this Section 2.19 with respect to the Non-Excluded Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest
(other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that such
Loan Party, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to such Loan Party
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or
any other information relating to its taxes which it deems confidential) to any Loan Party or any other Person.

 

(h)          The
Borrower and the Administrative Agent shall reasonably cooperate to provide any information reasonably requested by the Borrower
or the Administrative Agent, respectively, for the purpose of complying with the requirements of Code Sections 1271 through 1275
and the Treasury Regulations promulgated thereunder. Neither the Borrower nor the Administrative agent shall indemnify each other
or any other Person with respect to, or provide any guarantee concerning the accuracy of, information provided pursuant to the
preceding sentence.

 

(i)           The
agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

 

2.20.        Indemnity.
The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or
expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions
of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower
has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment (including any
payment made to a Lender in connection with a forced assignment by such Lender of Loans in accordance with Section 2.22(b) or
Section 10.1) of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert
or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section
submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

 

2.21.       Change
of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section
2.18 or 2.19(a) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object
of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment
of such Lender, cause such Lender and its lending office(s) to suffer no material economic, legal or regulatory disadvantage;
provided further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or
the rights of any Lender pursuant to Section 2.18 or 2.19(a).

 

    	46

    	 

    

  

2.22.       Mitigation
Obligations; Replacement of Lenders.

 

(a)   
   If any Lender requests compensation under Section 2.18, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.19(a), 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 2.18 or
2.19(a), 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
any Lender requests compensation under Section 2.18, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 2.19(a), or if any Lender becomes a Defaulting
Lender, then the Borrower may, at its sole expense and effort, upon three Business Days’ written 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 10.6; provided that such Lender shall be deemed to have executed the applicable Assignment
and Assumption), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided, that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (and if a Commitment is being assigned, the Issuing Lender), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in L/C Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder (including amounts payable pursuant to Section 2.20), 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 (iii) in the
case of any such assignment resulting from a claim for compensation under Section 2.18 or payments required to be made pursuant
to Section 2.19(a), 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.

 

2.23.       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 Commitment of such Defaulting Lender pursuant to Section 2.8(a);

 

(b)          the
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 10.1); provided, that this clause (b) 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 affected thereby;

 

    	47

    	 

    

  

(c)          if
any Swingline Exposure or L/C Obligation exists at the time such Lender becomes a Defaulting Lender then:

 

(i)          all
or any part of the Swingline Exposure and L/C Obligation of such Defaulting Lender shall be reallocated among the non-Defaulting
Lenders in accordance with their respective Aggregate Exposure Percentages but only to the extent the sum of all non-Defaulting
Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and L/C Obligation does not exceed
the total of all non-Defaulting Lenders’ Commitments;

 

(ii)         if
the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall following notice
by the Administrative Agent (x) first, within three Business Days following notice by the Administrative Agent, prepay such Swingline
Exposure and (y) second, within three Business Days following notice by the Administrative Agent, cash collateralize for the benefit
of the Issuing Lender only the Borrower’s obligations corresponding to such Defaulting Lender’s L/C Obligation (after
giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section
8 for so long as such L/C Obligation is outstanding;

 

(iii)        if
the Borrower cash collateralizes any portion of such Defaulting Lender’s L/C Obligation pursuant to Section 2.23(c), the
Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 3.3(a) with respect to such Defaulting
Lender’s L/C Obligation during the period such Defaulting Lender’s L/C Obligation is cash collateralized;

 

(iv)        if
the L/C Obligation of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders
pursuant to Section 2.8(a) and Section 3.3(a) shall be adjusted in accordance with such non-Defaulting Lenders’ Aggregate
Exposure Percentages; and

 

(v)         if
all or any portion of such Defaulting Lender’s L/C Obligation is neither reallocated nor cash collateralized pursuant to
Section 2.23, then, without prejudice to any rights or remedies of the Issuing Lender or any other Lender hereunder, all facility
fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s
Commitment that was utilized by such L/C Obligation) and letter of credit fees payable under Section 3.3(a) with respect to such
Defaulting Lender’s L/C Obligation shall be payable to the Issuing Lender until and to the extent that such L/C Obligation
is reallocated and/or cash collateralized; and

 

(d)          so
long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing
Lender shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure
and the Defaulting Lender’s then outstanding L/C Obligation will be 100% covered by the Commitments of the non-Defaulting
Lenders, including obligations to participate in Swingline Loans and Letters of Credit, and/or cash collateral will be provided
by the Borrower in accordance with Section 2.23(c), and participating interests in any newly made Swingline Loan or any newly
issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.23(c)(i)
(and such Defaulting Lender shall not participate therein).

 

    	48

    	 

    

  

In the event that the
Administrative Agent, the Borrower, the Swingline Lender and the Issuing Lender each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and L/C Obligation of the
Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase
at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its Aggregate Exposure Percentage.

 

2.24.       Incremental
Facility. (a) The Borrower may from time to time amend this Agreement in order to provide
to the Borrower additional revolving loan facilities and/or increased revolving commitments in respect of the Revolving Facility
or any other existing revolving facility hereunder (each, an “Incremental Revolving Facility”) and additional
term loan facilities hereunder (each, an “Incremental Term Facility”; together with any Incremental Revolving
Facility, the “Incremental Facilities”), provided that (i) the aggregate principal amount of the Incremental
Facilities shall not exceed $100,000,000, plus additional amounts to the extent the Consolidated First Lien Net Leverage
Ratio (determined (x) on a pro forma basis after giving effect to the provision of such Incremental Facility, (y) assuming, if
such Incremental Facility is an Incremental Revolving Facility, such Incremental Revolving Facility is fully drawn as of such
date and (z) disregarding the proceeds of such Incremental Facility in calculating such leverage ratio) as of the last day of
the most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the
Lenders pursuant to Section 6.1(a) or (b) is less than 3.75:1.00, (ii) each Incremental Facility shall be in a minimum aggregate
principal amount of $25,000,000, (iii) the Borrower shall be in pro forma compliance with the financial covenant set forth in
Section 7.1 after giving effect to the incurrence of such Incremental Facility, such compliance to be determined (x) on the basis
of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.1(a) or
(b) as though such incurrence had been consummated as of the first day of the fiscal period covered thereby, (y) assuming, if
such Incremental Facility is an Incremental Revolving Facility, such Incremental Revolving Facility is fully drawn as of such
date and (z) disregarding the proceeds of such Incremental Facility in calculating such financial covenant and (iv) at the time
and after giving effect to the incurrence of any Incremental Facility and the use of proceeds thereof, no Default or Event of
Default shall have occurred and be continuing. The Loans and Commitments in respect of any Incremental Facility and all obligations
in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral and
guaranteed on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. Each
Incremental Term Facility must have a weighted average life to maturity which is the same or longer than the then remaining weighted
average life to maturity of the Term Facility and a final maturity no earlier than the Final Maturity Date. Incremental Facilities
will be entitled to prepayments and voting rights on the same basis as the comparable Facility unless the applicable Incremental
Facility Amendment specifies a lesser treatment. Each Incremental Revolving Facility shall have a final maturity no earlier than
the Final Revolving Termination Date. The terms of the applicable Incremental Facility shall be as set forth in the applicable
Incremental Facility Amendment; provided that (i) other than amortization (with respect to any Incremental Term Facility),
pricing or maturity date, each Incremental Facility shall have the same terms as the Term Facility or the Revolving Facility,
as applicable, or such terms as are reasonably satisfactory to the Administrative Agent and the Borrower, (ii) no Incremental
Revolving Facility shall have any amortization and (iii) if, for any Incremental Facility, the Applicable Margin (which, for such
purposes only, shall be deemed to include all upfront or similar fees or original issue discount (equated to interest based on
an assumed four-year life to maturity) payable to all Lenders providing such Incremental Facility and any Eurodollar or ABR floor
applicable to such Incremental Facility but excluding any ticking fees, arrangement fees and other fees not paid to the makers
of such loans generally) relating to such Incremental Facility exceeds the Applicable Margin (which, for such purposes only, shall
be deemed to include all upfront or similar fees or original issue discount (equated to interest based on an assumed four-year
life to maturity) payable to all Lenders providing the Term Facility or the Revolving Facility, as applicable, and any Eurodollar
or ABR floor applicable to the Term Facility or the Revolving Facility, as applicable) relating to the Term Facility or the Revolving
Facility, as applicable, immediately prior to the effectiveness of such Incremental Facility by more than 0.50%, the Applicable
Margin (as calculated above) relating to the Term Facility or the Revolving Facility, as applicable, shall be adjusted to be equal
to the Applicable Margin (as calculated above) relating to such Incremental Facility minus 0.50% (it being understood that differences
in any Eurodollar or ABR floor, if required to be adjusted pursuant to the foregoing, shall be added to the Eurodollar or ABR
floor to the extent required and not to the Applicable Margin). In the case of any Incremental Revolving Facility that increases
the commitments under the Revolving Facility or any other existing revolving credit facility hereunder, the manner in which such
increase is implemented shall be reasonably satisfactory to the Administrative Agent. At no time shall there be Revolving Commitments
hereunder (including revolving commitments in respect of any Incremental Revolving Facility, Extended Revolving Commitments and
any original Revolving Commitments) that have more than four different maturity dates.

 

    	49

    	 

    
 

(b)          An
Incremental Facility shall be made available hereunder upon delivery to the Administrative Agent of notice thereof executed by
the Borrower. Any additional bank, financial institution, existing Lender or other Person that elects to extend loans or commitments
under an Incremental Facility shall be reasonably satisfactory to the Borrower (any such bank, financial institution, existing
Lender or other Person being called an “Additional Lender”) and, if not already a Lender, shall (i) be subject
to the consent (not to be unreasonably withheld or delayed) of the Administrative Agent, the Issuing Lender and/or the Swingline
Lender (to the extent such consent would be required with respect to an assignment to such Additional Lender pursuant to Section
10.6) and (ii) become a Lender under this Agreement pursuant to an amendment (an “Incremental Facility Amendment”)
to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Additional Lender and the Administrative
Agent. No Incremental Facility Amendment shall require the consent of any Lenders other than the Additional Lenders with respect
to such Incremental Facility Amendment. No Lender shall be obligated to provide any Incremental Facility, unless it so agrees.
Commitments in respect of any Incremental Facility shall become Commitments under this Agreement. An Incremental Facility Amendment
may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate,
in the opinion of the Administrative Agent, to effect the provisions of this Section (including to provide for voting provisions
applicable to the Additional Lenders). The effectiveness of any Incremental Facility Amendment shall, unless otherwise agreed
to by the Administrative Agent and the Additional Lenders, be subject to the satisfaction on the date thereof (each, an “Incremental
Facility Closing Date”) of each of the conditions set forth in Section 5.2. The proceeds of any Incremental Facility
will be used only for general corporate purposes (including, for the avoidance of doubt, Permitted Acquisitions and other Investments
and Restricted Payments) .

 

    	50

    	 

    

 

2.25.       Extensions
of Term Loans and Revolving Commitments. (a) Notwithstanding anything to the contrary in this Agreement, pursuant to
one or more offers (each, an “Extension Offer”) made from time to time by the Borrower to all Lenders of Term
Loans with a like maturity date or Revolving Commitments with a like maturity date, in each case on a pro rata basis (based on
the aggregate outstanding principal amount of the respective Term Loans or Revolving Commitments with a like maturity date, as
the case may be) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions
with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s
Term Loans and/or Revolving Commitments and otherwise modify the terms of such Term Loans and/or Revolving Commitments pursuant
to the terms of the relevant Extension Offer (including by increasing the interest rate or fees payable in respect of such Term
Loans and/or Revolving Commitments (and related outstandings) and/or modifying the amortization schedule in respect of such Lender’s
Term Loans) (each, an “Extension”, and each group of Term Loans or Revolving Commitments, as applicable, in
each case as so extended, as well as the original Term Loans and the original Revolving Commitments (in each case not so extended),
being a “tranche”; any Extended Term Loans shall constitute a separate tranche of Term Loans from the tranche of Term
Loans from which they were converted, and any Extended Revolving Commitments shall constitute a separate tranche of Revolving
Commitments from the tranche of Revolving Commitments from which they were converted), so long as the following terms are satisfied:
(i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension
Offer is delivered to the Lenders, (ii) except as to interest rates, fees and final maturity (which shall be determined by the
Borrower and set forth in the relevant Extension Offer), the Revolving Commitment of any Revolving Lender that agrees to an extension
with respect to such Revolving Commitment extended pursuant to an Extension (an “Extended Revolving Commitment”;
and the Loans thereunder, “Extended Revolving Loans”), and the related outstandings, shall be a Revolving Commitment
(or related outstandings, as the case may be) with the same terms as the original Revolving Commitments (and related outstandings);
provided that (x) subject to the provisions of Sections 2.6(c) and 3.1(c) to the extent dealing with Swingline Loans and
Letters of Credit which mature or expire after a maturity date when there exist Extended Revolving Commitments with a longer maturity
date, all Swingline Loans and Letters of Credit shall be participated in on a pro rata basis by all Lenders with Revolving Commitments
in accordance with their Revolving Percentages (and except as provided in Sections 2.6(c) and 3.1(c), without giving effect to
changes thereto on an earlier maturity date with respect to Swingline Loans and Letters of Credit theretofore incurred or issued)
and all borrowings under Revolving Commitments and repayments thereunder shall be made on a pro rata basis (except for (A) payments
of interest and fees at different rates on Extended Revolving Commitments (and related outstandings) and (B) repayments required
upon the maturity date of the non-extending Revolving Commitments) and (y) at no time shall there be Revolving Commitments hereunder
(including Extended Revolving Commitments, any revolving commitments under any Incremental Revolving Facility and any original
Revolving Commitments) that have more than four different maturity dates, (iii) except as to interest rates, fees, amortization,
final maturity date, premium, required prepayment dates and participation in prepayments (which shall, subject to immediately
succeeding clauses (iv), (v) and (vi), be determined between the Borrower and set forth in the relevant Extension Offer), the
Term Loans of any Term Lender that agrees to an extension with respect to such Term Loans extended pursuant to any Extension (“Extended
Term Loans”) shall have the same terms as the tranche of Term Loans subject to such Extension Offer until the maturity
of such Term Loans, (iv) the final maturity date of any Extended Term Loans shall be no earlier than the then latest maturity
date hereunder and the amortization schedule applicable to Term Loans pursuant to Section 2.3 for periods prior to the Term Loan
Maturity Date, as applicable, may not be increased, (v) the weighted average life of any Extended Term Loans shall be no shorter
than the remaining weighted average life of the Term Loans extended thereby, (vi) any Extended Term Loans may participate on a
pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments
or prepayments hereunder, in each case as specified in the respective Extension Offer, (vii) if the aggregate principal amount
of Term Loans (calculated on the face amount thereof) or Revolving Commitments, as the case may be, in respect of which Term Lenders
or Revolving Lenders, as the case may be, shall have accepted the relevant Extension Offer shall exceed the maximum aggregate
principal amount of Term Loans or Revolving Commitments, as the case may be, offered to be extended by the Borrower pursuant to
such Extension Offer, then the Term Loans or Revolving Loans, as the case may be, of such Term Lenders or Revolving Lenders, as
the case may be, shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed
actual holdings of record) with respect to which such Term Lenders or Revolving Lenders, as the case may be, have accepted such
Extension Offer, (viii) all documentation in respect of such Extension shall be consistent with the foregoing, (ix) any applicable
Minimum Extension Condition shall be satisfied unless waived by the Borrower and (x) the Minimum Tranche Amount shall be satisfied
unless waived by the Administrative Agent.

 

    	51

    	 

    

 

(b)          With
respect to all Extensions consummated by the Borrower pursuant to this Section, (i) such Extensions shall not constitute voluntary
or mandatory payments or prepayments for purposes of Sections 2.9, 2.10, 2.11 or 2.17 and (ii) no Extension Offer is required
to be in any minimum amount or any minimum increment; provided that (x) the Borrower may at its election specify as a condition
(a “Minimum Extension Condition”) to consummating any such Extension that a minimum amount (to be determined
and specified in the relevant Extension Offer in the Borrower’s sole discretion and may be waived by the Borrower) of Term
Loans or Revolving Commitments (as applicable) of any or all applicable tranches be tendered and (y) no tranche of Extended Term
Loans shall be in an amount of less than $50,000,000 (or, if less, the then aggregate outstanding amount of the Term Loans) (the
“Minimum Tranche Amount”), unless such Minimum Tranche Amount is waived by the Administrative Agent. The Administrative
Agent and the Lenders hereby consent to the transactions contemplated by this Section (including, for the avoidance of doubt,
payment of any interest, fees or premium in respect of any Extended Term Loans and/or Extended Revolving Commitments on such terms
as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including
Sections 2.9, 2.10, 2.11 or 2.17 or any other Loan Document that may otherwise prohibit any such Extension or any other transaction
contemplated by this Section.

 

(c)          No
consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than (A) the consent of
each Lender agreeing to such Extension with respect to one or more of its Term Loans and/or Revolving Commitments (or a portion
thereof) and (B) with respect to any Extension of the Revolving Commitments, the consent of the Issuing Lender and the Swingline
Lender, which consent shall not be unreasonably withheld or delayed. All Extended Term Loans, Extended Revolving Commitments and
all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by
the Collateral and guaranteed on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan
Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the
other Loan Documents with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Revolving
Commitments or Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion
of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each
case on terms consistent with this Section. Without limiting the foregoing, in connection with any Extensions the respective Loan
Parties shall (at their expense) amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity
date prior to the then latest maturity date so that such maturity date is extended to the then latest maturity date (or such later
date as may be advised by local counsel to the Administrative Agent).

