Document:

Exhibit 10.1

 

 

 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

This Agreement dated January 20, 2017 is made among:

 

TUCOWS.COM CO.

TING FIBER, INC.

TING INC.

TUCOWS (DELAWARE) INC. and

TUCOWS (EMERALD), LLC

(as Borrowers)

 

- and -

 

TUCOWS INC.

(as a Guarantor)

 

- and -

 

THE LENDERS FROM TIME TO TIME PARTY TO THIS AGREEMENT

(as Lenders)

 

- and -

 

BANK OF MONTREAL

as Administrative Agent

 

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party, the parties agree as follows:

 

 

ARTICLE I - INTERPRETATION

 

	
			1.01

				
			Definitions

			

 

In this Agreement, the words and phrases set out in the CBA Model Provisions (as hereinafter defined) shall have the respective meanings set forth therein. In addition, the following words and phrases shall have the respective meanings set forth below:

 

"2016 Credit Agreement" means the credit agreement made among the Credit Parties, the Agent and the lenders party thereto dated August 18, 2016.

 

“Acceleration Date” means the earlier of: (i) the occurrence of an Insolvency Event; and (ii) the delivery by the Agent to the Borrowers of a written notice that the Obligations are immediately due and payable, following the occurrence and during the continuation of an Event of Default other than an Insolvency Event.

 

 

 

 

“Acquireco” means Tucows (Emerald), LLC, a limited liability company formed under the laws of Delaware, which will acquire all of the issued and outstanding shares of eNom.

 

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of fifty percent (50%) of the Equity Interests of any Person or otherwise causing any Person to become a Subsidiary of Tucows Inc., or (c) an amalgamation, plan of arrangement, merger or consolidation or any other combination with another Person.

 

“Advance” means an extension of credit by one or more of the Lenders to any Borrower pursuant to this Agreement, including for greater certainty an extension of credit in the form of a Loan, an Overdraft, a Bankers’ Acceptance, a BA Equivalent Loan or a Letter of Credit.

 

“Affiliate” is defined in the CBA Model Provisions;

 

“Agent” means BMO in its capacity as the administrative agent hereunder, and its successors in such capacity.

 

“Agreement” means this amended and restated credit agreement (including the exhibits and schedules) as it may be amended, supplemented, replaced or restated from time to time; and each reference herein to “this Agreement”, “the date hereof”, “the date of this Agreement” and similar references are references to this amended and restated credit agreement and not to the 2016 Credit Agreement.

 

“Amendment Closing Date” means the date on which all conditions precedent listed in Section 11.01 herein have been satisfied, as confirmed by the Agent to the Borrowers in writing.

 

“AML Legislation” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and all other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws, whether within Canada or elsewhere, including any guidelines or orders thereunder. 

 

“Annual Business Plan” means a business plan in respect of the Companies for a Fiscal Year, in form and substance satisfactory to the Agent and the Lenders and disclosing all assumptions made in the formulation thereof, which shall include a detailed Capital Expenditure budget and projections on a quarterly basis in respect of revenue, expenses, cashflow, balance sheet items and compliance with all financial covenants in Section 9.03 herein.

 

“Applicable Law” is defined in the CBA Model Provisions.

 

 

 

 

“Applicable Margin” means, in respect of any Availment Option and in respect of any Fiscal Quarter, the percentage in the column relating to such Availment Option in the following table which corresponds to the Total Funded Debt to EBITDA Ratio in respect of such Fiscal Quarter described in the first column, which percentage shall be subject to adjustment from time to time as provided in Section 7.01(d); provided that from and after the eNom Closing Date until the Interim Financial Statements and Compliance Certificate for the Fiscal Quarter ending March 31, 2017 are received by the Agent in accordance with Section 9.04(b), the Applicable Margin for each Availment Option shall be based on the pro forma covenant calculations submitted immediately prior to the eNom Closing Date:

 

	
			Total Funded Debt to

			EBITDA Ratio

				
			Applicable Margin for

			Canadian Prime Rate

			Loans, U.S. Base Rate

			Loans, U.S. Prime

			Rate Loans and

			Overdrafts

				
			Applicable Margin for

			Bankers' Acceptances,

			BA Equivalent Loans,

			LIBOR Loans and

			Letters of Credit

				
			Applicable Margin for

			Standby Fee

			
	
			less than 1.00:1

				
			0.75%

				
			2.00%

				
			0.40%

			
	
			equal or greater than 1.00:1, but less than 2.00:1

				
			1.00%

				
			2.25%

				
			0.45%

			
	
			equal or greater than 2.00:1, but less than 2.25:1

				
			1.50%

				
			2.75%

				
			0.55%

			
	
			equal or greater than 2.25:1

				
			2.00%

				
			3.25%

				
			0.65%

			

 

“Associate” has the meaning ascribed thereto in the CBCA.

 

“Availment Option” means a method of borrowing which is available to a Borrower as provided herein.

 

“BA Equivalent Loan” means an Advance in Canadian Dollars made by a Non-BA Lender to a Borrower in respect of which such Borrower has issued a BA Equivalent Note.

 

“BA Equivalent Note” means a promissory note payable by a Borrower to a Non-BA Lender in the form of Exhibit “H” attached hereto.

 

“BA Lender” means a Lender identified in Exhibit “A” attached hereto as a Lender which will accept Bankers’ Acceptances hereunder.

 

“Bankers’ Acceptance” means a bill of exchange or a blank non-interest bearing depository bill as defined in the Depository Bills and Notes Act (Canada) drawn by a Canadian Borrower and accepted by a BA Lender in respect of which such Canadian Borrower becomes obligated to pay the face amount thereof to the holder (which may be a third party or such BA Lender) upon maturity.

 

“BIA” means the Bankruptcy and Insolvency Act (Canada).

 

“BMO” means Bank of Montreal and its successors and permitted assigns.

 

“Borrowers” means Tucows.com Co., Ting Fiber Inc., Ting Inc., Tucows (Delaware) Inc. and Acquireco; and “Borrower” means any of them as the context requires.

 

 

 

 

“Business Day” means any day on which the Agent is open for over-the-counter business in Toronto, Ontario, excluding Saturday, Sunday and any other day that is a statutory holiday in Toronto, Ontario; provided further that (i) with respect to U.S. Base Rate Loans and U.S. Prime Rate Loans, "Business Day" shall also exclude any day that the Agent is not open for over-the-counter business in New York, New York, and (ii) with respect to LIBOR Loans, "Business Day" shall also exclude any day on which the Agent is not open for over-the-counter business in New York, New York and any day on which dealings in U.S. Dollar deposits are not conducted by and between banks in the London interbank Eurodollar market.

 

“Canadian Borrower” means a Borrower which is incorporated under the laws of Canada or a province or territory thereof (for greater certainty, the only Canadian Borrower as at the date of this agreement being Tucows.com Co.).

 

“Canadian Companies” means Tucows.com Co. and all other Companies from time to time which are incorporated under the laws of Canada or a province or territory thereof.

 

“Canadian Prime Rate” means the greater of the following: (i) the rate of interest announced from time to time by the Agent as its reference rate then in effect for determining rates of interest on Canadian Dollar loans to its customers in Canada and designated as its prime rate; and (ii) the thirty (30) day CDOR Rate plus one percent (1.0%) per annum.

 

“Canadian Prime Rate Loan” means a loan made by a Lender to a Canadian Borrower in Canadian Dollars in respect of which interest is determined by reference to the Canadian Prime Rate, but excluding Advances in the form of Overdrafts and BA Equivalent Loans.

 

“Canadian Dollars” or “CDN$” means the lawful money of Canada.

 

“Capital Expenditures” means expenditures made directly or indirectly which are considered to be in respect of the acquisition or leasing of capital assets in accordance with GAAP, including the acquisition or improvement of Land, plant, machinery or equipment, whether fixed or removable.

 

“Capital Lease” means a lease of assets which in accordance with GAAP is required to be capitalized on the balance sheet of the lessee.

 

"Cash Available for Capital Expenditures and Share Repurchases" for the purposes of determining the Fixed Charge Coverage Ratio at any time during a Fiscal Year, means (i) in the Fiscal Year ending December 31, 2016, Three Million Seven Hundred Thousand Dollars ($3,700,000) (for the avoidance of doubt, being the amount of cash on hand above a minimum cash balance of at least Four Million Dollars ($4,000,000) as at December 31, 2015) less the portion thereof previously used by the Companies in such Fiscal Year to finance Capital Expenditures and Share Repurchases and so confirmed in writing by Tucows Inc. to the Agent; and (ii) in each subsequent Fiscal Year, such amount (if any) as may be designated by the Required Lenders in their discretion from time to time and advised in writing by the Agent to Tucows Inc., less the portion thereof previously used by the Companies in such Fiscal Year to finance Capital Expenditures and Share Repurchases and so confirmed in writing by Tucows Inc. to the Agent.

 

“Cash Taxes” in respect of any fiscal period means all amounts actually paid in cash by the Companies in such fiscal period in respect of income and capital taxes.

 

“CBA Model Provisions” means the model credit agreement provisions attached hereto as Exhibit “I”, which have been revised under the direction of the Canadian Bankers’ Association Secondary Loan Market Specialist Group from provisions prepared by The Loan Syndications and Trading Association, Inc.

 

 

 

 

“CBCA” means the Canada Business Corporations Act.

 

“CDOR Rate” means on any day the annual rate of interest which is the rate determined as being the arithmetic average of the quotations of all institutions listed in respect of the rate for Canadian Dollar denominated bankers’ acceptances for the relevant period displayed and identified as such on the “Reuters Screen CDOR Page” (as defined in the International Swap Dealer Association, Inc. definitions, as modified and amended from time to time) as of 10:00 A.M. Toronto, Ontario local time on such day and, if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Agent after 10:00 A.M. Toronto, Ontario local time to reflect any error in a posted rate of interest or in the posted average annual rate of interest with notice of such adjustment in reasonable detail evidencing the basis for such determination being concurrently provided to the Borrower); provided that if such rates are not available on the Reuters Screen CDOR Page on any particular day, then the CDOR Rate on that day shall be the average of the rates applicable to Canadian Dollar bankers’ acceptances for the relevant period quoted for customers in Canada by the Agent as of 10:00 A.M. Toronto, Ontario local time on such day; or if such day is not a Business Day, then on the immediately preceding Business Day; and provided further that the CDOR Rate shall not be less than zero.

 

“Collateral” means all property, assets and undertaking of the Secured Companies or any other Person encumbered by the Security, and all proceeds of the foregoing.

 

“Commitment” means, in respect of any Lender, such Lender’s commitment to make Advances to the Borrowers under all Facilities (or if required by the context, under any Facility or Tranche).

 

“Companies” means Tucows Inc., the Borrowers and all of their respective present and future Subsidiaries, specifically including the eNom Companies from and after the eNom Closing Date.

 

“Compliance Certificate” means a certificate delivered by a Senior Officer to the Agent in the form of Exhibit “F”.

 

“Control” is defined in the CBA Model Provisions.

 

“Controlled Group” in respect of any corporation incorporated in the United States means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with such or any of its Subsidiaries, are treated as a single employer under Section 414 of the Revenue Code.

 

“Conversion” means the substitution of one Availment Option for another, and does not constitute a fresh or new Advance.

 

“Conversion Notice” means a notice substantially in the form of Exhibit “D” given by a Borrower to the Agent for the purposes of requesting a Conversion.

 

“Copyrights” means all rights, title and interests (and all related IP Ancillary Rights) arising under any requirement of law in copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

 

“Credit Parties” means Tucows Inc. and the Borrowers; and “Credit Party” means any of them as the context requires.

 

 

 

 

“Currency Hedging Agreements” means agreements for the purpose of hedging currency risk, including currency exchange agreements and foreign exchange forward contracts.

 

“Default” is defined in the CBA Model Provisions.

 

“Distribution” means any amount paid to or on behalf of the employees, directors, officers, shareholders, partners or unitholders of any of the Companies, or to any Related Person thereto, by way of salary, bonus, commission, management fees, directors' fees, dividends, redemption of shares, distribution of profits or otherwise, and whether payments are made to such Persons in their capacity as shareholders, partners, unitholders, directors, officers, employees, owners or creditors of any of the Companies or otherwise, or any other direct or indirect payment in respect of the earnings or capital of any of the Companies; provided however that the payment of salaries, bonuses and commissions from time to time to the officers and employees of the Companies, and the payment of directors' fees to the directors of the Companies, in each case in the ordinary course of business and at reasonable levels, shall not be considered Distributions.

 

“Domain Name” means all right, title and interest (and all related IP Ancillary Rights) in an internet domain name.

 

“Domain Purchase” means an acquisition by a Secured Company of one or more Domain Names.

 

“Draw Request” means a notice in the form of Exhibit “B” given by a Borrower to the Agent for the purpose of requesting an Advance.

 

“EBITDA” means, in respect of any fiscal period, without duplication (A) the consolidated net income of Tucows Inc. in such fiscal period determined without including or deducting (i) unrealized gains or losses arising from Hedging Agreements and other foreign currency transactions; (ii) gains or losses arising from or in connection with any sale or other disposition of assets outside the ordinary course of business; or (iii) gains or losses arising from or in connection with any revaluation of assets; plus (B) the following amounts (to the extent such amounts were deducted in determining such consolidated net income): Interest, income taxes, capital taxes, depreciation, amortization, stock based compensation, non-cash charges relating to the impairment of goodwill and other intangible assets, net deferred revenue (which, for purposes of clarity, comprises the change in deferred revenue, net of prepaid domain name registry and other internet service fees, to reflect the amount of cash collected and paid for domain registrations and other Internet services at the time of activation), and any other non-cash expenses and extraordinary, unusual or non-recurring expenses approved in writing by the Required Lenders in their discretion (but specifically including non-recurring professional fees and expenses relating to the establishment or restructuring of the Facilities); all determined in accordance with GAAP; provided that:

 

	 	
			●

				
			in respect of each corporation which has become a Subsidiary of Tucows Inc. in such fiscal period, EBITDA shall be determined as if such corporation had been a Subsidiary of Tucows Inc. during the entire fiscal period; and

			

 

	 	
			●

				
			in respect of each corporation which has ceased to be a Subsidiary of Tucows Inc. in such fiscal period, EBITDA shall be determined as if such corporation had not been a Subsidiary of Tucows Inc. during the entire fiscal period.

			

 

 

 

 

“EDGAR” means the Electronic Data Gathering, Analysis and Retrieval System administered by the United States Securities and Exchange Commission.

 

“eNom” means eNom, Incorporated, a corporation incorporated under the laws of Nevada.

 

“eNom Closing Date” means the date of completion of the eNom Purchase Transaction.

 

“eNom Companies” means eNom and all of its present and future Subsidiaries.

 

“eNom EBITDA” means, in respect of any fiscal period of eNom, the earnings of the eNom Companies before deduction of interest, taxes, depreciation and amortization determined in the same manner as EBITDA, plus (without duplication) the following expenses allocated to the eNom Companies by the eNom Vendor Parties in such fiscal period (to the extent such expenses were deducted in determining such earnings): personnel costs, facilities and telecom costs, professional service fees, travel and entertainment costs, Taxes and board of directors fees; and the parties furthermore acknowledge and agree that eNom EBITDA in each fiscal quarter noted below shall be deemed to be as follows:

 

	 	
			●

				
			$4,779,174 for the fiscal quarter ended December 31, 2015;

			

 

	 	
			●

				
			$3,795,707 for the fiscal quarter ended March 31, 2016;

			

 

	 	
			●

				
			$4,082,429 for the fiscal quarter ended June 30, 2016; and

			

 

	 	
			●

				
			$3,774,917 for the fiscal quarter ended September 30, 2016.

			

 

“eNom Purchase Agreement” means the share purchase agreement made between the eNom Purchaser Parties and the eNom Vendor Parties dated January 20, 2017 providing for the acquisition of the eNom Shares by Acquireco, specifically including for greater certainty all exhibits, schedules and other attachments thereto and all disclosure letters referred to therein.

 

“eNom Purchase Documents” means the eNom Purchase Agreement and all other agreements, documents, instruments and assurances required or contemplated therein, specifically including employment, consulting, non-competition, confidentiality and transition services agreements.

 

“eNom Purchase Transaction” means the purchase of the eNom Shares by Acquireco pursuant to the eNom Purchase Agreement and all other transactions contemplated therein.

 

“eNom Purchaser Parties” means Tucows Inc. and Acquireco.

 

“eNom Secured Companies” means eNom and all other eNom Companies which may from time to time hereafter be designated as Secured Companies pursuant to this Agreement.

 

“eNom Shares” means all of the issued and outstanding shares in the capital of eNom.

 

“eNom Vendor Parties” means Rightside Group, Ltd. and its wholly-owned Subsidiary Rightside Operating Co.

 

“Equity Interest” means any share, interest, participation or other right to participate in the voting or equity ownership of a corporation and any equivalent ownership interest in any Person that is not a corporation, including any partnership or membership interest, and any warrant, option or other right which is exchangeable or convertible into any of the foregoing. 

 

 

 

 

“Equivalent Amount” means, in relation to an amount in one currency, the amount in another currency that could be purchased by the amount in the first currency, determined by reference to the applicable Exchange Rate at the time of such determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 (United States) as amended from time to time, or any successor statute thereto, and the regulations and published interpretations thereof.

 

“Event of Default” is defined in Section 12.01.

 

“Excess Cash Flow” in respect of any Fiscal Year means EBITDA in such Fiscal Year, less the aggregate of the following amounts (without duplication):

 

	 	
			(a)

				
			Cash Taxes in respect of such Fiscal Year;

			

 

	 	
			(b)

				
			Unfunded Capital Expenditures paid during such Fiscal Year, to the extent incurred in compliance with Section 9.02(f);

			

 

	 	
			(c)

				
			Interest paid in cash during such Fiscal Year in respect of Permitted Funded Debt (except the portion of any such Interest which constitutes a Distribution); and

			

 

	 	
			(d)

				
			scheduled principal payments paid during such Fiscal Year in respect of Permitted Funded Debt (except the portion of any such principal payments which constitute Distributions);

			

 

For greater certainty, Excess Cash Flow shall not be reduced by cash used to finance Permitted Acquisitions.

 

“Excess Cash Flow Certificate” means a certificate delivered by a Senior Officer of Tucows Inc. to the Agent in the form of Exhibit “G”.

 

“Exchange Rate” means, on the date of determination of any amount of Canadian Dollars to be converted into another currency pursuant to this Agreement for any reason, or vice-versa, the spot rate of exchange for converting Canadian Dollars into such other currency or vice-versa, as the case may be, established by the Bank of Canada at approximately noon (Toronto time) on the first Business Day of the month in which such conversion is required.

 

“Facilities” means Facility A, Facility B, Facility C and Facility D; and “Facility” means any one of them as the context requires.

 

“Facilities Initial Establishment Date” means August 18, 2016.

 

“Facility A” is defined in Section 2.01(a).

 

“Facility A Lenders” means those Lenders which have issued Commitments to extend credit under Facility A.

 

“Facility A Limit” means Five Million Dollars ($5,000,000).

 

 

 

 

“Facility B” is defined in Section 3.01(a).

 

“Facility B Lenders” means those Lenders which have issued Commitments to extend credit under Facility B.

 

“Facility B Limit” means Fifteen Million Dollars ($15,000,000). 

 

“Facility C” is defined in Section 4.01(a).

 

“Facility C Lenders” means those Lenders which have issued Commitments to extend credit under Facility C.

 

“Facility C Limit” means, at any time, Thirty-Five Million Dollars ($35,000,000) less the aggregate amount of Repayments made under Facility C prior to such time.

 

“Facility D” is defined in Section 5.01.

 

“Facility D Lenders” means those Lenders which have issued Commitments to extend credit under Facility D.

 

“Facility D Limit” means, at any time, Eighty-Five Million Dollars ($85,000,000) less the aggregate amount of Repayments made under Facility D prior to such time.

 

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

 

“First-Ranking Security Interest” in respect of any Collateral means a Lien in such Collateral which is registered where necessary or desirable to record and perfect the charges contained therein (to the extent that such charges are capable of perfection under Applicable Law) and which ranks in priority to all other Liens in such Collateral except for any Permitted Liens which may have priority in accordance with Applicable Law.

 

“Fiscal Quarter” means a fiscal quarter of Tucows Inc., ending on the last days of March, June, September, and December in each year.

 

“Fiscal Year” means a fiscal year of Tucows Inc., ending on the last day of December in each year.

 

“Fixed Charge Coverage Ratio” means, in respect of any Fiscal Quarter, the ratio of: (i) EBITDA in the fiscal period comprised of such Fiscal Quarter and the immediately preceding three Fiscal Quarters, less the aggregate of all amounts paid by the Companies in such fiscal period in respect of Unfunded Capital Expenditures, Unfunded Share Repurchases, Cash Taxes and Distributions; to (ii) Funded Debt Service in respect of such fiscal period.

 

 

 

 

“FTTH Capital Expenditures” means Capital Expenditures with respect to the build out and deployment of the Borrowers’ “Fiber to the Home” program in existing and new markets.  Capital Expenditures are recorded at historical cost, and for self -constructed fiber and related assets, will include materials, direct labour and applicable overhead costs.

 

“Funded Debt” in respect of any Person means obligations of such Person which are considered to constitute debt in accordance with GAAP, including indebtedness for borrowed money (in the case of the Borrowers, specifically including the Outstanding Advances), Subordinated Debt, obligations secured by Purchase-Money Security Interests, obligations under Capital Leases, capitalized interest, and the redemption price of any securities issued by such Person having attributes substantially similar to debt (such as securities which are redeemable at the option of the holder); but excluding the following: accounts payable, future income taxes (both current and long-term) and obligations under Hedging Agreements which have not yet become due and payable; plus, in the case of the Companies, the T-Mobile Liability.

 

“Funded Debt Service” means, in respect of any fiscal period, without duplication: (i) the aggregate amount of Interest paid or payable in respect of the Funded Debt of Tucows Inc. on a consolidated basis in respect of such fiscal period (but for greater certainty, excluding any Interest which is capitalized and not paid or payable during such fiscal period); plus (ii) the aggregate amount of scheduled principal payments and scheduled Capital Lease payments paid or payable in respect of the Funded Debt of Tucows Inc. on a consolidated basis in respect of such fiscal period, except the portion of any final payment due in respect of such Funded Debt which constitutes a “balloon payment” and any amount paid in connection with the exercise of an option to purchase equipment under a Capital Lease.

 

“GAAP” means generally accepted accounting principles in the United States, as approved by the Financial Accounting Standards Board, as in effect from time to time.

 

“Governmental Authority” is defined in the CBA Model Provisions. 

 

“Guarantee” means any agreement by which any Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any creditor of such Person against loss, and shall include any contingent liability under any letter of credit or similar document or instrument.

 

“Hazardous Materials” means any contaminant, pollutant, waste or substance that is likely to cause immediately or at some future time harm or degradation to the surrounding environment or risk to human health; and without restricting the generality of the foregoing, including any pollutant, contaminant, waste, hazardous waste or dangerous goods that is regulated by any Requirements of Environmental Law or that is designated, classified, listed or defined as hazardous, toxic, radioactive or dangerous or as a contaminant, pollutant or waste by any Requirements of Environmental Law.

 

“Hedging Agreements” means Interest Rate Hedging Agreements and Currency Hedging Agreements.

 

“Hedging Obligations” means all obligations of the Borrowers to the Lenders pursuant to or arising in connection with Hedging Agreements made between the Borrowers and any Lenders.

 

 

 

 

“Indemnitees” means the Lenders, the Agent and their respective successors and permitted assigns hereunder, any agent of any of them (specifically including a receiver or receiver-manager) and the respective officers, directors and employees of the foregoing.

 

“Insolvency Event” means, in respect of any Person:

 

	 	
			●

				
			such Person ceases to carry on its business; or commits an act of bankruptcy or becomes insolvent (as such terms are used in the BIA); or makes an assignment for the benefit of creditors, files a petition in bankruptcy, makes a proposal or commences a proceeding under Insolvency Legislation; or petitions or applies to any tribunal for, or consents to, the appointment of any receiver, trustee or similar liquidator in respect of all or a substantial part of its property; or admits the material allegations of a petition or application filed with respect to it in any proceeding commenced in respect of it under Insolvency Legislation; or takes any corporate action for the purpose of effecting any of the foregoing; or

			

 

	 	
			●

				
			any proceeding or filing is commenced against such Person seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment or composition of it or its debts under any Insolvency Legislation, or seeking appointment of a receiver, trustee, custodian or other similar official for it or any of its property or assets; unless (i) such Person is diligently defending such proceeding in good faith and on reasonable grounds; and (ii) such proceeding does not materially adversely affect the ability of such Person to carry on its business and to perform and satisfy all of its obligations.