 

(d)          In
connection with any Extension, the Borrower shall provide the Administrative Agent at least five Business Days’ (or such
shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures
(including regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities
hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting
reasonably to accomplish the purposes of this Section.

 

2.26.       Prepayments
Below Par. (a) Notwithstanding anything to the contrary set forth in this Agreement (including
Sections 2.17 or 10.7) or any other Loan Document, the Borrower shall have the right at any time and from time to time to prepay
Term Loans to the Lenders at a discount to the par value of such Loans and on a non pro rata basis (each, a “Discounted
Voluntary Prepayment”) pursuant to the procedures described in this Section 2.26; provided that (A) on the date
of the Discounted Prepayment Option Notice and after giving effect to the Discounted Voluntary Prepayment, there shall be no outstanding
Revolving Loans or Swingline Loans, (B) any Discounted Voluntary Prepayment shall be offered to all Term Lenders of a particular
tranche on a pro rata basis, (C) the Borrower shall deliver to the Administrative Agent, together with each Discounted Prepayment
Option Notice, a certificate of a Responsible Officer of the Borrower (1) stating that no Event of Default has occurred and is
continuing or would result from the Discounted Voluntary Prepayment, (2) containing a customary representation and warranty that
there is no material non-public information as of such date, (3) stating that each of the conditions to such Discounted Voluntary
Prepayment contained in this Section 2.26 has been satisfied and (4) specifying the aggregate principal amount of Term Loans to
be prepaid pursuant to such Discounted Voluntary Prepayment and (D) the aggregate amount of Term Loans prepaid pursuant to this
Section 2.26 (valued at the par amount thereof) shall not exceed $100,000,000.

 

    	52

    	 

    

 

(b)          To
the extent the Borrower seeks to make a Discounted Voluntary Prepayment, the Borrower will provide written notice to the Administrative
Agent substantially in the form of Exhibit I hereto (each, a “Discounted Prepayment Option Notice”) that the
Borrower desires to prepay Term Loans in an aggregate principal amount specified therein by the Borrower (each, a “Proposed
Discounted Prepayment Amount”), in each case at a discount to the par value of such Loans as specified below. The Proposed
Discounted Prepayment Amount of any Loans shall not be less than $10,000,000 (unless otherwise agreed by the Administrative Agent).
The Discounted Prepayment Option Notice shall further specify with respect to the proposed Discounted Voluntary Prepayment (A)
the Proposed Discounted Prepayment Amount for Loans to be prepaid, (B) a discount range (which may be a single percentage) selected
by the Borrower with respect to such proposed Discounted Voluntary Prepayment equal to a percentage of par of the principal amount
of the Loans to be prepaid (the “Discount Range”), and (C) the date by which Lenders are required to indicate
their election to participate in such proposed Discounted Voluntary Prepayment, which shall be at least five Business Days following
the date of the Discounted Prepayment Option Notice (the “Acceptance Date”).

 

(c)          Upon
receipt of a Discounted Prepayment Option Notice, the Administrative Agent shall promptly notify each applicable Lender thereof.
On or prior to the Acceptance Date, each such Lender may specify by written notice substantially in the form of Exhibit J hereto
(each, a “Lender Participation Notice”) to the Administrative Agent (A) a maximum discount to par (the “Acceptable
Discount”) within the Discount Range (for example, a Lender specifying a discount to par of 20% would accept a purchase
price of 80% of the par value of the Loans to be prepaid) and (B) a maximum principal amount (subject to rounding requirements
specified by the Administrative Agent) of the Loans to be prepaid held by such Lender with respect to which such Lender is willing
to permit a Discounted Voluntary Prepayment at the Acceptable Discount (“Offered Loans”). Based on the Acceptable
Discounts and principal amounts of the Loans to be prepaid specified by the Lenders in the applicable Lender Participation Notice,
the Administrative Agent, in consultation with the Borrower, shall determine the applicable discount for such Loans to be prepaid
(the “Applicable Discount”), which Applicable Discount shall be (A) the percentage specified by the Borrower
if the Borrower has selected a single percentage pursuant to Section 2.26(b) for the Discounted Voluntary Prepayment or (B) otherwise,
the highest Acceptable Discount at which the Borrower can pay the Proposed Discounted Prepayment Amount in full (determined by
adding the principal amounts of Offered Loans commencing with the Offered Loans with the highest Acceptable Discount); provided
that in the event that such Proposed Discounted Prepayment Amount cannot be repaid in full at any Acceptable Discount, the
Applicable Discount shall be the lowest Acceptable Discount specified by the Lenders that is within the Discount Range. The Applicable
Discount shall be applicable for all Lenders who have offered to participate in the Voluntary Discounted Prepayment and have Qualifying
Loans (as defined below). Any Lender with outstanding Loans to be prepaid whose Lender Participation Notice is not received by
the Administrative Agent by the Acceptance Date shall be deemed to have declined to accept a Discounted Voluntary Prepayment of
any of its Loans at any discount to their par value within the Applicable Discount.

 

    	53

    	 

    
 

(d)          The
Borrower shall make a Discounted Voluntary Prepayment by prepaying those Loans to be prepaid (or the respective portions thereof)
offered by the Lenders (“Qualifying Lenders”) that specify an Acceptable Discount that is equal to or greater
than the Applicable Discount (“Qualifying Loans”) at the Applicable Discount; provided that if the aggregate
proceeds required to prepay all Qualifying Loans (disregarding any interest payable at such time) would exceed the amount of aggregate
proceeds required to prepay the Proposed Discounted Prepayment Amount, such amounts in each case calculated by applying the Applicable
Discount, the Borrower shall prepay such Qualifying Loans ratably among the Qualifying Lenders based on their respective principal
amounts of such Qualifying Loans (subject to rounding requirements specified by the Administrative Agent). If the aggregate proceeds
required to prepay all Qualifying Loans (disregarding any interest payable at such time) would be less than the amount of aggregate
proceeds required to prepay the Proposed Discounted Prepayment Amount, such amounts in each case calculated by applying the Applicable
Discount, the Borrower shall prepay all Qualifying Loans.

 

(e)          Each
Discounted Voluntary Prepayment shall be made within five Business Days of the Acceptance Date (or such later date as the Administrative
Agent shall reasonably agree, given the time required to calculate the Applicable Discount and determine the amount and holders
of Qualifying Loans), without premium or penalty (and not subject to Section 2.20), upon irrevocable notice substantially in the
form of Exhibit K hereto (each a “Discounted Voluntary Prepayment Notice”), delivered to the Administrative
Agent no later than 1:00 p.m. New York City Time, three Business Days prior to the date of such Discounted Voluntary Prepayment,
which notice shall (i) specify the date and amount of the Discounted Voluntary Prepayment and the Applicable Discount determined
by the Administrative Agent, (ii) provide a customary representation and warranty that there is no material non-public information
at the time of such purchase or a statement that such representation and warranty cannot be made at such time and (iii) state
that no Event of Default has occurred and is continuing or would result from the Discounted Voluntary Prepayment. Upon receipt
of any Discounted Voluntary Prepayment Notice, the Administrative Agent shall promptly notify each relevant Lender thereof. If
any Discounted Voluntary Prepayment Notice is given, the amount specified in such notice shall be due and payable to the applicable
Lenders, subject to the Applicable Discount on the applicable Loans, on the date specified therein together with accrued interest
(on the par principal amount) to but not including such date on the amount prepaid. The par principal amount of each Discounted
Voluntary Prepayment of a Term Loan shall be applied ratably to reduce the remaining installments of such Term Loans.

 

(f)          To
the extent not expressly provided for herein, each Discounted Voluntary Prepayment shall be consummated pursuant to reasonable
procedures (including as to timing, rounding, minimum amounts, Type and Interest Periods and calculation of Applicable Discount
in accordance with Section 2.26(c) above) established by the Administrative Agent and the Borrower.

 

(g)          Prior
to the delivery of a Discounted Voluntary Prepayment Notice, (A) upon written notice to the Administrative Agent, the Borrower
may withdraw or modify its offer to make a Discounted Voluntary Prepayment pursuant to any Discounted Prepayment Option Notice
and (B) no Lender may withdraw its offer to participate in a Discounted Voluntary Prepayment pursuant to any Lender Participation
Notice unless the terms of such proposed Discounted Voluntary Prepayment have been modified by the Borrower after the date of
such Lender Participation Notice. Within one Business Day of delivery of a Discounted Voluntary Prepayment Notice, a Lender may
withdraw its offer to participate in a Discounted Voluntary Prepayment solely if the Borrower is unable to provide a customary
representation and warranty in the Discounted Voluntary Prepayment Notice that there is no material non-public information.

 

(h)          Nothing
in this Section 2.26 shall require the Borrower to undertake any Discounted Voluntary Prepayment.

 

    	54

    	 

    

 

SECTION
3.          LETTERS OF CREDIT

 

3.1.          L/C
Commitment. (a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the
other Revolving Lenders set forth in Section 3.4(a), agrees to issue standby letters of credit (“Letters of Credit”)
for the account of the Borrower or the Subsidiaries listed on Schedule 3.1 (as such schedule may be updated from time to time
to the satisfaction of the Issuing Lender), and to amend or extend Letters of Credit previously issued by it, on any Business
Day during the Revolving Commitment Period in such form as may be approved from time to time by the Issuing Lender; provided,
that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the
L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the Available Revolving Commitments would be less
than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first
anniversary of its date of issuance and (y) the date that is five Business Days prior to the Revolving Termination Date; provided
that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above); provided further, that in the event any
such Letter of Credit is renewed beyond the date referred to in clause (y) above, such Letter of Credit shall be cash collateralized
or otherwise credit supported to the reasonable satisfaction of the Administrative Agent and the Issuing Lender on or prior to
the date that is five Business Days prior to the Revolving Termination Date.

 

(b)          The
Issuing Lender shall not at any time be obligated to issue or amend any Letter of Credit if such issuance or amendment would conflict
with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

 

(c)          If
the maturity date in respect of any tranche of Revolving Commitments occurs prior to the expiration of any Letter of Credit, then
(i) if one or more other tranches of Revolving Commitments in respect of which the maturity date shall not have occurred are then
in effect, (x) the outstanding Revolving Loans shall be repaid pursuant to Section 2.10 on such maturity date in an amount sufficient
to permit the reallocation of the L/C Obligations relating to the outstanding Letters of Credit contemplated by clause (y) below
and (y) such Letters of Credit shall automatically be deemed to have been issued (including for purposes of the obligations of
the Revolving Lenders to purchase participations therein and to make payments in respect thereof pursuant to Section 3.4) under
(and ratably participated in by Lenders pursuant to) the Revolving Commitments in respect of such non-terminating tranches up
to an aggregate amount not to exceed the aggregate principal amount of the Revolving Commitments in respect of such non-terminating
tranches at such time (it being understood that (A) the participations therein of Revolving Lenders under the maturing tranche
shall be correspondingly released and (B) no partial face amount of any Letter of Credit may be so reallocated) and (ii) to the
extent not reallocated pursuant to immediately preceding clause (i), but without limiting the obligations with respect thereto,
the Borrower shall cash collateralize any such Letter of Credit in a manner reasonably satisfactory to the Administrative Agent
and the Issuing Bank. If, for any reason, such cash collateral is not provided or the reallocation does not occur, the Revolving
Lenders under the maturing tranche shall continue to be responsible for their participating interests in the Letters of Credit;
provided that, notwithstanding anything to the contrary contained herein, upon any subsequent repayment of the Revolving
Loans, the reallocation set forth in clause (i) shall automatically and concurrently occur to the extent of such repayment (it
being understood that no partial face amount of any Letter of Credit may be so reallocated). Except to the extent of reallocations
of participations pursuant to clause (i) of the second preceding sentence, the occurrence of a maturity date with respect to a
given tranche of Revolving Commitments shall have no effect upon (and shall not diminish) the percentage participations of the
Revolving Lenders in any Letter of Credit issued before such maturity date. Commencing with the maturity date of any tranche of
Revolving Commitments, the sublimit for Letters of Credit under any tranche of Revolving Commitments that has not so then matured
shall be as agreed with such Revolving Lenders; provided that in no event shall such sublimit be less than the sum of (x)
the L/C Obligations of the Revolving Lenders under such extended tranche immediately prior to such maturity date and (y) the face
amount of the Letters of Credit reallocated to such tranche of Revolving Commitments pursuant to clause (i) above (assuming Revolving
Loans are repaid in accordance with clause (i)(x)).

 

    	55

    	 

    

 

(d)          The
Rollover Letters of Credit shall, as of and after the Closing Date, be deemed issued and outstanding pursuant to, and shall constitute
“Letters of Credit” for all purposes of, this Agreement; provided that the Rollover Letters of Credit shall
not be extended unless agreed by the applicable Issuing Bank.

 

3.2.          Procedure
for Issuance and Amendment of Letter of Credit. The Borrower may from time to time request that the Issuing Lender
issue or amend, as the case may be, a Letter of Credit by delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein an Application therefor, completed to the satisfaction of each of the Issuing
Lender and the Administrative Agent, and such other certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in accordance with its customary procedures (including
receiving information from the Administrative Agent that there is sufficient availability under the L/C Commitment and the Revolving
Commitment) and shall promptly issue or amend, as applicable, the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue or amend any Letter of Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original
of such Letter of Credit to the beneficiary thereof, amending an existing Letter of Credit, or as otherwise may be agreed to by
the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance or amendment thereof. The Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance or amendment of each Letter of Credit (including the amount thereof).

 

3.3.          Fees
and Other Charges. (a) The Borrower will pay a fee on all outstanding undrawn and unexpired Letters of Credit at a
per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility, shared
ratably among the Revolving Lenders and payable quarterly in arrears on each Fee Payment Date after the issuance date. In addition,
the Borrower shall pay to the Issuing Lender for its own account a fronting fee of 0.125% per annum on the undrawn and unexpired
amount of each Letter of Credit, payable quarterly in arrears on each Fee Payment Date after the issuance date or amendment date,
as applicable.

 

(b)          In
addition to the foregoing fees, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise
administering any Letter of Credit.

 

3.4.          L/C
Participations. (a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions set forth below, for
such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage
in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement
(or in the event that any reimbursement received by the Issuing Lender shall be required to be returned to it at any time), such
L/C Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein
an amount equal to such L/C Participant’s Revolving Percentage of the amount that is not so reimbursed (or is so returned).
Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against
the Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default
or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change
in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the
Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing.

 

    	56

    	 

    

 

(b)          If
any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.4 a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is paid to the Issuing Lender within three Business
Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant,
on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under
the Revolving Facility. A certificate of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing
under this Section shall be conclusive in the absence of manifest error.

 

(c)          Whenever,
at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), the Issuing Lender receives any payment related
to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of Collateral applied thereto by
the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender will distribute to such L/C Participant
its pro rata share thereof; provided that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.

 

3.5.          Reimbursement
Obligation of the Borrower. If any draft is paid under any Letter of Credit, the Borrower shall reimburse the Issuing Lender
for the amount of (a) the draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender
in connection with such payment, not later than 1:00 P.M., New York City time, on (i) the Business Day that the Borrower receives
notice of such draft, if such notice is received on such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above
does not apply, the Business Day immediately following the day that the Borrower receives such notice; provided, that the
Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.5 or Section 2.7 that
such payment be financed with an ABR Revolving Loan or Swingline Loan in an equivalent amount and, to the extent so financed,
the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Loan or Swingline
Loan. Each such payment shall be made to the Issuing Lender at its address for notices referred to herein in Dollars and in immediately
available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment
in full at the rate set forth in (x) until the Business Day next succeeding the date of the relevant notice, Section 2.14(b) and
(y) thereafter, Section 2.14(c).

 

    	57

    	 

    
 

3.6.          Obligations
Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Issuing
Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall
in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction
to have resulted from the gross negligence or willful misconduct of the Issuing Lender. The Borrower agrees that any action taken
or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done
in the absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not result in any liability
of the Issuing Lender to the Borrower.

 

3.7.          Letter
of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of the Issuing Lender to the Borrower in connection with
any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for
in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit
in connection with such presentment are substantially in conformity with such Letter of Credit.

 

3.8.          Applications.
To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.

 

3.9.          Letters
of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of
any obligations, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the Issuing Lender hereunder
of any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for
the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial
benefits from the businesses of such Subsidiaries.

 

SECTION
4.          REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent and the
Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to the Administrative Agent and each Lender that:

 

4.1.          Financial
Condition. (a) Each of the unaudited pro forma consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at June 30, 2011 (including the notes thereto) (the “Pro Forma Balance Sheet”) and the related
pro forma statement of operations of the Borrower and its consolidated Subsidiaries (the “Pro Forma Statement of Operations”),
copies of which have heretofore been furnished to each Lender, has been prepared giving effect (as if such events had occurred
(i) on such date (in the case of the Pro Forma Balance Sheet) and (ii) at the beginning of such period (in the case of the Pro
Forma Statement of Operations)) to the Transactions. Each of the Pro Forma Balance Sheet and the Pro Forma Statement of Operations
has been prepared based on the best information available to the Borrower as of the date of delivery thereof, and presents fairly
on a pro forma basis the estimated financial position of Borrower and its consolidated Subsidiaries as at June 30,
2011, assuming that the events specified in the preceding sentence had actually occurred at such date (in the case of the Pro
Forma Balance Sheet) or at the beginning of such period (in the case of the Pro Forma Statement of Operations.

 

    	58

    	 

    
 

(b)          The
audited consolidated balance sheets of the Borrower and its consolidated Subsidiaries as at December 31, 2008, December 31, 2009
and December 31, 2010 and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from Ernst & Young, LLP, present fairly in all material respects the
consolidated financial condition of the Borrower and its consolidated Subsidiaries as at such date, and the consolidated results
of its operations and its consolidated cash flows for the respective fiscal years then ended. The unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at March 31, 2011 and June 30, 2011 and the related unaudited consolidated
statements of income and cash flows for the fiscal periods ended on such date, present fairly in all material respects the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such date, and the consolidated results of its operations
and its consolidated cash flows for the portion of the fiscal year then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein),
subject, in the case of the unaudited quarterly financial statements, to normal year-end audit adjustments, if any.

 

(c)          The
audited consolidated balance sheets of the Target and its consolidated Subsidiaries as at December 31, 2008, December 31, 2009
and December 31, 2010 and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from Ernst & Young, LLP, to the Borrower’s knowledge, present
fairly in all material respects the consolidated financial condition of the Target and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended.
To the Borrower’s knowledge, all such financial statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned
firm of accountants and disclosed therein). As of the Closing Date, neither the Target nor any of its Subsidiaries has any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange transaction or obligation in respect of derivatives,
that are not reflected in the most recent financial statements referred to in this paragraph or reflected on Schedule 4.1. During
the period from December 31, 2010 to and including the date hereof, there has been no Disposition by the Target or any of its Subsidiaries
of any material part of its business or property, other than as set forth on Schedule 4.1.

 

4.2.          No
Change. Since December 31, 2010, there has been no development or event that has had or could reasonably be expected to have
a Material Adverse Effect.

 

4.3.          Existence;
Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation
of property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law,
except in the case of each of (b) through (d), to the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

    	59

    	 

    
 

4.4.          Power;
Authorization; Enforceable Obligations. Each Loan Party has the power and authority, and the legal right, to make, deliver
and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder.
Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions
of this Agreement. Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party
party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). No consent
or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or enforceability of any of the Loan Documents, except
(i) the filings referred to in Section 4.19 or otherwise required in order to perfect, record or maintain the security interests
granted under the Security Documents and (ii) those that, if not obtained or made, could not reasonably be expected to have a
Material Adverse Effect.

  

4.5.          No
Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters
of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of any Group Member, except for any such violation other than with respect to a violation of the organizational documents
of any Group Member, which could not reasonably be expected to have a Material Adverse Effect, and will not result in, or require,
the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any such Requirement of Law
or any such Contractual Obligation (other than the Liens created by the Security Documents).

 

4.6.          Litigation.
No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge
of any Responsible Officer of the Borrower, threatened by or against any Group Member or against any of the properties or revenues
of any Group Member (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or
(b) that could reasonably be expected to have a Material Adverse Effect.

 

4.7.          Insurance.
The properties of the Group Members are insured with financially sound and reputable insurance companies, in at least such amounts
and against at least such risks (but including in any event public liability, product liability and business interruption) as
are customarily insured against by Persons engaged in the same general area by companies engaged in the same or a similar business,
and owning similar properties, as the Group Members.

.

 

4.8.          Ownership
of Property; Liens. Each Group Member has title in fee simple to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its other property except as could not reasonably be expected to materially
interfere with the conduct of business of the Group Members, taken as a whole, and none of such property is subject to any Lien
except as permitted by Section 7.3.

 

4.9.          Intellectual
Property. Each Group Member owns, is licensed to use or possesses the right to use all material Intellectual Property necessary
for the conduct of its business as currently conducted. No claim has been asserted in writing and is pending by any Person challenging
the use of any Intellectual Property owned by any Group Member or the validity or effectiveness of any such Intellectual Property,
nor does any Responsible Officer of the Borrower know of any valid basis for any such claim. The conduct of the business by each
Group Member does not infringe on the rights of any Person in any material respect.

 

    	60

    	 

    
 

4.10.         Taxes.
(i) Each Group Member has filed or caused to be filed all material Federal, state and other tax returns that are required to be
filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property
and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any
the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the relevant Group Member); and (ii) no tax Lien has been
filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge.

 

4.11.         Federal
Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used (a) for “buying”
or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation
U as now and from time to time hereafter in effect for any purpose that violates the provisions of the Regulations of the Board
or (b) for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

 

4.12.         Labor
Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against any Group Member pending or, to the knowledge of the Borrower, threatened; (b) hours worked
by and payment made to employees of each Group Member have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters (including but not limited to meal and rest breaks); (c) all payments
due from any Group Member on account of employee health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member; (d) all individuals have been properly classified as employees or contractors; (e) there is
no litigation or other proceeding pending, or to the knowledge of the Borrower, threatened, against any Group Member arising out
of employment matters; and (f) no Group Member is subject to any consent decree arising out of employment matters.

 

4.13.         ERISA.
Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) each Plan
is drafted and has been operated and administered in compliance with the applicable provisions of ERISA and the provisions of
the Code relating to Plans and the regulations and published interpretations thereunder; (ii) no ERISA Event or Foreign Plan Event
has occurred or is reasonably expected to occur; (iii) all amounts required by applicable law with respect to, or by the terms
of, any retiree welfare benefit arrangement maintained by any Group Member or any ERISA Affiliate or to which any Group Member
or any ERISA Affiliate has an obligation to contribute have been accrued in accordance with ASC Topic 715-60. The present value
of all accrued benefits under each Pension Plan (determined based on the assumptions used by such Pension Plans pursuant to Section
430(h) of the Code) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed
made, exceed by more than a material amount the value of the assets of such Pension Plan (as determined pursuant to Section 430(g)
of the Code) allocable to such accrued benefits, and the present value of all accumulated benefit obligations of all underfunded
Pension Plans (based on the assumptions used for purposes of ASC Topic 715-30) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than a material amount the fair market value of the assets of all such underfunded
Pension Plans; (iv) no Group Member nor any ERISA Affiliate has had a complete or partial withdrawal from any Multiemployer Plan,
and, to the knowledge of the Loan Parties, none of the Loan Parties nor any ERISA Affiliate would become subject to any liability
under ERISA if the Loan Parties or any such ERISA Affiliate were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is made or deemed made; and (f) no such Multiemployer
Plan is in Reorganization or Insolvent.

 

    	61

    	 

    
 

4.14.       Investment
Company Act; Other Regulations. No Loan Party is an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended from time to time.
No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X of the Board) that limits its ability
to incur Indebtedness.

 

4.15.       Subsidiaries.
Except as disclosed to the Administrative Agent by the Borrower in writing from time to time after the Closing Date, (a) Schedule
4.15 (i) sets forth the name and jurisdiction of organization of each Subsidiary and, as to each such Subsidiary, the percentage
of each class of Capital Stock owned by any Loan Party and (ii) identifies all of the Unrestricted Subsidiaries and (b) there
are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of any Subsidiary
of the Borrower, except to the extent permitted by the Loan Documents.

 

4.16.       Use
of Proceeds. The proceeds of the Term Loans made on the Restatement Effective Date shall be used to satisfy the condition
in Section 5.3(a) and to prepay loans under the Second Lien Credit Agreement. The proceeds of the Revolving Loans and the Swingline
Loans, and the Letters of Credit, shall be used for working capital needs and general corporate purposes of Group Members (including
for Permitted Acquisitions and other Investments and Restricted Payments).

 

4.17.       Environmental
Matters.

 

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

 

(i)          the
facilities and properties owned, leased or operated by any Group Member (the “Properties”) do not contain, and
have not previously contained, any Materials of Environmental Concern in amounts or concentrations or under circumstances that
constitute or constituted a violation of, or could reasonably be expected give rise to liability under, any applicable Environmental
Law;

 

(ii)         each
Group Member (A) is in compliance with all, and has not violated any, applicable Environmental Laws; (B) holds all Environmental
Permits (each of which is in full force and effect) required for any of its current or intended operations or for any property
owned, leased, or otherwise operated by it; and (C) is in compliance with all, and has not violated any, of its Environmental Permits;

 

(iii)        no
Group Member is aware of any past, present, or reasonably anticipated future events, circumstances, practices, plans, or legal
requirements that could reasonably be expected to prevent it from (or increase the burden on it of) complying with applicable Environmental
Laws or obtaining, renewing, or complying with all Environmental Permits required under such laws;

 

    	62

    	 

    
 

(iv)        Materials
of Environmental Concern are not present at, on, under, in or about any current or former Properties or at any other location (including,
without limitation, any location to which Materials of Environmental Concern have been sent for re-use or recycling or for treatment,
storage, or disposal) in amounts or concentrations or under circumstances that: (A) constitute or constituted a violation of, or
could give rise to liability under, any Environmental Law or otherwise result in costs to any Group Member; or (B) interfere with
the continuing operations of any Group Member;

 

(v)         no
Group Member has received notice of any pending or threatened Environmental Claim with regard to any of the Properties or the business
operated by the any Group Member, nor is the Borrower aware of any facts, conditions or circumstances that could reasonably be
expected to give rise to such an Environmental Claim; and

 

(vi)        no
Group Member has assumed or retained any obligations or liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Material of Environmental Concern.

 

(b)         The
Borrower has provided to the Administrative Agent true and complete copies of all Environmental Reports that are in the possession
or control of any Group Member.

 

4.18.       Accuracy
of Information, etc. No statement or information contained in this Agreement, any other Loan Document or any other document,
certificate or statement furnished by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them,
for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, taken as a whole, contain
as of the date such statement, information, document or certificate was so furnished any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained herein or therein not materially misleading in light
of the circumstances when made. The projections and pro forma financial information contained in the materials referenced
above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time
made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such financial information may differ from the projected
results set forth therein by a material amount. There is no fact known to any Loan Party that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents or in any other documents,
certificates and statements furnished to the Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.

 

4.19.       Security
Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof.
In the case of the certificated Pledged Stock described in the Guarantee and Collateral Agreement, when stock certificates representing
such Pledged Stock are delivered to the Administrative Agent (together with a properly completed and signed stock power or endorsement),
and in the case of the other Collateral described in the Guarantee and Collateral Agreement, when financing statements and other
filings specified on Schedule 4.19 in appropriate form are filed in the offices specified on Schedule 4.19, the Guarantee
and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other Person (except, in the case of Collateral other than
Pledged Stock, Liens permitted by Section 7.3).

 

    	63

    	 

    
 

(b)          If and when
delivered, each of the Mortgages, upon proper filing, shall be effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the properties described therein and proceeds thereof,
and if and when such Mortgages are filed in the appropriate recording offices, each such Mortgage shall constitute a fully perfected
(if and to the extent perfection may be achieved by such filings) Lien on, and security interest in, all right, title and interest
of the Loan Parties in the property subject to such Mortgage and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other Person (except that the security interest created
in such property may be subject to the Liens permitted by Section 7.3).

 

4.20.         Solvency.
As of the Closing Date, the Loan Parties on a consolidated basis are, and immediately after giving effect to the Transactions
will be, Solvent.

 

4.21.         Patriot
Act. To the extent applicable, each Group Member is in compliance, in all material respects, with (i) the Trading with
the Enemy Act, as amended from time to time, and each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended from time to time) and any other enabling legislation or executive order
relating thereto, and (ii) the Patriot Act. No part of the proceeds of the Loans will be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage,
in violation of the United States Foreign Corrupt Practices Act of 1977, as amended from time to time.

 

SECTION
5.          CONDITIONS PRECEDENT

 

5.1.          Conditions
to Initial Extension of Credit. The agreement of each Lender to have made the initial extensions of credit requested to be
made by it was subject to the satisfaction, prior to or concurrently with the making of such extension of credit on the Closing
Date, of the following conditions precedent (it being understood and acknowledged that the Closing Date occurred on October 27,
2011 and that capitalized terms used in this Section 5.1 shall be used with the meanings assigned thereto in the Existing Credit
Agreement):

 

(a)          Credit
Agreement; Guarantee and Collateral Agreement; Intercreditor Agreement. The Administrative Agent shall have received (i) the
Existing Credit Agreement, executed and delivered by the Administrative Agent, the Borrower and each Person listed on Schedule
1.1A to the Existing Credit Agreement, (ii) the Guarantee and Collateral Agreement, executed and delivered by the Borrower and
each Subsidiary Guarantor, including for the avoidance of doubt, the Target, (iii) an Acknowledgement and Consent in the form attached
to the Guarantee and Collateral Agreement, executed and delivered by each Issuer (as defined therein), if any, that is not a Loan
Party and (iv) the Intercreditor Agreement, executed and delivered by each Loan Party, the Administrative Agent and the Second
Lien Administrative Agent.

 

(b)          Acquisition;
Equity Contribution; Refinancing. (i) The Acquisition shall be consummated concurrently with the initial funding of the Facilities
in accordance with the terms of the Acquisition Agreement and no terms or conditions
of the Acquisition Agreement shall have been amended or modified in any material respect, no provision thereof shall have been
waived in any material respect and no material consent thereunder shall have been granted by the Borrower, in each case in a manner
materially adverse to the Lenders (in their capacity as such), as reasonably determined by the Lead Arrangers, without the consent
of the Lead Arrangers (which consent shall not be unreasonably withheld or delayed);

 

    	64

    	 

    
 

(ii)       The Administrative
Agent shall have received evidence reasonably satisfactory to it that the Borrower shall have received a cash contribution (in
the form of common equity) from General Atlantic, LLC or its Affiliates, which, together with any common equity issued to such
investors pursuant to the Acquisition Agreement and any existing common equity of the Target, will be in an aggregate amount equal
to at least 33% of the total pro forma (i) consolidated Indebtedness plus (ii) equity capitalization of the Borrower and its Restricted
Subsidiaries on the Closing Date after giving effect to the Transactions (it being understood that for purposes hereof, (i) the
existing common equity of the Target shall be deemed to be $237,845,000 and (ii) the pro forma equity capitalization of the Borrower
and its Restricted Subsidiaries shall be deemed to be $384,365,000).

 

(iii)        The
Administrative Agent shall have received evidence reasonably satisfactory to it that the Existing Debt shall have been repaid and
all commitments, security interests and guarantees in connection therewith shall have been terminated.

 

(c)          Pro
Forma Balance Sheet; Financial Statements. The Lenders shall have received (i) the Pro Forma Balance Sheet and the Pro Forma
Statement of Operations for the 12-month period ending June 30, 2011, prepared in accordance with Regulation S-X with such adjustments
or deviations therefrom as the Lead Arrangers may agree, (ii) the audited consolidated financial statements of the Target for
the 2008, 2009 and 2010 fiscal years and (iii) the unaudited interim consolidated financial statements of the Target for each
fiscal quarter ended (A) after the date of the latest applicable financial statements delivered pursuant to clause (ii) of this
paragraph and (B) at least 45 days prior to the Closing Date.

 

(d)          Acquisition
Agreement Representations. All of the Acquisition Agreement Representations shall be true and correct in all material respects
on and as of the Closing Date as if made on and as of the Closing Date (unless stated to relate to a specific earlier date, in
which case, such representations and warranties shall be true and correct in all material respects as of such earlier date).

 

(e)          Lien
Searches. The Administrative Agent shall have received the results of a recent Lien search with respect to each Loan Party,
and such search shall reveal no Liens on any of the assets of the Loan Parties except for Liens (A) permitted by Section 7.3 or
(B) discharged on or prior to the Closing Date pursuant to documentation satisfactory to the Administrative Agent.

 

(f)          Fees.
The Lenders, the Administrative Agent and the Lead Arrangers shall have received all fees required to be paid, and all expenses
for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the third Business
Day prior to the Closing Date pursuant to the Fee Letter. All such amounts will be paid with proceeds of Loans made on the Closing
Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing
Date.

 

(g)          Closing
Certificate; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received
(i) a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions
and attachments, including (other than with respect to MonsterCommerce, LLC) the charter, articles, certificate of organization
or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party
(if applicable), and (ii) a long-form good standing certificate for each Loan Party (other than MonsterCommerce, LLC) from its
jurisdiction of organization (if applicable).

 

(h)          Legal
Opinion. The Administrative Agent shall have received the legal opinion of Cooley LLP, counsel to the Group Members, in form
and substance reasonably satisfactory to the Administrative Agent.

 

    	65

    	 

    
 

(i)          Pledged
Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the shares
of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, 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 Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof; provided that if, notwithstanding the use by the Loan Parties
of commercially reasonable efforts to deliver to the Administrative Agent the certificates and undated stock powers required by
clause (i) and the promissory notes and related transfer forms required by clause (ii), such certificates, stock powers, promissory
notes and/or transfer forms are not delivered as of the Closing Date, delivery of such items (other than any certificates representing
the shares of Capital Stock of Material Restricted Subsidiaries that are (x) Domestic Subsidiaries and (y) Wholly Owned Subsidiaries)
shall not be a condition to the agreement of each Lender to make the initial extension of credit requested to be made by it (but
shall be required to be satisfied within 30 days of the Closing Date (or such later date as the Administrative Agent may agree
in its reasonable discretion)).

 

(j)          Filings,
Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the
Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order
to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.3), shall be
in proper form for filing, registration or recordation; provided that if, notwithstanding the use by the Loan Parties of
commercially reasonable efforts to satisfy the requirement set forth in this Section 5.1(j), such requirement is not satisfied
as of the Closing Date, the satisfaction of such requirement (other than with respect to the filing of any Uniform Commercial Code
financing statement) shall not be a condition to the agreement of each Lender to make the initial extension of credit requested
to be made by it (but shall be required to be satisfied within 30 days of the Closing Date (or such later date as the Administrative
Agent may agree in its reasonable discretion)).