			

 

“Insolvency Legislation” means legislation in any applicable jurisdiction relating to reorganization, arrangement, compromise or re-adjustment of debt, dissolution or winding-up, or any similar legislation, and specifically includes for greater certainty the BIA, the Companies’ Creditors Arrangement Act (Canada), and the Winding-Up and Restructuring Act (Canada) and the Bankruptcy Code (United States).

 

“Intellectual Property” means all rights, title and interests in intellectual property and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Domain Names, Trade Secrets, industrial designs, integrated circuit topographies, plant breeders’ rights and rights under IP Licenses.

 

“Interest” means interest on loans, stamping fees in respect of bankers' acceptances, the difference between the proceeds received by the issuers of bankers' acceptances and the amounts payable upon the maturity thereof, issuance fees in respect of letters of credit, and any other charges or fees in connection with the extension of credit which are determined by reference to the amount of credit extended, plus standby fees in respect of the unutilized portion of any credit facility; but for greater certainty “Interest” shall not include capitalized interest (for greater certainty, being interest which is accrued but not paid), agency fees, arrangement fees, structuring fees, fees relating to the granting of consents, waivers, amendments, extensions or restructurings, the reimbursement of costs and expenses, and any similar amounts which may be charged from time to time in connection with the establishment, administration or enforcement of the Facilities.

 

“Interest Rate Hedging Agreements” means agreements for the purpose of hedging interest rate risk, including interest rate exchange agreements (commonly known as “interest rate swaps”) and forward rate agreements; and for greater certainty, including interest rate exchange agreements in U.S. Dollars (commonly known as “cross-currency swaps”).

 

 

 

 

“Interim Financial Statements” in respect of any Fiscal Quarter means the unaudited financial statements of Tucows Inc. on a consolidated and unconsolidated basis in respect of such Fiscal Quarter (and also on a year-to-date basis in respect of such Fiscal Quarter and all previous Fiscal Quarters in the same Fiscal Year), including management’s discussion and analysis with respect thereto in the form disclosed on EDGAR and SEDAR.

 

“Investment” means: (i) an investment made or held by a Person, directly or indirectly, in another Person (whether such investment was made by the first-mentioned Person in such other Person or was acquired from a third party); (ii) a contribution of capital; (iii) the acquisition or holding of common or preferred shares, debt obligations, partnership interests and interests in joint ventures; and (iv) the acquisition of all or substantially all of the assets used in connection with a business; provided however that if a transaction would constitute a “Capital Expenditure” as defined herein and would also constitute an “Investment” as defined herein, it shall be deemed to constitute an Investment and not a Capital Expenditure.

 

“Issuing Bank” means BMO.

 

“IP Ancillary Rights” means, with respect to an item of Intellectual Property all foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, includes in each case, all rights to obtain any other IP Ancillary Right. 

 

“IP License” means all contractual obligations (and all related IP Ancillary Rights), whether written or oral, granting any right, title and interest in any Intellectual Property.

 

“Land” means real property (including a leasehold interest in land) and all buildings, improvements, fixtures and plant situated thereon.

 

“Landlord Agreement” means an agreement in form and substance satisfactory to the Agent given by the landlord of a Material Leased Property in favour of the Agent, which shall include the following provisions (except to the extent otherwise agreed by the Agent in its discretion): such landlord consents to the granting of a security interest in the lease by the Company which is a tenant thereunder in favour of the Agent, agrees to give written notice to the Agent in respect of and a reasonable opportunity to cure any default before terminating the lease, and agrees to waive (or subordinate and defer the enforcement of) its rights and remedies and any security it may hold in respect of any assets owned by such Company located on such Material Leased Property or affixed to such Material Leased Property which the tenant is entitled to remove under Applicable Law or pursuant to the terms of the lease.

 

“Lenders” means the lenders identified in Exhibit “A” attached hereto and any other Persons which may from time to time become lenders pursuant to this Agreement; and their respective successors and permitted assigns; and “Lender” means any of them as the context requires.

 

"Lender-Related Distress Event" means, with respect to any Lender or any Person that directly or indirectly Controls such Lender (such Lender and each such Person being individually referred to in this definition as a "distressed person"), (i) the commencement of a voluntary or involuntary proceeding with respect to such distressed person under any Insolvency Legislation, (ii) the appointment of a custodian, conservator, receiver or similar official in respect of such distressed person or any substantial part of its assets, (iii) a forced liquidation, merger, sale or other change of Control of such distressed person supported in whole or in part by Guarantees or other support (including, without limitation, the nationalization or assumption of ownership or operating control of such distressed person by any Governmental Authority), or (iv) such distressed person makes a general assignment for the benefit of its 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, bankrupt, or deficient in meeting any capital adequacy or liquidity standard of any such Governmental Authority. 

 

 

 

 

“Lending Office” in respect of any Lender means the office of such Lender designated by it from time to time as the office from which it will make Advances hereunder.

 

“Letter of Credit” means a stand-by letter of guarantee or documentary letter of credit issued by the Swingline Lender under the Swingline, or by the Issuing Bank under Tranche A-1, and for greater certainty includes a Syndicated Letter of Credit.

 

"LIBO Rate" or "LIBOR" means, with respect to any LIBOR Period for any Libor Loan, the rate listed on the page of the Reuters Libor01 screen (or any successor thereto as may be selected by the Agent), applicable to the relevant LIBOR Period, at which deposits in U.S. Dollars are offered to financial institutions in the London interbank market at 11:00 a.m. (London local time) on the date two (2) Business Days in advance of the commencement of the applicable LIBOR Period; provided that if the Reuters Libor01 screen, including any successor or similar service is not available, “LIBO Rate” or “LIBOR” shall mean the rate at which the Agent, in accordance with its normal practice, has offered on such date (or if no such offer has been made on such date, would be prepared to offer) to leading banks in the London interbank market for delivery by the Agent on the first day of the applicable LIBOR Period for a period equal to the number of days in such LIBOR Period, deposits in U.S. Dollars of amounts comparable to the principal amount of such Libor Loan to be outstanding during such LIBOR Period; provided that Libor shall not be less than zero.

 

"LIBOR Loan" means a loan that bears interest at a rate determined with reference to LIBOR.

 

"LIBOR Period" means, with respect to any LIBOR Loan, the period commencing on the date on which such LIBOR Loan is advanced or continued or another Loan is converted into such LIBOR Loan, as applicable, and ending on the date that is one, two or three months thereafter (subject to availability), as selected by the Borrower in its Draw Request; provided that:

 

	 	
			(a)

				
			any LIBOR Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another month, in which case such LIBOR Period shall end on the immediately preceding Business Day;

			

 

	 	
			(b)

				
			any LIBOR Period that begins on the last Business Day of a month (or on a day for which there is no numerically corresponding day in the month at the end of such LIBOR Period) shall end on the last Business Day of the month at the end of such LIBOR Period; and

			

 

	 	
			(c)

				
			no LIBOR Period shall extend beyond the Maturity Date.

			

 

“Lien” means: (i) a lien, charge, mortgage, pledge, security interest or conditional sale agreement; (ii) an assignment, lease, consignment, trust or deemed trust that secures payment or performance of an obligation; (iii) a garnishment; (iv) any other encumbrance of any kind; and (v) any commitment or agreement to enter into or grant any of the foregoing.

 

 

 

 

“Loan” means a Canadian Prime Rate Loan, a U.S. Base Rate Loan, a U.S. Prime Rate Loan or a LIBOR Loan.

 

“Loan Documents” means this Agreement, the Security and all other agreements, documents and instruments required or contemplated herein to be provided by the Secured Companies and other Persons in favour of the Agent and the Lenders.

 

“MasterCard Line” means a line of credit in the maximum principal amount of One Million Dollars ($1,000,000) which BMO in its sole discretion may establish for the Borrowers from time to time in respect of credit cards issued by BMO to the Companies’ employees for corporate purposes, including purchasing supplies and funding miscellaneous business expenses.

 

“Material Adverse Change” means any change or event which: (i) constitutes a material adverse change in the business, operations, condition (financial or otherwise) or properties of the Companies on a consolidated basis; (ii) is reasonably likely to materially impair the ability of the Companies (taken as a whole) to timely and fully perform their obligations under the Loan Documents; or (iii) is reasonably likely to materially impair the ability of the Agent or the Lenders to enforce their rights and remedies under this Agreement or the Security.

 

“Material Agreement” means an agreement made between a Company and another Person which if terminated would result, or would have a reasonable likelihood of resulting, in an Event of Default or Material Adverse Change, specifically including, as at the date of this Agreement, each agreement listed in Schedule 8.01(n).

 

“Material Leases” means the leases relating to the Material Leased Properties.

 

“Material Leased Properties” means all Land leased by the Companies as tenants from time to time which if terminated would result, or would have a reasonable likelihood of resulting, in an Event of Default or Material Adverse Change, specifically including as at the date of this Agreement the Land described in Schedule 8.01(k) attached hereto.

 

“Material Permit” means a licence, permit, approval, registration or qualification granted to or held by a Company which if terminated would result, or would have a reasonable likelihood of resulting, in an Event of Default or Material Adverse Change; specifically including, as at the date of this Agreement, each licence, permit, approval, registration or qualification listed in Schedule 8.01(h).

 

“Maturity Date” means the earlier of (i) the date which is four (4) years after the Amendment Closing Date; and (ii) February 1, 2021.

 

“Minor Title Defects” in respect of any parcel of Land means encroachments, restrictions, easements, rights-of-way, servitudes and defects or irregularities in the title to such Land which are of a minor nature and which, in the aggregate, will not materially impair the use of such Land for the purposes for which such Land is held by the owner thereof.

 

“Multiemployer Plan” means a Pension Plan covering employees of a U.S. Company that is described in Section 4001(a)(3) of ERISA to which any U.S. Company or ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding seven (7) years.

 

 

 

 

“Non-BA Lender” means a Lender identified in Exhibit “A” attached hereto as a Lender which will make BA Equivalent Loans instead of accepting Bankers’ Acceptances hereunder.

 

“Non-Funding Lender” means any Lender (i) that has failed to fund any payment or Advance required to be made by it hereunder or to purchase all participations required to be purchased by it hereunder and under the Loan Documents, or (ii) that has given verbal or written notice to the Borrower, the Agent or any other Lender, or has otherwise publicly announced, that it believes that it may be unable to fund advances under one or more credit agreements to which it is a party, or (iii) with respect to which one or more Lender-Related Distress Events has occurred, or (iv) with respect to which the Agent believes, acting reasonably, that such Lender has defaulted or may default in fulfilling its obligations (whether as an agent, lender or letter of credit issuer) under one or more other credit agreements to which it is a party, or (v) with respect to which the Agent believes, acting reasonably, that there is a reasonable chance that such Lender will fail to fund any payment or Advance required to be made hereunder. 

 

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

 

“Obligations” means, at any time and without duplication: (i) all direct and indirect, contingent and absolute indebtedness, obligations and liabilities of the Companies to the Agent and the Lenders (or if the context requires, to any Lender) under or in connection with this Agreement and the Loan Documents (specifically including for greater certainty all Guarantees provided hereunder) at such time, specifically including the Outstanding Advances, all accrued and unpaid Interest thereon, and all fees, expenses and other amounts payable pursuant to this Agreement and the Loan Documents; plus (ii) indebtedness outstanding under the MasterCard Line (if any) at such time; plus (iii) the Hedging Obligations (if any) at such time; plus (v) any obligations under Service Agreements at such time; provided that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.

 

“Outstanding Advances” means, at any time, the aggregate of all obligations of the Borrowers to the Lenders (or if the context requires, to any Lender) in respect of all Advances made under the Facilities (or if the context requires, under any Facility or any Tranche) which have not been repaid or satisfied at such time, determined as follows: (i) in the case of Overdrafts in Canadian Dollars and Canadian Prime Rate Loans, the Equivalent Amount expressed in United States Dollars; (ii) in the case of Bankers’ Acceptances and BA Equivalent Notes, the Equivalent Amount of the face amount thereof expressed in United States Dollars; and (iii) in the case of Overdrafts in U.S. Dollars, U.S. Base Rate Loans, U.S. Prime Rate Loans and LIBOR Loans, the principal amount thereof.

 

“Overdraft” means indebtedness of any Borrower to the Swingline Lender arising in connection with all amounts debited to all accounts established by such Borrower with the Swingline Lender pursuant to the Swingline, including without limitation all cheques, transfers, withdrawals, Interest, costs, charges and fees debited to such accounts.

 

“Owned Properties” means all Land owned by the Companies from time to time.

 

“Patents” means all rights, title and interests (and all related IP Ancillary Rights) arising under any requirement of law in or relating to patents and applications therefor. 

 

 

 

 

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

 

“Pension Plan” means (i) a “pension plan” or “plan” which is subject to the funding requirements of applicable pension benefits legislation in any jurisdiction of Canada or the United States and is applicable to employees of any Company resident in Canada or the United States; or (ii) any pension benefit plan or similar arrangement applicable to employees of any Company.

 

“Permitted Acquisition” means an Acquisition of Equity Interests in a Person (referred to herein as a “share purchase”), or an Acquisition of assets of a Person (referred to herein as an “asset purchase”), in either case if all of the following criteria are satisfied (except to the extent as may be otherwise agreed in writing by the Required Lenders in their discretion):

 

	 	●	the Required Lenders in their discretion shall have provided their prior written consent to such Acquisition after conducting such due diligence they may consider appropriate in the circumstances (for greater certainty, specifically including the terms and conditions of the purchase agreement and due diligence in respect of financial matters including projections for the subsequent five (5) years and the capital expense budget, material contracts, the corporate and capital structure of such Person, key management, and business, environmental, regulatory, tax and legal matters, and Tucows Inc. shall provide all information requested by the Required Lenders in connection with such due diligence at least ten (10) Business Days prior to the proposed completion of such Acquisition); provided however that the prior written consent of the Required Lenders shall not be required in connection with an Acquisition (hereinafter referred to as a “small Acquisition”) if (i) all other criteria listed in this definition are satisfied in respect of such Acquisition; (ii) the purchase price for such Acquisition plus the amount of any Funded Debt assumed in connection therewith does not exceed One Million Dollars ($1,000,000); and (iii) the aggregate purchase price for such Acquisition and all other small Acquisitions previously completed in the same Fiscal Year plus the amount of all Funded Debt assumed in connection therewith does not exceed Two Million Dollars ($2,000,000);

 

	 	
			●

				
			such Person is engaged in a business similar to one or more of the businesses conducted by the Borrowers as at the date of this Agreement;

			

 

	 	
			●

				
			the Acquisition does not involve a hostile or unsolicited take-over;

			

 

	 	
			●

				
			the Acquisition shall be accretive to EBITDA on a twelve month pro forma prospective basis, after giving effect to (i) normalization adjustments and (ii) pro forma synergies reasonably expected to result from such Acquisition, in each case as may be advised by Tucows Inc. and approved by the Required Lenders;

			

 

	 	
			●

				
			in the case of a share purchase, immediately thereafter such Person will be a wholly-owned Subsidiary of Tucows Inc.;

			

 

	 	
			●

				
			in the case of a share purchase (i) upon the completion of such Acquisition all Funded Debt (except Funded Debt which will constitute Permitted Funded Debt hereunder) of such Person shall be repaid and the holders of all Liens (except Liens which will constitute Permitted Liens hereunder) affecting the assets of such Person shall provide an undertaking to release and discharge such Liens within thirty (30) days thereafter; and (ii) within thirty (30) days following the completion of such Acquisition all Liens (except Liens which will constitute Permitted Liens hereunder) affecting the assets of such Person shall be released and discharged and such Person shall provide a Guarantee and all other Security required herein to be provided by a Subsidiary of Tucows Inc. hereunder (including registrations, searches, legal opinions and ancillary documentation);

			

 

 

 

 

	 	
			●

				
			in the case of an asset purchase (i) the Required Lenders shall have received satisfactory evidence that the requirements of the Bulk Sales Act (Ontario) or any similar applicable legislation shall be satisfied; (ii) upon the completion of such Acquisition all Funded Debt (except Funded Debt which will constitute Permitted Funded Debt hereunder) secured by the acquired assets shall be repaid and the holders of all Liens (except Liens which will constitute Permitted Liens hereunder) affecting such assets shall provide an undertaking to release and discharge such Liens within thirty (30) days thereafter; and (iii) within thirty (30) days following the completion of such Acquisition all Liens (except Liens which will constitute Permitted Liens hereunder) affecting such assets shall be released and discharged and all Security required herein to be provided to the Agent in respect of such assets (including registrations, searches, legal opinions and ancillary documentation) shall be provided;

			

 

	 	
			●

				
			the Acquisition does not involve the assumption of any material environmental liabilities, and all representations and warranties contained herein with respect to environmental matters shall be true and correct both immediately before and immediately after such Acquisition; and if as a result of the Acquisition any Company will acquire ownership of any Land, Tucows Inc. shall have provided an environmental questionnaire in form and substance satisfactory to the Agent in respect of such Land which evidences compliance with all such representations and warranties;

			

 

	 	
			●

				
			Tucows Inc. and the Borrowers are in compliance with all covenants and representations and warranties in all material respects under this Agreement and will remain in compliance after giving effect to such Acquisition; and no Default or Event of Default shall have occurred and be continuing or would result from the completion of such Acquisition;

			

 

	 	
			●

				
			if any Company proposes to incur Subordinated Debt to finance all or any portion of such Acquisition, the terms and conditions of such Subordinated Debt shall be satisfactory to the Required Lenders, and the holder(s) of such Subordinated Debt shall enter into a subordination and postponement agreement with the Agent containing terms and conditions contemplated in the definition of “Subordinated Debt” herein;

			

 

and provided further that if any such transaction would constitute both a Capital Expenditure and a Permitted Acquisition, it shall be deemed to constitute a Permitted Acquisition and not a Capital Expenditure.

 

“Permitted Funded Debt” means, without duplication: (i) the Outstanding Advances; (ii) indebtedness of a Borrower to the holders of Bankers' Acceptances (and for greater certainty, such Borrower's contingent obligation to each Lender which has accepted a Bankers' Acceptance comprises part of the Outstanding Advances); (iii) indebtedness of any Company to another Company; (iv) Subordinated Debt; (v) Funded Debt of the Companies secured by Permitted Liens; (vi) the T-Mobile Liability; and (vii) obligations under any Guarantees which are considered to constitute Funded Debt, but only to the extent such Guarantees are permitted pursuant to this Agreement.

 

 

 

 

“Permitted Liens” means:

 

	 	
			(a)

				
			Statutory Liens in respect of any amount which is not at the time overdue;

			

 

	 	
			(b)

				
			Statutory Liens in respect of any amount which may be overdue but the validity of which is being contested in good faith and in respect of which reserves have been established in accordance with GAAP;

			

 

	 	
			(c)

				
			Liens or rights of distress reserved in or exercisable under any lease for rent not at the time overdue or for compliance with the terms of such lease not at the time in default; and security deposits given under leases not in excess of six (6) months' rent;

			

 

	 	
			(d)

				
			any obligations or duties affecting any Land due to any public utility or to any municipality or government, or to any statutory or public authority, with respect to any franchise, grant, licence or permit in good standing and any defects in title to structures or other facilities arising solely from the fact that such structures or facilities are constructed or installed on Land under government permits, leases or other grants in good standing; which obligations, duties and defects in the aggregate do not materially impair the use of such property, structures or facilities for the purpose for which they are held;

			

 

	 	
			(e)

				
			Liens incurred or deposits of cash made or pledged to secure obligations under workers' compensation legislation or similar legislation, or in connection with contracts, bids, tenders or expropriation proceedings, surety or appeal bonds, costs of litigation when required by law, public and statutory obligations, and warehousemen's, storers', repairers', carriers' and other similar Liens and deposits;

			

 

	 	
			(f)

				
			security given to a public utility or any municipality or government or to any statutory or public authority to secure obligations incurred to such utility, municipality, government or other authority in the ordinary course of business and not at the time overdue;

			

 

	 	
			(g)

				
			Liens and privileges arising out of judgments or awards in respect of which: an appeal or proceeding for review has been commenced; a stay of execution pending such appeal or proceedings for review has been obtained; and reserves have been established in accordance with GAAP;

			

 

	 	
			(h)

				
			any Lien arising in connection with the construction or improvement of any Land or arising out of the furnishing of materials or supplies therefor, provided that such Lien secures moneys not at the time overdue (or if overdue, the validity of which is being contested in good faith and in respect of which and reserves have been established as reasonably required by the Required Lenders), notice of such Lien has not been given to the Agent or any Lender and such Lien has not been registered against title to such Land;

			

 

	 	
			(i)

				
			Minor Title Defects;

			

 

	 	
			(j)

				
			Permitted Purchase-Money Security Interests;

			

 

	 	
			(k)

				
			the Specific Permitted Liens;

			

 

	 	
			(l)

				
			the Security; and

			

 

	 	
			(m)

				
			Liens securing Subordinated Debt;

			

 

provided that the use of the term “Permitted Liens” to describe the foregoing Liens shall mean that such Liens are permitted to exist (whether in priority to or subsequent in priority to the Security, as determined by Applicable Law); and for greater certainty such Liens shall not be entitled to priority over the Security by virtue of being described in this Agreement as “Permitted Liens”.

 

 

 

 

“Permitted Purchase-Money Security Interests” means Purchase-Money Security Interests incurred or assumed in compliance with the provisions of this Agreement (for greater certainty, including the restrictions relating to Capital Expenditures contained in Section 9.02(f)) in connection with the purchase, leasing or acquisition of capital equipment in the ordinary course of business, provided that the aggregate amount of the Companies' liability thereunder is not at any time greater than Five Hundred Thousand Dollars ($500,000).

 

“Person” is defined in the CBA Model Provisions.

 

“Plan” means any employee pension benefit plan other than a Multiemployer Plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Revenue Code that either (i) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group or (ii) has at any time within the preceding seven (7) years been maintained, funded or administered for the employees of any U.S. Company or any current ERISA Affiliates.

 

“Proceeds of Realization”, in respect of the Security or any portion thereof, means all amounts received by the Agent and any Lender in connection with:

 

	 	
			●

				
			any realization thereof, whether occurring as a result of enforcement or otherwise;

			

 

	 	
			●

				
			any sale, expropriation, loss or damage or other disposition of the Collateral or any portion thereof (other than a disposition of Collateral made pursuant to Section 9.02(c)); and

			

 

	 	
			●

				
			the dissolution, liquidation, bankruptcy or winding-up of any Company or any other distribution of its assets to creditors;

			

 

and all other amounts which are expressly deemed to constitute “Proceeds of Realization” in this Agreement.

 

“Prohibited Transaction” means any transaction set forth in Section 406 of ERISA or Section 4975 of the Revenue Code, to the extent that such transaction is not otherwise exempt by Applicable Law.

 

“Properties” means the Owned Properties and the Material Leased Properties.

 

“Proportionate Share” in respect of any Lender means:

 

	 	●	
			in the context of such Lender's obligation to make Advances under any Facility or Tranche, such Lender's Commitment to make Advances under such Facility or Tranche divided by the aggregate amount of all Lenders' Commitments to make Advances under such Facility or Tranche;

			

 

 

 

 

	 	
			●

				
			in the context of such Lender's entitlement to receive a portion of the standby fee in respect of any Facility or Tranche, such Lender's Commitment to make Advances under such Facility or Tranche divided by the aggregate amount of all Lenders' Commitments to make Advances under such Facility or Tranche;

			

 

	 	
			●

				
			subject to Section 13.03, in the context of any Lender's entitlement to receive payments of principal, interest or fees (other than standby fees) in respect of any Facility or Tranche, the Outstanding Advances due to such Lender under such Facility or Tranche divided by the aggregate amount of the Outstanding Advances due to all Lenders under such Facility or Tranche; and

			

 

	 	
			●

				
			in any other context, such Lender's Commitment divided by the aggregate of all Lenders' Commitments.

			

 

“Purchase-Money Security Interest” means (i) a Capital Lease; or (ii) a Lien on any property or asset which is created, issued or assumed to secure the unpaid purchase price thereof, provided that such Lien is restricted to such property or asset (including all additions thereto, replacements and proceeds thereof) and secures an amount not in excess of the purchase price thereof and any interest and fees payable in respect thereof.