 

(k)          Solvency
Certificate. The Administrative Agent shall have received a solvency certificate from the chief financial officer of the Borrower.

 

(l)          Insurance.
The Administrative Agent shall have received insurance certificates satisfying the requirements of Section 5.2 of the Guarantee
and Collateral Agreement; provided that if, notwithstanding the use by the Loan Parties of commercially reasonable efforts
to satisfy the requirement set forth in this Section 5.1(l), such requirement is not satisfied as of the Closing Date, the satisfaction
of such requirement shall not be a condition to the agreement of each Lender to make the initial extension of credit requested
to be made by it (but shall be required to be satisfied within 30 days of the Closing Date (or such later date as the Administrative
Agent may agree in its reasonable discretion)).

 

(m)         No
Material Adverse Effect. Since June 30, 2011, no Closing Date Material Adverse Effect has occurred.

 

(n)          Patriot
Act. Before the end of the third Business Day prior to the Closing Date, the Administrative Agent shall have received all documentation
and other information, which has been requested in writing at least five Business Days prior to the Closing Date, required by regulatory
authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot
Act.

 

    	66

    	 

    
 

(o)          Representations
and Warranties. All of the representations and warranties made by any Loan Party in the Loan Documents shall be true and correct
in all material respects; provided that the only representations and warranties the truth or accuracy of which in all material
respects shall be a condition to the agreement of each Lender to make the initial extension of credit requested to be made by it
hereunder shall be the representations and warranties set forth in Section 4.3(a), 4.4 (other than the last sentence thereof),
4.5 (solely with respect to organizational documents and Requirements of Law; provided that the term “Material Adverse
Effect” therein shall be deemed to be replaced, solely for purposes hereof, with the term “Closing Date Material Adverse
Effect”), 4.11, 4.14, 4.16, 4.19(a), 4.20 and 4.21.

 

For the purpose of determining compliance with the conditions
specified in this Section 5.1, each Lender that has signed this Agreement shall be deemed to have accepted, and to be satisfied
with, each document or other matter required under this Section 5.1 unless the Administrative Agent shall have received written
notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

5.2.          Conditions
to Each Extension of Credit After the Closing Date. The agreement of each Lender (other than as agreed by the Administrative
Agent and the Additional Lenders as set forth in Section 2.24(b)) to make any extension of credit requested to be made by it on
any date, other than on the Closing Date, is subject to the satisfaction of the following conditions precedent:

  

(a)           Representations
and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall
be true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent that
such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all
material respects on and as of such earlier date.

 

(b)           No
Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.

 

Each borrowing by and issuance of a Letter of Credit on behalf
of the Borrower hereunder (other than on the Closing Date and as agreed by the Administrative Agent and the Additional Lenders
as set forth in Section 2.24(b)) shall constitute a representation and warranty by the Borrower as of the date of such extension
of credit that the conditions contained in this Section 5.2 have been satisfied.

 

5.3.          Conditions
to Restatement Effective Date. The agreement of each Lender to make the initial extensions of credit requested to be made
by it on the Restatement Effective Date is subject to the satisfaction, prior to or concurrently with the making of such extension
of credit on the Restatement Effective Date, of the following conditions precedent:

 

(a)           Agreement;
Term Lender Addenda; Reaffirmation Agreement. The Administrative Agent shall have received (i) this Agreement, executed
and delivered by the Administrative Agent, the Borrower and each Revolving Lender listed on Schedule 1.1A (who together with any
Existing Term Lenders executing this Agreement constitute Required Lenders (as defined under the Existing Credit Agreement)) and
all Term Loans outstanding under the Existing Credit Agreement shall have been replaced with Term Loans hereunder (and all accrued
interest thereon shall have been paid), (ii) Term Lender Addenda to this Agreement, executed and delivered by Persons with aggregate
Term Commitment Conversion Amounts and Term Commitment Funding Amounts of $629,500,000 and (iii) a reaffirmation, substantially
in the form of Exhibit N hereto, executed and delivered by the Borrower and each Subsidiary Guarantor.

 

    	67

    	 

    
 

(b)           Fees.
The Administrative Agent, the Lead Arrangers, the Existing Term Lenders and the Lenders shall have received all fees required to
be paid on or prior to the Restatement Effective Date, and all expenses for which invoices have been presented (including the reasonable
fees and expenses of legal counsel).

 

(c)           No
Default. No Default or Event of Default shall have occurred and be continuing on the Restatement Effective Date or after giving
effect to the Restatement Effective Date or the extensions of credit requested to be made on such date.

 

(d)           Closing
Certificate; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received
(i) a certificate of each Loan Party, dated the Restatement Effective Date, substantially in the form of Exhibit C hereto, with
appropriate insertions and attachments, including the charter, articles, certificate of organization or incorporation of each Loan
Party certified by the relevant authority of the jurisdiction of organization of such Loan Party (if applicable), and (ii) a long-form
good standing certificate for each Loan Party from its jurisdiction of organization (if applicable).

 

(e)           Legal
Opinion. The Administrative Agent shall have received the legal opinion of Cooley LLP, counsel to the Group Members, in form
and substance reasonably satisfactory to the Administrative Agent.

 

(f)           Representations
and Warranties. All of the representations and warranties made by any Loan Party in the Loan Documents shall be true and correct
in all material respects.

 

(g)           Pledged
Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the shares
of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, 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 Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof.

 

(h)           Filings,
Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the
Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order
to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.3), shall be
in proper form for filing, registration or recordation.

 

For the purpose of determining compliance with the conditions
specified in this Section 5.3, each Lender that has signed this Agreement or a Term Lender Addendum shall be deemed to have accepted,
and to be satisfied with, each document or other matter required under this Section 5.3 unless the Administrative Agent shall have
received written notice from such Lender prior to the proposed Restatement Effective Date specifying its objection thereto.

 

    	68

    	 

    
 

SECTION
6.          AFFIRMATIVE COVENANTS

 

The Borrower hereby agrees that, so long as
the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or
the Administrative Agent hereunder, the Borrower shall and shall cause each of its Restricted Subsidiaries to:

 

6.1.          Financial
Statements. Furnish to the Administrative Agent and each Lender:

 

(a)           as
soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a copy of the audited
consolidated and unaudited Borrower-prepared consolidating balance sheet of the Borrower and its consolidated and consolidating
Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous year, reported on, in the case of audited financial
statements, without a “going concern” or like qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young, LLP or other independent certified public accountants of nationally recognized standing; and

 

(b)           as
soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated and unaudited Borrower-prepared consolidating balance sheet of the Borrower and
its consolidated and consolidating Subsidiaries as at the end of such quarter and the related unaudited consolidated statements
of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth
in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments).

  

All such financial statements shall be complete and correct
in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied (except as approved by
such accountants or officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.

 

6.2.          Certificates;
Other Information. Furnish to the Administrative Agent and each Lender:

 

(a)           concurrently
with the delivery of the financial statements referred to in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such certificate;

 

(b)           concurrently
with the delivery of any financial statements pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating that,
to the best of each such Responsible Officer’s knowledge, each Loan Party during such period has observed or performed all
of its covenants and other agreements, and satisfied every condition contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii) in the case of quarterly or annual financial statements,
(x) a Compliance Certificate containing all information and calculations necessary for determining compliance by each of the Borrower
and its Restricted Subsidiaries with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter
or fiscal year of the Borrower, as the case may be (including, in the case of financial statements delivered pursuant to Section
6.1(a), beginning with the financial statements for the fiscal year ending December 31, 2012, a reasonably detailed calculation
of Excess Cash Flow), and (y) to the extent not previously disclosed to the Administrative Agent, (1) a description of any change
in the jurisdiction of organization of any Loan Party, (2) a list of any Intellectual Property acquired by any Loan Party and (3)
a description of any Person that has become a Borrower or any of its Restricted Subsidiaries, in each case since the date of the
most recent report delivered pursuant to this clause (y) (or, in the case of the first such report so delivered, since the Closing
Date);

 

    	69

    	 

    
 

(c)           as
soon as available, and in any event no later than 45 days after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year;

 

(d)           concurrently
with the delivery of any financial statements pursuant to Section 6.1, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Restricted Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as compared to the comparable periods of the previous year;

 

(e)           [Reserved];

 

(f)           within
five days after the same are sent, copies of all financial statements and reports that the Borrower sends to the holders of any
class of its debt securities or public equity securities and, within five days after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the SEC;

 

(g)           promptly
following receipt thereof, copies of (i) any documents described in Section 101(k) of ERISA that the Borrower, any of its Subsidiaries
or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l) of ERISA
that the Borrower, any of its Subsidiaries or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided,
that if the Borrower, any of its relevant Subsidiaries or ERISA Affiliate has not requested such documents or notices from the
administrator or sponsor of the applicable Multiemployer Plan, then, upon reasonable request of the Administrative Agent, the Borrower,
any of its Subsidiaries or the ERISA Affiliate shall promptly make a request for such documents or notices from such administrator
or sponsor and the Borrower shall provide copies of such documents and notices promptly after receipt thereof; and

 

(h)           promptly,
such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof
as the Administrative Agent may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.1(a)
or (b) or Section 6.2(d) or (f) shall be deemed to have been delivered on the date (i) on which the Borrower files such documents
with the SEC and such documents are publicly available on the SEC’s EDGAR filing system or any successor thereto, (ii) on
which the Borrower posts such documents, or provides a link thereto on the Borrower’s website or (iii) on which such documents
are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided
that (A) the Borrower shall deliver paper copies of such documents to the Administrative Agent for further distribution to any
Lender that requests that the Borrower deliver such paper copies and (B) in the case of clauses (i) and (ii) above, the Borrower
shall (x) notify the Administrative Agent of the filing or posting of any such documents and (y) provide copies of all such documents
to the Administrative Agent for posting on an Internet or intranet website to which the Lenders have access.

 

    	70

    	 

    
 

6.3.          Payment
of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, including tax liabilities, except where such obligation is currently being
contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or any of its relevant Restricted Subsidiaries.

 

6.4.          Maintenance
of Existence; Compliance. (a)(i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take
all reasonable action to maintain all rights, privileges and franchises reasonably necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by Section 7.4 or 7.5 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with Requirements
of Law, except (i) to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect or (ii) to the extent such Requirement of Law is currently being contested in good faith by appropriate
proceedings.

 

6.5.          Maintenance
of Property; Insurance. (a)  Keep all material property reasonably necessary in the conduct of its business in good working
order and condition, ordinary wear and tear excepted and (b) maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability,
product liability and business interruption) as are customarily insured against by Persons engaged in the same general area by
companies engaged in the same or a similar business and owning similar properties.

 

6.6.          Inspection
of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP (or, in the case of Foreign Subsidiaries, generally accepted accounting principles in effect from
time to time in their respective jurisdictions of organization) and all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities and (b) at reasonable times and upon reasonable advance notice, as often
as may be desired, permit representatives of the Administrative Agent or any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records and to discuss the business, operations, properties and financial
and other condition of the Group Members with officers and employees of the Group Members and with their independent certified
public accountants; provided, that (i) representatives of the Group Members may be present and participate in any such
discussion with such accountants and (ii) unless an Event of Default has occurred and is continuing, such visits, inspections
and making of abstracts shall occur not more than once in any fiscal quarter for the Administrative Agent and all of the Lenders
taken together.

 

6.7.          Notices.
Promptly after a Responsible Officer or any Loan Party obtains knowledge thereof, give notice to the Administrative Agent and
each Lender of:

 

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

 

(b)           any
litigation or proceeding affecting any Group Member (i) in which the amount sought against any Group Member is $10,000,000 or
more and not covered by insurance, (ii) in which injunctive or similar relief is sought as to which there is a reasonable probability
of an adverse determination and, if adversely determined, could reasonably be expected to have a Material Adverse Effect or (iii)
which relates to any Loan Document;

 

(c)           an
ERISA Event; and

 

(d)           any
other development or event that has had or could reasonably be expected to have a Material Adverse Effect.

 

    	71

    	 

    
 

Each notice pursuant to this Section 6.7 shall be accompanied
by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the
relevant Group Member proposes to take with respect thereto.

 

6.8.          Environmental
Laws. (a) Comply with, and undertake reasonable efforts to ensure compliance, by all tenants and subtenants, if any, with,
all applicable Environmental Laws, and obtain and comply with and maintain, and undertake reasonable efforts to ensure that all
tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws.

 

(b)           Conduct
and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental
Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.

 

6.9.          Ratings.
Use commercially reasonable efforts to obtain and maintain a public corporate family and/or corporate credit rating, as applicable,
and public ratings in respect of the Facilities, in each case from each of S&P and Moody’s.

 

6.10.         Further
Assurances; Additional Collateral, etc. (a) With respect to any property acquired after the Closing Date by any Loan Party
(other than (x) any property described in paragraph (c) below, (y) any property subject to a Lien expressly permitted by Section
7.3(g) and (z) any Excluded Collateral (as defined in the Guarantee and Collateral Agreement)) as to which the Administrative
Agent, for the benefit of the Secured Parties, does not have a perfected Lien, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent deems necessary
or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such property
and (ii) take all actions necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties,
a perfected first priority security interest in such property, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative
Agent and the filing of documents with the United States Patent and Trademark Office and the United States Copyright Office as
may be required by the Security Documents or by law or as may be requested by the Administrative Agent.

 

(b)          With
respect to any fee interest in any real property having a value (together with improvements thereof) of at least $5,000,000 acquired
after the Closing Date by any Loan Party (other than any such real property subject to a Lien expressly permitted by Section 7.3(g)),
promptly (i) execute and deliver a first priority Mortgage, in favor of the Administrative Agent, for the benefit of the Lenders,
covering such real property, (ii) if requested by the Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s
certificate and (y) any consents or estoppels reasonably deemed necessary or advisable by the Administrative Agent in connection
with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Administrative Agent, (iii) if requested
by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent, (iv) deliver a
“Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to such real property
(if such real property is located in an area that has been identified by the Secretary of Housing and Urban Development as an area
having special flood hazards, together with a notice about special flood hazard area status and flood disaster assistance required
pursuant to Section 208.25(i) of Regulation H of the Board, duly executed by the Borrower or the applicable Subsidiary) and (v)
if such real property is located in an area that has been identified by the Secretary of Housing and Urban Development as an area
having special flood hazards, obtain flood insurance made available under the National Flood Insurance Act of 1968, if such insurance
is available, or otherwise provide evidence of flood insurance, reasonably satisfactory to the Administrative Agent.

 

    	72

    	 

    
 

(c)          With
respect to any new Material Restricted Subsidiary created or directly acquired after the Closing Date by the Borrower or any other
Loan Party (which, for the purposes of this paragraph (c), shall include any directly-held existing Subsidiary of a Loan Party
that becomes a Material Restricted Subsidiary (other than any Disregarded Domestic Subsidiary, Foreign Subsidiary, Non-Wholly Owned
Subsidiary or Captive Insurance Subsidiary) or ceases to be a Disregarded Domestic Subsidiary, a Foreign Subsidiary, a Non-Wholly
Owned Subsidiary or a Captive Insurance Subsidiary), promptly (i) execute and deliver to the Administrative Agent such amendments
to the Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Secured Parties, a perfected first priority security interest in the Capital Stock of such new Subsidiary
that is directly owned by any Loan Party (provided that such security interest shall be limited, in the case of a Foreign
Subsidiary or a Disregarded Domestic Subsidiary, to 65% of such voting Capital Stock in such Foreign Subsidiary or Disregarded
Domestic Subsidiary, as applicable), (ii) deliver to the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Loan Party, (iii)
cause such new Subsidiary (if such new Subsidiary is a Material Restricted Subsidiary, unless such Subsidiary is a Foreign Subsidiary,
a Disregarded Domestic Subsidiary, a Non-Wholly Owned Subsidiary or a Captive Insurance Subsidiary) (A) to become a party
to the Guarantee and Collateral Agreement, (B) to take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Secured Parties a perfected first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement with respect to such new Subsidiary, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative
Agent and (C) to deliver to the Administrative Agent a certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments, and (iv) if requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent. Notwithstanding anything to the contrary contained herein, if any Subsidiary shall guarantee
obligations in respect of the Second Lien Credit Agreement or any Permitted Refinancing thereof, such Subsidiary shall promptly
become a party to the Guarantee and Collateral Agreement.

 

6.11.         Designation
of Subsidiaries. (a) The board of directors of the Borrower may at any time designate any Restricted Subsidiary as an Unrestricted
Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such
designation, no Default or Event of Default shall have occurred and be continuing, (ii) no Subsidiary may be designated as an
Unrestricted Subsidiary if it has Indebtedness with recourse to any Group Member, (ii) no Subsidiary may be designated as an Unrestricted
Subsidiary if it was previously designated an Unrestricted Subsidiary, (iv) no Subsidiary may be designated as an Unrestricted
Subsidiary if it is party to any agreement or contract with any Group Member, unless the terms of such agreement are no less favorable
to the applicable Group Member than those that might be obtained from an unaffiliated third-party, (v) no Subsidiary may be designated
as an Unrestricted Subsidiary if such Subsidiary is a Person with respect to which any Group Member has any direct or indirect
obligation to make capital contributions or to maintain such Subsidiary’s financial condition, (vi) no Disregarded Domestic
Subsidiary may be designated an Unrestricted Subsidiary, (vii) no Subsidiary may be designated an Unrestricted Subsidiary if after
giving effect to such designation, the Consolidated Total Net Leverage Ratio (calculated disregarding the proceeds of any Indebtedness
incurred on such date) as of such date would exceed 3.00 to 1.00, (viii) for so long as the Second Lien Credit Agreement is outstanding,
no Subsidiary may be (x) designated an Unrestricted Subsidiary hereunder unless it simultaneously becomes an “Unrestricted
Subsidiary” under the Second Lien Credit Agreement and (y) designated a Restricted Subsidiary hereunder unless it simultaneously
becomes a “Restricted Subsidiary” under the Second Lien Credit Agreement and (ix) no Unrestricted Subsidiary may engage
in any transaction described in Section 7.8 (with respect to the prepayment of any Indebtedness) if the Borrower is prohibited
from engaging in such transaction.

 

    	73

    	 

    
 

(b)          The
designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Borrower therein, at the date
of designation in an amount equal to the fair market value of the Borrower’s investment therein as determined in good faith
by the board of directors of the Borrower. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall, at
the time of such designation, constitute the incurrence of any Indebtedness or Liens of such Subsidiary existing at such time.
Upon a redesignation of any Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent
Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Borrower’s Investment in such Subsidiary
at the time of such redesignation less (b) the fair market value of the net assets of such Subsidiary at the time of such
redesignation.  Any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at
the time of such transfer, in each case as determined in good faith by the board of directors of the Borrower.  

 

6.12.         Post-Closing
Covenants. Satisfy, to
the extent not satisfied as of the Closing Date, the requirements set forth in Sections 5.1(i), 5.1(j) and 5.1(l) within the time
period set forth in the applicable Section.

 

SECTION
7.          NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as
the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or
the Administrative Agent hereunder, the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly:

 

7.1.          Consolidated
First Lien Net Leverage Ratio. Permit the Consolidated First Lien Net Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending with any fiscal quarter set forth below to exceed the ratio set forth below
opposite such fiscal quarter:

 

	Fiscal
                                                              Quarter Ending 
	 	Consolidated
    First Lien Leverage Ratio
	 	 	 
	December 31, 2011 through September 30, 2012	 	
        5.50:1.00 

	 	 	 
	December 31, 2012 through September 30, 2013	 	
        5.25:1.00 

	 	 	 
	December 31, 2013 through September 30, 2014	 	
        4.75:1.00 

	 	 	 
	December 31, 2014 through September 30, 2015	 	
        4.25:1.00 

	 	 	 
	December 31, 2015 and thereafter	 	3.50:1.00

 

    	74

    	 

    
 

Solely for purposes of determining compliance
with the financial covenant set forth herein, any cash equity contribution (which equity shall be common equity or other equity
on terms and conditions reasonably acceptable to the Administrative Agent) made to the Borrower during the period commencing on
the first day of the relevant fiscal quarter and on or prior to the day that is 10 Business Days after the day on which financial
statements for the relevant fiscal quarter are required to be delivered pursuant to Section 6.1(a) or Section 6.1(b), as applicable,
shall, at the request of Borrower, be included in the calculation of Consolidated EBITDA for the purposes of determining compliance
with the financial covenant set forth herein for periods including such fiscal quarter (any such equity contribution so included
in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”); provided that (a) in each
four fiscal quarter-period there shall be a period of at least two fiscal quarters in which no Specified Equity Contribution is
made and there shall not be more than four Specified Equity Contributions during the term of this Agreement, (b) the amount of
any Specified Equity Contribution shall be no greater than the amount required to cause the Borrower to be in compliance with the
financial covenant set forth herein, (c) there shall be no pro forma reduction in Indebtedness with the proceeds of any Specified
Equity Contribution for the purpose of determining compliance with the financial covenant set forth herein for any fiscal quarter
ended prior to the fiscal quarter in which such Specified Equity Contribution was made and (d) upon the Administrative Agent’s
receipt of any such request of Borrower to include any Specified Equity Contribution in the calculation of Consolidated EBITDA,
until the 10th Business Day after the applicable day on which financial statements are required to be delivered pursuant
to Section 6.1(a) or Section 6.1(b), as applicable, no Credit Party shall exercise any right to accelerate the Loans or terminate
the Commitments and no Credit Party shall exercise any right to foreclose on or take possession of the Collateral solely on the
basis of an Event of Default having occurred and being continuing as a result of a breach of this Section 7.1.  For the avoidance
of doubt, all Specified Equity Contributions shall be disregarded for all other purposes of this Agreement.

 

7.2.          Indebtedness.
Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except:

 

(a)           (i)
Indebtedness of any Loan Party under this Agreement (including Indebtedness in respect of any Incremental Facility) and any Permitted
Refinancing in respect of the Term Loans (any Indebtedness under such Permitted Refinancing, the “First Lien Refinancing
Indebtedness”); provided that, (w) such First Lien Refinancing Indebtedness, if secured, is secured only by the
Collateral on a pari passu or junior basis with the Obligations under this Agreement (provided that the First Lien Refinancing
Indebtedness shall not consist of bank loans that are secured on a pari passu basis with the Obligations under this Agreement),
(x) no Loan Party that is not originally obligated with respect to repayment of the Indebtedness being refinanced is obligated
with respect to the First Lien Refinancing Indebtedness, (y) the terms of any such First Lien Refinancing Indebtedness are (excluding
pricing, fees, rate floors and optional prepayment or redemption terms), taken as a whole, no more favorable to the lenders providing
such First Lien Refinancing Indebtedness than those applicable to the Indebtedness being refinanced (other than any covenants or
other provisions applicable only to periods after the later of the Final Maturity Date and the Final Revolving Termination Date)
and (z) such First Lien Refinancing Indebtedness shall be subject to an intercreditor agreement reasonably satisfactory to the
Administrative Agent;

 

(b)           Indebtedness
of (i) the Borrower to any Restricted Subsidiary, (ii) any Subsidiary Guarantor to the Borrower or any other Restricted Subsidiary
or (iii) any Restricted Subsidiary that is not a Loan Party to any other Restricted Subsidiary that is not a Loan Party;

 

(c)           Guarantee
Obligations incurred by any Group Member of obligations of any Loan Party to the extent such obligations are permitted hereunder;
provided that to the extent any such obligations are subordinated to the Obligations, any such related Guarantee Obligations
incurred by a Loan Party shall be subordinated to the guarantee of such Loan Party of the Obligations on terms no less favorable
to the Lenders than the subordination provisions of the obligations to which such Guarantee Obligation relates;

 

    	75

    	 

    
 

(d)          Indebtedness
of any Loan Party under the Second Lien Credit Agreement in an initial principal amount not to exceed $150,000,000 and any Permitted
Refinancing thereof;

 

(e)          the
Existing Letters of Credit; provided that the aggregate face value of the Existing Letters of Credit shall not exceed $1,250,000
at any time;

 

(f)          Indebtedness
(including, without limitation, Capital Lease Obligations and purchase money obligations) to finance the acquisition of fixed or
capital assets in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding;

 

(g)          Indebtedness
outstanding on the date hereof and listed on Schedule 7.2(g) and any Permitted Refinancing thereof;

 

(h)          Indebtedness
pursuant to the Canadian Government Loan not to exceed CDN $672,000 at any time and any guarantees provided in connection therewith;

 

(i)          Indebtedness
of the Borrower in respect of Specified Cash Management Agreements, netting services, overdraft protections and other cash management,
intercompany cash pooling and similar arrangements in connection with deposit accounts, in each case in the ordinary course of
business;

 

(j)          Indebtedness
arising under any Swap Agreement permitted by Section 7.11;

 

(k)          Indebtedness
(other than for borrowed money) that may be deemed to exist pursuant to any guarantees, warranty or contractual service obligations,
performance, surety, statutory, appeal, bid, prepayment guarantee, payment (other than payment of Indebtedness) or completion of
performance guarantees or similar obligations incurred in the ordinary course of business;

 

(l)          Indebtedness
in respect of workers’ compensation claims, payment obligations in connection with health, disability or other types of social
security benefits, unemployment or other insurance obligations, reclamation and statutory obligations, in each case in the ordinary
course of business;

 

(m)          Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient
funds, so long as such Indebtedness is covered or extinguished within five Business Days;

 

(n)          Indebtedness
consisting of (i) the financing of insurance premiums or self-insurance obligations or (ii) take-or-pay obligations contained in
supply or similar agreements in each case in the ordinary course of business;

 

(o)          client
advance or deposits received in the ordinary course of business;

 

(p)          any
indemnification, purchase price adjustment, earn-out or similar obligations incurred in connection with Investments permitted by
Section 7.7;

 

    	76

    	 

    
 

(q)          Indebtedness
acquired by any Group Member in connection with a Permitted Acquisition; provided, that such Indebtedness is not incurred
in connection with, or in contemplation of, such transaction; provided further, that on the date of the incurrence
of such Indebtedness, after giving effect to the incurrence thereof and otherwise determined on a pro forma basis in accordance
with the provisions set forth in the definition of Consolidated EBITDA, the Consolidated First Lien Net Leverage Ratio would not
exceed the Consolidated First Lien Net Leverage Ratio then in effect pursuant to Section 7.1 minus 0.25:1.00; provided further
that (x) such Indebtedness is not guaranteed in any respect by the Borrower or any Restricted Subsidiary (other than by any such
Person that so becomes a Restricted Subsidiary or is the survivor of a merger with such Person and any of its Restricted Subsidiaries)
and (y) such Person executes a supplement to the Guarantee and Collateral Agreement to the extent required under Section 6.10;

 

(r)          the
capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument
that would appear on a balance sheet of such Person as of such date in accordance with GAAP arising from the Permitted Sale and
Leaseback;

 

(s)          additional
Indebtedness of the Group Members in an aggregate principal amount (for all Group Members) not to exceed $15,000,000 at any one
time outstanding;

 

(t)          Indebtedness
pursuant to an arrangement with a Governmental Authority having terms substantially similar to those of the Canadian Government
Loan in an aggregate amount not to exceed $5,000,000 at any time and guarantees provided in connection therewith;

 

(u)          time-based
licenses of the Borrower or any Subsidiary in the ordinary course of business;

 

(v)         additional
senior unsecured Indebtedness and/or unsecured Indebtedness that is subordinated to the Obligations on terms reasonably satisfactory
to the Administrative Agent; provided that (i) immediately before and immediately after giving effect on a pro forma basis
to the incurrence of such Indebtedness, no Event of Default shall have occurred and be continuing, (ii) immediately after giving
effect to the incurrence of such Indebtedness, the Borrower shall be in pro forma compliance with the covenant set forth in Section
7.1, such compliance to be determined (x) on the basis of the financial information most recently delivered to the Administrative
Agent and the Lenders pursuant to Section 6.1(a) or (b) as though such incurrence had been consummated as of the first day of the
fiscal period covered thereby and (y) disregarding the proceeds of such Indebtedness in calculating such leverage ratio and (iii)
immediately after giving effect to the incurrence of such Indebtedness, the Consolidated Total Net Leverage Ratio shall be less
than or equal to 5.00:1.00, with such Consolidated Total Net Leverage Ratio determined in accordance with clauses (x) and (y) above;
provided further that the aggregate amount of Indebtedness incurred in reliance on this clause (v) by Restricted
Subsidiaries that are not Subsidiary Guarantors shall not exceed $15,000,000; and

 

(w)          any
Permitted Refinancing with respect to Sections 7.2(e) and (q).

 

7.3.          Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except:

 

(a)          Liens
for taxes, assessments or governmental charges or claims not yet due or that are being contested in good faith by appropriate proceedings;
provided, that adequate reserves with respect thereto are maintained on the books of the Borrower or its Restricted Subsidiaries,
as the case may be, in conformity with GAAP;

 

    	77

    	 

    
 

(b)          carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens arising in the ordinary course
of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

 

(c)          pledges
or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

 

(d)          deposits
to secure the performance of tenders, bids, trade contracts (other than for borrowed money), leases, regulatory or statutory obligations,
surety or appeal bonds, tender or performance bonds, return of money bonds, bankers’ acceptances, government contracts and
other obligations of a like nature incurred in the ordinary course of business;

 

(e)          easements,
rights-of-way, municipal and zoning and building ordinances and similar charges, encumbrances, title defects or other irregularities,
governmental restrictions on the use of property or conduct of business, and Liens in favor of governmental authorities and public
utilities, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are
not substantial in amount and that do not in any case materially interfere with the ordinary conduct of the business of the Group
Members (taken as a whole);

 

(f)          Liens
in existence on the date hereof listed on Schedule 7.3(f) and any modifications, replacements, renewals or extensions thereof;
provided, that (i) such Lien shall not apply to any other property or asset (other than products or proceeds) of any Group
Member and (ii) such Lien shall secure only those obligations that it secures on the date hereof and any Permitted Refinancing
thereof permitted by Section 7.2(w);

 

(g)          (i)
Liens securing Indebtedness of any Group Member incurred pursuant to Section 7.2(f) to finance the acquisition of fixed or capital
assets; provided, that (A) such Liens shall be created substantially simultaneously with the acquisition of such fixed or
capital assets and (B) such Liens do not at any time encumber any property other than the property financed by such Indebtedness
and the proceeds and products thereof; and (ii) Liens securing any refinancing with respect to such Indebtedness permitted by Section
7.2;

 

(h)          Liens
created pursuant to the Security Documents (or any First Priority Security Documents (as defined in the Intercreditor Agreement))
and, subject to the Intercreditor Agreement, the Second Lien Security Documents (or any Second Priority Security Documents (as
defined in the Intercreditor Agreement));

 

(i)          any
interest or title of a lessor under any lease or sublease or any licensor under any license or sublicense entered into by any Group
Member in the ordinary course of its business and covering only the assets so leased;

 

(j)          Liens
pursuant to the Canadian Government Loan and Indebtedness permitted pursuant to Section 7.2(t) on the assets, other than real property,
of Register.Com located at 150 Barrington Street, 12N, Halifax, Nova Scotia, and all proceeds thereof;

 

(k)          Liens
in favor of any Loan Party so long as such Liens are junior to the Liens created pursuant to the Security Documents;

 

(l)          Liens
arising from filing Uniform Commercial Code or personal property security financing statements (or substantially equivalent filings
outside of the United States) regarding leases;

 

    	78

    	 

    
 

(m)          any
option or other agreement to purchase any asset of any Group Member, the purchase, sale or other disposition of which is not prohibited
by Section 7.5;

 

(n)          Liens
arising from the rendering of an interim or final judgment or order against any Group Member that does not give rise to an Event
of Default, and Liens imposed against any Group Member in connection with any claim against such Group Member so long as the claim
is being contested in good faith and does not materially adversely affect the business and operations of the Group Members, taken
as a whole;

 

(o)          Liens
on property (including Capital Stock) existing at the time of the permitted acquisition of such property by any Group Member to
the extent the Liens on such assets secure Indebtedness permitted by Section 7.2(q) or other obligations permitted by this Agreement,
provided that such Liens attach at all times only to the same assets or category of assets that such Liens (other than after
acquired property that is affixed or incorporated into the property covered by such Lien) attached to, and secure only the same
Indebtedness or obligations (or any Permitted Refinancing permitted by Section 7.2(w)) that such Liens secured, immediately prior
to such permitted acquisition;

 

(p)          cash
collateral arrangements made with respect to Existing Letters of Credit permitted by Section 7.2(e);

 

(q)          licenses,
sublicenses, leases and subleases of Intellectual Property of any Group Member in the ordinary course of business;

 

(r)          Liens
not otherwise permitted by this Section so long as the aggregate principal amount of the obligations secured thereby does not exceed
(as to all Group Members) $10,000,000 at any one time.

 

7.4.         Fundamental
Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution), or Dispose of all or substantially all of its property or business, except that:

 

(a)          any
Restricted Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided, that the Borrower
shall be the continuing or surviving corporation) or with or into any other Restricted Subsidiary (provided, that when any
Subsidiary Guarantor is merging with or into another Restricted Subsidiary, such Subsidiary Guarantor shall be the continuing or
surviving corporation or the continuing or surviving corporation shall, substantially simultaneously with such merger or consolidation,
become a Subsidiary Guarantor);

 

(b)          (i)
any Restricted Subsidiary of the Borrower may Dispose of any or all of its assets (x) to the Borrower or any Subsidiary Guarantor
(upon voluntary liquidation or otherwise) or (y) pursuant to a Disposition permitted by Section 7.5 and (ii) the Borrower may dispose
of its assets pursuant to a Disposition permitted by Section 7.5;

 

(c)          any
Restricted Subsidiary of the Borrower that is not a Loan Party may dispose of all or substantially all of its assets to any Group
Member;

 

(d)          the
Group Members may consummate the Acquisition in accordance with the Acquisition Agreement; and

 

    	79

    	 

    
 

(e)          any
Investment expressly permitted by Section 7.7 may be structured as a merger, consolidation or amalgamation.