 

“Related Person” in relation to any Person means a Subsidiary, Affiliate, Associate or employee of such Person.

 

“Repayment” means a repayment by a Borrower on account of the Outstanding Advances, other than the reduction of an Overdraft.

 

“Repayment Notice” means a notice delivered by a Borrower to the Agent committing it to make a Repayment, in the form of Exhibit “E”.

 

“Reportable Event” means any of the events set forth in Section 4043 of ERISA, other than an event for which the provision of notice has been waived.

 

“Required Lenders” means, (i) at any time prior to the occurrence of an Event of Default which is continuing, any two or more Lenders which have issued Commitments hereunder representing two-thirds (2/3) or more of the aggregate amount of all Lenders’ Commitments; and (ii) at any time after the occurrence of an Event of Default which is continuing, any two or more Lenders which have Outstanding Advances representing two-thirds (2/3) or more of the total amount of the Outstanding Advances under the Facilities; provided however that if at any time there are only two (2) Lenders under this Agreement, “Required Lenders” shall mean both such Lenders, and if at any time there is only one (1) Lender under this Agreement, “Required Lenders” shall mean such Lender.

 

“Requirements of Environmental Law” means: (i) obligations under common law; (ii) requirements imposed by or pursuant to statutes, regulations and by-laws whether presently or hereafter in force; (iii) requirements announced by a Governmental Authority as having immediate effect (provided that at the time of making such announcement the government also states its intention of enacting legislation to confirm such requirements retroactively); (iv) all directives, policies and guidelines issued or relied upon by any Governmental Authority to the extent such directives policies or guidelines have the force of law; (v) all permits, licenses, certificates and approvals from Governmental Authorities which are required in connection with air emissions, discharges to surface or groundwater, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of Hazardous Materials; and (vi) all requirements imposed under any clean-up, compliance or other order made pursuant to any of the foregoing, in each and every case relating to environmental, health or safety matters including all such obligations and requirements which relate to (A) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation of Hazardous Materials and (B) exposure to Hazardous Materials.

 

 

 

 

“Revenue Code” means the United States Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and the regulations and published interpretations thereof.

 

“Rollover” means the renewal of an Availment Option upon its maturity in the same form.

 

“Rollover Notice” means a notice substantially in the form of Exhibit “C” given by a Borrower to the Agent for the purpose of requesting a Rollover.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by the United States government, including those administered by OFAC, or the United Nations Security Council, the European Union or Her Majesty's Treasury of the United Kingdom or other relevant sanctions authority with jurisdiction over the U.S. Companies and their Subsidiaries.

 

“Sanctioned Person” means a person named on the list of Specially Designated Nationals maintained by OFAC or other relevant sanctions authority with jurisdiction over a U.S. Company and their Subsidiaries.

 

“Secured Companies” means all Companies other than the Unsecured Companies; and “Secured Company” means any one of them as the context requires; and for greater certainty from and after the eNom Closing Date “Secured Companies” shall include all eNom Companies other than those designated as Unsecured Companies.

 

“Security” means all Guarantees, security agreements, mortgages, debentures and other documents required to be provided to the Agent or the Lenders pursuant to Article X and all other documents and agreements delivered by the Secured Companies and other Persons to the Agent for the benefit of the Lenders from time to time as security for the payment and performance of the Obligations, and the security interests, assignments and Liens constituted by the foregoing.

 

“SEDAR” means the System for Electronic Document Analysis and Retrieval established by the Canadian Securities Administrators for electronically filing securities-related information with Canadian securities regulatory authorities. 

 

“Senior Officer” means the President, Chief Financial Officer or other senior officer of Tucows Inc. acceptable to the Required Lenders.

 

“Service Agreements” means all agreements from time to time made between any Company and BMO or any of its Affiliates (specifically including Harris N.A.) in respect of cash management, payroll or other banking services.

 

“Share Repurchases” means purchases by Tucows Inc. of its issued and outstanding common shares.

 

 

 

 

“Solvent” means, with respect to any Company as of the date of determination, (i) the aggregate property of such Company is sufficient, if disposed of at a fairly conducted sale under legal process, to enable payment of all its obligations, due and accruing due; (ii) such Company is able to meet its obligations as they generally become due; and (iii) such Company has not ceased paying its current obligations in the ordinary course of business as they generally become due; for purposes of this definition, the amount of any contingent obligation at such time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. 

 

“Specific Permitted Liens” means the Liens described in Schedule 8.01(i) as such Liens may be amended or replaced from time to time on substantially similar terms and conditions, provided that the principal amount of the indebtedness secured by each such Lien shall not be increased.

 

“Statutory Lien” means a Lien in respect of any property or assets of a Company created by or arising pursuant to any applicable legislation in favour of any Person (such as but not limited to a Governmental Authority), including, without limitation, a Lien for the purpose of securing such Company's obligation to deduct and remit employee source deductions and goods and services tax pursuant to the Income Tax Act (Canada), the Excise Tax Act (Canada), the Canada Pension Plan (Canada), the Employment Insurance Act (Canada) and any legislation in any jurisdiction similar to or enacted in replacement of the foregoing from time to time.

 

“Subordinated Debt” means indebtedness of any Company to any Person which the Lenders in their sole discretion have consented to in writing and in respect of which the holder thereof has entered into a subordination and postponement agreement in favour of the Agent in form and substance satisfactory to the Agent and registered in all places where necessary or desirable to protect the priority of the Security, which shall provide (among other things) that: (i) the maturity date of such indebtedness is later than the Maturity Date; (ii) the holder of such indebtedness may not receive any payments on account of principal or interest thereon (except to the extent, if any, expressly permitted therein); (iii) any security held in respect of such indebtedness is subordinated to the Security; (iv) the holder of such indebtedness may not take any enforcement action in respect of any such security (except to the extent, if any, otherwise expressly provided therein) without the prior written consent of the Agent; and (v) any enforcement action taken by the holder of such indebtedness will not interfere with the enforcement action (if any) being taken by the Agent in respect of the Security.

 

“Subsidiary” means a business entity which is Controlled by another business entity (as used herein, “business entity” includes a corporation, company, partnership, limited partnership, trust or joint venture); and for greater certainty includes a Subsidiary of a Subsidiary.

 

“Swingline” (which is also referred to herein as “Tranche A-2”) is defined in Section 2.07.

 

“Swingline Lender” means BMO.

 

“Swingline Limit” means Five Hundred Thousand Dollars ($500,000).

 

“Syndicated Letter of Credit” is defined in Section 2.08(g).

 

“T-Mobile Agreement” means the Wholesale Supply Agreement between T-Mobile USA, Inc. and Ting, Inc. dated December 8, 2014 as amended by a first amendment thereto dated September 2, 2015 and a second amendment thereto dated September 30, 2016.

 

 

 

 

“T-Mobile Liability” means, at any time, the cumulative amount payable by the Companies at such time to T-Mobile USA, Inc. pursuant to Section 2.7 (Minimum Purchase Guarantee) of Schedule B to the T-Mobile Agreement (for greater certainty, after deduction of the cumulative amount spent by the Companies on network services thereunder) as determined in accordance with the T-Mobile Agreement.

 

“Taxes” is defined in the CBA Model Provisions.

 

“Total Funded Debt” means, at any time, the Funded Debt of Tucows Inc. on a consolidated basis at such time, specifically including for greater certainty the Outstanding Advances, Subordinated Debt and the T-Mobile Liability at such time.

 

“Total Funded Debt to EBITDA Ratio” means, at any time, the ratio of (i) Total Funded Debt at such time to (ii) EBITDA in the immediately preceding twelve (12) month period.

 

“Trade Secrets” means all right, title and interest (and all related IP Ancillary Rights) arising under any requirement of law in or relating to trade secrets.

 

“Trademarks” means all right, title and interest (and all related IP Ancillary Rights) in trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith. 

 

“Tranche” means a designated portion of a Facility which is subject to certain additional terms and conditions as provided herein.

 

“Tranche A-1” means the portion of Facility A other than the Swingline.

 

“Tranche A-1 Lenders” means those Lenders which have issued Commitments to extend credit under Tranche A-1.

 

“Tranche A-1 Limit” means, at any time, the Facility A Limit in effect at such time less the Swingline Limit in effect at such time.

 

“Tranche A-2” means the Swingline (and for greater certainty, the defined terms “Tranche A-2” and “Swingline” are used interchangeably in this Agreement).

 

“Tucows Inc.” means Tucows Inc., a corporation incorporated under the laws of Pennsylvania.

 

“Tucows.com Co.” means Tucows.com Co., a Nova Scotia company which is an indirect wholly-owned Subsidiary of Tucows Inc.

 

“U.S. Base Rate” means the greater of the following: (i) the rate of interest announced from time to time by the Agent as its reference rate then in effect for determining rates of interest on U.S. dollar loans to its customers in Canada and designated as its U.S. base rate; and (ii) the Federal Funds Rate plus one percent (1.0%) per annum.

 

“Unfunded Capital Expenditures” means Capital Expenditures made by the Companies which are not funded by any one or more of the following: an Advance under Facility B or Facility C, a Permitted Purchase-Money Security Interest, Subordinated Debt, insurance proceeds, proceeds from an asset disposition, or Cash Available for Capital Expenditures and Share Repurchases; and for greater certainty a Capital Expenditure which is directly or indirectly funded using the proceeds of an Advance under Facility A shall be considered an Unfunded Capital Expenditure.

 

 

 

 

“Unfunded Share Repurchases” means amounts paid by Tucows Inc. in connection with Share Repurchases which are not funded by any one or more of the following: an Advance under Facility B or Facility C, Subordinated Debt, or Cash Available for Capital Expenditures and Share Repurchases; and for greater certainty a Share Repurchase which is directly or indirectly funded using the proceeds of an Advance under Facility A shall be considered an Unfunded Share Repurchase.

 

“United States Dollars”, “U.S. Dollars” or “U.S.$” means the lawful money of the United States.

 

“Unsecured Companies” means the Companies listed under the heading “Unsecured Companies” in Schedule 8.01(b); and “Unsecured Company” means any one of them as the context requires.

 

“U.S. Base Rate Loan” means an Advance made by a Lender to a Canadian Borrower in Canada by way of a direct loan in U.S. Dollars in respect of which interest is to be calculated by reference to the U.S. Base Rate.

 

“U.S. Borrower” means a Borrower which is incorporated under the laws of a state in the United States (for greater certainty, the U.S. Borrowers as at the date of this agreement being Ting Fiber Inc., Ting Inc., Tucows (Delaware) Inc. and Acquireco).

 

“U.S. Companies” means those Companies which are incorporated under the laws of a State of the United States.

 

“U.S. Prime Rate” means the greater of (i) the floating annual rate of interest established from time to time by the Agent as the rate it will use to determine rates of interest on U.S. dollar loans to its customers in the United States and designated as its U.S. prime rate, and (ii) the Federal Funds Rate plus one percent (1.0%) per annum. 

 

“U.S. Prime Rate Loan” means an Advance made by a Lender to a U.S. Borrower by way of a direct loan in U.S. Dollars in respect of which interest is to be calculated by reference to the U.S. Prime Rate. 

 

“Welfare Plan” means any medical, health, hospitalization, insurance or other employee benefit or welfare plan, agreement or arrangement applicable to employees of any Company; and includes a “welfare plan” as defined in Section 3(1) of ERISA.

 

“Year-end Financial Statements” in respect of any Fiscal Year means the audited financial statements of Tucows Inc. on a consolidated and unconsolidated basis in respect of such Fiscal Year, including management’s discussion and analysis with respect thereto in the form disclosed on EDGAR and SEDAR.

 

 

 

 

	
			1.02

				
			Accounting Principles

			

 

Except as otherwise provided herein, (i) each financial term in this Agreement shall be interpreted in accordance with GAAP in effect on the date of such interpretation; and (ii) where the character or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other computation is required to be made for the purpose of this Agreement, such determination or calculation shall be made in accordance with GAAP in effect on the date of such determination. Notwithstanding the foregoing, if after the date of this Agreement there is an accounting change under GAAP (referred to herein as an “accounting change”), and if any financial ratio or amount determined pursuant to Section 9.03 would be materially different as a result of such accounting change, such financial ratio or amount shall be determined without regard to such accounting change and for the information of the Lenders Tucows Inc. shall also deliver to the Lenders a reconciliation in form and substance satisfactory to the Lenders.

 

	
			1.03

				
			Currency References

			

 

All amounts referred to in this Agreement are in United States Dollars unless otherwise noted.

 

	
			1.04

				
			References to Statutes

			

 

Whenever in this Agreement reference is made to a statute or regulations made pursuant to a statute, such reference shall, unless otherwise specified, be deemed to include all amendments to such statute or regulations from time to time and all statutes or regulations which may come into effect from time to time substantially in replacement for the said statutes or regulations.

 

	
			1.05

				
			Extended Meanings

			

 

Terms defined in the singular have the same meaning when used in the plural, and vice-versa. When used in the context of a general statement followed by a reference to one or more specific items or matters, the term “including” shall mean “including, without limitation”, and the term “includes” shall mean “includes, without limitation”. Any reference herein to any action to be taken or decision to be made by the Agent or the Lenders (or the Required Lenders, as the case may be) in their “sole discretion” shall mean that such sole discretion is absolute and unfettered.

 

	
			1.06

				
			Exhibits and Schedules

			

 

The following exhibits and schedules are attached to this Agreement and incorporated herein by reference:

 

Exhibits

 

	“A”	-     Lenders and Lenders’ Commitments
	“B”	
			-     Draw Request

			
	“C” 	-     Rollover Notice
	“D” 	-     Conversion Notice
	“E”  	
			-     Repayment Notice

			
	“F”  	-     Compliance Certificate
	“G” 	-     Excess Cash Flow Certificate
	“H”	
			-     Form of BA Equivalent Note

			
	“I”	-     CBA Model Provisions

 

Schedules

 

	8.01(b) 	-     Corporate Information
	8.01(h) 	-     Material Permits

 

 

 

 

	8.01(i) 	
			-     Specific Permitted Liens

			
	8.01(j) 	-     Owned Properties
	8.01(k) 	-     Material Leased Properties
	8.01(l) 	-     Intellectual Property
	8.01(n) 	-     Material Agreements
	8.01(o)	-     Labour Agreements
	8.01(p)	-     Environmental Matters
	8.01(q)	-     Litigation
	
			8.01(r)

				-     Pensio Plans
	8.01(z) 	-     Sources and Application of Funds relating to the eNom Purchase Transactionn

 

 

 

 

 

ARTICLE II - FACILITY A

 

	
			2.01

				
			Continuation of Facility A

			

 

	 	
			(a)

				
			Subject to the terms and conditions in this Agreement (specifically including Section 7.15), each Facility A Lender hereby confirms that it has established a committed, revolving credit facility for the Borrowers in the maximum principal amount indicated opposite such Lender's name in Exhibit “A” under the heading “Facility A Commitments”. The said credit facilities are established by the Facility A Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility A”. Each Advance by a Tranche A-1 Lender under Tranche A-1 shall be made by such Lender in its Proportionate Share of Tranche A-1. Each Advance under Tranche A-2 (also referred to herein as the Swingline) shall be made only by the Swingline Lender, as more particularly set out in Section 2.07.

			

 

	 	
			(b)

				
			The Outstanding Advances at any time under Tranche A-1 shall not exceed the Tranche A-1 Limit. In addition, the maximum aggregate amount of the Outstanding Advances to each Borrower noted below under Tranche A-1 shall not at any time exceed the applicable sublimit designated below, provided that the Borrowers may by notice in writing to the Agent from time to time (for greater certainty, without the consent of the Agent or any Lender) reallocate such sublimits among the Borrowers:

			

 

Tucows.com Co. - $1,000,000

Ting Fiber, Inc. - $3,000,000

Ting Inc. - $500,000

Tucows (Delaware) Inc. – nil

Acquireco - nil

 

	
			2.02

				
			Purpose

			

 

Advances under Facility A shall be used by the Borrowers for working capital purposes and general corporate requirements but may not be used, directly or indirectly, for any purposes set out in Sections 3.02, 4.02 or 5.02.

 

	
			2.03

				
			Revolving Nature

			

 

Facility A shall be a revolving facility. For greater certainty, the Borrowers shall be entitled to obtain Advances under Facility A from time to time and repay all or any portion of the Outstanding Advances under Facility A from time to time; provided that the Outstanding Advances under Facility A shall not exceed the Facility A Limit.

 

	
			2.04

				
			Repayment

			

 

The Obligations under Facility A shall become due and payable on the earlier of: (i) the Acceleration Date and (ii) the Maturity Date. If at any time the Outstanding Advances under Facility A exceed the Facility A Limit for any reason (specifically including as a result of a fluctuation in currency exchange rates), the Borrowers shall immediately make a Repayment under Facility A in such amount as will result in the Outstanding Advances under Facility A not exceeding the Facility A Limit.

 

 

 

 

	
			2.05

				
			Availment Options

			

 

	 	
			(a)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) each Canadian Borrower may receive Advances under Facility A by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			Canadian Prime Rate Loans;

			

 

	 	
			(ii)

				
			U.S. Base Rate Loans;

			

 

	 	
			(iii)

				
			Bankers' Acceptances, each having a maturity between 28 and 182 days (inclusive), subject to availability;

			

 

	 	
			(iv)

				
			BA Equivalent Loans from Non-BA Lenders with a maturity between 28 and 182 days (inclusive), subject to availability; or

			

 

	 	
			(v)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability; or

			

 

	 	
			(vi)

				
			Letters of Credit, subject to Section 2.08.

			

 

	 	
			(b)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) each U.S. Borrower may receive Advances under Facility A by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			U.S. Prime Rate Loans; or

			

 

	 	
			(ii)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability; or

			

 

	 	
			(iii)

				
			Letters of Credit, subject to Section 2.08.

			

 

	 	
			(c)

				
			Bankers' Acceptances, BA Equivalent Loans, LIBOR Loans and Letters of Credit will not be issued which in the opinion of the Lenders could result in the Facility A Limit being exceeded at any time. The Outstanding Advances under Facility A in the form of any above Availment Option may be converted into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, Bankers' Acceptances, BA Equivalent Loans, LIBOR Loans and Letters of Credit may not be converted into another Availment Option prior to the maturity thereof).

			

 

	
			2.06

				
			Interest and Fees under Tranche A-1

			

 

In respect of Advances made to a Borrower under Tranche A-1 such Borrower agrees to pay to the Agent:

 

	 	
			(a)

				
			interest on Canadian Prime Rate Loans at the Canadian Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

 

 

 

	 	
			(b)

				
			interest on U.S. Base Rate Loans at the U.S. Base Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(c)

				
			in respect of each Bankers’ Acceptance, a stamping fee equal to the Applicable Margin in effect at the time of issuance, multiplied by the face amount of the Bankers’ Acceptance with the product thereof further multiplied by the number of days to maturity of the Bankers’ Acceptance and divided by 365, payable at the time of acceptance;

			

 

	 	
			(d)

				
			in respect of each BA Equivalent Note, a stamping fee equal to the Applicable Margin in effect at the time of issuance multiplied by the face amount of the BA Equivalent Note with the product thereof further multiplied by the number of days to maturity of the BA Equivalent Note and divided by 365, payable at the time of acceptance;

			

 

	 	
			(e)

				
			interest on U.S. Prime Rate Loans at the U.S. Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(f)

				
			interest on LIBOR Loans at the LIBO Rate plus the Applicable Margin per annum calculated on the basis of a year of three hundred and sixty (360) days, payable in the manner set out in Section 7.10(b);

			

 

	 	
			(g)

				
			in respect of each Syndicated Letter of Credit, an administrative fee equal to one-quarter of one percent (0.25%) of the face amount of such Syndicated Letter of Credit (without regard to the number of days to expiry thereof), payable to the Issuing Bank (for its own account) on the due date of the first quarterly amount payable in respect of such Syndicated Letter of Credit pursuant to paragraph (h) below;

			

 

	 	
			(h)

				
			the following fees in respect of each Letter of Credit: (i) in respect of the period from the date of issuance of such Letter of Credit to the last day of the then current Fiscal Quarter, a fee equal to the Applicable Margin in effect on the date of issuance multiplied by the face amount of such Letter of Credit multiplied by the number of days in such period (including the first day but excluding the last day of such period) and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter; (ii) in respect of each subsequent Fiscal Quarter (other than the Fiscal Quarter in which the Letter of Credit shall expire), a fee equal to the Applicable Margin in effect on the first Business Day of such Fiscal Quarter multiplied by the face amount of such Letter of Credit multiplied by the number of days in such Fiscal Quarter (including the first day but excluding the last day) and divided by three hundred and sixty-five (365), payable on the last Business Day of such Fiscal Quarter; and (iii) in respect of the Fiscal Quarter in which such Letter of Credit shall expire, a fee equal to the Applicable Margin in effect on the first day of such Fiscal Quarter multiplied by the face amount of such Letter of Credit multiplied by the number of days in such period (including the first day but excluding the last day of such period) and divided by three hundred and sixty-five (365), payable on the said expiry date;

			

 

	 	
			(i)

				
			an application fee of Fifty Dollars ($50) per Letter of Credit, plus any administrative fees charged by the Issuing Bank in accordance with its usual practice from time to time in respect of the amendment and renewal of Letters of Credit;

			

 

 

 

 

	 	
			(j)

				
			a standby fee with respect to the unused portion of Tranche A-1, calculated on a daily basis as being the difference between (i) the Facility A Limit (less the Commitments of any Non-Funding Lenders under Facility A), less the Swingline Limit and (ii) the Outstanding Advances under Tranche A-1, multiplied by the Applicable Margin and divided by 365; which standby fee shall be payable quarterly in arrears on the last day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date; and for the purpose of calculating such standby fee, the U.S. Dollar equivalent of Outstanding Advances in Canadian Dollars shall be determined by reference to the spot rate of exchange for converting Canadian Dollars into U.S. Dollars quoted by the Bank of Canada at approximately noon (Toronto time) on the first Business Day of the month in which such standby fee is calculated; and

			

 

	 	
			(k)

				
			such fees payable to the Agent (for its own account) as may be agreed in writing from time to time between the Borrowers and the Agent relating to any cash management services which may be provided by the Agent for the Borrowers from time to time.

			

 

Except as otherwise provided in this Agreement, such payments shall be made to the Agent on behalf of the Tranche A-1 Lenders; and the Agent shall promptly remit to each Tranche A-1 Lender its Proportionate Share of each such payment.

 

	
			2.07

				
			Swingline (Tranche A-2)

			

 

A portion of Facility A in the maximum amount of the Swingline Limit is hereby designated as the “Swingline” (or “Tranche A-2”). The Swingline shall form a part of Facility A and, except to the extent provided in this Section, shall be subject to all terms and conditions of this Article II, specifically including the Facility A Limit. The Swingline shall be established and maintained by the Swingline Lender for its own account, and the Swingline Lender shall not have the right to assign or grant a participation in the Swingline in whole or in part to any other Person. Each Borrower shall be entitled to receive Advances under the Swingline, subject to the following conditions (in addition to any other applicable terms and conditions contained in this Agreement):

 

	 	
			(a)

				
			The Outstanding Advances at any time under the Swingline shall not exceed the Swingline Limit. In addition, the maximum aggregate amount of the Outstanding Advances to each Borrower noted below under the Swingline shall not at any time exceed the applicable sublimit designated below, provided that the Borrowers may by notice in writing to the Swingline Lender from time to time (for greater certainty, without notice to or the consent of any other Lender or the Agent) reallocate such sublimits among the Borrowers:

			

 

Tucows.com Co. - $250,000

Ting Fiber, Inc. - nil

Ting Inc. - $250,000

Tucows (Delaware) Inc. – nil

Acquireco - nil

 

 

 

 

	 	
			(b)

				
			Advances to each Borrower under the Swingline shall be made by way of Overdrafts in U.S. Dollars or Canadian Dollars in the following manner. The Swingline Lender will make Advances into one or more accounts designated by the applicable Borrower as required in order to honour cheques drawn by such Borrower on such accounts which are presented to the Swingline Lender for payment. As deposits are made into such accounts by such Borrower, the Swingline Lender shall withdraw funds from such accounts from time to time and apply such funds as repayments under the Swingline. Advances to each Borrower and repayments by each Borrower under the Swingline shall be made without notice and shall be on a dollar for dollar basis (i.e. not subject to minimum amounts or multiples). Notwithstanding the foregoing, due to internal system requirements of the Swingline Lender, each U.S. Borrower is required to provide prior written notice to the Swingline Lender in respect of any Advances it may request under the Swingline.