 

7.5.         Disposition
of Property. Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any Person, except:

 

(a)          the
Disposition of obsolete, worn out, retired or surplus property (other than current assets) in the ordinary course of business and
Dispositions of property (other than current assets) no longer used or useful in the conduct of the business of Group Members;

 

(b)          Dispositions
of inventory and Cash Equivalents in the ordinary course of business;

 

(c)          Dispositions
permitted by clause (i) of Section 7.4(b);

 

(d)          the
sale or issuance of any Restricted Subsidiary’s Capital Stock to the Borrower or any Subsidiary Guarantor;

 

(e)          Dispositions
consisting of the sale, transfer, assignment or other disposition of unpaid and overdue accounts receivable in connection with
the collection, compromise or settlement thereof in the ordinary course of business and not as part of a financing transaction;

 

(f)          Dispositions
of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property;

 

(g)          Dispositions
resulting from casualty events;

 

(h)          licenses,
sublicenses, leases and subleases of Intellectual Property of the Group Members in the ordinary course of business;

 

(i)          the
Disposition of any property acquired in connection with a Permitted Acquisition;

 

(j)          the
Disposition of other property having a fair market value not to exceed $7,500,000 in the aggregate for any period of two fiscal
years of the Borrower;

 

(k)          the
Orange Soda Disposition; and

 

(l)          Dispositions
of other property in an aggregate amount not to exceed $20,000,000; provided that (i) such Disposition shall be made for
fair value (determined as if such Disposition was consummated on an arms’-length basis), (ii) the consideration for such
sale or other disposition consists of at least 75% in cash and Cash Equivalents and (iii) no Event of Default then exists or would
result therefrom.

 

7.6.         Restricted
Payments. Declare or pay any dividend (other than dividends payable solely in common stock (including warrants, rights or
options relating thereto of the Person making such dividend)) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock
of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of any Group Member (collectively, “Restricted Payments”),
except that:

 

    	80

    	 

    
 

(a)          any
Restricted Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor;

 

(b)          any
Restricted Subsidiary that is not a Loan Party may make Restricted Payments to any other Restricted Subsidiary that is not a Loan
Party;

 

(c)          the
Borrower may make repurchases of Capital Stock deemed to occur upon (i) the exercise of stock options, rights or warrants issued
in accordance with any stock option plan, any management, director and/or employee stock ownership or incentive plan if such Capital
Stock represents a portion of the exercise price of such options, rights or warrants or (ii) the election of an employee to have
the Borrower withhold shares of Capital Stock to cover withholding taxes due upon the vesting of restricted stock awards with any
stock option plan or any management, director and/or employee stock ownership or incentive plan to the extent that such Capital
Stock represents the amount that the Borrower is required to withhold to cover state and federal income taxes;

 

(d)          any
Group Member may make any Restricted Payment required to be made pursuant to the Acquisition Agreement as in effect on the Closing
Date;

 

(e)          the
Borrower may make repurchases of its Capital Stock not to exceed (x) $5,000,000 in any fiscal year of the Borrower if, at the time
of the making of such repurchase, the Consolidated First Lien Net Leverage Ratio shall be less than 3.00:1.00 but greater than
2.25:1.00, or (y) $10,000,000 in any fiscal year of the Borrower, if at the time of the making of such repurchase, the Consolidated
First Lien Net Leverage Ratio shall be less than or equal to 2.25:1.00, in each case determined on a pro forma basis giving effect
to such repurchase, as if such repurchase had been made at the beginning of the most recent Reference Period; and

 

(f)          so
long as (i) no Default or Event of Default then exists or would result therefrom and (ii) immediately after giving effect to the
making of such Restricted Payment and the incurrence of any Indebtedness in connection therewith, the Consolidated First Lien Net
Leverage Ratio shall be equal to or less than 3.25:1.00, such compliance to be determined (x) on the basis of the financial information
most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.1(a) or (b) as though such incurrence
had been consummated as of the first day of the fiscal period covered thereby and (y) disregarding the proceeds of any such Indebtedness
in calculating such leverage ratio, the Borrower may make Restricted Payments in an aggregate amount not to exceed the Available
Amount; provided, that the requirement set forth in clause (ii) above shall not apply until the aggregate amount of Restricted
Payments made pursuant to this Section 7.6(f) shall exceed $5,000,000.

 

7.7.         Investments.
Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other
investment in, any other Person (all of the foregoing, “Investments”), except:

 

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

 

(b)          investments
in Cash Equivalents;

 

    	81

    	 

    
 

(c)          Guarantee
Obligations permitted by Section 7.2;

 

(d)          loans
and advances to directors, officers and employees of any Group Member in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for the Group Members not to exceed $1,000,000 at any one time outstanding;

 

(e)          the
Acquisition;

 

(f)          Investments
in assets useful in the business, other than current assets, of the Group Members made by any Group Member with the proceeds of
any Reinvestment Deferred Amount;

 

(g)          intercompany
Investments (i) by any Group Member in the Borrower or any Person that, prior to such investment, is a Subsidiary Guarantor and
(ii) by any Restricted Subsidiary that is not a Loan Party in any other Restricted Subsidiary that is not a Loan Party; and

 

(h)          the
purchase or other acquisition (a “Permitted Acquisition”) of all of the Capital Stock of, or all or substantially
all of the property of, any Person that, upon the consummation thereof, will be wholly-owned directly by the Borrower or one or
more of its wholly-owned Restricted Subsidiaries (including as a result of a merger or consolidation); provided, that with
respect to each purchase or other acquisition made pursuant to this Section 7.7(h):

 

(i)          any
such newly-created or acquired Subsidiary shall comply with the requirements of Section 6.10;

 

(ii)         the
lines of business of the Person to be (or the property of which is to be) so purchased or otherwise acquired shall be substantially
the same lines of business, or reasonably related, incidental or complimentary thereto, as one or more of the businesses in which
the Group Members are engaged on the date of this Agreement (after giving effect to the Acquisition);

 

(iii)        (A)
immediately before and immediately after giving effect on a pro forma basis to any such purchase or other acquisition, no Event
of Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition
(and any related Dispositions and retirement of Indebtedness), the Group Members shall be in pro forma compliance with the covenant
set forth in Section 7.1, such compliance to be determined (i) on the basis of the financial information most recently delivered
to the Administrative Agent and the Lenders pursuant to Section 6.1(a) or (b) as though such purchase or other acquisition had
been consummated as of the first day of the fiscal period covered thereby, (ii) as if such purchase or acquisition is a Material
Acquisition (even if such purchase or acquisition does not involve the payment of consideration by the Group Members in excess
of $10,000,000) and (iii) disregarding the proceeds of any Indebtedness incurred in connection therewith in calculating the Consolidated
First Lien Net Leverage Ratio; and

 

(iv)        the
aggregate consideration (whether cash or property, as valued in good faith by the board of directors of the Borrower) given by
the Group Members for all acquisitions consummated after the Closing Date in reliance on this clause (h) of Persons that do not,
upon the acquisition thereof, become Subsidiary Guarantors shall not exceed the Available Amount.

 

    	82

    	 

    
 

(i)          promissory
notes and other non-cash consideration received in connection with Dispositions permitted by Section 7.5 or received in connection
with collections and compromises of accounts receivable in the ordinary course of business;

 

(j)          Investments
acquired as a result of the purchase or other acquisition by any Group Member in connection with a Permitted Acquisition; provided,
that such Investments were not made in contemplation with such Permitted Acquisition and were in existence at the time of such
Permitted Acquisition;

 

(k)          Investments
in joint ventures in an aggregate amount (valued at cost) not to exceed $10,000,000; provided, that with respect to joint
ventures in which no Group Member has any existing Investment on the Closing Date, the aggregate amount (valued at cost) of such
Investments shall not exceed $5,000,000 during the term of this Agreement;

 

(l)          in
addition to Investments otherwise expressly permitted by this Section, Investments by the Group Members in an aggregate amount
(valued at cost) not to exceed $5,000,000 during the term of this Agreement;

 

(m)          the
Group Members may make other Investments in an aggregate amount not to exceed the Available Amount at such time; and

 

(n)          Investments
existing on the date hereof and set forth on Schedule 7.7(n) and any modification, refinancing, renewal, refunding, replacement
or extension thereof; provided that the amount of any Investment permitted pursuant to this Section 7.7(k) is not increased
from the amount of such Investment on the Closing Date.

 

For purposes of calculating the amount
of any Investment, such amount shall equal (x) the amount actually invested less (y) any repayments, interest, returns, profits,
dividends, distributions, income and similar amounts actually received in cash from such Investment (from dispositions or otherwise)
(which amount referred to in this clause (y) shall not exceed the amount of such Investment at the time such Investment was made).

 

7.8.         Payments
and Modifications of Certain Debt Instruments. (a) Make or offer to make any optional or voluntary payment or prepayment of
principal, repurchase or redemption of or otherwise optionally or voluntarily defease or segregate funds with respect to any unsecured
Indebtedness or any Subordinated Indebtedness, other than (i) with the Declined Prepayment Amount to the extent that it has not
otherwise been applied by the Borrower to make any payment of any other Indebtedness of the Group Members and (ii) in an amount
equal to the Available Amount; provided that no payment of Subordinated Indebtedness (including any scheduled payments
of principal or interest) shall be permitted if an Event of Default has occurred and is continuing or if such payment is otherwise
in violation of the subordination provisions of such Subordinated Indebtedness.

 

(b) Amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any
unsecured Indebtedness or any Subordinated Indebtedness (other than any such amendment, modification, waiver or other change that
(i) would not adversely affect the interests of the Lenders and (ii) does not involve the payment of a consent fee).

 

    	83

    	 

    
 

(c) Designate any Indebtedness
(other than (i) obligations of the Loan Parties pursuant to the Loan Documents, the Second Lien Loan Documents and Indebtedness
incurred pursuant to Section 7.2(b) and (ii) obligations of the Loan Parties with respect to First Lien Refinancing Indebtedness
and any Permitted Refinancing of the Indebtedness outstanding under the Second Lien Loan Documents or under Section 7.2(b), which
obligations are, in each case, pari passu in right of payment to the Obligations) as “Senior Indebtedness” (or any
other defined term having a similar purpose) for the purposes of any Subordinated Indebtedness.

 

(d) Amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of the
Second Lien Loan Documents in a manner prohibited by the Intercreditor Agreement.

 

7.9.           Transactions
with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any Affiliate (other than the Borrower or any Subsidiary
Guarantor) unless such transaction is (a) otherwise permitted under this Agreement and (b) upon fair and reasonable
terms no less favorable to the Borrower or any of its relevant Restricted Subsidiaries than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate; provided, that the foregoing restriction in clause (b) shall
not apply to (i) transactions between or among the Loan Parties; (ii) transactions permitted under Section 7.6; (iii) the payment
of customary directors’ fees and indemnification and reimbursement of expenses to directors, officers or employees; (iv)
any issuance 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; (v) employment
and severance arrangements entered into in the ordinary course of business between the Borrower or any Subsidiary and any employee
thereof and approved by the Borrower’s board of directors; and (vi) intercompany transactions undertaken in good faith (as
certified by a Responsible Officer of the Borrower) for the purpose of improving the consolidated tax efficiency of the Group
Members.

 

7.10.         Sales
and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Group Member of real or personal
property that has been or is to be sold or transferred by any Group Member to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property or rental obligations of any Group Member, other
than the Permitted Sale and Leaseback.

 

7.11.         Swap
Agreements. Enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which any
Group Member has actual exposure (other than those in respect of Capital Stock) and (b) Swap Agreements entered into in order
to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating
rate, from floating to fixed rates or otherwise) with respect to any interest-bearing liability or investment of any Group Member.

 

7.12.         Changes
in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower’s
method of determining fiscal quarters.

 

    	84

    	 

    
 

7.13.         Negative
Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of the
any Group Member to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned
or hereafter acquired, to secure its obligations under the Loan Documents to which it is a party other than (a) (i) this Agreement,
the other Loan Documents and the Second Lien Loan Documents, (ii) any agreement governing any Indebtedness incurred pursuant to
Section 7.2(v), so long as any such agreement is not more restrictive than the Loan Documents and (iii) any agreement governing
any Permitted Refinancing in respect of the Loans, the loans under the Second Lien Credit Agreement or Indebtedness incurred pursuant
to Section 7.2(v), in each case, with respect to this clause (iii), so long as any such agreement is not more restrictive than
the Loan Documents, the Second Lien Loan Documents and such Indebtedness, as applicable, (b) any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), (c) any agreement in effect at the time any Restricted Subsidiary becomes a Restricted
Subsidiary of the Borrower, so long as such agreement was not entered into in contemplation of such Person becoming a Restricted
Subsidiary of the Borrower, as such agreement may be amended, restated, supplemented, modified extended renewed or replaced, so
long as such amendment, restatement, supplement, modification, extension, renewal or replacement does not expand in any material
respect the scope of any restriction contemplated by this Section 7.13 contained therein or (d) customary provisions restricting
assignments, subletting, sublicensing, pledging or other transfers contained in leases, subleases, licenses or sublicenses, so
long as such restrictions are limited to the property or assets subject to such leases, subleases, licenses or sublicenses, as
the case may be.

 

7.14.         Clauses
Restricting Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary of the Borrower to (a) make Restricted Payments in respect of any Capital Stock of
such Restricted Subsidiary held by, or pay any Indebtedness owed to, any Group Member, (b) make loans or advances to, or other
Investments in, any Group Member or (c) transfer any of its assets to any Group Member, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under (A) the Loan Documents or the Second Lien Loan Documents, (B)
any agreement governing Indebtedness incurred pursuant to Section 7.2(v) or (C) any agreement governing Permitted Refinancing
in respect of the Loans, any loans under the Second Lien Credit Agreement or any Indebtedness incurred pursuant to Section 7.2(v),
in each case so long as any such agreement is not more restrictive than the Loan Documents, the Second Lien Loan Documents and
such Indebtedness, as applicable, (ii) any restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement
that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary, (iii) any restriction under any agreement in effect at the time any Restricted Subsidiary becomes a Restricted
Subsidiary of the Borrower, so long as such agreement was not entered into in contemplation of such Person becoming a Restricted
Subsidiary of the Borrower, as such agreement may be amended, restated, supplemented, modified extended renewed or replaced, so
long as such amendment, restatement, supplement, modification, extension, renewal or replacement does not expand in any material
respect the scope of any restriction contemplated by this Section 7.14 contained therein or (iv) customary provisions restricting
assignments, subletting, sublicensing, pledging or other transfers contained in leases, subleases, licenses or sublicenses, so
long as such restrictions are limited to the property or assets subject to such leases, subleases, licenses or sublicenses, as
the case may be.

 

7.15.         Lines
of Business. Enter into any business, either directly or through any Restricted Subsidiary, except for those businesses in
which the Group Members are engaged on the date of this Agreement (after giving effect to the Acquisition) or that are reasonably
related, incidental or complementary thereto, or reasonable extensions thereof.

 

SECTION
8.          EVENTS OF DEFAULT

 

8.1.           Events
of Default. If any of the following events shall occur and be continuing:

  

(a)            the
Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof;
or the Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest or other amount becomes due in accordance with the terms
hereof; or

 

    	85

    	 

    
 

(b)          any
representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or
any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made;
or

 

(c)          any
Loan Party shall default in the observance or performance of any agreement contained in Section 3.1(c), clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7 of this Agreement or Section 5.5(b) of the Guarantee and
Collateral Agreement; or

 

(d)          any
Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for
a period of 30 days after notice to the Borrower from the Administrative Agent or the Required Lenders; or

 

(e)          the
Borrower or any Restricted Subsidiary shall (i) default in making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, and including, for purposes of this Section 8.1(e), obligations in respect of Swap Agreements, but excluding
the Loans) on the scheduled or original due date with respect thereto; (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness
or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness
(or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness
to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall
not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the aggregate
outstanding principal amount of which is $10,000,000 or more; or

 

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

 

    	86

    	 

    
 

(g)          (i)
an ERISA Event or a Foreign Plan Event shall have occurred, (ii) a trustee shall be appointed by a United States district court
to administer any Pension Plan, (iii) the PBGC shall institute proceedings to terminate any Pension Plan(s), (iv) any Group Member
or any of their respective ERISA Affiliates shall have been notified by the sponsor of a Multiemployer Plan that it has incurred
or will be assessed Withdrawal Liability to such Multiemployer Plan and such entity does not have reasonable grounds for contesting
such Withdrawal Liability or is not contesting such Withdrawal Liability in a timely and appropriate manner; or (v) any other event
or condition shall occur or exist with respect to a Plan, a Foreign Benefit Arrangement or a Foreign Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, could reasonably
be expected to have a Material Adverse Effect; or

 

(h)          one
or more final monetary judgments or decrees shall be entered against any Group Member (to the extent not paid or covered by insurance
as to which the relevant insurance company has not denied coverage) of $10,000,000 or more, which such judgments or decrees are
not paid, discharged, satisfied, annulled, rescinded, vacated, discharged, stayed or bonded pending appeal for a period of 60 days;
or

 

(i)          any
of the Security Documents or the Intercreditor Agreement shall cease, for any reason, to be in full force and effect, or any Loan
Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby (and, for the avoidance of doubt, as required by
the Intercreditor Agreement); or

 

(j)          the
guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

 

(k)          a
Change in Control shall occur;

 

then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the Revolving Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount
of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired
or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower hereunder and under the other Loan Documents shall have been paid in full,
the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto). Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrower.