			

 

	 	
			(c)

				
			In respect of each Canadian Borrower, interest on Overdrafts in Canadian Dollars under the Swingline shall be payable at the Canadian Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date, and interest on Overdrafts in U.S. Dollars under the Swingline shall be payable at the U.S. Base Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date. 

			

 

	 	
			(d)

				
			In respect of each U.S. Borrower, interest on Overdrafts in U.S. Dollars under the Swingline shall be payable at the U.S. Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date.

			

 

	 	
			(e)

				
			Each Borrower may also receive Advances under the Swingline by means of the issuance of Letters of Credit by the Swingline Lender as provided in Section 2.08. Fees in respect of such Letters of Credit shall be payable in the same amounts and in the same manner as provided in Sections 2.06(g) and (h) herein.

			

 

	 	
			(f)

				
			The Borrowers jointly and severally agree to pay a standby fee with respect to the Swingline to the Swingline Lender (for its own account), calculated on a daily basis as being the difference between the Swingline Limit and the Outstanding Advances under the Swingline, multiplied by the Applicable Margin and divided by 365; which standby fee shall be payable quarterly in arrears on the last day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date; and for the purpose of calculating such standby fee, the U.S. Dollar equivalent of Outstanding Advances in Canadian Dollars shall be determined by reference to the spot rate of exchange for converting Canadian Dollars into U.S. Dollars quoted by the Bank of Canada at approximately noon (Toronto time) on the first Business Day of the month in which such standby fee is calculated.

			

 

	 	
			(g)

				
			The Swingline Lender may in its discretion at any time, by written notice to the Borrowers, require the Borrowers to reduce the Outstanding Advances under the Swingline by a specified amount (in this paragraph called the “Swingline Reduction Amount”). Each Borrower agrees to promptly comply with any such request by making a repayment on the Swingline from its own resources, or by requesting an Advance under Tranche A-1, the proceeds of which shall be applied to reduce the Outstanding Advances under the Swingline accordingly. If the Borrowers fail to comply with any such request from the Swingline Lender within two (2) Business Days after receipt thereof, the Lenders agree that upon request by the Swingline Lender they will make Advances under Tranche A-1 in an aggregate amount equal to the Swingline Reduction Amount, the proceeds of which shall be applied to reduce the Outstanding Advances under the Swingline.

			

 

 

 

 

	
			2.08

				
			Letters of Credit under Facility A

			

 

Letters of Credit issued for the account of any Borrower under Tranche A-1 or the Swingline shall be subject to the following provisions:

 

	 	
			(a)

				
			Letters of Credit shall be available in in Canadian Dollars or U.S. Dollars (or such other major currency as the Issuing Bank or the Swingline Lender, as applicable may agree in its discretion).

			

 

	 	
			(b)

				
			The Equivalent Amount expressed in U.S. Dollars of the aggregate face amount of all Letters of Credit outstanding under Facility A at any time may not exceed One Million Dollars ($1,000,000). In addition, the Equivalent Amount expressed in U.S. Dollars of the aggregate face amount of all Letters of Credit issued at any time to each Borrower noted below under Facility A shall not at any time exceed the applicable sublimit designated below, provided that the Borrowers may by notice in writing to the Agent from time to time (for greater certainty, without the consent of the Agent or any Lender) reallocate such sublimits among the Borrowers:

			

 

Tucows.com Co. - nil

Ting Fiber, Inc. - $1,000,000

Ting Inc. – nil

Tucows (Delaware) Inc. – nil

Acquireco - nil

 

	 	
			(c)

				
			Each fee in respect of a Letter of Credit issued in Canadian Dollars or U.S. Dollars shall be paid in the same currency as the currency of such Letter of Credit. Each fee in respect of a Letter of Credit issued in any other currency shall be paid in U.S. Dollars; and for the purposes of calculating such fee in respect of any Fiscal Quarter, the Equivalent Amount (expressed in U.S. Dollars) of the face amount of such Letter of Credit shall be calculated on the basis of the Bank of Canada noon spot rate on the first Business Day of the month in which such fee is calculated.

			

 

	 	
			(d)

				
			Letters of Credit will not be issued for the purpose of guaranteeing obligations of any Person (except a Company).

			

 

	 	
			(e)

				
			Each Letter of Credit shall have a term not in excess of one (1) year (but for greater certainty, a Letter of Credit may have a longer term if it contains a provision which permits the issuer thereof to terminate such Letter of Credit by written notice to the beneficiary on an annual basis).

			

 

	 	
			(f)

				
			Each request for the issuance of a Letter of Credit shall be delivered by the applicable Borrower to the Agent in accordance with the notice requirements set out in Section 7.02(a) herein, together with the customary form of application and indemnity agreement required by the Issuing Bank or the Swingline Lender (as applicable) completed to its satisfaction and the proposed form of the Letter of Credit (which shall be satisfactory to the Issuing Bank or the Swingline Lender, as applicable) and such other certificates, documents and other papers and information as the Issuing Bank or the Swingline Lender (as applicable) may reasonably request.

			

 

 

 

 

	 	
			(g)

				
			Concurrently with each request for the issuance of a Letter of Credit, the applicable Borrower shall notify the Agent in writing whether: (i) the Letter of Credit is to be issued by the Swingline Lender on its own behalf under the Swingline, or (ii) the Letter of Credit is to be issued by the Issuing Bank on behalf of the Lenders under Tranche A-1 (a “Syndicated Letter of Credit”). The Agent shall notify each Lender of the principal amount, the reference number and the expiration date of each Syndicated Letter of Credit and the amount of such Lender's participation therein. By the issuance of a Syndicated Letter of Credit hereunder and without further action on the part of the Issuing Bank or the Lenders, each said Lender hereby accepts from the Issuing Bank a participation (which participation shall be without recourse to the Issuing Bank) in such Syndicated Letter of Credit in such Lender's Proportionate Share of Tranche A-1, effective upon the issuance of such Syndicated Letter of Credit. Each Lender hereby absolutely and unconditionally assumes, as primary obligor and not as a surety, and agrees to pay and discharge and to indemnify and hold the Issuing Bank harmless from liability in respect of, such Lender's said Proportionate Share of the amount of any drawing under a Syndicated Letter of Credit. Each said Lender acknowledges and agrees that its obligation to acquire participations in each Syndicated Letter of Credit issued by the Issuing Bank and its obligation to make the payments specified herein, and the right of the Issuing Bank to receive the same, in the manner specified herein, are absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or Event of Default hereunder, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. The Issuing Bank shall review each draft and any accompanying documents presented under a Syndicated Letter of Credit and shall notify each said Lender of any such presentment. Promptly after it shall have ascertained that any draft and any accompanying documents presented under such Syndicated Letter of Credit appear on their face to be in substantial conformity with the terms and conditions of the Syndicated Letter of Credit, the Issuing Bank shall give notice to each said Lender and the applicable Borrower of the receipt and amount of such draft and the date on which payment thereon will be made, and each said Lender shall, by 11:00 a.m. Toronto time on the date such payment is to be made, pay its said Proportionate Share of the amount so drawn under the Syndicated Letter of Credit in immediately available funds, and the Issuing Bank shall make the appropriate payment to the beneficiary of such Syndicated Letter of Credit. The applicable Borrower agrees to immediately reimburse each said Lender in an amount equal to the said payment by such Lender with interest thereon payable at the same rate and in the same manner as Canadian Dollar Prime-Based Loans under Facility A. The obligation of the applicable Borrower under this Section to reimburse the said Lenders and the Issuing Bank, as applicable, for all drawings under Letters of Credit shall be absolute, unconditional and irrevocable and shall be satisfied strictly in accordance with their terms, irrespective of:

			

 

	 	
			(i)

				
			any lack of validity or enforceability of any Letter of Credit;

			

 

	 	
			(ii)

				
			the existence of any claim, setoff, defence or other right which the applicable Borrower or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank or any Lender (other than the defence of payment in accordance with the terms of this Agreement or a defence based on the gross negligence or wilful misconduct of the Issuing Bank or any Lender) or any other Person in accordance with this Agreement or other transaction;

			

 

	 	
			(iii)

				
			any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; and

			

 

 

 

 

	 	
			(iv)

				
			any other circumstance or event whatsoever, whether or not similar to any of the foregoing.

			

 

	 	
			(h)

				
			In making any payment under any Letter of Credit (i) the Issuing Bank's exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (ii) any non-compliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, not be deemed wilful misconduct or negligence of the Issuing Bank or any Lender.

			

 

	 	
			(i)

				
			The Issuing Bank and its correspondents may accept and act upon the name, signature, or act of any party purporting to be the executor, administrator, receiver, trustee in bankruptcy or other legal representative of any party designated in any Letter of Credit in the place of the name, signature, or act of such party.

			

 

	 	
			(j)

				
			On or before the Maturity Date the Borrowers shall (i) arrange for the cancellation and return of all outstanding Letters of Credit to the Issuing Bank or (ii) provide cash collateral in favour of the Agent in respect of all outstanding Letters of Credit in an amount equal to the aggregate of the face amounts of all such Letters of Credit, plus an additional amount determined by the Issuing Bank and the Swingline Lender to be necessary to cover their customary fees and expenses associated with the settlement of such Letters of Credit. For greater certainty, the Agent shall have no obligation to release all or any portion of the Security unless and until all Letters of Credit are cancelled or such cash collateral is provided in respect thereof to the satisfaction of the Issuing Bank and the Swingline Lender.

			

 

	
			2.09

				
			Voluntary Cancellation

			

 

The Borrowers may at any time and from time to time upon not less than two (2) Business Days' prior written notice to the Agent, without penalty or fee, cancel any unadvanced portion of Facility A in a minimum amount and a multiple of One Hundred Thousand Dollars ($100,000), in which event the Facility A Limit shall be reduced by the amount so cancelled.

 

 

 

 

 

ARTICLE III - FACILITY B

 

	
			3.01

				
			Continuation of Facility B

			

 

	 	
			(a)

				
			Subject to the terms and conditions in this Agreement (specifically including Section 7.15), each Facility B Lender hereby confirms that it has established a committed, revolving, reducing credit facility for the Borrowers in the maximum principal amount indicated opposite such Lender's name in Exhibit “A” under the heading “Facility B Commitments”. The said credit facilities are established by the Facility B Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility B”. Each Advance by a Facility B Lender under Facility B shall be made by such Lender in its Proportionate Share of Facility B.

			

 

	 	
			(b)

				
			The Outstanding Advances at any time under Facility B shall not exceed the Facility B Limit. In addition, the maximum aggregate amount of the Outstanding Advances to each Borrower noted below under Facility B shall not at any time exceed the applicable sublimit designated below, provided that the Borrowers may by notice in writing to the Agent from time to time (for greater certainty, without notice to or the consent of the Agent or any Lender) reallocate such sublimits among the Borrowers:

			

 

Tucows.com Co. - $7,000,000

Ting Fiber, Inc. - $6,000,000

Ting Inc. - $2,000,000

Tucows (Delaware) Inc. – nil

Acquireco – nil

 

	
			3.02

				
			Purpose

			

 

Advances under Facility B shall be used by the Borrowers for any one or more of the following purposes: (i) Share Repurchases; (ii) Domain Purchases and Permitted Acquisitions; and (iii) FTTH Capital Expenditures.

 

	
			3.03

				
			Revolving Nature

			

 

Facility B shall be a revolving facility. For greater certainty, the Borrowers shall be entitled to obtain Advances under Facility B from time to time and repay all or any portion of the Outstanding Advances under Facility B from time to time; provided that the Outstanding Advances under Facility B shall not exceed the Facility B Limit.

 

	
			3.04

				
			Repayment

			

 

	 	
			(a)

				
			Notwithstanding all other provisions in this Section 3.04, the obligations under Facility B shall become due and payable on the earliest of: (i) the Acceleration Date; and (ii) the Maturity Date.

			

 

	 	
			(b)

				
			Following the end of each Fiscal Year (referred to in this Section 3.04 as the “subject Fiscal Year”), on the last day of each Fiscal Quarter thereafter the Borrowers shall make a Repayment under Facility B (in addition to all other Repayments required pursuant to this Section 3.04) equal to one-sixteenth (1/16) of the aggregate amount of all Advances under Facility B made in the subject Fiscal Year for the purpose of Share Repurchases (or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for such purpose). 

			

 

 

 

 

	 	
			(c)

				
			Following the end of the subject Fiscal Year, on the last day of each Fiscal Quarter thereafter the Borrowers shall make a Repayment under Facility B (in addition to all other Repayments required pursuant to this Section 3.04) equal to one-twentieth (1/20) of the aggregate amount of all Advances under Facility B made in the subject Fiscal Year for the purpose of Domain Purchases and Permitted Acquisitions (or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for such purpose).

			

 

	 	
			(d)

				
			Following the end of the subject Fiscal Year, on the last day of each Fiscal Quarter thereafter the Borrowers shall make a Repayment under Facility B (in addition to all other Repayments required pursuant to this Section 3.04) equal to one-twenty-eighth (1/28) of the aggregate amount of all Advances under Facility B made in the subject Fiscal Year for the purpose of FTTH Capital Expenditures (or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for such purpose).

			

 

	 	
			(e)

				
			If at any time the Outstanding Advances under Facility B exceed the Facility B Limit for any reason (specifically including as a result of a fluctuation in currency exchange rates), the Borrowers shall immediately make a Repayment under Facility B in such amount as will result in the Outstanding Advances under Facility B not exceeding the Facility B Limit.

			

 

	 	
			(f)

				
			In addition to all other Repayments required in respect of Facility B pursuant to this Section 3.04, Repayments shall be required under Facility B as provided in Sections 4.04(e) and (f).

			

 

	
			3.05

				
			Availment Options

			

 

	 	
			(a)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) each Canadian Borrower may receive Advances under Facility B by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			Canadian Prime Rate Loans;

			

 

	 	
			(ii)

				
			U.S. Base Rate Loans;

			

 

	 	
			(iii)

				
			Bankers' Acceptances, each having a maturity between 28 and 182 days (inclusive), subject to availability;

			

 

	 	
			(iv)

				
			BA Equivalent Loans from Non-BA Lenders with a maturity between 28 and 182 days (inclusive), subject to availability; or

			

 

	 	
			(v)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability.

			

 

	 	
			(b)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) each U.S. Borrower may receive Advances under Facility B by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			U.S. Prime Rate Loans; or

			

 

	 	
			(ii)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability.

			

 

 

 

 

	 	
			(c)

				
			Bankers' Acceptances, BA Equivalent Loans and LIBOR Loans will not be issued which in the opinion of the Lenders could result in the Facility B Limit being exceeded at any time. The Outstanding Advances under Facility B in the form of any above Availment Option may be converted into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, Bankers' Acceptances, BA Equivalent Loans and LIBOR Loans may not be converted into another Availment Option prior to the maturity thereof).

			

 

	
			3.06

				
			Interest and Fees under Facility B

			

 

In respect of Advances made to a Borrower under Facility B such Borrower agrees to pay to the Agent:

 

	 	
			(a)

				
			interest on Canadian Prime Rate Loans at the Canadian Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(b)

				
			interest on U.S. Base Rate Loans at the U.S. Base Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(c)

				
			in respect of each Bankers’ Acceptance, a stamping fee equal to the Applicable Margin in effect at the time of issuance, multiplied by the face amount of the Bankers’ Acceptance with the product thereof further multiplied by the number of days to maturity of the Bankers’ Acceptance and divided by 365, payable at the time of acceptance;

			

 

	 	
			(d)

				
			in respect of each BA Equivalent Note, a stamping fee equal to the Applicable Margin in effect at the time of issuance multiplied by the face amount of the BA Equivalent Note with the product thereof further multiplied by the number of days to maturity of the BA Equivalent Note and divided by 365, payable at the time of acceptance;

			

 

	 	
			(e)

				
			interest on U.S. Prime Rate Loans at the U.S. Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(f)

				
			interest on LIBOR Loans at the LIBO Rate plus the Applicable Margin per annum calculated on the basis of a year of three hundred and sixty (360) days, payable in the manner set out in Section 7.10(b); and

			

 

	 	
			(g)

				
			a standby fee with respect to the unused portion of Facility B, calculated on a daily basis as being the difference between (i) the Facility B Limit (less the Commitments of any Non-Funding Lenders under Facility B) and (ii) the Outstanding Advances under Facility B, multiplied by the Applicable Margin and divided by 365; which standby fee shall be payable quarterly in arrears on the last day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date; and for the purpose of calculating such standby fee, the U.S. Dollar equivalent of Outstanding Advances in Canadian Dollars shall be determined by reference to the spot rate of exchange for converting Canadian Dollars into U.S. Dollars quoted by the Bank of Canada at approximately noon (Toronto time) on the first Business Day of the month in which such standby fee is calculated.

			

 

 

 

 

Except as otherwise provided in this Agreement, such payments shall be made to the Agent on behalf of the Facility B Lenders; and the Agent shall promptly remit to each Facility B Lender its Proportionate Share of each such payment.

 

	
			3.07

				
			Voluntary Cancellation

			

 

The Borrowers may at any time and from time to time upon not less than two (2) Business Days' prior written notice to the Agent, without penalty or fee, cancel any unadvanced portion of Facility B in a minimum amount and a multiple of One Hundred Thousand Dollars ($100,000), in which event the Facility B Limit shall be reduced by the amount so cancelled.

 

 

 

 

 

ARTICLE IV - FACILITY C

 

	
			4.01

				
			Continuation of Facility C

			

 

	 	
			(a)

				
			Subject to the terms and conditions in this Agreement (specifically including Section 7.15), each Facility C Lender hereby confirms that it has established a committed, non-revolving credit facility for the Borrowers in the maximum principal amount indicated opposite such Lender's name in Exhibit “A” under the heading “Facility C Commitments”. The said credit facilities are established by the Facility C Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility C”. Each Advance by a Facility C Lender under Facility C shall be made by such Lender in its Proportionate Share of Facility C.

			

 

	 	
			(b)

				
			The Outstanding Advances at any time under Facility C shall not exceed the Facility C Limit. In addition, the maximum aggregate amount of the Outstanding Advances to each Borrower noted below under Facility C shall not at any time exceed the applicable percentage of the Facility C Limit designated below, provided that the Borrowers may by notice in writing to the Agent from time to time (for greater certainty, without notice to or the consent of the Agent or any Lender) reallocate such sublimits among the Borrowers:

			

 

Tucows.com Co. - 10%

Ting Fiber, Inc. - 55%

Ting Inc. - 35%

Tucows (Delaware) Inc. – 0%

Acquireco – 0%

 

	
			4.02

				
			Purpose

			

 

Advances under Facility C shall be used by the Borrowers for any one or more of the following purposes: (i) Share Repurchases; (ii) Domain Purchases and Permitted Acquisitions; and (iii) FTTH Capital Expenditures.

 

	
			4.03

				
			Non-Revolving Nature

			

 

Facility C shall be a non-revolving facility, and any Repayment under Facility C may not be reborrowed.

 

	
			4.04

				
			Repayment

			

 

	 	
			(a)

				
			Notwithstanding all other provisions in this Section 4.04, the obligations under Facility C shall become due and payable on the earliest of: (i) the Acceleration Date; and (ii) the Maturity Date.

			

 

	 	
			(b)

				
			In respect of each Advance under Facility C made for the purpose of Share Repurchases (or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for such purpose), on the last day of each Fiscal Quarter following such Advance the Borrowers shall make a Repayment under Facility C (in addition to all other Repayments required pursuant to this Section 4.04) equal to one-sixteenth (1/16) of the amount of such Advance. 

			

 

 

 

 

	 	
			(c)

				
			In respect of each Advance under Facility C made for the purpose of Domain Purchases or Permitted Acquisitions (or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for such purpose), on the last day of each Fiscal Quarter following such Advance the Borrowers shall make a Repayment under Facility C (in addition to all other Repayments required pursuant to this Section 4.04) equal to one-twentieth (1/20) of the amount of such Advance.

			

 

	 	
			(d)

				
			In respect of each Advance under Facility C made for the purpose of FTTH Capital Expenditures (or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for such purpose), on the last day of each Fiscal Quarter following such Advance the Borrowers shall make a Repayment under Facility C (in addition to all other Repayments required pursuant to this Section 4.04) equal to one-twenty-eighth (1/28) of the amount of such Advance.

			

 

	 	
			(e)

				
			In addition to all other Repayments required under this Section 4.04, if the Total Funded Debt to EBITDA Ratio is greater than 2.25 to 1 at the end of the Fiscal Year ending December 31, 2017 or any Fiscal Year thereafter, the Borrowers shall make a Repayment in an amount equal to fifty percent (50%) of the Excess Cash Flow in such Fiscal Year. Such Repayments shall be made not later than thirty (30) days after the date of delivery to the Agent of the Year-end Financial Statements for such Fiscal Year. Each Repayment made under this paragraph (e) shall be applied firstly against the Borrowers’ obligations to make scheduled Repayments under Facility D in reverse chronological order; secondly against the Borrowers’ obligations to make scheduled Repayments under Facility C in reverse chronological order; thirdly against the Borrowers’ obligations to make scheduled Repayments under Facility B in reverse chronological order; and thereafter against the Outstanding Advances under Facility A.

			

 

	 	
			(f)

				
			In addition to all other Repayments required pursuant to this Section 4.04, the following Repayments shall be required:

			

 

	 	
			(i)

				
			If any Company receives proceeds from a policy of insurance the Borrowers shall make a Repayment to the Agent in an amount equal to the portion of such proceeds not permitted to be retained by such Company as provided in Section 10.08, within three (3) Business Days after receipt thereof.

			

 

	 	
			(ii)

				
			If any Company receives proceeds (net of transaction expenses) from the raising of capital by way of equity or Subordinated Debt the Borrower shall make a Repayment to the Agent in an amount equal to the amount of such net proceeds, within three (3) Business Days after receipt thereof.

			

 

	 	
			(iii)

				
			If any Company receives proceeds (net of transaction expenses, applicable taxes and usual adjustments, if applicable) from a transaction involving the sale or other disposition, not in the ordinary course of business, of any individual asset or group of related assets (other than Domain Names) in one or a series of related transactions, within 180 days after such disposition the Borrowers shall make a Repayment to the Agent in an amount equal to the portion of such net proceeds not used to purchase similar assets within such 180 days period. Notwithstanding the foregoing however, the first Five Hundred Thousand Dollars ($500,000) of net proceeds under this clause (iii) in the aggregate in any Fiscal Year shall not be required to be applied as a Repayment.

			

 

 

 

 

	 	
			(iv)

				
			If at the end of any Fiscal Quarter in a Fiscal Year the proceeds (net of transaction expenses, applicable taxes and usual adjustments, if applicable) from the disposition of Domain Names by the Companies in such Fiscal Year exceeds the applicable threshold (as hereinafter defined), the amount in excess of the applicable threshold shall be applied as a Repayment within 180 days after the end of such Fiscal Quarter, except to the extent such excess net proceeds were used to purchase similar assets within such 180 day period. In this clause (iv), “applicable threshold” means Eight Million Dollars ($8,000,000) prior to the eNom Closing Date, and Fifteen Million Dollars (15,000,000) thereafter.

			

 

Each Repayment made under this paragraph (f) shall be applied firstly against the Borrowers’ obligations to make scheduled Repayments under Facility D in reverse chronological order; secondly against the Borrowers’ obligations to make scheduled Repayments under Facility C in reverse chronological order; thirdly against the Borrowers’ obligations to make scheduled Repayments under Facility B in reverse chronological order; and thereafter against the Outstanding Advances under Facility A.

 

	 	
			(g)

				
			If at any time the Outstanding Advances under Facility C exceed the Facility C Limit for any reason (specifically including as a result of a fluctuation in currency exchange rates), the Borrowers shall immediately make a Repayment under Facility C in such amount as will result in the Outstanding Advances under Facility C not exceeding the Facility C Limit.

			

 

	
			4.05

				
			Availment Options

			

 

	 	
			(a)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) each Canadian Borrower may receive Advances under Facility C by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			Canadian Prime Rate Loans;

			

 

	 	
			(ii)

				
			U.S. Base Rate Loans;

			

 

	 	
			(iii)

				
			Bankers' Acceptances, each having a maturity between 28 and 182 days (inclusive), subject to availability;

			

 

	 	
			(iv)

				
			BA Equivalent Loans from Non-BA Lenders with a maturity between 28 and 182 days (inclusive), subject to availability; or

			

 

	 	
			(v)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability.