 

    	87

    	 

    
 

8.2.         Application
of Proceeds. The proceeds received by the Administrative Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the Administrative Agent of its remedies shall be applied,
in full or in part, together with any other sums then held by the Administrative Agent pursuant to this Agreement, promptly by
the Administrative Agent as follows:

 

(a)          First,
to the payment of all reasonable costs and expenses, fees, commissions and taxes of such sale, collection or other realization
including compensation to the Administrative Agent and its agents and counsel, and all expenses, liabilities and advances made
or incurred by the Administrative Agent in connection therewith and all amounts for which the Administrative Agent is entitled
to indemnification pursuant to the provisions of any Loan Document, together with interest on each such amount pursuant to Section
2.14 from and after the date such amount is due, owing or unpaid until paid in full;  

 

(b)          Second,
to the payment of all other reasonable out-of-pocket costs and expenses of such sale, collection or other realization including
compensation to the other Secured Parties and their agents and counsel and all costs, liabilities and advances made or incurred
by the other Secured Parties in connection therewith, together with interest on each such amount at the highest rate then in effect
under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;  

 

(c)          Third,
to the payment in full in cash of the principal amount of the Obligations (excluding Obligations in respect of Specified Cash Management
Agreements), any interest and premium thereon and any breakage, termination or other payments under agreements giving rise to Obligations
and any interest accrued thereon; and  

 

(d)          Fourth,
to the payment in full in cash of the principal amount of the Obligations in respect of Specified Cash Management Agreements,
and any interest and premium thereon; and  

 

(e)          Fifth,
the balance remaining after the Obligations shall have been paid in full, no Letters of Credit shall be outstanding and the Commitments
shall have terminated, if any, to the person lawfully entitled thereto (including the applicable Loan Party or its successors or
assigns) or as a court of competent jurisdiction may direct.  

 

    	88

    	 

    
 

In the event that any such proceeds are insufficient
to pay in full the items described in clauses (a) through (e) of this Section 8.2, the Loan Parties shall remain liable, jointly
and severally, for any deficiency.

 

SECTION
9.          THE AGENTS

 

9.1.          Appointment.
Each Lender hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement,
the other Loan Documents, and the Specified Swap Agreements and each such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the provisions of this Agreement, the other Loan Documents, and the
Specified Swap Agreements and to exercise such powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement, the other Loan Documents, and the Specified Swap Agreements, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Administrative Agent.

 

9.2.          Delegation
of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected
by it with reasonable care.

 

9.3.          Exculpatory
Provisions. Neither any Agent nor any of their respective officers, directors, employees, agents, advisors, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection
with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful
misconduct) 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 Agents 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 or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder.
The Agents shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books
or records of any Loan Party.

 

9.4.          Reliance
by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy or email message, statement, order
or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants
and other experts selected by the Administrative Agent. If the payee of any Note is listed as a Lender in the Register, the Administrative
Agent may deem and treat the payee of any Note as the owner thereof to the extent of such Payee’s registered principal and
stated interest on any Loan for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have
been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required
Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.

 

    	89

    	 

    
 

9.5.          Notice
of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default unless the Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or,
if so specified by this Agreement, all Lenders); provided, that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

 

9.6.          Non-Reliance
on Agents and Other Lenders. Each Lender expressly acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, advisors, attorneys-in-fact or affiliates have made any representations or warranties to it and
that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party,
shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the Agents
that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans hereunder
and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and
to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into
the possession of the Administrative Agent or any of its officers, directors, employees, agents, advisors, attorneys-in-fact or
affiliates.

 

    	90

    	 

    
 

9.7.          Indemnification.
The Lenders agree to indemnify the Administrative Agent and its officers, directors, employees, affiliates, agents, advisors and
controlling 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 Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind 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 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 no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements 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.

 

9.8.          Agent
in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in
any kind of business with any Loan Party as though such Agent were not an Agent. With respect to its Loans made or renewed by
it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and
the terms “Lender” and “Lenders” shall include each Agent in its individual capacity.

 

9.9.          Successor
Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders
and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents,
then the Required Lenders shall appoint a successor agent for the Lenders, which shall be a financial institution, which successor
agent shall (unless an Event of Default under Section 8.1(a) or Section 8.1(f) with respect to the Borrower shall have occurred
and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative
Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s
rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has
accepted appointment as Administrative Agent by the date that is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders
shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 9 and of Section 10.5 shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

 

9.10.        Agents.
None of the Co-Syndication Agents or the Co-Documentation Agents shall have any duties or responsibilities hereunder in its capacity
as such.

 

    	91

    	 

    
 

SECTION
10.         MISCELLANEOUS

 

10.1.        Amendments
and Waivers. Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this Section 10.1. The Required Lenders and each Loan Party party to the
relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party
party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto
and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements
of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided that no
such waiver and no such amendment, supplement or modification shall (i) forgive the principal amount or extend the final scheduled
date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest or fee payable hereunder (except (x) 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 Majority Facility Lenders of each adversely affected
Facility) and (y) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall
not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any
payment thereof, or increase the amount or extend the expiration date of any Lender’s Revolving Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii) eliminate or reduce the voting rights of any Lender
under this Section 10.1 without the written consent of such Lender; (iii) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement
and the other Loan Documents, release all or substantially all of the Collateral or release all or substantially all of the Subsidiary
Guarantors from their obligations under the Guarantee and Collateral Agreement, in each case without the written consent of all
Lenders; (iv)  reduce the percentage specified in the definition of Majority Facility Lenders with respect to any Facility
without the written consent of all Lenders under such Facility; (v) amend, modify or waive any provision of Section 9 or any other
provision of any Loan Document that primarily affects the Administrative Agent without the written consent of the Administrative
Agent; (vi) amend, modify or waive any provision of Section 2.6 or 2.7 without the written consent of the Swingline Lender; (vii)
amend, modify or waive any provision of Section 3 without the written consent of the Issuing Lender; (viii) amend Section 2.23
without the written consent of the Required Lenders, the Administrative Agent, the Swingline Lender and the Issuing Lender; (ix)
amend, modify or waive any provision of Section 8.2 without the written consent of all Lenders; or (x) amend Section 3.1(c) without
the consent of Lenders holding more than 50% of the Revolving Commitments in respect of the applicable maturing Revolving Commitments
(or, if the Revolving Commitments in respect of such tranche have been terminated, the Total Revolving Extensions of Credit then
outstanding in respect of such maturing tranche); provided further that (A) this Agreement and the other Loan Documents
may be amended solely with the consent of the Administrative Agent to incorporate the terms of any Extension or any Incremental
Facility, (B) the conditions set forth in Section 5.2 may be waived solely with the consent of the Majority Facility Lenders in
respect of the Revolving Facility and (C) this Agreement may be amended solely with the consent of the Borrower and the Majority
Facility Lenders with respect to the applicable Facility with respect to any amendments or modifications that affect only such
Facility (it being understood that increases in the Applicable Margin, amendments or modifications to the amortization of the
Term Loans as in effect on the Restatement Effective Date, any amendment to the Maturity Date such that the Term Loans mature
prior to the Maturity Date as in effect on the Restatement Effective Date and any waiver of conditions to the provision of any
Incremental Facility shall be deemed to affect each Facility). Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and
all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event
of Default, or impair any right consequent thereon. To the extent that this Section 10.1 requires the consent of all Lenders to
any amendment, waiver or modification, a Defaulting Lender’s vote shall not be included; provided, that (i) such
Defaulting Lender’s Commitment may not be increased or extended without its consent and (ii) the principal amount of, or
interest or fees payable on, Loans or L/C Disbursements may not be reduced or excused or the scheduled date of payment may not
be postponed as to such Defaulting Lender without such Defaulting Lender’s consent.

 

    	92

    	 

    

 

In connection with any proposed amendment,
modification, waiver or termination (a “Proposed Change”) requiring the consent of all Lenders or all directly
and adversely affected Lenders, if the consent of the Required Lenders (and, to the extent any Proposed Change requires the consent
of Lenders holding Loans of any Class pursuant to clause (v) of the preceding paragraph of this Section, the consent of the
Majority Facility Lenders of the outstanding Loans and unused Commitments of such Class) to such Proposed Change is obtained, but
the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is
not obtained as described in this Section 10.1 being referred to as a “Non-Consenting Lender”), then, so long
as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and
effort, upon three Business Days’ written notice to such Non-Consenting Lender and the Administrative Agent, require such
Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 10.6; provided that such Lender shall be deemed to have executed the applicable Assignment
and Assumption), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided, that (a) the Borrower shall have
received the prior written consent of the Administrative Agent to the extent such consent would be required under Section 10.6(b)
for an assignment of Loans or Commitments, as applicable (and, if a Revolving Commitment is being assigned, each Issuing Lender
and Swingline Lender), which consent shall not unreasonably be withheld, (b) such Non-Consenting Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations in L/C Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder (including amounts payable
pursuant to Section 2.20), from the assignee (to the extent of such outstanding principal and accrued interest and fees)
or the Borrower (in the case of all other amounts), (c) unless waived, the Borrower or such assignee shall have paid to the
Administrative Agent the processing and recordation fee specified in Section 10.6(b) and (d) the assignee shall consent to such
Proposed Change. At any time on or prior to the first anniversary after the Restatement Effective Date, if the Proposed Change
to which the Non-Consenting Lender withholds consent would result in a prepayment premium being payable to any Lender pursuant
to Section 2.10 (assuming no waiver of such prepayment premium), the Borrower shall be required to pay such Non-Consenting Lender
a 1% premium on the amount of such Non-Consenting Lender’s Term Loans in connection with any assignment thereof pursuant
to this paragraph.

 

Notwithstanding the foregoing, this Agreement
may be amended (x) with the written consent of the Administrative Agent, the Borrower and the Lenders providing the relevant Replacement
Term Loans (as defined below) to permit the refinancing, replacement or modification of all or any portion of the outstanding
Term Loans or the term loans under any Incremental Term Facility (“Replaced Term Loans”) with a replacement
term loan hereunder (“Replacement Term Loans”); provided, that (a) the aggregate principal amount of
such Replacement Term Loans shall not exceed the aggregate principal amount of such Replaced Term Loans, (b) the terms of Replacement
Term Loans are (excluding pricing, fees, rate floors and optional prepayment or redemption terms), taken as a whole, no more favorable
to the lenders providing such Replacement Term Loans than those applicable to the Replaced Term Loans (other than any covenants
or other provisions applicable only to periods after the later of the Final Maturity Date and the Final Revolving Termination
Date), (c) the maturity date of such Replacement Term Loans shall not be earlier than the maturity date of the Replaced Term Loans
and (d) the weighted average life to maturity of such Replacement Term Loans shall not be shorter than the weighted average life
to maturity of such Replaced Term Loans at the time of such refinancing and (y) with the written consent of the Administrative
Agent, the Borrower and the Lenders providing the relevant Replacement Revolving Facility (as defined below) to permit the refinancing,
replacement or modification of all or any portion of the Revolving Facility or any Incremental Revolving Facility (a “Replaced
Revolving Facility”) with a replacement revolving facility hereunder (a “Replacement Revolving Facility”);
provided that (a) the aggregate amount of such Replacement Revolving Facility shall not exceed the aggregate amount of
such Replaced Revolving Facility, (b) the termination date of such Replacement Revolving Facility shall be no earlier than the
termination date of the Replaced Revolving Facility and (c) the terms of any such Replacement Revolving Facility are (excluding
pricing, fees, rate floors and optional prepayment or redemption terms), taken as a whole, no more favorable to the lenders providing
such Replacement Revolving Facility than those applicable to the Replaced Revolving Facility (other than any covenants or other
provisions applicable only to periods after the later of the Final Maturity Date and the Final Revolving Termination Date).   

 

    	93

    	 

    
 

10.2.          Notices.
All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy),
and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business
Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows
in the case of the Borrower and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the
Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties
hereto:

 

	Borrower:	
        12808 Gran Bay Parkway West

        Jacksonville, Florida 32258

	 	Attention:  Chief Financial Officer
	 	Facsimile:  (904) 880-0350
	 	Telephone:  (904) 680-6600
	 	 
	Administrative Agent:	
        JPMorgan Chase Bank, N.A.

        Address: 1111 Fannin Street, Floor 10

        Houston, Texas 77002-6925

	 	Attention: Talitha Humes

Facsimile: (713) 750-2878

Telephone: (713) 427-6190

 

	 	
         With copies to:

         

        JPMorgan Chase Bank, N.A.

        Address: 1111 Fannin Street, Floor 10

        Houston, Texas 77002-6925

        Attention: Jeremy Jones

        Facsimile: (713) 750-2878

        Telephone: ( 713) 750-3512

         

        JPMorgan Chase Bank, N.A.

        Address: 383 Madison Avenue, Floor 24

        New York, New York 10179

        Attention: Tina Ruyter

        Facsimile: (212) 270-5127

        Telephone: (212) 270-4676

 

provided, that any notice, request or demand to or upon
the Administrative Agent or the Lenders shall not be effective until received.

 

    	94

    	 

    
 

Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent;
provided, that the foregoing shall not apply to notices pursuant to Section 2 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.

 

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

 

10.4.          Survival
of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any
document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery
of this Agreement and the making of the Loans and other extensions of credit hereunder.

 

10.5.          Payment
of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Administrative Agent and the Lead Arrangers for all
of their respective reasonable and documented out-of-pocket costs and expenses incurred in connection with the syndication of
the Facilities and the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration
of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of one firm of counsel to
the Administrative Agent and the Lead Arrangers (and, if necessary, one local counsel in any relevant jurisdiction) and filing
and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Borrower prior to the Closing
Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other
periodic basis as the Administrative Agent shall deem appropriate, in each case, together with backup documentation supporting
such reimbursement request, (b) to pay or reimburse each Lender and the Administrative Agent for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement,
the other Loan Documents and any such other documents, including the fees and disbursements of counsel to the Administrative Agent
and the Lenders; provided, that the Borrower shall not be liable for the fees and disbursements of more than one separate
firm for the Administrative Agent and the Lenders (unless there shall exist an actual conflict of interest among the Administrative
Agent and the Lenders (or among the Lenders), in which case the Borrower shall be liable for the fees and disbursements of another
separate counsel for the affected Person) and one local counsel in any material jurisdiction, (c) to pay, indemnify, and hold
each Lender and the Administrative Agent harmless from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and similar taxes, if any, other than those found by a final
and nonappealable decision of a court of competent jurisdiction to have been caused by the willful misconduct, bad faith or gross
negligence of the Administrative Agent or any Lender that may be payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent and their respective officers, directors,
employees, affiliates, agents, advisors, partners, representatives and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses, damages, penalties, judgments, suits or actions
or other legal proceedings (whether brought by a third party or the Borrower or other Loan Party), costs, expenses or disbursements
of any kind or nature whatsoever arising out of the execution, delivery, enforcement, performance and administration of this Agreement,
the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans
or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower
or any Subsidiary or any of the Properties, any Environmental Claims, and the reasonable and documented fees and expenses of legal
counsel (provided that the Borrower shall not be liable for the fees and expenses of more than one separate firm for the
Indemnitees (unless there shall be an actual conflict of interest among the Indemnitees, in which case the Borrower shall be liable
for the fees and expenses of another separate counsel for the affected Indemnitees) and one local counsel in any material jurisdiction)
in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing
in this clause (d), collectively, the “Indemnified Liabilities”); provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities (x) to the extent such Indemnified Liabilities
are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence,
bad faith or willful misconduct of such Indemnitee or any of its affiliates or their respective officers, directors or employees
or (y) arising out of a dispute solely between Indemnitees not involving an act or omission by the Borrower or any of its Affiliates
(other than any such indemnified liabilities asserted against any Indemnitee in its capacity, or in fulfilling its role, as an
agent or Lead Arranger or similar role for any Facility (including any Incremental Facility)).  The
Borrower shall not be liable to for any special, indirect, consequential or punitive damages (other than as required pursuant
to Section 10.5(c) or (d)). Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive,
all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them
might have by statute or otherwise against any Indemnitee. All amounts due under this Section 10.5 shall be payable not later
than 10 days after written demand therefor. Statements payable by the Borrower pursuant to this Section 10.5 shall be submitted
to Chief Financial Officer (Telephone No. (904) 680-6600) (Telecopy No. (904) 880-0350), at the address of the Borrower
set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a written notice
to the Administrative Agent. The agreements in this Section 10.5 shall survive the termination of this Agreement and the repayment
of the Loans and all other amounts payable hereunder. 

 

    	95

    	 

    
 

10.6.       Successors
and Assigns; Participations and Assignments. (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 Lender
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.

 

(b)          (i)
Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (each, an “Assignee”)
all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans
at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)         the
Borrower; provided, that no consent of the Borrower shall be required (i) for an assignment of all or any portion of a Term
Loan to a Lender, an Affiliate of a Lender or an Approved Fund (as defined below), (ii) for an assignment of Revolving Commitments
or Revolving Loans to a Revolving Lender or an Affiliate of a Revolving Lender or (iii) if an Event of Default under Section 8.1(a)
or (f) has occurred and is continuing, for an assignment of all or any portion of a Term Loan, Revolving Commitments or Revolving
Loans to any other Person; provided further that, prior to the date that is 30 days after the Restatement Effective
Date, no consent of the Borrower shall be required with respect to any assignment of all or any portion of a Loan in connection
with the initial syndication of the Loans; provided further that the Borrower shall be deemed to have consented to
any assignment of a Term Loan unless the Borrower has objected thereto by written notice to the Administrative Agent within 10
Business Days after having received notice thereof

 

    	96

    	 

    
 

(B)         the
Administrative Agent; provided, that no consent of the Administrative Agent shall be required for an assignment of all or
any portion of a Term Loan to a Lender, an affiliate of a Lender or an Approved Fund; and

 

(C)         the
Issuing Lender and the Swingline Lender, only if such assignment is of a Revolving Loan.

 

(ii)         Assignments
shall be subject to the following additional conditions:

 

(A)         except
in the case of an assignment to a Lender, an affiliate of a Lender or an Approved Fund or an assignment of the entire remaining
amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments 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 $1,000,000 (in the case of Term Loans) and $5,000,000 (in the
case of the Revolving Facility) unless each of the Borrower and the Administrative Agent otherwise consent; provided, that
(1) no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (2) such amounts
shall be aggregated in respect of each Lender and its affiliates or Approved Funds, if any;

 

(B)         (1)
the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500 and (2) the assigning Lender shall have paid in full any amounts owing by it to the
Administrative Agent; and

 

(C)         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 information
about the Borrower and its Affiliates and their related parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal
and state securities laws.