			

 

	 	
			(b)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) each U.S. Borrower may receive Advances under Facility C by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			U.S. Prime Rate Loans; or

			

 

	 	
			(ii)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability.

			

 

 

 

 

	 	
			(c)

				
			Bankers' Acceptances, BA Equivalent Loans and LIBOR Loans will not be issued which in the opinion of the Lenders could result in the Facility C Limit being exceeded at any time. The Outstanding Advances under Facility C in the form of any above Availment Option may be converted into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, Bankers' Acceptances, BA Equivalent Loans and LIBOR Loans may not be converted into another Availment Option prior to the maturity thereof).

			

 

	
			4.06

				
			Interest and Fees under Facility C

			

 

In respect of Advances made to a Borrower under Facility C such Borrower agrees to pay to the Agent:

 

	 	
			(a)

				
			interest on Canadian Prime Rate Loans at the Canadian Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(b)

				
			interest on U.S. Base Rate Loans at the U.S. Base Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(c)

				
			in respect of each Bankers’ Acceptance, a stamping fee equal to the Applicable Margin in effect at the time of issuance, multiplied by the face amount of the Bankers’ Acceptance with the product thereof further multiplied by the number of days to maturity of the Bankers’ Acceptance and divided by 365, payable at the time of acceptance;

			

 

	 	
			(d)

				
			in respect of each BA Equivalent Note, a stamping fee equal to the Applicable Margin in effect at the time of issuance multiplied by the face amount of the BA Equivalent Note with the product thereof further multiplied by the number of days to maturity of the BA Equivalent Note and divided by 365, payable at the time of acceptance;

			

 

	 	
			(e)

				
			interest on U.S. Prime Rate Loans at the U.S. Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(f)

				
			interest on LIBOR Loans at the LIBO Rate plus the Applicable Margin per annum calculated on the basis of a year of three hundred and sixty (360) days, payable in the manner set out in Section 7.10(b); and

			

 

	 	
			(g)

				
			a standby fee with respect to the unused portion of Facility C, calculated on a daily basis as being the difference between (i) the Facility C Limit (less the Commitments of any Non-Funding Lenders under Facility C) and (ii) the Outstanding Advances under Facility C, multiplied by the Applicable Margin and divided by 365; which standby fee shall be payable quarterly in arrears on the last day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date; and for the purpose of calculating such standby fee, the U.S. Dollar equivalent of Outstanding Advances in Canadian Dollars shall be determined by reference to the spot rate of exchange for converting Canadian Dollars into U.S. Dollars quoted by the Bank of Canada at approximately noon (Toronto time) on the first Business Day of the month in which such standby fee is calculated.

			

 

 

 

 

Except as otherwise provided in this Agreement, such payments shall be made to the Agent on behalf of the Facility C Lenders; and the Agent shall promptly remit to each Facility C Lender its Proportionate Share of each such payment.

 

	
			4.07

				
			Voluntary Cancellation; Voluntary Repayments

			

 

	 	
			(a)

				
			The Borrowers may at any time and from time to time upon not less than two (2) Business Days' prior written notice to the Agent, without penalty or fee, cancel any unadvanced portion of Facility C in a minimum amount and a multiple of One Hundred Thousand Dollars ($100,000), in which event the Facility C Limit shall be reduced by the amount so cancelled.

			

 

	 	
			(b)

				
			Upon delivery of an executed Repayment Notice to the Agent not less than two (2) Business Days’ prior to making a Repayment, the Borrowers may make Repayments on account of the Outstanding Advances under Facility C from time to time in a minimum amount of One Hundred Thousand Dollars ($100,000) without payment of any penalty or fee, provided however that Bankers’ Acceptances, BA Equivalent Loans and LIBOR Loans may not be repaid prior to the maturity thereof. Each such Repayment under Facility C shall be applied against the scheduled Repayments payable under Facility C in reverse chronological order.

			

 

 

 

 

ARTICLE V - FACILITY D

 

	
			5.01

				
			Establishment of Facility D

			

 

Subject to the terms and conditions in this Agreement (specifically including Section 7.15), each Facility D Lender hereby establishes a committed, non-revolving credit facility for Acquireco in the maximum principal amount indicated opposite such Lender's name in Exhibit “A” under the heading “Facility D Commitments”. The said credit facilities are established by the Facility D Lenders severally and not jointly, and are hereinafter collectively referred to as “Facility D”. One Advance under Facility D shall be made on the eNom Closing Date, and any portion of Facility D which remains unadvanced thereafter shall be cancelled.

 

	
			5.02

				
			Purpose

			

 

The Advance under Facility D shall be made on the eNom Closing Date to assist Acquireco in acquiring the eNom Shares in accordance with the terms and conditions of the eNom Purchase Agreement.

 

	
			5.03

				
			Non-Revolving Nature

			

 

Facility D shall be a non-revolving facility, and any Repayment under Facility D may not be reborrowed.

 

	
			5.04

				
			Repayment

			

 

	 	
			(a)

				
			Notwithstanding all other provisions in this Section 5.04, the obligations under Facility D shall become due and payable on the earliest of: (i) the Acceleration Date; and (ii) the Maturity Date.

			

 

	 	
			(b)

				
			On the last day of each Fiscal Quarter following the Advance under Facility D, Acquireco shall make a Repayment under Facility D (in addition to all other Repayments required pursuant to this Section 5.04) equal to one-twentieth (1/20) of the amount of the Advance. 

			

 

	 	
			(c)

				
			If at any time the Outstanding Advances under Facility D exceed the Facility D Limit for any reason (specifically including as a result of a fluctuation in currency exchange rates), Acquireco shall immediately make a Repayment under Facility D in such amount as will result in the Outstanding Advances under Facility D not exceeding the Facility D Limit.

			

 

	 	
			(d)

				
			In addition to all other Repayments required in respect of Facility D pursuant to this Section 5.04, Repayments shall be required under Facility D as provided in Sections 4.04(e) and (f).

			

 

	
			5.05

				
			Availment Options

			

 

	 	
			(a)

				
			Subject to the restrictions contained in this Agreement (and in particular, Sections 7.02 and 7.03) Acquireco may receive Advances under Facility D by any one or more of the following Availment Options (or any combination thereof): 

			

 

	 	
			(i)

				
			U.S. Prime Rate Loans; or

			

 

	 	
			(ii)

				
			LIBOR Loans with a LIBOR Period of one (1), two (2) or three (3) months, subject to availability.

			

 

 

 

 

	 	
			(b)

				
			LIBOR Loans will not be issued which in the opinion of the Lenders could result in the Facility D Limit being exceeded at any time. The Outstanding Advances under Facility D in the form of any above Availment Option may be converted into another form of Availment Option, subject to and in accordance with the terms and conditions of this Agreement (but for greater certainty, LIBOR Loans may not be converted into another Availment Option prior to the maturity thereof).

			

 

	
			5.06

				
			Interest and Fees under Facility D

			

 

In respect of Advances made under Facility D Acquireco agrees to pay to the Agent:

 

	 	
			(a)

				
			interest on U.S. Prime Rate Loans at the U.S. Prime Rate plus the Applicable Margin per annum, payable monthly in arrears on the last day of each and every month and on the Maturity Date;

			

 

	 	
			(b)

				
			interest on LIBOR Loans at the LIBO Rate plus the Applicable Margin per annum calculated on the basis of a year of three hundred and sixty (360) days, payable in the manner set out in Section 7.10(b); and

			

 

	 	
			(c)

				
			a standby fee with respect to the unused portion of Facility D, calculated on a daily basis as being the difference between (i) the Facility D Limit (less the Commitments of any Non-Funding Lenders under Facility D) and (ii) the Outstanding Advances under Facility D, multiplied by the Applicable Margin and divided by 365; which standby fee shall be payable quarterly in arrears on the last day of each Fiscal Quarter based on the number of days in such Fiscal Quarter (including the first day and excluding the last day in such Fiscal Quarter) and on the Maturity Date.

			

 

Except as otherwise provided in this Agreement, such payments shall be made to the Agent on behalf of the Facility D Lenders; and the Agent shall promptly remit to each Facility D Lender its Proportionate Share of each such payment.

 

	
			5.07

				
			Voluntary Cancellation; Voluntary Repayments

			

 

	 	
			(a)

				
			Acquireco may at any time and from time to time upon not less than two (2) Business Days' prior written notice to the Agent, without penalty or fee, cancel any unadvanced portion of Facility D in a minimum amount and a multiple of One Hundred Thousand Dollars ($100,000), in which event the Facility D Limit shall be reduced by the amount so cancelled.

			

 

	 	
			(b)

				
			Upon delivery of an executed Repayment Notice to the Agent not less than two (2) Business Days’ prior to making a Repayment, Acquireco may make Repayments on account of the Outstanding Advances under Facility D from time to time in a minimum amount of One Hundred Thousand Dollars ($100,000) without payment of any penalty or fee, provided however that LIBOR Loans may not be repaid prior to the maturity thereof. Each such Repayment under Facility D shall be applied against the scheduled Repayments payable under Facility D in reverse chronological order.

			

 

 

 

 

 

ARTICLE VI - HEDGING AGREEMENTS

 

	
			6.01

				
			Hedging Agreements

			

 

	 	
			(a)

				
			BMO (for greater certainty, in its capacity as a Lender hereunder and not in its capacity as the Agent) shall act as lead swap arranger for all Interest Rate Hedging Agreements to be entered into between any Borrower and the Lenders hereunder, and shall offer the Lenders an opportunity to participate in a pro-rata portion of such Interest Rate Hedging Agreements pursuant to such arrangements as may be agreed between BMO and the other Lenders, respectively.

			

 

	 	
			(b)

				
			Each Borrower may deal directly with the respective Lenders in connection with the establishment of Currency Hedging Agreements.

			

 

	 	
			(c)

				
			Each Hedging Agreement between a Borrower and a Lender shall be upon such terms and conditions as may be offered by such Lender in its discretion (not inconsistent with the terms of this Agreement), and such Borrower agrees to execute and deliver to such Lender all such agreements as it may reasonably require (for greater certainty, specifically including an ISDA master agreement). Each Hedging Agreement between the Borrower and a Lender shall include such Lender's standard early termination events. Without limiting the generality of the foregoing, each Hedging Agreement shall also stipulate that the termination of all or any of the Facilities shall constitute an Early Termination Event (as defined in the applicable ISDA Master Agreement) and the Affected Party (as defined in such ISDA Agreement) shall be the counter-party to the Lender in such contract. Such Lender shall have the right to choose the payment measure and the payment method (as such terms are understood in the ISDA Master Agreement) in respect of such Early Termination Event.

			

 

	 	
			(d)

				
			Hedging Agreements may not be entered into for speculative purposes. Without limiting the generality of the foregoing, if requested in writing by the Agent from time to time upon the instructions of the Required Lenders, the Borrowers shall promptly take all actions which may be necessary to unwind one or more Interest Rate Hedging Agreements in whole or in part to the extent necessary to ensure that the aggregate notional amount of all outstanding Interest Rate Hedging Agreements does not at any time exceed the Outstanding Advances at such time.

			

 

	 	
			(e)

				
			The term of each Interest Rate Hedging Agreement shall expire not later than the Maturity Date.

			

 

	 	
			(f)

				
			The term of each Currency Hedging Agreement shall expire not later than the earlier of (a) eighteen (18) months from the date of such Hedging Agreement, and (b) the Maturity Date.

			

 

	 	
			(g)

				
			The Security shall secure all obligations of the Borrowers under or in respect of each Hedging Agreement on a pari passu basis with all other Obligations. Each Lender acknowledges that the enforcement of the Security is a matter which requires the approval of the Required Lenders. 

			

 

 

 

 

	 	
			(h)

				
			If a Lender continues to be a party to one or more Hedging Agreements with any Borrower after all other indebtedness and obligations of the Borrowers to such Lender hereunder have been repaid and satisfied in full (or assigned by such Lender to an assignee), for greater certainty such Lender shall continue to be a Lender for all purposes of this Agreement and the obligations under such Hedging Agreement(s) shall continue to be secured by the Security as provided herein, but such Lender shall not be a “Required Lender” as such term is defined herein.

			

 

	 	
			(i)

				
			On or before the Maturity Date the Borrowers shall (i) unwind all Hedging Agreements (and pay all applicable unwinding costs in respect thereof); or (ii) provide cash collateral in favour of the Agent in respect of all outstanding Hedging Agreements in an amount satisfactory to the Agent. For greater certainty, the Agent shall have no obligation to release all or any portion of the Security unless and until all Hedging Agreements are terminated or such cash collateral is provided in respect thereof.

			

 

 

 

 

 

ARTICLE VII - GENERAL CONDITIONS

 

	
			7.01

				
			Matters relating to Interest

			

 

	 	
			(a)

				
			Unless otherwise indicated, interest on any outstanding principal amount shall be calculated daily and shall be payable monthly in arrears on the last day of each and every month and on the Maturity Date. If the last day of a month is not a Business Day, the interest payment due on such day shall be made on the next Business Day, and interest shall continue to accrue on the said principal amount and shall also be paid on such next Business Day. Interest shall accrue from and including the day upon which an Advance is made or is deemed to have been made, and ending on but excluding the day on which such Advance is repaid or satisfied. Any change in the Canadian Prime Rate shall cause an immediate adjustment of the interest rate applicable to Canadian Prime Rate Loans and Overdrafts in Canadian Dollars, and any change in the U.S. Base Rate shall cause an immediate adjustment of the interest rate applicable to U.S. Base Rate Loans and Overdrafts in U.S. Dollars, and any change in the U.S. Prime Rate shall cause an immediate adjustment of the interest rate applicable to U.S. Prime Rate Loans, in each case without the necessity of any notice to the Borrowers.

			

 

	 	
			(b)

				
			Unless otherwise stated, in this Agreement if reference is made to a rate of interest, fee or other amount “per annum” or a similar expression is used, such interest, fee or other amount shall be calculated on the basis of a year of three hundred and sixty-five (365) or three hundred and sixty-six (366) days, as the case may be. If the amount of any interest, fee or other amount is determined or expressed on the basis of a period of less than one year of three hundred and sixty-five (365) or three hundred and sixty-six (366) days, as the case may be, the equivalent yearly rate is equal to the rate so determined or expressed, divided by the number of days in the said period, and multiplied by the actual number of days in that calendar year.

			

 

	 	
			(c)

				
			Notwithstanding any other provisions of this Agreement, if the amount of any interest, premium, fees or other monies or any rate of interest stipulated for, taken, reserved or extracted under the Loan Documents would otherwise contravene the provisions of Section 347 of the Criminal Code (Canada), Section 8 of the Interest Act (Canada) or any successor or similar legislation, or would exceed the amounts which any Lender is legally entitled to charge and receive under any law to which such compensation is subject, then such amount or rate of interest shall be reduced to such maximum amount as would not contravene such provision; and to the extent that any excess has been charged or received such Lender shall apply such excess against the Outstanding Advances and refund any further excess amount.

			

 

	 	
			(d)

				
			Any change in the Applicable Margin in respect of any Availment Option under a Facility shall be determined by the Agent based upon the information contained in the most recent Compliance Certificate received by the Agent, and shall take effect commencing on the fifth (5th) Business Day following receipt of such Compliance Certificate by the Agent (in this paragraph called the “effective date”). For greater certainty:

			

 

	 	
			(i)

				
			the interest rates and fees applicable to all Advances made on or after the effective date shall be based upon the said revised Applicable Margin;

			

 

 

 

 

	 	
			(ii)

				
			from and after the effective date, the interest rates and fees applicable to all Loans outstanding on the effective date shall be based upon the said revised Applicable Margin;

			

 

	 	
			(iii)

				
			no readjustment shall be made in respect of any Bankers’ Acceptance or BA Equivalent Loan which is outstanding on the effective date, and the said revised Applicable Margin all apply to all Bankers’ Acceptances and BA Equivalent Loans issued or made on or after the effective date; and

			

 

	 	
			(iv)

				
			in respect of each Letter of Credit which is outstanding on the effective date there shall be a readjustment to the fee initially paid upon the issuance thereof, as follows: the fee relating to the period from the date of issuance to but excluding the effective date shall be based upon the Applicable Margin in effect during such period; and the fee relating to the period from and including the effective date to but excluding the date of expiry of such Letter of Credit shall be based upon the Applicable Margin in effect from after the effective date; and the Agent and the Borrower agrees to promptly make all such payments as the Agent may advise are required in order to effect such adjustments.

			

 

The determination of such adjustments by the Agent shall be deemed to be correct absent manifest error. If the Agent does not receive a Compliance Certificate on a date required pursuant to Section 9.04(b), then from and after the date such Compliance Certificate was required to have been delivered, the Applicable Margin in respect of each Availment Option shall be the highest Applicable Margin relating thereto, until the fifth Business Day following receipt by the Agent of the required Compliance Certificate.

 

	
			7.02

				
			Notice Periods

			

 

	 	
			(a)

				
			The Borrowers shall provide written notice to the Agent in respect of Advances, Rollovers, Conversions and Repayments as follows:

			

 

	 	
			(i)

				
			no notice is required in respect of Advances and repayments in respect of Overdrafts;

			

 

	 	
			(ii)

				
			except in respect of Overdrafts, two (2) Business Days’ notice is required before 11:00 a.m. Toronto time in respect of any Advance, Rollover, Conversion or Repayment; and

			

 

	 	
			(iii)

				
			notwithstanding the foregoing, three (3) Business Days’ notice is required before 11:00 a.m. Toronto time in respect of an Advance, Rollover or Repayment relating to a LIBOR Loan or a Letter of Credit, and in respect of a Conversion of another Availment Option into a LIBOR Loan.

			

 

	 	
			(b)

				
			Notice of any Advance, Rollover, Conversion or voluntary Repayment referred to in paragraph (a) above shall be given in the form of a Draw Request, Rollover Notice, Conversion Notice or Repayment Notice, as the case may be, attached hereto as Exhibits. All such notices shall be given to the Agent at its address set out in Section 15.07.

			

 

	 	
			(c)

				
			If notice is not provided as contemplated herein with respect to the maturity of a Bankers’ Acceptance, BA Equivalent Loan or LIBOR Loan, the Agent may convert the Bankers’ Acceptance, BA Equivalent Loan or LIBOR Loan upon its maturity into a Canadian Prime Rate Loan, a U.S. Base Rate Loan or a U.S. Prime Rate Loan, as the case may be.

			

 

 

 

 

	 	
			(d)

				
			Any Conversion from one form of Availment Option to another shall be subject to satisfaction of all of the terms and conditions applicable to the form of the new Availment Option as herein provided.

			

 

	
			7.03

				
			Minimum Amounts, Multiples and Procedures re Draws, Conversions and Repayments

			

 

	 	
			(a)

				
			Advances under the Swingline shall be on a dollar for dollar basis and not subject to a minimum amount or a required multiple.

			

 

	 	
			(b)

				
			Subject to paragraph (a), each request by a Borrower for an Advance or Conversion in the form of a Canadian Prime Rate Loan shall be in a minimum amount of CDN$500,000 and a multiple of CDN$100,000, and each request by a Borrower for an Advance or Conversion in the form of a U.S. Base Rate Loan or a U.S. Prime Rate Loan shall be in a minimum amount of $500,000 and a multiple of $100,000.

			

 

	 	
			(c)

				
			Each request by a Canadian Borrower for an Advance by way of Bankers' Acceptances and BA Equivalent Notes shall be for an aggregate face amount of Bankers' Acceptances and BA Equivalent Notes of not less than CDN$1,000,000 and in a multiple of CDN$100,000, and in such amount as will result in the face amount of each Bankers' Acceptance or BA Equivalent Note issued by a Lender being in a multiple of CDN$100,000.

			

 

	 	
			(d)

				
			Each request by a Borrower for an Advance in the form of a LIBOR Loan, and each request by a Borrower for a Conversion of any Availment Option (including existing LIBOR Loans) into a LIBOR Loan, shall be for an aggregate principal amount of not less than $1,000,000 and in a multiple of $100,000.

			

 

	 	
			(e)

				
			Upon receipt of a Draw Request under any Facility, the Agent shall promptly notify each Lender under such Facility of the contents thereof and such Lender's Proportionate Share of the Advance. Such Draw Request shall not thereafter be revocable.

			

 

	 	
			(f)

				
			Each Advance shall be made by the applicable Lenders to the Agent at its address referred to in Section 15.07 or such other address as the Agent may designate by notice in writing to the Lenders from time to time. Each Lender shall make available its Proportionate Share of each said Advance to the Agent. Unless the Agent determines that any condition of the Advance has not been satisfied or waived, the Agent shall make the funds so received from the Lenders available to a Borrower by 2:00 p.m. (Toronto time) on the requested date of the Advance. No Lender shall be responsible for any other Lender's obligation to make available its Proportionate Share of the said Advance.

			

 

	 	
			(g)

				
			Each Borrower agrees to deliver in favour of each Lender such other agreements and documentation as such Lender may reasonably require (not inconsistent with this Agreement) in respect of such Lender's requirements for the acceptance of Bankers' Acceptances or the issuance of BA Equivalent Notes.

			

 

	 	
			(h)

				
			All payments of principal, interest and other amounts made by a Borrower to the Agent in respect of the Outstanding Advances under a Facility (other than the Swingline) shall be paid by the Agent to the respective Lenders, each in accordance with its Proportionate Share thereof.

			

 

 

 

 

	
			7.04

				
			Place of Advances, Repayments

			

 

	 	
			(a)

				
			Advances by any Lender to a Canadian Borrower shall be made by such Lender to the Agent from such Lender's Lending Office in Canada. All payments of principal, interest and other amounts to be made by a Canadian Borrower pursuant to this Agreement shall be made to the Agent at its address noted in Section 15.07 or to such other address in Canada as the Agent may direct in writing from time to time. All such payments received by the Agent on a Business Day before 2:00 p.m. (Toronto time) shall be treated as having been received by the Agent on that day; and payments made after such time on a Business Day shall be treated as having been received by the Agent on the next Business Day.

			

 

	 	
			(b)

				
			Advances by the Swingline Lender to a U.S. Borrower shall be made by the Swingline Lender from its Lending Office in the United States. All payments of principal, interest and other amounts to be made by a U.S. Borrower pursuant to this Agreement shall be made to the Agent at its address at 115 South LaSalle Street, Chicago, Illinois, or to such other address in the United States as the Agent may direct in writing from time to time. All such payments received by the Agent on a Business Day before 2:00 p.m. (Chicago time) shall be treated as having been received by the Agent on that day; payments made after such time on a Business Day shall be treated as having been received by the Agent on the next Business Day.

			

 

	 	
			(c)

				
			Whenever any payment shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. Interest shall continue to accrue and be payable thereon as provided herein, until the date on which such payment is received by the Agent.

			

 

	 	
			(d)

				
			Each of the Borrowers hereby irrevocably authorizes the Agent to debit any account maintained by such Borrowers with the Agent from time to time in order to pay any amount of principal, interest, fees, expenses or other amounts payable by the Borrowers pursuant to this Agreement, if such amount is not paid in full by the Borrowers within thirty (30) days after receipt of a written request from the Agent for payment of such amount.

			

 

	
			7.05

				
			Evidence of Obligations (Noteless Advances)

			

 

The Agent shall open and maintain, in accordance with its usual practice, accounts evidencing the Obligations; and the information entered in such accounts shall constitute conclusive evidence of the Obligations absent manifest error. The Agent may, but shall not be obliged to, request the Borrowers to execute and deliver promissory notes from time to time as additional evidence of the Obligations, in form and substance satisfactory to the Agent acting reasonably.

 

	
			7.06

				
			Determination of Equivalent Amounts

			

 

Whenever it is necessary or desirable at any time to determine the Equivalent Amount in Canadian Dollars of an amount expressed in U.S. Dollars, or vice-versa (specifically including for greater certainty the determination of whether the Outstanding Advances under any Facility exceed the maximum amount of such Facility), the Equivalent Amount shall be determined by reference to the Exchange Rate on the date of such determination.

 

 

 

 

	
			7.07

				
			Purchase of Bankers' Acceptances and BA Equivalent Notes

			

 

	 	
			(a)

				
			In connection with the issuance by a Borrower of a Bankers' Acceptance or BA Equivalent Note, the amount payable by the purchaser thereof to the Borrower shall be determined in accordance with the following formula:

			

 

_____F_____

1 + (D x T/365)

 

where:

 

F     means the face amount of such Bankers’ Acceptance or BA Equivalent Note,

 

D     means the discount rate, and

 

T     means the number of days to maturity of such Bankers’ Acceptance or BA Equivalent Note,

 

with the amount as so calculated being rounded up or down to the fifth decimal place and with 0.000005 being rounded up.

 

	 	
			(b)

				
			Each BA Lender which is a bank listed in Schedule I of the Bank Act (Canada) agrees to purchase those Bankers' Acceptances which it has accepted at a discount from the face amount thereof equal to the CDOR Rate for the relevant period in effect on the issuance date thereof; provided however that if BMO is the only BA Lender under a Facility, the discount rate shall be the applicable discount rate established by BMO on the issuance date thereof.

			

 

	 	
			(c)

				
			Each BA Lender which is a bank listed in Schedule II or Schedule III of the Bank Act (Canada) agrees to purchase those Bankers' Acceptances which it has accepted at a discount from the face amount thereof equal to the CDOR Rate for the relevant period in effect on the issuance date thereof plus a premium determined by such BA Lender not in excess of one-tenth of one percent (0.10%) per annum.

			

 

	 	
			(d)

				
			Each Non-BA Lender agrees to purchase BA Equivalent Notes issued by it hereunder at a discount from the face amount thereof equal to the CDOR Rate for the relevant period in effect on the issuance date thereof.

			

 

	 	
			(e)

				
			The discount applicable to each Bankers' Acceptances and BA Equivalent Note shall be determined on the basis of a year of 365 days.

			

 

 

 

 

	
			7.08

				
			Provisions Regarding Bankers’ Acceptances

			

 

The following provisions are applicable to Bankers’ Acceptances issued by a Canadian Borrower (referred to in this Section as “the Borrower”) and accepted by any BA Lender hereunder:

 

Payment of Bankers’ Acceptances

 

	 	
			(a)

				
			The Borrower agrees to provide for each Bankers' Acceptance by payment of the face amount thereof to the Agent on behalf of the BA Lender on the maturity of the Bankers' Acceptance or, prior to such maturity, on the Acceleration Date; and the Agent shall remit the said amount to such BA Lender and such BA Lender shall in turn remit such amount to the holder of the Bankers' Acceptance. If the Borrower fails to provide for the payment of the Bankers' Acceptance accordingly, any amount not so paid shall be immediately payable by the Borrower to the Agent on behalf of the BA Lender together with interest on such amount calculated daily and payable monthly at the rate and in the manner applicable to Canadian Prime Rate Loans under the Facility under which such Bankers' Acceptance was issued. The Borrower agrees not to claim any days of grace for the payment at maturity of any Bankers' Acceptance and agrees to indemnify and save harmless the BA Lender in connection with all payments made by the BA Lender (or by the Agent on its behalf) pursuant to Bankers' Acceptances accepted by the BA Lender, together with all reasonable costs and expenses incurred by the BA Lender in this regard. The Borrower hereby waives any defences to payment which might otherwise exist if for any reason a Bankers' Acceptance is held by the BA Lender for its own account at maturity.

			

 

Availability of Bankers’ Acceptances

 

	 	
			(b)

				
			If at any time and from time to time the Agent determines, acting reasonably, that there no longer exists a market for Bankers' Acceptances for the term requested by the Borrower, or at all, the Agent shall so advise the Borrower, and in such event the BA Lenders shall not be obliged to accept and the Borrower shall not be entitled to issue Bankers' Acceptances.

			

 

Power of Attorney

 

	 	
			(c)

				
			The Borrower hereby appoints each BA Lender as its true and lawful attorney to complete and issue Bankers' Acceptances on behalf of the Borrower in accordance with written (including facsimile) transmitted instructions provided by the Borrower to the Agent on behalf of such BA Lender, and the Borrower hereby ratifies all that its said attorney may do by virtue thereof. The Borrower agrees to indemnify and hold harmless the Agent and the BA Lenders and their respective directors, officers and employees from and against any charges, complaints, costs, damages, expenses, losses or liabilities of any kind or nature which they may incur, sustain or suffer, arising from or by reason of acting, or failing to act, as the case may be, in reliance upon this power of attorney, except to the extent caused by the gross negligence or wilful misconduct of the Agent or the BA Lender or their respective directors, officers and employees. The Borrower hereby agrees that each Bankers' Acceptance completed and issued and accepted in accordance with this Section by a BA Lender on behalf of the Borrower is a valid, binding and negotiable instrument of the Borrower as drawer and endorser. The Borrower agrees that each BA Lender's accounts and records will constitute prima facie evidence of the execution and delivery by the Borrower of Bankers' Acceptances. This power of attorney shall continue in force until written notice of revocation has been served upon the Agent by the Borrower at the Agent's address set out in Section 15.07.

			

 

 

 

 

	
			7.09

				
			Provisions regarding BA Equivalent Notes

			

 

Each Non-BA Lender will not accept Bankers’ Acceptances hereunder, and shall instead from time to time make BA Equivalent Loans to a Canadian Borrower (referred to in this Section as “the Borrower”). Each BA Equivalent Loan shall be evidenced by a non-interest bearing promissory note payable by the Borrower to the Non-BA Lender substantially in the form of Exhibit “H” attached hereto, which will be purchased by the Non-BA Lender. Each BA Equivalent Note shall be negotiable by the Non-BA Lender without notice to or the consent of the Borrower, and the holder thereof shall be entitled to enforce such BA Equivalent Note against the Borrower free of any equities, defences or rights of set-off that may exist between the Borrower and the Non-BA Lender. In this Agreement, all references to a BA Equivalent Note shall mean the loan evidenced thereby if required by the context; and all references to the “issuance” of a BA Equivalent Note by a Non-BA Lender and similar expressions shall mean the making of a BA Equivalent Loan by the Non-BA Lender which is evidenced by a BA Equivalent Note. The following provisions are applicable to each BA Equivalent Loan made by a Non-BA Lender to the Borrower hereunder:

 

Payment of BA Equivalent Notes

 

	 	
			(a)

				
			The Borrower agrees to provide for each BA Equivalent Note by payment of the face amount thereof to the Agent on behalf of the Non-BA Lender on the maturity of the BA Equivalent Note or, prior to such maturity, on the Acceleration Date; and the Agent shall remit the said amount to such Non-BA Lender and such Non-BA Lender shall in turn remit such amount to the holder of the BA Equivalent Note. If the Borrower fails to provide for the payment of the BA Equivalent Note accordingly, any amount not so paid shall be immediately payable by the Borrower to the Agent on behalf of the Non-BA Lender together with interest on such amount calculated daily and payable monthly at the rate and in the manner applicable to Canadian Prime Rate Loans under the Facility under which such BA Equivalent Note was issued. The Borrower agrees not to claim any days of grace for the payment at maturity of any BA Equivalent Note and agrees to indemnify and save harmless the Non-BA Lender in connection with all payments made by the Non-BA Lender (or by the Agent on its behalf) pursuant to BA Equivalent Notes accepted by the Non-BA Lender, together with all reasonable costs and expenses incurred by the Non-BA Lender in this regard. The Borrower hereby waives any defences to payment which might otherwise exist if for any reason a BA Equivalent Note is held by the Non-BA Lender for its own account at maturity.

			

 

Availability of BA Equivalent Loans

 

	 	
			(b)

				
			The Non-BA Lender shall have no obligation to make BA Equivalent Loans during any period in which the BA Lenders' obligation to issue Bankers' Acceptances is suspended pursuant to Section 3.5 of the CBA Model Provisions.

			

 

 

 

 

 

Power of Attorney

 

	 	
			(c)

				
			The Borrower hereby appoints the Non-BA Lender as its true and lawful attorney to complete BA Equivalent Notes on behalf of the Borrower in accordance with written (including facsimile) transmitted instructions delivered by the Borrower to the Agent, and the Borrower hereby ratifies all that its said attorney may do by virtue thereof. The Borrower agrees to indemnify and hold harmless the Agent and the Non-BA Lender and their respective directors, officers and employees from and against any charges, complaints, costs, damages, expenses, losses or liabilities of any kind or nature which they may incur, sustain or suffer, arising from or by reason of acting, or failing to act, as the case may be, in reliance upon this power of attorney except to the extent caused by the gross negligence or wilful misconduct of the Agent or the Non-BA Lender or their respective directors, officers and employees. The Borrower hereby agrees that each BA Equivalent Note completed by the Non-BA Lender on behalf of the Borrower is a valid, binding and negotiable instrument of the Borrower as drawer and endorser. The Borrower agrees that the Non-BA Lender's accounts and records will constitute prima facie evidence of the execution and delivery by the Borrower of BA Equivalent Notes. This power of attorney shall continue in force until written notice of revocation has been served upon the Agent on behalf of the Non-BA Lender by the Borrower at the Agent's address provided in Section 15.07.

			

 

	
			7.10

				
			Provisions Regarding LIBOR Loans

			

 

The following provisions are applicable to LIBOR Loans made by the Lenders to any Borrower:

 

Drawdown Procedures

 

	 	
			(a)

				
			Upon receipt by the Agent from the Borrower of a Draw Request, Conversion Notice or Rollover Notice in respect of a LIBOR Loan, the Agent will promptly advise the Borrower of the LIBO Rate, such rate to be determined as at approximately 11:00 a.m. London, England time, two (2) LIBOR Business Days before the commencement of the LIBOR Period for such LIBOR Loan.

			

 

Interest Payment Dates

 

	 	
			(b)

				
			Interest in respect of any LIBOR Loan shall be calculated on the basis of a year of three hundred and sixty (360) days. Interest in respect of any LIBOR Loan with a LIBOR Period of between one (1) and three (3) months (inclusive) shall be payable at the time the principal amount of such LIBOR Loan is payable.

			

 

Laws Applicable to LIBOR Loans 

 

	 	
			(c)

				
			The Borrower acknowledges that the ability of the Lenders to maintain or provide any LIBOR Loan and/or to charge interest on any LIBOR Loan at the LIBO Rate is and will be subject to any statute, law, regulation, rule or direction by any Governmental Authority having jurisdiction which may prohibit or restrict or limit such loans and/or such interest. The Borrower agrees that the Lenders shall have the right to comply with any such requirements and, if the Agent determines it to be necessary as a result of such requirement, the Agent may convert any LIBOR Loan to a U.S. Base Rate Loan or require immediate repayment of all LIBOR Loans.

			

 

 

 

 

	
			7.11

				
			No Repayment of Certain Availment Options

			

 

The Borrowers acknowledge that Bankers' Acceptances, BA Equivalent Loans and LIBOR Loans may not be repaid prior to the maturity thereof. If prior to the maturity of such Availment Option the Agent receives any funds from a Borrower or any other Person which are intended to be applied as a Repayment thereof, the Agent may retain such funds without any obligation to invest such funds or pay interest thereon, and shall apply such funds against such Availment Option on the scheduled maturity date thereof.

 

	
			7.12

				
			Illegality

			

 

The obligation of any Lender to make Advances hereunder shall be suspended if and for so long as it is unlawful or impossible for such Lender to maintain the Facility or make Advances hereunder as a result of the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency.

 

	
			7.13

				
			Advances in the United States

			

 

The Swingline Lender hereby agrees to make Advances to each U.S. Borrower hereunder from its Lending Office located in the United States, and hereby confirms its understanding that, as at the date of this Agreement, United States withholding tax is not payable in respect of interest, fees, costs and other amounts which are payable by each U.S. Borrower to the Swingline Lender in respect of such Advances. The Swingline Lender will provide the Borrowers and Agent with a properly completed and executed IRS Form W-9, form W-8ECI, Form W-8WMI, Form W-8BEN or other applicable form, certificate or document prescribed by the United States Internal Revenue Service, or any successor agency, or the United States Department of the Treasury, establishing that the Swingline Lender is exempt from any applicable U.S. withholding tax or any U.S. backup withholding tax, as applicable.

 

	
			7.14

				
			Harris N.A.

			

 

Any credit to be extended under this Agreement by BMO to a U.S. Borrower (specifically including for greater certainty an extension of credit arising from the issuance of a Letter of Credit or the entering into of a Service Agreement) may, at the discretion of BMO, be extended by its wholly-owned subsidiary Harris N.A. (referred to in this Section as “Harris”). If any such credit is extended by Harris to a U.S. Borrower, Harris shall be deemed to be a Lender hereunder, and for greater certainty all such extensions of credit shall constitute part of the Obligations and shall be secured by the Security. However, BMO and Harris shall be deemed to be one Lender for the purposes of the definition of "Required Lenders" in Section 1.01; and any notice given to BMO pursuant to Section 15.07 shall be deemed to have also been given to Harris.

 

	
			7.15

				
			Temporary Facilities Limit

			

 

Notwithstanding any other provisions in this Agreement, until the Lenders have received and confirmed (by written notice to the Credit Parties) their satisfaction with (i) the audited financial statements of eNom in respect of its fiscal year ended December 31, 2016; and (ii) all other financial information required by the Lenders to evidence that the eNom EBITDA for such fiscal year is not less than Fifteen Million Dollars ($15,000,000), the aggregate maximum amount of the Outstanding Advances under all Facilities shall not exceed One Hundred Million Dollars ($100,000,000). The Credit Parties undertake and agree to obtain and provide such audited financial statements and additional financial information to the Agent by no later than ninety (90) days after the eNom Closing Date.

 

 

 

 

ARTICLE VIII - REPRESENTATIONS AND WARRANTIES

 

	
			8.01

				
			Representations and Warranties

			

 

Notwithstanding that this Agreement has been executed and delivered by the parties hereto prior to the completion of the eNom Purchase Transaction, the representations and warranties set out herein are hereby deemed to have been made as if the eNom Purchase Transaction had been completed, and for greater certainty in this Article VIII each reference to the Companies includes the eNom Companies and each reference to a Company includes each eNom Company. The Credit Parties hereby jointly and severally represent and warrant to the Agent and the Lenders as follows:

 

	 	
			(a)

				
			Status – Each Company has been duly incorporated (or amalgamated) and organized and is validly subsisting under the laws of its jurisdiction of incorporation and is up-to-date in respect of all material corporate filings.

			

 

	 	
			(b)

				
			Information – Schedule 8.01(b) attached hereto contains a list of all Companies as at the eNom Closing Date, and the following information in respect of each Company: its present and all prior corporate names, including the names of all corporate predecessors, jurisdiction of incorporation or establishment, present governing jurisdiction, registered office, principal place of business, all locations at which it has places of business or owns assets, its bank accounts, the number and classes of its issued and outstanding shares and a list of its shareholders, partners or members, as applicable, including the number and class of shares (or proportionate membership or partnership interest) held by each. Schedule 8.01(b) also identifies those Companies which are Unsecured Companies.

			

 

	 	
			(c)

				
			Solvency – Each Company is Solvent.

			

 

	 	
			(d)

				
			No Pending Changes – No Person has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, warrants or convertible obligations of any nature, for the purchase of any properties or assets of any Company out of the ordinary course of business or for the purchase, subscription, allotment or issuance of any debt or equity securities of any Company.

			

 

	 	
			(e)

				
			No Conflicting Agreements – Neither the execution and delivery of the Security, nor compliance with the terms, provisions and conditions of this Agreement or the Security will conflict with, result in a breach of, or constitute a default under the charter documents or by-laws of any Secured Company or any agreement or instrument to which it is a party or is otherwise bound, and does not require the consent or approval of any Person, other than those which have been obtained.

			

 

	 	
			(f)

				
			No Conflict with Charter Documents – There are no provisions in the charter documents, by-laws or partnership agreement of any Secured Company or in any unanimous shareholder agreement affecting it which restrict or limit its powers to borrow money, issue debt obligations, guarantee the payment or performance of the obligations of others, or otherwise encumber all or any of its property, now owned or subsequently acquired.

			

 

	 	
			(g)

				
			Loan Documents – Each Credit Party has the corporate capacity, power, legal right and authority to borrow from the Lenders, perform its obligations under this Agreement and provide the Security required to be provided by it hereunder; and each other Secured Company has the corporate capacity, power, legal right and authority to guarantee payment to the Agent and the Lenders of the Borrowers’ obligations and provide the Security required to be provided by it hereunder. The execution and delivery of the Loan Documents by the Secured Companies and the performance of their respective obligations therein have been duly authorized by all necessary corporate action. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of the Secured Companies, enforceable against them in accordance with the terms and provisions thereof, subject to laws of general application affecting creditors’ rights (including Insolvency Legislation) and the discretion of the court in awarding equitable remedies.

			

 

 

 

 

	 	
			(h)

				
			Conduct of Business; Material Permits – Each Company is in compliance in all material respects with all Applicable Laws of each jurisdiction in which it carries on business and is duly licensed, registered and qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the property owned or leased by it make such qualification necessary, except to the extent that the failure to hold any such licences, registrations and permits would not constitute a Material Adverse Change. Attached hereto as Schedule 8.01(h) is a true and complete list of all Material Permits, and all such Material Permits are valid and subsisting and in good standing.

			

 

	 	
			(i)

				
			Ownership of Assets; Specific Permitted Liens – Each Company owns, and possesses its property free and clear of any and all Liens except for Permitted Liens. No Company has any commitment or obligation (contingent or otherwise) to grant any Liens except for Permitted Liens. No event has occurred which constitutes, or which with the giving of notice, lapse of time or both would constitute, a material default under any Lien which has been granted by any of the Companies. Schedule 8.01(i) attached hereto contains a true and complete list of the Specific Permitted Liens.

			

 

	 	
			(j)

				
			Owned Properties – The Companies do not own any real property other than the real property listed in Schedule 8.01(j) attached hereto.

			

 

	 	
			(k)

				
			Material Leased Properties – Schedule 8.01(k) attached hereto contains a true and complete list of all Material Leased Properties and the Leases and other agreements relating thereto, including, the names of the parties; the address of the Material Leased Property; the rent and other amounts payable under the Material Lease; the term of the Material Lease and all renewal options, and the existence of any purchase option or right of first refusal in respect of the purchase of the Material Leased Property.

			

 

	 	
			(l)

				
			Intellectual Property – Each Company possesses or has the right to use all Intellectual Property material to the conduct of its business. Attached hereto as Schedule 8.01(l) is a list of all such material Intellectual Property held by the Companies as at the eNom Closing Date, including a description of the nature of such rights. No Person has asserted any written claim in respect of the validity of such Intellectual Property or the Companies’ rights therein, and the Credit Parties are not aware of any valid basis for the assertion of any such claims. To the knowledge of the Credit Parties, the conduct and operations of the businesses of each Company do not infringe, misappropriate, dilute or violate any Intellectual Property rights held by any other Person.

			

 

	 	
			(m)

				
			Insurance – The Companies have obtained insurance which satisfies all requirements set out in Section 9.01(h) herein.

			

 

 

 

 

	 	
			(n)

				
			Material Agreements – Each Material Agreement to which any Company is a party is in good standing and in full force and effect; and none of the Borrowers, or, to the knowledge of the Credit Parties, any of the other parties thereto, is in material breach of any of the terms or conditions contained therein. Attached hereto as Schedule 8.01(n) is a true and complete list of all Material Agreements to which the Companies are a party as at the eNom Closing Date.

			

 

	 	
			(o)

				
			Labour Agreements – Schedule 8.01(o) attached hereto contains a true and complete list of all contracts with labour unions and employee associations to which the Companies are a party, and the Borrowers are not aware of any attempts to organize or establish any other labour union or employee association.

			

 

	 	
			(p)

				
			Environmental Laws – Except to the extent disclosed in Schedule 8.01(p) attached hereto:

			

 

	 	
			(i)

				
			each Company and its business, operations, assets, equipment, property, leaseholds and other facilities is in compliance in all material respects with all Requirements of Environmental Law, specifically including all Requirements of Environmental Law concerning the storage and handling of Hazardous Materials;

			

 

	 	
			(ii)

				
			each Company holds all material permits, licenses, certificates and approvals from Governmental Authorities which are required in connection with air emissions, discharges to surface or groundwater, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation or disposal of Hazardous Materials and all other Requirements of Environmental Law;

			

 

	 	
			(iii)

				
			there has been no material emission, spill, release, or discharge into or upon the air, soils (or any improvements located thereon), surface water or groundwater or the sewer, septic system or waste treatment, storage or disposal system servicing the premises, of any Hazardous Materials at or from any of the Properties;

			

 

	 	
			(iv)

				
			no complaint, order, directive, claim, citation, or notice from any Governmental Authority or any other Person has been received by any Company with respect to any of the Properties in respect of air emissions, spills, releases, or discharges to soils or improvements located thereon, surface water, groundwater or the sewer, septic system or waste treatment, storage or disposal systems servicing any of the Properties, noise emissions, solid or liquid waste disposal, the use, generation, storage, transportation, or disposal of Hazardous Materials or other Requirements of Environmental Law affecting the Properties;

			

 

	 	
			(v)

				
			there are no legal or administrative proceedings, investigations or claims now pending, or to the Borrowers’ knowledge, threatened in writing, with respect to the presence on or under, or the discharge, emission, spill, radiation or disposal into or upon any of the Properties, the atmosphere, or any watercourse or body of water, of any Hazardous Material; nor are there any material matters under discussion between any Company and any Governmental Authority relating thereto; and to the knowledge of the Credit Parties there is no valid basis for any such proceedings, investigations or claims; and

			

 

	 	
			(vi)

				
			the Companies have no material indebtedness, obligation or liability, absolute or contingent, matured or not matured, with respect to the storage, treatment, cleanup or disposal of any Hazardous Materials, including without limitation any such indebtedness, obligation, or liability under any Requirements of Environmental Law regarding such storage, treatment, cleanup or disposal.

			

 

 

 

 

	 	
			(q)

				
			No Litigation – There are no actions, suits or proceedings pending, or to the knowledge of the Credit Parties, threatened in writing, against any Company in any court or before or by any Governmental Authority, except: (i) litigation disclosed in Schedule 8.01(q) attached hereto; and (ii) other litigation in which all amounts claimed against the Companies do not in the aggregate exceed Five Hundred Thousand Dollars ($500,000). To the knowledge of the Credit Parties, there are no investigations by any Governmental Authority (specifically including any Canadian federal or provincial Governmental Authority or any U.S. federal or state Governmental Authority) with respect to the conduct of any Credit Party's business.

			

 

	 	
			(r)

				
			Pension Plans – Schedule 8.01(r) attached hereto contains a true and complete list of all Pension Plans established by the Companies, and no Pension Plan listed therein is a defined benefit pension plan. No steps have been taken to terminate any such Pension Plan (in whole or in part), no contribution failure has occurred with respect to any such Pension Plan sufficient to give rise to a Lien under any applicable laws of any jurisdiction, and no condition exists and no event or transaction has occurred with respect to any such Pension Plan which might result in the incurrence by any Company of any material liability, fine or penalty. Each such Pension Plan is in compliance in all material respects with all Applicable Law, (i) all contributions (including employee contributions made by authorized payroll deductions or other withholdings) required to be made to the appropriate funding agency in accordance with all applicable laws and the terms of such Pension Plan have been made in accordance with all Applicable Law and the terms of such Pension Plan, (ii) to the extent applicable, all liabilities under such Pension Plan are funded, on a going concern and solvency basis, in accordance with the terms of the respective Pension Plans, the requirements of applicable pension benefits laws and of applicable regulatory authorities and the most recent actuarial report filed with respect to the Pension Plan, and (iii) no event has occurred and no conditions exist with respect to any such Pension Plan that has resulted or could reasonably be expected to result in such Pension Plan having its registration revoked or refused for the purposes of any Applicable Law or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any Taxes or penalties under any Applicable Law.

			

 

	 	
			(s)

				
			Financial Statements – The most recent Year-end Financial Statements and Interim Financial Statements delivered to the Agent and the Lenders have been prepared in accordance with GAAP (except in the case of the Interim Financial Statements, subject to normal year-end adjustments and the absence of footnotes) on a basis which is consistent with the previous fiscal period, and present fairly (in each case, subject to normal year-end adjustments):

			

 

	 	
			(i)

				
			the assets and liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of Tucows Inc. on a consolidated basis as at the dates therein specified;

			

 

	 	
			(ii)

				
			the sales, earnings and results of operations of Tucows Inc. on a consolidated basis during the periods covered thereby; and

			

 

 

 

 

	 	
			(iii)

				
			in the case of the Year-end Financial Statements, the changes in financial position of Tucows Inc. on a consolidated basis;

			

 

and since the dates of the said Year-end Financial Statements and Interim Financial Statements, as the case may be, no material liabilities have been incurred by Tucows Inc. on a consolidated basis except in the ordinary course of business and except for liabilities permitted to be incurred pursuant to this Agreement, and no Material Adverse Change has occurred.