 

For the purposes of this Section 10.6, “Approved
Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank
loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

    	97

    	 

    
 

Notwithstanding anything
to the contrary set forth in this Agreement or any other Loan Document, any Lender may assign all or a portion of its Term Loans
to any Affiliated Lender (and any such assignment may be at a discount to the par value thereof in accordance with procedures reasonably
satisfactory to the Administrative Agent); provided that any such assignment (other than any such assignment to an Affiliated
Debt Fund) shall be subject to the following additional conditions: (1) no Event of Default shall have occurred and be continuing
immediately before and after giving effect to such assignment, (2) immediately after giving effect to such assignment and to all
other assignments with all Affiliated Lenders, the aggregate principal amount of all Term Loans then held by all Affiliated Lenders
shall not exceed 25% of the aggregate unpaid principal amount of the Term Loans then outstanding, (3) the Affiliated Lender shall
execute a waiver in form and substance reasonably satisfactory to the Administrative Agent that it shall have no right whatsoever
so long as such Person is an Affiliated Lender (i) to vote as a Lender with respect to any amendment, modification, waiver, consent
or other such action with respect to any of the terms of this Agreement or any other Loan Document (it being understood that such
interest will be deemed voted in the same proportion as the allocation of voting with respect to such matter by those Lenders who
are not Affiliated Lenders), provided that, notwithstanding the foregoing, (x) such Affiliated Lender shall be permitted
to vote as a Lender if such amendment, modification, waiver, consent or other such action (A) requires the vote of all Lenders
or all affected Lenders and all other Lenders or all other affected Lenders, as the case may be, have given their consent thereto,
or (B) disproportionately affects such Affiliated Lender in its capacity as a Lender as compared to other Lenders that are not
Affiliated Lenders and (y) no amendment, modification, waiver, consent or other action shall deprive any Affiliated Lender of its
share of any payments which the Lenders are entitled to share on a pro rata basis hereunder without consent of such Affiliated
Lender, (ii) subject to subclause (i) of clause (3) of this paragraph, to otherwise vote as a Lender on any matter related to this
Agreement or any other Loan Document, (iii) to, in its capacity as a Lender, attend (or receive any notice of) any meeting, conference
call or correspondence with the Administrative Agent or any Lender or receive any information from the Administrative Agent or
any Lender, (iv) to receive advice of counsel to the Administrative Agent or to Lenders other than Affiliated Lenders or to challenge
the Lenders’ attorney-client privilege or (v) to make or bring any claim, in its capacity as a Lender, against the Administrative
Agent or any Lender with respect to the duties and obligations of such Persons under the Loan Documents (except with respect to
rights expressly retained under subclause (i) of clause (3) of this paragraph), (4) each Affiliated Lender shall acknowledge and
agree that the Loans owned by it shall be non-voting under sections 1126 and 1129 of the Bankruptcy Code in the event that any
proceeding thereunder shall be instituted by or against any Group Member, or, alternatively, to the extent that the foregoing non-voting
designation is deemed unenforceable for any reason, each Affiliated Lender shall vote in such proceedings in the same proportion
as the allocation of voting with respect to such matter by those Lenders who are not Affiliated Lenders, except to the extent that
any plan of reorganization proposes to treat the obligations held by such Affiliated Lender in a manner that is less favorable
in any material respect to such Affiliated Lender than the proposed treatment of similar obligations held by Lenders that are not
Affiliated Lenders and (5) the Affiliated Lender shall provide, (x) as of the date of its offer to purchase, a customary representation
and warranty that there is no material non-public information and (y) as of the date of the effectiveness of such purchase and
assignment, either a customary representation and warranty that there is no material non-public information at such time or a statement
that such representation cannot be made at such time; provided further that any assignment to an Affiliated Debt
Fund shall be subject to the condition that Affiliated Debt Funds shall not account for more than 50% of the amounts included in
determining whether the Required Lenders (or the Majority Facility Lenders in respect of the Term Facility) have consented to any
amendment, modification or waiver pursuant to Section 10.1.

 

    	98

    	 

    
 

(iii)        Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and,
in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.18, 2.19, 2.20
and 10.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this
Section 10.6 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations
in accordance with paragraph (c) of this Section.

 

(iv)        The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time
to time (the “Register”). The entries in the Register shall be conclusive (absent manifest error), and the Borrower,
the Administrative Agent, the Issuing Lender and the Lenders may treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

 

(v)         Upon
its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s
completed administrative questionnaire (unless the Assignee shall already be a Lender 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. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph. 

 

(c)           (i)
Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitments 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 Lender 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 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 may provide that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the proviso
to the second sentence of Section 10.1 and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of, and subject to the limitations of, Sections 2.18,
2.19 and 2.20 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7(b) as
though it were a Lender; provided, such Participant shall be subject to Section 10.7(a) as though it were a Lender.

 

    	99

    	 

    
 

(ii)         A
Participant shall not be entitled to receive any greater payment under Section 2.18 or 2.19 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. No Participant shall be entitled to the benefits of Section 2.19
unless such Participant complies with Sections 2.19(d), (e) and (f) as if it were a Lender. Each Lender that sells a participation,
acting solely for this purpose as a non-fiduciary agent of the Borrower, shall 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 (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant
or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations
under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter
of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive (absent manifest error), and such Lender, each Loan Party and the Administrative
Agent shall treat each person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such
participation for all purposes of this Agreement, notwithstanding notice to the contrary.

 

(d)          Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, 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.

 

(e)          The
Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above; provided, that a transfer of any Note may be effected only by
the surrender of the original Note and either re-issuance by the Borrower of the original Note to a new holder or the issuance
by the Borrower of a new Note to a new holder.

 

(f)          Notwithstanding
the foregoing, any Conduit Lender may assign any or all of the Loans it may have funded hereunder to its designating Lender without
the consent of the Borrower or the Administrative Agent and without regard to the limitations set forth in Section 10.6(b). The
Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or join
any other Person in instituting against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Conduit Lender; provided that each Lender designating any Conduit Lender hereby agrees
to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability
to institute such a proceeding against such Conduit Lender during such period of forbearance.

 

    	100

    	 

    
 

10.7.        Adjustments;
Set-off. (a) Except to the extent that this Agreement or a court order expressly provides for payments to be allocated to
a particular Lender or to the Lenders under a particular Facility, if any Lender (a “Benefitted Lender”) shall
receive any payment of all or part of the Obligations owing to it (other than in connection with an assignment made pursuant to
Section 10.6), or receive any Collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events
or proceedings of the nature referred to in Section 8.1(f), or otherwise), in a greater proportion than any such payment to or
Collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such
other Lender, or shall provide such other Lenders with the benefits of any such Collateral, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such Collateral ratably with each of the Lenders; provided
that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

(b)           In
addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any Obligations becoming
due and payable by the Borrower (whether at the stated maturity, by acceleration or otherwise), to apply to the payment of such
Obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender, any affiliate thereof or any of their respective branches or agencies
to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative
Agent after any such application made by such Lender; provided, that the failure to give such notice shall not affect the
validity of such application.

 

10.8.        Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature
page of this Agreement by email or facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 

 

10.9.        Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.10.      Integration.
This Agreement, the other Loan Documents and the Fee Letter represent the entire agreement of the Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.

 

10.11.      Governing
Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10.12.      Submission
To Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally:

 

    	101

    	 

    
 

(a)          submits
for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of
the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate
courts from any thereof (except that, (x) in the case of any Mortgage or other Security Document, proceedings may also be brought
by the Administrative Agent or collateral agent in the state in which the respective Mortgaged Property or Collateral is located
or any other relevant jurisdiction and (y) in the case of any bankruptcy, insolvency or similar proceedings with respect to any
Loan Party, actions or proceedings related to this Agreement and the other Loan Documents may be brought in such court holding
such bankruptcy, insolvency or similar proceedings);

 

(b)          consents
that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;

 

(c)          agrees
that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the Borrower, as the case may be at its address set forth in Section
10.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)          agrees
that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and

 

(e)          waives,
to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.

 

10.13.     Acknowledgements.
The Borrower hereby acknowledges that:

 

(a)          it
has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

 

(b)          neither
the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and Lenders, on one
hand, the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)          
no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.

 

10.14.     Releases
of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender
except as expressly required by Section 10.1) to take any action requested by the Borrower having the effect of releasing any
Collateral or Guarantee Obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any
Loan Document or that has been consented to in accordance with Section 10.1 or (ii) under the circumstances described in paragraph
(b) below.

 

    	102

    	 

    
 

(b)          At
such time as the Loans, the Reimbursement Obligations and the other obligations under the Loan Documents (other than obligations
under or in respect of Specified Cash Management Agreements) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created by the Security Documents,
and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative
Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of
any act by any Person.

 

10.15.     Confidentiality.
Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any
Loan Party, the Administrative Agent or any Lender pursuant to or in connection with this Agreement that is designated by the
provider thereof as confidential; provided, that nothing herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (a) to the Administrative Agent, any other Lender or any affiliate thereof, (b) subject to an
agreement to comply with the provisions of this Section, to any actual or prospective Transferee or any direct or indirect counterparty
to any Swap Agreement (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates, provided that such Persons have been advised of
the confidentiality provisions hereof and are subject thereto, (d) upon the request or demand of any Governmental Authority, (e)
in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement
of Law, (f) if requested or required to do so in connection with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued
with respect to such Lender, (i) in connection with the exercise of any remedy hereunder or under any other Loan Document, (j)
if agreed by the Borrower in its sole discretion, to any other Person or (k) to any regulatory or self-regulatory agency having
supervisory authority over any Lender in connection with an examination of such Lender by such agency.

 

Each Lender acknowledges that information
furnished to it pursuant to this Agreement or the other Loan Documents may include material non-public information concerning the
Borrower and its Affiliates and their related parties or their respective securities, and confirms that it has developed compliance
procedures regarding the use of material non-public information and that it will handle such material non-public information in
accordance with those procedures and applicable law, including Federal and state securities laws.

 

All information, including requests for waivers
and amendments, furnished by the Borrower or the Administrative Agent pursuant to, or in the course of administering, this Agreement
or the other Loan Documents will be syndicate-level information, which may contain material non-public information about the Borrower
and its Affiliates and their related parties or their respective securities. Accordingly, each Lender represents to the Borrower
and the Administrative Agent that it has identified in its administrative questionnaire a credit contact who may receive information
that may contain material non-public information in accordance with its compliance procedures and applicable law, including Federal
and state securities laws.

 

10.16.     WAIVERS
OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

    	103

    	 

    
 

10.17.         Patriot
Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.
L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Patriot Act.

 

10.18.         Usury
Savings. Notwithstanding any other provision herein, the aggregate interest rate charged hereunder, including all charges
or fees in connection therewith deemed in the nature of interest under applicable law, shall not exceed the Highest Lawful Rate
(as such term is defined below).  If the rate of interest (determined without regard to the preceding sentence) under this
Agreement at any time exceeds the Highest Lawful Rate (as defined below), the outstanding amount of the Loans made hereunder shall
bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which
would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect.  In
addition, if and when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest
set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Borrower shall pay to the
Administrative Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would
have been paid if the Highest Lawful Rate had at all times been in effect.  Notwithstanding the foregoing, it is the intention
of the Lenders and the Borrower to conform strictly to any applicable usury laws.  Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall
be cancelled automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding amount of
the Loans made hereunder or be refunded to the Borrower.  As used in this paragraph, the term “Highest Lawful Rate”
means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received
under the laws applicable to such Lender which are presently in effect or, to the extent allowed by law, under such applicable
laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow. 

 

10.19.         Intercreditor
Agreement. Each Lender hereby authorizes and directs the Administrative Agent (a) to enter into the Intercreditor Agreement
on its behalf, perform the Intercreditor Agreement on its behalf and take any actions thereunder as determined by the Administrative
Agent to be necessary or advisable to protect the interest of the Lenders and the Issuing Lender, and each Lender agrees to be
bound by the terms of the Intercreditor Agreement and (b) to enter into any other intercreditor agreement reasonably satisfactory
to the Administrative Agent on its behalf, perform such intercreditor agreement on its behalf and take any actions thereunder
as determined by the Administrative Agent to be necessary or advisable to protect the interests of the Lenders and the Issuing
Lender, and each Lender agrees to be bound by the terms of such intercreditor agreement.

 

10.20.         No
Novation. The terms and conditions of the Existing Credit Agreement are amended as set forth in, and restated in their entirety
and superseded by, this Agreement.  Nothing in this Agreement shall be deemed to be a novation of any of the Obligations
as defined in the Existing Credit Agreement.  Notwithstanding any provision of this Agreement or any other Loan Document
or instrument executed in connection herewith, the execution and delivery of this Agreement and the incurrence of Obligations
hereunder shall be in substitution for, but not in payment of, the Obligations owed by the Loan Parties under the Existing Credit
Agreement. From and after the Restatement Effective Date, each reference to the “Agreement”, “Credit Agreement”
or other reference originally applicable to the Existing Credit Agreement contained in any Loan Document shall be a reference
to this Agreement, as amended, supplemented, restated or otherwise modified from time to time. 

 

10.21.         Existing
Credit Agreement. Each Lender and the Borrower agree that with respect to any prepayment of Existing Term Loans on the Restatement
Effective Date, the notice requirements under Section 2.10 of the Existing Credit Agreement are hereby waived.  

 

    	104

    	 

    
 

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

 

	 	WEB.COM GROUP, INC.
	 	 
	 	By: 	/s/ David L. Brown
	 	Name:  David L. Brown
	 	Title: Chief Executive Officer

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	JPMORGAN CHASE BANK, N.A., as Administrative Agent, Co-Syndication Agent and as a Lender
	 	 
	 	By: 	/s/ Tina Ruyter
	 	Name:  Tina Ruyter
	 	Title: Executive Director

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	DEUTSCHE BANK SECURITIES INC., as Co-Syndication Agent
	 	 
	 	By: 	/s/ David Lynch
	 	Name:  David Lynch
	 	Title: Managing Director

 

	 	By: 	/s/ Alexandra Barth
	 	Name:  Alexandra Barth
	 	Title: Managing Director

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	SUNTRUST BANK, as Co-Documentation Agent and as a Lender
	 	 
	 	By: 	/s/ Brian Guffin
	 	Name:  Brian Guffin
	 	Title: Director

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	GOLDMAN SACHS LENDING PARTNERS LLC, as Co-Documentation Agent and as a Lender
	 	 
	 	By: 	/s/ Robert Euhdin
	 	Name:  Robert Euhdin
	 	Title: Authorized Signatory

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	CITIGROUP GLOBAL MARKETS, INC., as Co-Documentation Agent and as a Lender
	 	 
	 	By: 	/s/ Avrum Spiegel
	 	Name: Avrum Spiegel
	 	Title: Managing Director

 

[Credit Agreement Signature Page]

 

    	 

    	 

    
 

	 	WELLS FARGO BANK, N.A., as Co-Documentation Agent and as a Lender
	 	 
	 	By: 	/s/ Caraline J. Vince
	 	Name:  Caraline J. Vince
	 	Title: Assistant Vice President

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	JPMORGAN CHASE BANK, N.A., as a Lender
	 	 
	 	By: 	/s/ Tina Ruyter
	 	Name: Tina Ruyter
	 	Title: Executive Director

 

x Check this box
if you are a Revolving Lender consenting to the Amendment and Restatement

 

 ̈ Check this
box if you are an Existing Term Lender that is not executing a Term Lender Addendum

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

  

	 	Deutsche Bank Trust Company Americas, as a Lender
	 	 
	 	By: 	/s/ Courtney E. Meehan
	 	Name: Courtney E. Meehan
	 	Title: Vice President

 

	 	By: 	/s/ Anca Trifan
	 	Name: Anca Trifan
	 	Title: Managing Director

 

x Check this box
if you are a Revolving Lender consenting to the Amendment and Restatement

 

 ̈ Check this
box if you are an Existing Term Lender that is not executing a Term Lender Addendum

 

[Credit Agreement Signature Page]

 

    	 

    	 

    
 

 

	 	SUNTRUST BANK, as a Lender
	 	 	 
	 	By:	/s/ Brian Guffin
	 	Name: Brian Guffin
	 	Title: Director

 

x Check this box
if you are a Revolving Lender consenting to the Amendment and Restatement

 

 ̈ Check this
box if you are an Existing Term Lender that is not executing a Term Lender Addendum

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	GOLDMAN SACHS LENDING PARTNERS, LLC, as a Lender
	 	 
	 	By:	/s/ Michelle Latzoni
	 	Name: Michelle Latzoni 
	 	Title: Authorized Signatory

 

x Check this box
if you are a Revolving Lender consenting to the Amendment and Restatement

 

 ̈ Check this
box if you are an Existing Term Lender that is not executing a Term Lender Addendum

 

[Credit Agreement Signature Page]

 

    	 

    	 

    

 

	 	Citibank, N.A., as a Lender
	 	 
	 	By:	/s/ Avram Spiegel
	 	Name: Avrum Spiegel
	 	Title: Managing Director

 

 ̈ Check this
box if you are a Revolving Lender consenting to the Amendment and Restatement

 

 ̈ Check this
box if you are an Existing Term Lender that is not executing a Term Lender Addendum

 

[Credit Agreement Signature Page]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}]]