 

	 	
			(t)

				
			Financial and Other Information – All financial and other written information provided by or in respect of the Companies to the Agent and the Lenders was true, correct and complete in all material respects when provided. No written information, exhibit, or report furnished by the Companies to the Agent or the Lenders contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statement contained therein not materially misleading in the circumstances in which it was made.

			

 

	 	
			(u)

				
			No Guarantees – No Guarantees have been granted by any Company, except for (i) Guarantees which comprise part of the Security; and (ii) Guarantees in respect of Permitted Funded Debt incurred by any other Company;

			

 

	 	
			(v)

				
			Taxes – Each Company has duly and timely filed all tax returns required to be filed by it, and has paid all Taxes which are due and payable by it except for Taxes being contested in good faith and in respect of which reserves have been established in accordance with GAAP. Each Company has also paid all other Taxes, charges, penalties and interest due and payable under or in respect of all assessments and re-assessments of which it has received written notice except for Taxes being contested in good faith and in respect of which reserves have been established in accordance with GAAP. There are no actions, suits, proceedings, investigations or claims pending, or to the knowledge of the Credit Parties, threatened in writing, against any Company in respect of Taxes, governmental charges or assessments except for any such actions, suits, proceedings, investigations or claims which are being contested in good faith and in respect of which reserves have been established in accordance with GAAP.

			

 

	 	
			(w)

				
			Statutory Liens – Each Company has remitted on a timely basis all amounts required to have been withheld and remitted (including withholdings from employee wages and salaries relating to income tax, employment insurance and Canada Pension Plan contributions), goods and services tax and all other amounts which if not paid when due could result in the creation of a Statutory Lien against any of its property, except for Permitted Liens.

			

 

	 	
			(x)

				
			No Default, etc. – No Default, Event of Default or Material Adverse Change has occurred and is continuing.

			

 

	 	
			(y)

				
			Transactions with Related Persons – The Companies are not party to any contract, commitment or transaction (including by way of loan) with any Related Person thereto which contains any terms which are not commercially reasonable.

			

 

	 	
			(z)

				
			Financing of eNom Purchase Transactions - Attached hereto as Schedule 8.01(z) is a summary of the sources and application of funds relating to the eNom Purchase Transaction. Immediately following the completion of the eNom Purchase Transaction, Acquireco and each eNom Company will continue to be Solvent, and the Credit Parties have no reason to believe that the Acquireco or any eNom Company will not continue to be Solvent thereafter.

			

 

 

 

 

	 	
			(aa)

				
			eNom Purchase Documents – Acquireco has the corporate capacity, power, legal right and authority to purchase the eNom Shares and to enter into and perform its obligations under the eNom Purchase Documents. The execution and delivery of the eNom Purchase Documents by the eNom Purchaser Parties and the performance of their respective obligations therein have been duly authorized by all necessary corporate action and constitute legal, valid and binding obligations of the eNom Purchaser Parties, enforceable against them in accordance with the terms and provisions thereof, subject to laws of general application affecting creditors' rights and the discretion of the court in awarding equitable remedies.

			

 

	 	
			(bb)

				
			Due Diligence regarding eNom Purchase Transaction – The Credit Parties have conducted due diligence with respect to eNom and its business and assets as would be considered appropriate and prudent for a transaction in the nature of the eNom Purchase Transaction. No information was disclosed during such due diligence concerning eNom or its business and assets, and the Credit Parties are not aware of any information inconsistent in any material respect with any of the representations or warranties provided the eNom Vendor Parties in the eNom Purchase Agreement or which could reasonably be expected to be material to a purchaser of eNom, except as expressly disclosed in the eNom Purchase Agreement.

			

 

	
			8.02

				
			Additional Representations and Warranties in respect of U.S. Companies

			

 

The Credit Parties hereby jointly and severally represent and warrant to the Agent and the Lenders as follows with respect to each U.S. Company (for greater certainty, including each eNom Company):

 

	 	
			(a)

				
			Margin Stock – It is not engaged in the business of purchasing or carrying margin stock, or extending credit to others for the purpose of purchasing or carrying margin stock, in violation of any of the provisions of Regulations T, U or X of the Board of Governors of the U.S. Federal Reserve System), and no part of the proceeds of any Advance or any other extension of credit made hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.

			

 

	 	
			(b)

				
			Investment Company – It is not an “investment company’ nor a company “controlled” by an “investment company,” nor is it required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

			

 

 

 

 

	 	
			(c)

				
			ERISA – Compliance by the U.S. Companies with the provisions hereof and the credit events contemplated hereby will not involve any prohibited transactions within the meaning of ERISA or Section 4975 of the Revenue Code. With respect to each Plan, it and each other member of its Controlled Group has fulfilled its obligations under the minimum funding standards of and is in compliance in all material respects with ERISA and the Revenue Code to the extent applicable to it and has not incurred any liability to the PBGC or under Title IV of ERISA, other than a liability to the PBGC for premiums under Section 4007 of ERISA; and it does not have any contingent liabilities with respect to any post-retirement benefits under a Welfare Plan, other than liability for continuation coverage described in article 6 of Title I of ERISA or as required under U.S. State law requirements for health continuation coverage. Neither a Reportable Event nor a Prohibited Transaction has occurred and is continuing with respect to any Plan; no notice of intent to terminate a Plan has been filed, nor has any Plan been terminated; no circumstances exist which constitute grounds entitling the PBGC to institute proceedings to terminate, or appoint a trustee to administer, a Plan, nor has the PBGC instituted any such proceedings; neither it nor any member of its Controlled Group has completely or partially withdrawn from a Multiemployer Plan; it and all members of its Controlled Group have met their minimum funding requirements under ERISA with respect to all of their Plans and the present value of all vested benefits under each Plan exceeds the fair market value of all Plan assets allocable to such benefits, as determined on the most recent valuation date of the Plan and in accordance with the provisions of ERISA; and neither it nor any member of its Controlled Group has incurred any liability to the PBGC under ERISA, in each case, which could reasonably be expected to result in a Material Adverse Change.

			

 

	 	
			(d)

				
			OFAC – It is not in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC. No Borrower nor any other Company (i) is a Sanctioned Person or a Sanctioned Entity, (ii) has any assets located in a country or territory subject to sanctions administered and enforced by OFAC, or (iii) except where such restrictions conflict with applicable Canadian laws, knowingly derives any revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. Except where such restrictions conflict with applicable Canadian laws, no proceeds of any Advance made under this Agreement will knowingly be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

			

 

	 	
			(e)

				
			Patriot Act – To the extent applicable, it is in compliance with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and the Patriot Act. No part of the proceeds of the loans made hereunder will be used by any U.S. Companies or any of their Affiliates, 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.

			

 

	 	
			(f)

				
			Foreign Corrupt Practices Act – Each of the U.S. Companies and each of its Subsidiaries is in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, as amended and the U.S. Companies and each Subsidiary has procedures and internal controls reasonably designed to ensure compliance with the United States Foreign Corrupt practices Act of 1977, as amended. No part of the proceeds of the loans made hereunder will be used by the Borrowers, any U.S. Company or any of their Affiliates, 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.

			

 

 

 

 

	
			8.03

				
			Survival of Representations and Warranties

			

 

Each Credit Party acknowledges that the Agent and the Lenders are relying upon the foregoing representations and warranties in connection with the establishment of the Facilities, the making of Advances thereunder from time to time and the entering into of any Hedging Agreements with the Borrowers from time to time. Notwithstanding any investigations which may be made by the Agent or the Lenders, the said representations and warranties shall survive the execution and delivery of this Agreement until full and final payment and satisfaction of the Obligations.

 

 

 

 

 

ARTICLE IX - COVENANTS

 

	
			9.01

				
			Positive Covenants

			

 

Each Credit Party hereby covenants and agrees with the Agent and the Lenders that it will, and will cause each Company which is its Subsidiary to:

 

	 	
			(a)

				
			Prompt Payment – in the case of the Borrowers, pay all principal, interest and other amounts due hereunder at the times and in the manner specified herein;

			

 

	 	
			(b)

				
			Preservation of Corporate Existence – except for corporate changes made in compliance with the requirements of Section 9.02(h) herein, maintain its corporate existence, continue to carry on its business, preserve its rights, powers, licences, privileges, franchises and goodwill, exercise any rights of renewal or extensions of any leases, licences, concessions, franchises or any other rights whatsoever which are material to the conduct of its business, maintain all qualifications to carry on business in each jurisdiction in which such qualifications are required, carry on and conduct its business in a proper and efficient manner so as to protect its property and income and not materially change the nature of its business;

			

 

	 	
			(c)

				
			Compliance with Laws – comply in all material respects with Applicable Law (specifically including, for greater certainty, Requirements of Environmental Law), use the proceeds of all Advances hereunder for legal and proper purposes, and obtain and maintain in good standing all material leases, licences, permits and approvals from any and all Governmental Authorities required in respect of its business and operations;

			

 

	 	
			(d)

				
			Payment of Taxes, etc. – pay when due all rents, Taxes, rates, levies, assessments and governmental charges, fees and dues lawfully levied, assessed or imposed in respect of its property which are material to the conduct of its business, and deliver to the Agent upon request receipts evidencing such payments; except for rents, Taxes, rates, levies, assessments and governmental charges, fees or dues in respect of which an appeal or review proceeding has been commenced, a stay of execution pending such appeal or review proceeding has been obtained, reserves have been established in accordance with GAAP; and the amounts in question do not in the aggregate materially detract from the ability of the Companies to carry on their businesses and to perform and satisfy all of their respective obligations hereunder;

			

 

	 	
			(e)

				
			Maintain Records – maintain adequate books, accounts and records in accordance with GAAP;

			

 

	 	
			(f)

				
			Maintenance of Assets – keep its property and assets in good repair and working condition;

			

 

	 	
			(g)

				
			Inspection – permit the Agent and the Lenders and their respective employees and agents (during normal business hours and in a manner which does not materially interfere with its operations) to enter upon and inspect its properties, assets, books and records from time to time and make copies of and abstracts from such books and records, and discuss its affairs, finances and accounts with any of its officers, directors, accountants and auditors;

			

 

 

 

 

	 	
			(h)

				
			Insurance – obtain from financially responsible insurance companies and maintain liability insurance, all-risks property insurance on a replacement cost basis (less a reasonable deductible not to exceed amounts customary in the industry for similar businesses and properties), business interruption insurance and insurance in respect of such other risks as the Agent upon the instructions of the Required Lenders may reasonably require from time to time; all of which policies of insurance shall be in such amounts as may be reasonably required by the Required Lenders and shall include a standard mortgage clause approved by the Insurance Bureau of Canada (or an equivalent clause in respect of all U.S. Companies); and the interest of the Agent shall be noted as an additional insured on all liability insurance policies and as first mortgagee and loss payee on all other insurance policies (except in respect of property insurance for the Unsecured Companies); and the Agent shall be provided with certificates of insurance and certified copies of such policies from time to time upon request;

			

 

	 	
			(i)

				
			Perform Obligations – fulfil all covenants and obligations required to be performed by it under those Loan Documents to which it is a party and any other agreement or undertaking now or hereafter made between it and the Lenders or the Agent;

			

 

	 	
			(j)

				
			Notice of Certain Events – provide prompt notice to the Agent of: (i) the occurrence of any Default (for greater certainty, whether or not such Default is continuing); (ii) the incorrectness in any material respect of any representation or warranty in this Agreement and any material changes to the information contained in the Schedules attached hereto; (iii) any material contravention of or non-compliance by any Company with any terms and conditions of any Loan Document; (iv) any Material Adverse Change; (v) any litigation in which the amount claimed against any one or more of the Companies and not covered by insurance is greater than Five Hundred Thousand Dollars ($500,000); (vi) any notice of default, termination or suspension received by any Company in respect of Funded Debt or in respect of any Material Agreement or Material Permit; (vii) the adoption by any Company of any material accounting change promptly thereafter; (viii) the issuance of any management letter to Tucows Inc. by its auditor; (ix) a proposed change of name of any Company, which notice shall be given at least thirty (30) days prior to such change becoming effective; and (x) any written notice given by any party to the eNom Purchase Agreement regarding an amount payable or claimed to be payable by any other party thereto in excess of Five Hundred Thousand Dollars ($500,000) (excluding amounts comprising working capital or purchase price adjustments contemplated and determined in accordance with the provisions thereof);

			

 

	 	
			(k)

				
			Bank Accounts and Service Agreements – maintain all of its bank accounts and Service Agreements with BMO and its Affiliates, subject to the following exceptions:

			

 

	 	
			(i)

				
			Tucows.com may continue to maintain all bank accounts maintained by it with The Toronto-Dominion Bank in Canada and the United States existing as at the Facilities Initial Establishment Date (in this clause referred to as the “permitted accounts”) provided that (i) Tucows.com Co., such bank and the Agent shall have entered into a deposit account control agreement in respect of each permitted account in form and substance satisfactory to the Agent; and (ii) if at any time the aggregate amount in the permitted accounts exceeds the Equivalent Amount of Five Hundred Thousand Dollars ($500,000) Tucows.com Co. shall promptly (without the necessity of any notice or request by the Agent) transfer monies from the permitted accounts into a bank account maintained by it with the Agent such that immediately after such transfer the amount in the permitted accounts does not exceed Five Hundred Thousand Dollars ($500,000);

			

 

 

 

 

	 	
			(ii)

				
			Tucows Corp. may continue to maintain its bank account with Bankcorp South Starkville existing as at the Facilities Initial Establishment Date provided that (i) the amount on deposit in such account shall not exceed One Hundred Thousand Dollars ($100,000) at any time; and (ii) if requested by the Agent at any time, Tucows Corp., such bank and the Agent shall enter into a deposit account control agreement in respect of such account in form and substance satisfactory to the Agent;

			

 

	 	
			(iii)

				
			Blue Ridge Websoft, LLC (doing business under the name and style of “Blue Ridge Internetworks”) may continue to maintain its bank account with Middleburg Bank existing as at the Facilities Initial Establishment Date provided that (i) the amount on deposit in such account shall not exceed Three Hundred Fifty Thousand Dollars ($350,000) at any time; and (ii) if requested by the Agent at any time, Blue Ridge Websoft, LLC, such bank and the Agent shall enter into a deposit account control agreement in respect of such account in form and substance satisfactory to the Agent;

			

 

	 	
			(iv)

				
			EPAG Domainservices GmbH may continue to maintain its bank accounts with Deutsche Bank and Commerzbank existing as at the Facilities Initial Establishment Date provided that the aggregate amount on deposit in such accounts shall not exceed Five Hundred Thousand Euros (€500,000) at any time;

			

 

	 	
			(v)

				
			the eNom Companies may continue to maintain their bank accounts with Silicon Valley Bank existing as at the Amendment Closing Date during the sixty (60) day period immediately following the eNom Closing Date provided that the aggregate of all amounts held in such accounts shall not exceed One Million Dollars ($1,000,000) at any time during such period (and for greater certainty, the eNom Companies shall establish replacement bank accounts with an Affiliate of BMO within such sixty (60) day period); and the Credit Parties may at their option extend such period for a further period of sixty (60) days if prior to the commencement of such extended period a deposit account control agreement in respect of such accounts shall have been provided to the Agent in form and substance satisfactory to the Agent; and

			

 

	 	
			(vi)

				
			the eNom Companies may continue to maintain their bank accounts with Commonwealth Bank in Australia existing as at the Amendment Closing Date during the sixty (60) day period immediately following the eNom Closing Date provided that the aggregate of all amounts held in such accounts shall not exceed Two Hundred Thousand Dollars ($200,000) at any time during such period (and for greater certainty, the eNom Companies shall establish replacement bank accounts with an Affiliate of BMO within such sixty (60) day period); and the Credit Parties may at their option extend such period for a further period of sixty (60) days if prior to the commencement of such extended period a deposit account control agreement in respect of such accounts shall have been provided to the Agent in form and substance satisfactory to the Agent;

			

 

 

 

 

	 	
			(l)

				
			Use of Advances – utilize the proceeds of all Advances for the respective Borrowers’ own business purposes; and not permit such proceeds to be used, directly or indirectly, by any other Person or for any other purpose;

			

 

	 	
			(m)

				
			Environmental Information – if requested by the Agent from time to time upon the instructions of the Required Lenders: (i) provide the Agent with an environmental questionnaire in the Agent’s standard form completed by a knowledgeable officer of Tucows Inc. in respect of any Owned Property or Material Leased Property; and (ii) if the information contained therein is inconsistent in any material respect with the representations in Section 8.01(p) herein, provide the Agent with a phase I environmental report in respect of such Owned Property or Material Leased Property, and promptly take all such action as may be required to comply with all recommendations contained therein;

			

 

	 	
			(n)

				
			ERISA – in the case of the U.S. Companies, promptly pay and discharge all obligations and liabilities arising under ERISA of a character which if unpaid or unperformed could result in the imposition of a Lien other than a Permitted Lien against any of its properties; promptly notify the Agent of (i) the occurrence of any Reportable Event with respect to a Plan, (ii) receipt of any notice from the PBGC of its intention to seek termination of any Plan or appointment of a trustee therefor, (iii) its intention to terminate or withdraw from any Plan, and (iv) the occurrence of any event with respect to any Plan which would result in the incurrence by it or any Subsidiary of any material liability, fine or penalty, or any material increase in its contingent liability with respect to any post-retirement Welfare Plan benefit;

			

 

	 	
			(o)

				
			Patriot Act – in the case of the U.S. Companies, the Borrowers acknowledge and agree that pursuant to the provisions of the USA Patriot Act (Title III of the Pub. L. 107-56) signed into law October 26, 2001 (the “Patriot Act”), the Agent and any Lender may be required to obtain, verify and record information with respect to the U.S. Companies; and each Borrower hereby agrees to cooperate with the Administrative Agent and each Lender and provide them with all information they may require in order to fulfil their obligations under the Patriot Act; and without limiting the generality of the foregoing, each Borrower agrees to use commercially reasonable efforts to obtain the consent of any of its officers, directors and employees whose consent to the disclosure of any such information is required under applicable privacy legislation in Canada; and

			

 

	 	
			(p)

				
			Further Assurances – provide the Agent and the Lenders with such further information, financial data, documentation and other assurances as they may reasonably require from time to time in order to ensure ongoing compliance with the terms of this Agreement.

			

 

 

 

 

 

	
			9.02

				
			Negative Covenants

			

 

Each Credit Party hereby covenants and agrees with the Agent and the Lenders that it will not, and will ensure that each Company which is its Subsidiary does not, without the prior written consent of the Required Lenders (or if required pursuant to Section 13.01, all Lenders acting unanimously), which consent may be withheld in their sole discretion unless otherwise expressly provided herein:

 

	 	
			(a)

				
			Funded Debt – create, incur or assume any Funded Debt, except Permitted Funded Debt;

			

 

	 	
			(b)

				
			Liens – grant or suffer to exist any Lien in respect of any of its property, except Permitted Liens;

			

 

	 	
			(c)

				
			Disposition of Assets – directly or indirectly sell or otherwise dispose of any of its assets, except that:

			

 

	 	
			(i)

				
			each Company may sell or transfer assets to any other Secured Company; and

			

 

	 	
			(ii)

				
			each Company may sell or dispose of Domain Names from time to time, and Section 4.04(f) (to the extent applicable) shall apply in respect of all such dispositions; and

			

 

	 	
			(iii)

				
			each Company may sell or dispose of inventory and other assets (excluding Domain Names) from time to time in the ordinary course of business (but for greater certainty, a sale and leaseback transaction shall not be considered to be in the ordinary course of business); and Section 4.04(f) (to the extent applicable) shall apply in respect of all such dispositions;

			

 

	 	
			(d)

				
			Guarantees – become obligated under Guarantees except: (i) Guarantees which comprise part of the Security; (ii) Guarantees in respect of Permitted Funded Debt incurred by any Company; and (iii) Guarantees in respect of trade obligations incurred by any Company in the ordinary course of business;

			

 

	 	
			(e)

				
			Investments – make or acquire any Investments, except that the following Investments may be made or acquired if both immediately before and immediately after each such Investment no Default or Event of Default has occurred and is continuing:

			

 

	 	
			(i)

				
			Permitted Acquisitions;

			

 

	 	
			(ii)

				
			Investments in a Secured Company;

			

 

	 	
			(iii)

				
			Investments in an Unsecured Company, provided that the aggregate amount of all Investments made by the Companies in Unsecured Companies does not at any time exceed Two Million Five Hundred Thousand Dollars ($2,500,000);

			

 

	 	
			(iv)

				
			Investments in direct obligations of Canada or the United States of America, including Canadian or United States of America federal, provincial or state obligations, with maturities of one (1) year or less from the date of acquisition of the investment, provided that if required by the Required Lenders, the Company making such Investment shall provide such additional items of Security as the Agent may require in order that such investments shall be specifically pledged to the Agent;

			

 

 

 

 

	 	
			(v)

				
			Investments in certificates of deposit having maturities of less than one (1) year, issued by BMO; and

			

 

	 	
			(vi)

				
			an Investment in NameJet, LLC pursuant to that certain Joint Venture Agreement, dated as of October 4, 2007, by and between Network Solutions, LLC and eNom.

			

 

	 	
			(f)

				
			Capital Expenditures – incur Capital Expenditures, except that the following Capital Expenditures may be incurred if both immediately before and immediately after each such Capital Expenditure no Default or Event of Default has occurred and is continuing:

			

 

	 	
			(i)

				
			in the Fiscal Year ending December 31, 2016 the Companies may incur Capital Expenditures in the maximum aggregate amount of Twenty-Two Million Dollars ($22,000,000);

			

 

	 	
			(ii)

				
			in the Fiscal Year ending December 31, 2017, if the eNom Purchase Transaction has not been completed the Companies may incur Capital Expenditures in the maximum aggregate amount of Twenty-Two Million Dollars ($22,000,000);

			

 

	 	
			(iii)

				
			in the Fiscal Year ending December 31, 2017, if the eNom Purchase Transaction has been completed the Companies may incur Capital Expenditures in the maximum aggregate amount of Thirty-Two Million Eight Hundred Thousand Dollars ($32,800,000); and

			

 

	 	
			(iv)

				
			in each subsequent Fiscal Year the Companies may incur Capital Expenditures in the maximum aggregate amount of the forecasted Capital Expenditures set out in the Annual Business Plan submitted by Tucows Inc. and approved by the Required Lenders in respect of such Fiscal Year, such approval not to be unreasonably withheld;

			

 

	 	
			(g)

				
			Distributions – make any Distributions, except as follows: (A) each Company may make Distributions to any Secured Company; and (B) prior to the Acceleration Date, each Company may make Distributions provided that both immediately before and immediately after each such Distribution no Default, Event of Default or Material Adverse Change has occurred and is continuing;

			

 

	 	
			(h)

				
			Corporate Changes – not materially change the nature of its business or enter into any transaction whereby all or a substantial portion of its property would become the property of any other Person, whether by way of reconstruction, reorganization, recapitalization, consolidation, amalgamation, merger, transfer, sale or otherwise, without the prior written consent of the Required Lenders; except that any of the foregoing transactions may take place among the Companies (and no other Persons) if prior written notice is given to the Agent, a Material Adverse Change will not occur as a result, and the Companies concurrently provide such additional or replacement Security as the Required Lenders may reasonably require;

			

 

 

 

 

 

	 	
			(i)

				
			Payments in respect of Subordinated Debt – make any payment in respect of principal, interest, fees or any other amounts in respect of Subordinated Debt except to the extent (if any) expressly permitted under the terms and conditions of the subordination and postponement agreement relating thereto;

			

 

	 	
			(j)

				
			Defined Benefit Pension Plans – establish, assume or otherwise become a party to or liable under any defined benefit pension plan;

			

 

	 	
			(k)

				
			Fiscal Year – change its Fiscal Year (which for greater certainty presently ends on December 31st in each year), except with the prior written consent of the Required Lenders;

			

 

	 	
			(l)

				
			Auditors – change its auditors from its current audit firm (KPMG LLP) to a firm that is not a nationally recognized auditing firm, except with the prior written consent of the Required Lenders;

			

 

	 	
			(m)

				
			Dealing with Related Persons – enter into any contract with any Related Person unless all terms and conditions thereof (specifically including the price) are commercially reasonable;

			

 

	 	
			(n)

				
			Use of Advances – use the proceeds of any Advance for any purposes other than those expressly contemplated in this Agreement (and without limiting the generality of the foregoing, the proceeds of any Advance will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity); and

			

 

	 	
			(o)

				
			New Subsidiaries – create or acquire any Subsidiary unless (a) all of the issued and outstanding shares in the capital of such Subsidiary are owned directly or indirectly by Tucows Inc.; (b) such new Subsidiary provides a Guarantee in respect of the Obligations and all Security required to be provided by it hereunder; and (c) all of the issued and outstanding shares of such new Subsidiary are pledged to the Agent, and in each case accompanied by legal opinions as contemplated herein.

			

 

	
			9.03

				
			Financial Covenants

			

 

Tucows Inc. agrees to maintain, on a consolidated basis, the financial ratios and amounts listed below:

 

	 	
			(a)

				
			the Fixed Charge Coverage Ratio shall not be less than 1.20 to 1 at the end of each Fiscal Quarter:

			

 

	 	
			(b)

				
			subject to paragraph (c), the Total Funded Debt to EBITDA Ratio shall not exceed:

			

 

	 	
			(i)

				
			2.25 to 1 on the Amendment Closing Date and at the end of each Fiscal Quarter thereafter up to and including the Fiscal Quarter ending March 31, 2017; and

			

 

	 	
			(ii)

				
			2.00 to 1 on June 30, 2017 at the end of each Fiscal Quarter thereafter; and 

			

 

 

 

 

	 	
			(c)

				
			from and after the eNom Closing Date, paragraph (b) shall no longer apply and in lieu thereof, the Total Funded Debt to EBITDA Ratio shall not exceed:

			

 

	 	
			(i)

				
			3.00 to 1 on the eNom Closing Date and at the end of each Fiscal Quarter thereafter up to and including the Fiscal Quarter ending September 30, 2017;

			

 

	 	
			(ii)

				
			2.50 to 1 on December 31, 2017 and at the end of each Fiscal Quarter thereafter up to and including the Fiscal Quarter ending September 30, 2018; and

			

 

	 	
			(iii)

				
			2.25 to 1 on December 31, 2018 and at the end of each Fiscal Quarter thereafter. 

			

 

	
			9.04

				
			Reporting Requirements

			

 

The Credit Parties shall deliver or cause to be delivered (by email in accordance with Section 15.07) to the Agent the following financial and other information at the times indicated below:

 

	 	
			(a)

				
			if requested by the Agent upon the instructions of the Required Lenders from time to time, a list of aged accounts receivable and accounts payable for the Companies on a consolidated basis within thirty (30) days after the end of each month;

			

 

	 	
			(b)

				
			the Interim Financial Statements by the 45th day after the end of each of each Fiscal Quarter (for greater certainty, specifically including the fourth Fiscal Quarter in each Fiscal Year), together with a Compliance Certificate certified by a Senior Officer of Tucows Inc. in the form of Exhibit “F” attached hereto which shall evidence compliance with all financial ratios and amounts set out in Section 9.03 herein in respect of such Fiscal Quarter (including all supporting calculations) and shall include a report with respect to the sale of Domain Names in such Fiscal Quarter and all previous Fiscal Quarters in the same Fiscal Year, accompanied by an analysis of any material variances between actual results to date and the projections contained in the most recent Annual Business Plan presented to the Agent and the Lenders;

			

 

	 	
			(c)

				
			the annual audited Year-end Financial Statements of Tucows Inc. on a consolidated and consolidating basis (including an unqualified opinion from its auditor in respect of thereof together with an authorized copy of the auditor’s letter to management) prepared in accordance with GAAP, by the 120th day after the end of each Fiscal Year, accompanied by a Compliance Certificate certified by a Senior Officer in the form of Exhibit “F” attached hereto which shall evidence compliance with all financial ratios and amounts set out in Section 9.03 herein in respect of such Fiscal Year (including all supporting calculations), and accompanied by an analysis of any material variances between actual results for such Fiscal Year and the projections contained in the most recent Annual Business Plan presented to the Agent and the Lenders;

			

 

	 	
			(d)

				
			not later than one-hundred twenty (120) days following the end of each Fiscal Year, an Excess Cash Flow Certificate in respect of such Fiscal Year certified by a Senior Officer in the form of Exhibit “G” attached hereto;

			

 

	 	
			(e)

				
			not later than thirty (30) days following the commencement of each Fiscal Year, the Annual Business Plan for such Fiscal Year;

			

 

	 	
			(f)

				
			promptly upon request by the Agent from time to time, an updated certificate of insurance listing all insurance policies then held by the Companies and including the notation of the Agent’s interest thereon in compliance with the requirements of Section 9.01(h) herein (which certificate shall contain no disclaimers which would prevent the Agent from relying thereon); and

			

 

 

 

 

	 	
			(g)

				
			such additional information and documents as the Agent or the Lenders may reasonably require from time to time, not inconsistent with the terms of this Agreement, to ensure the ongoing compliance by the Borrowers with the terms and conditions of this Agreement, in form reasonably acceptable to the Agent and the Lenders.

			

 

	
			9.05

				
			Anti-Money Laundering

			

 

	 	
			(a)

				
			The Credit Parties acknowledge that, pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws, whether within Canada or elsewhere (collectively, including any guidelines or orders thereunder, “AML Legislation”), the Agent and the Lenders may be required to obtain, verify and record information regarding the Companies and their respective directors, authorized signing officers, direct or indirect shareholders, partners or other persons in control of the Companies and the transactions contemplated hereby. The Credit Parties shall promptly provide all such information, including any supporting documentation and other evidence, as may be reasonably requested by the Agent or any Lender, or any prospective assignee or participant of a Lender or the Agent, to the extent the same is required in order to comply with any applicable AML Legislation, whether now or hereafter in existence.

			

 

	 	
			(b)

				
			If the Agent has ascertained the identity of any Company, or any authorized signatories of any Company, for the purposes of applicable AML Legislation, then the Agent shall:

			

 

	 	
			(i)

				
			be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between each Lender and the Agent within the meaning of applicable AML Legislation; and

			

 

	 	
			(ii)

				
			provide each Lender with copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.

			

 

Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Lenders agrees that the Agent has no obligation to ascertain the identity of any Company, or any authorized signatories of any Company, on behalf of any Lender or to confirm the completeness or accuracy of any information that the Agent obtains from any Company, or any such authorized signatory, in doing so.

 

	
			9.06

				
			Terrorist Lists

			

 

The Credit Parties shall ensure that each Company is and will remain in compliance in all material respects with all Canadian economic sanctions laws and implementing regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Criminal Code (Canada), the United Nations Act (Canada) and all similar applicable anti-money laundering and counter-terrorism financing provisions and regulations issued pursuant to any of the foregoing. No Company (i) is a Person designated by the Canadian government on any list set out in the United Nations Al-Qaida and Taliban Regulations, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism or the Criminal Code (collectively, the “Terrorist Lists”) with which a Canadian Person cannot deal with or otherwise engage in business transactions, (iii) is a Person who is otherwise Targetco of Canadian economic sanctions laws or (iv) is Controlled by (including without limitation by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on a Terrorist List or a foreign government that is Targetco of Canadian economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under Canadian law.

 

 

 

 

ARTICLE X - SECURITY

 

	
			10.01

				
			Security to be Provided by the Companies

			

 

The Credit Parties agree to provide (or cause to be provided) the security listed below as continuing security for the payment of the Obligations and the payment and performance of all other present and future, direct and indirect, indebtedness and obligations of the Borrowers to the Agent and the Lenders, specifically including the obligations of the Borrowers arising under or in respect of this Agreement, the Hedging Agreements and the other Loan Documents:

 

	 	
			(a)

				
			a Guarantee from each Secured Company in respect of all present and future, direct and indirect, indebtedness and obligations of the Borrowers to the Agent and the Lenders, subject to the following exceptions and limitations:

			

 

	 	
			(i)

				
			the amount of each Guarantee shall be unlimited unless a limit is required under Applicable Law, in which event the limit of such Guarantee shall be the highest amount permissible under Applicable Law; and

			

 

	 	
			(ii)

				
			each Guarantee and all Security provided by a U.S. Company shall expressly provide that the obligations of the Borrowers secured thereby do not include any obligations arising under or in connection with any Hedging Agreements to the extent that the granting of such Guarantee or Security would be illegal pursuant to the Commodity Exchange Act (7 U.S.C. § 1 et, seq.) as amended from time to time and any successor statute or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of the failure of such U.S. Company to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time such Guarantee or the grant of such Security becomes effective with respect to such Hedging Agreement;

			

 

	 	
			(b)

				
			a general security agreement, debenture, movable hypothec or similar form of security from each Secured Company creating a First-Ranking Security Interest in respect of all of its present and future property, assets and undertaking, specifically including all shares, partnership interests and other equity interests held by such Secured Company in the capital of any other Secured Company;

			

 

	 	
			(c)

				
			a debenture or collateral mortgage from each Secured Company creating a First-Ranking Security Interest in respect of all Owned Properties;

			

 

	 	
			(d)

				
			to the extent requested by the Agent upon the instructions of the Required Lenders, debentures, collateral mortgages or other forms of security required by the Agent in order to create a First-Ranking Security Interest in respect of any or all Material Leased Properties;

			

 

	 	
			(e)

				
			to the extent requested by the Agent upon the instructions of the Required Lenders, specific assignments by the Companies of all rights and benefits arising under any Material Agreement, accompanied by an agreement from the other contracting party thereto, in form and substance satisfactory to the Agent and the Lenders;

			

 

	 	
			(f)

				
			a specific assignment of all rights and benefits (but not obligations) of the eNom Purchaser Parties under the eNom Purchase Agreement, including an acknowledgement and consent to such assignment from the eNom Vendor Parties in form and substance satisfactory to the Agent;

			

 

 

 

 

	 	
			(g)

				
			to the extent requested by the Agent upon the instructions of the Required Lenders, security agreements creating an assignment and First-Ranking Security Interest in respect of its rights to and interest in Intellectual Property, together with any necessary consents from other Persons which may be required in connection with the granting of such assignment and security interest in any Intellectual Property considered by the Lenders to be material;

			

 

	 	
			(h)

				
			assignments of the interest of each Secured Company in all policies of insurance held by it which requirement shall be satisfied if the Agent’s interest as first mortgagee and loss payee is recorded on such policies; and

			

 

	 	
			(i)

				
			such other security as may be reasonably required by the Agent and the Lenders from time to time, not inconsistent with the provisions of this Agreement.

			

 

	
			10.02

				
			Designation of Secured Companies

			

 

If at any time the earnings before interest, taxes depreciation and amortization of all Unsecured Companies (determined in the same manner as EBITDA) represents more than fifteen percent (15%) of EBITDA, or if the value of the assets of all Unsecured Companies represents more than fifteen percent (15%) of the aggregate value of the assets of the Companies (in each case as indicated on the most recent Interim Financial Statements or Year-end Financial Statements), the Required Lenders may by notice in writing to Tucows Inc. designate any one or more of such Unsecured Companies to be a Secured Company in order that such thresholds are not exceeded. Tucows Inc. shall cause each such Secured Company to promptly execute and deliver a guarantee and all Security required pursuant to Section 10.01.

 

	
			10.03

				
			Security to be Provided by Others

			

 

	 	
			(a)

				
			The Borrowers shall cause each holder of indebtedness which is intended to constitute Subordinated Debt to provide a subordination and postponement agreement in favour of the Agent, in form and substance satisfactory to the Agent. The provision of such subordination and postponement agreements shall constitute a condition precedent to the first Advance and each subsequent Advance hereunder, and the absence of any required such subordination and postponement agreement shall constitute an Event of Default.

			

 

	 	
			(b)

				
			To the extent requested by the Agent from time to time, the Borrowers agree to use commercially reasonable efforts to obtain Landlord Agreements in respect of the Material Leased Properties.

			

 

	
			10.04

				
			General Provisions re Security; Registration

			

 

The Security shall be in form and substance satisfactory to the Agent and the Lenders in their sole discretion. The Agent may require that any item of Security be governed by the laws of the jurisdiction where the property subject to such item of Security is located. The Security shall be registered where necessary or desirable to record and perfect the charges contained therein as may be determined by the Agent in its sole discretion, specifically including registrations in the Canadian Intellectual Property Office.

 

 

 

 

	
			10.05

				
			Opinions re Security

			

 

The Credit Parties shall cause to be delivered to the Agent the opinions of the solicitors for the Secured Companies regarding their corporate status, the due authorization, execution and delivery of the Security provided by them, all registrations in respect of the Security, the results of all applicable searches in respect of them, and the enforceability of such Security; all such opinions to be in form and substance satisfactory to the Agent and its counsel.

 

	
			10.06

				
			After-Acquired Property, Further Assurances

			

 

The Credit Parties shall execute and deliver from time to time, and cause each of their respective Subsidiaries and Affiliates to execute and deliver from time to time, all such further documents and assurances as may be reasonably required by the Agent and Lenders from time to time, not inconsistent with the terms of this Agreement, in order to provide the Security contemplated hereunder, specifically including: supplemental or additional security agreements, assignments and pledge agreements which shall include lists of specific assets to be subject to the security interests required hereunder. The Credit Parties also agree to provide to the Agent from time to time, promptly upon receipt of a written request from the Agent, copies of any documents delivered in connection with the completion of the eNom Purchase Transaction.

 

	
			10.07

				
			Insurance by Agent

			

 

If the Credit Parties do not provide the Agent with evidence of continuing insurance coverage in accordance with the requirements of this Agreement, the Agent may, but shall have no obligation to, purchase such insurance in order to protect the interests of the Agent and the Lenders in the Collateral. Such insurance may also, but need not, also protect the Companies’ interests in the Collateral. The Credit Parties agree to immediately reimburse the Agent upon demand for all costs and expenses incurred by the Agent in respect of the purchase of any such insurance, and until so paid such expenses shall constitute part of the Obligations, shall bear interest at the highest rate provided herein and shall be secured by the Security.

 

	
			10.08

				
			Insurance Proceeds

			

 

If insurance proceeds become payable in respect of loss of or damage to any property owned by a Secured Company:

 

	 	
			(a)

				
			if an Event of Default has occurred and is continuing at such time, the Agent shall apply such proceeds against the Obligations;

			

 

	 	
			(b)

				
			if no Event of Default has occurred and is continuing at such time, and such proceeds are less than Two Hundred Fifty Thousand Dollars ($250,000), the Lenders agree to consent to the payment of such proceeds to such Secured Company if:

			

 

	 	
			(i)

				
			such property has been repaired or replaced and the proceeds will reimburse the Secured Company for payments it has made for such purpose; or

			

 

	 	
			(ii)

				
			the Secured Company confirms in writing to the Agent and the Lenders that it will forthwith use such proceeds to repair or replace such property; and

			

 

	 	
			(c)

				
			if no Event of Default has occurred and is continuing at such time, and such proceeds are equal to or greater than Two Hundred Fifty Thousand Dollars ($250,000), the Agent shall apply such proceeds against the Obligations unless the Agent, on the instructions of the Required Lenders in their sole discretion, has agreed in writing that such proceeds shall be used to replace the property.

			

 

 

 

 

ARTICLE XI - CONDITIONS PRECEDENT

 

	
			11.01

				
			Conditions Precedent to Amendments

			

 

The amendments to the 2016 Credit Agreement reflected in this Agreement shall become effective on the date (the “Amendment Closing Date”) on which all of the following conditions have been satisfied, in each case to the satisfaction of the Agent and the Lenders in their sole discretion:

 

	 	
			(a)

				
			all conditions present in Section 11.02 shall have been satisfied;

			

 

	 	
			(b)

				
			no litigation is pending or threatened in writing against one or more of the Companies that, if decided against the applicable Company or Companies, could constitute a Material Adverse Change;

			

 

	 	
			(c)

				
			all Security required to be provided prior to the Amendment Closing Date shall have been executed and delivered, all registrations necessary or desirable in connection therewith shall have been made, and all legal opinions and other documentation required by the Lenders in connection therewith shall have been executed and delivered, all in form and substance satisfactory to the Agent and the Lenders in their sole discretion;

			

 

	 	
			(d)

				
			the Companies shall have no other Funded Debt (except Funded Debt which will constitute Permitted Funded Debt hereunder);

			

 

	 	
			(e)

				
			the Agent and the Lenders shall have received satisfactory evidence that there are no Liens affecting any of the Companies, except for Permitted Liens;

			

 

	 	
			(f)

				
			if requested by the Agent, the Agent and the Lenders shall have received particulars of all Permitted Liens, specifically including the assets encumbered thereby, the amounts due thereunder, and confirmation from the holders thereof that the terms thereof are being complied with;

			

 

	 	
			(g)

				
			the property and assets of the Secured Companies shall be insured in accordance with the requirements of this Agreement;

			

 

	 	
			(h)

				
			the Agent shall have received an officer's certificate and certified copies of resolutions of the board of directors of each Secured Company concerning the due authorization, execution and delivery of the Loan Documents to which it is a party, and such related matters as the Agent and the Lenders may reasonably require;

			

 

	 	
			(i)

				
			the Agent shall have received a certificate of status, certificate of compliance or similar certificate for each Secured Company issued by its governing jurisdiction and each other jurisdiction in which it carries on business or holds any material assets;

			

 

	 	(j)	the Agent shall have received opinions from the solicitors for each Secured Company regarding its corporate status, the due authorization, execution, delivery and enforceability of the Loan Documents provided by it, and such other matters as the Agent and the Lenders may reasonably require;

 

	 	
			(k)

				
			the Agent and the Lenders shall have received a Compliance Certificate which evidences compliance with all financial covenants in Section 9.03 as at September 30, 2016;

			

 

 

 

 

	 	
			(l)

				
			the Companies shall have satisfied all requirements of the Agent and each Lender under AML Legislation;

			

 

	 	
			(m)

				
			the Borrowers shall have paid to the Agent all fees and expenses (including the Agent’s reasonable third party legal expenses) relating to the amendments contained herein, specifically including all underwriting fees, arrangement fees and similar fees as agreed in writing between the Borrowers and the Agent; and

			

 

	 	
			(n)

				
			the Agent and the Lenders shall have received such additional evidence, documents or undertakings as they may require to complete the transactions contemplated hereby in accordance with the terms and conditions contained herein.

			

 

	
			11.02

				
			Conditions Precedent to all Advances

			

 

The Lenders shall have no obligation to make the first Advance or any subsequent Advance to any Borrower unless at the time of making each such Advance the following conditions shall have been satisfied:

 

	 	
			(a)

				
			the representations and warranties in Section 8.01 shall be true and correct in all material respects as if made on the date of such Advance, except for any such representations and warranties which are expressly stated herein to have been made only as at the date of this Agreement, and except as may be otherwise agreed in writing by the Required Lenders in their discretion from time to time;

			

 

	 	
			(b)

				
			any additional Security required to be provided at such time shall have been executed and delivered and all registrations necessary or desirable in connection therewith shall have been made as required pursuant to this Agreement, and any other documentation required by the Agent pursuant to this Agreement shall have been executed and delivered, all in form and substance satisfactory to the Agent in its sole discretion;

			

 

	 	
			(c)

				
			no Default or Event of Default shall have occurred and be continuing, nor shall the making of such Advance result in the occurrence of any Default or Event of Default;

			

 

	 	
			(d)

				
			the Borrowers shall have given a Draw Request to the Agent in accordance with the notice requirements provided herein (except in respect of Advances in the form of Overdrafts);

			

 

	 	
			(e)

				
			since the date of the most recent Interim Financial Statements delivered to the Agent, no Material Adverse Change shall have occurred; and

			

 

	 	
			(f)

				
			no third party demand or garnishment order for payment to any Governmental Authority shall have been received by the Agent or any Lender in respect of any Company.

			

 

 

 

 

	
			11.03

				
			Additional Conditions Precedent to Advances under Facility B and Facility C

			

 

The Lenders shall have no obligation to make the first Advance or any subsequent Advance under each of Facility B and Facility C unless at the time of making each such Advance the following conditions shall have been satisfied (for greater certainty, in addition to all other conditions precedent under Section 11.02):

 

	 	
			(a)

				
			no Default or Event of Default shall have occurred and be continuing, nor shall the transaction(s) intended to be made using the proceeds of such Advance result in the occurrence of any Default or Event of Default;

			

 

	 	
			(b)

				
			the Draw Request shall set out whether the purpose of the requested Advance is for the purpose of: (i) Share Repurchases; (ii) Domain Purchases and Permitted Acquisitions; or (iii) FTTH Capital Expenditures; or to repay indebtedness incurred prior to the Facilities Initial Establishment Date for any such purposes;

			

 

	 	
			(c)

				
			in respect of an Advance for the purpose of assisting the Borrowers in making a Permitted Acquisition, a description of business and assets proposed to be acquired, the business rational for the Acquisition, a pro-forma Compliance Certificate indicating Tucows Inc. is in compliance with all financial covenants in Section 9.03 herein immediately prior to such Acquisition and will continue to be in compliance with such financial covenants during four (4) Fiscal Quarters immediately thereafter, and all other information reasonably required by the Lenders to satisfy themselves that such Acquisition constitutes a Permitted Acquisition;

			

 

	 	
			(d)

				
			in respect of an Advance for the purpose of assisting the Borrowers in making FTTH Capital Expenditures, details of such Capital Expenditures to be made using the proceeds of such Advance and the aggregate amount of all FTTH Capital Expenditures previously made in the same Fiscal Year with a comparison to the budgeted FTTH Capital Expenditures for such Fiscal Year contained in the Annual Business Plan; and

			

 

	 	
			(e)

				
			in respect of an Advance for the purpose of Share Repurchases, the Lenders shall be satisfied in their discretion with the terms and conditions of Tucows’ Inc. share buyback program, and the aggregate amount of such Advance and all other Advances previously made for such purpose shall not at exceed the greater of the following amounts: (i) Twenty Million Dollars ($20,000,000); and (ii) the lesser of (A) Forty Million Dollars ($40,000,000); and (B) an amount equal to one and one-half (1.5) times EBITDA in the four (4) Fiscal Quarters immediately preceding such Advance.

			

 

	
			11.04

				
			Additional Conditions Precedent to Advance under Facility D

			

 

The Lenders shall have no obligation to make an Advance under Facility D unless at the time of making such Advance the following conditions shall have been satisfied (for greater certainty, in addition to all other conditions precedent under Section 11.02):

 

	 	
			(a)

				
			the Lenders shall have completed and shall be satisfied with their due diligence in respect of financial matters relating to the eNom Companies, specifically including the following:

			

 

	 	
			(i)

				
			the audited financial statements in respect of eNom prepared by PriceWaterhouseCoopers in respect of its fiscal years ending December 31, 2014 and December 31, 2015, and the unaudited interim financial statements of eNom prepared by PriceWaterhouseCoopers on a review basis in respect of the fiscal period in its current fiscal year to September 30, 2016, all on a consolidated and unconsolidated basis and prepared in accordance with GAAP; and no Material Adverse Change shall have occurred in the financial condition or prospects of the eNom Companies since September 30, 2016;

			

 

 

 

 

	 	
			(ii)

				
			a financial forecast in respect of the eNom Companies in respect of the five (5) year period immediately following the eNom Closing Date, specifically including a statement of cash flows and a detailed budget in respect of Capital Expenditures;

			

 

	 	
			(iii)

				
			a pro forma Compliance Certificate which evidences compliance with all financial covenants in Section 9.03 as if the eNom Purchase Transaction had been completed and the Advance under Facility D had been made, based on the Interim Financial Statements of Tucows Inc. as at September 30, 2016 and the interim financial statements of eNom as at September 30, 2016;

			

 

	 	
			(iv)

				
			satisfactory review of the eNom EBITDA with respect to:

			

 

	 	
			A.

				
			normalization adjustments, as identified by management;

			

 

	 	
			B.

				
			impact of new and/or discontinued product/business lines;

			

 

	 	
			C.

				
			impact of related party transactions (including but not limited to the current indirect cost allocation methodology of the eNom Vendor Parties);

			

 

	 	
			D.

				
			impact of any changes in accounting policies, procedures, estimates and timing of accruals;

			

 

	 	
			E.

				
			impact of large, unusual and/or non-recurring events or transactions that may have distorted results; and

			

 

	 	
			F.

				
			any other potential items identified during due diligence.

			

 

	 	
			(b)

				
			the Lenders shall have completed and shall be satisfied with their due diligence in respect of operational and other non-financial matters relating to the eNom Companies, specifically including the following:

			

 

	 	
			(i)

				
			third party validation of the number of domains under registration for eNom for its fiscal years ended December 31, 2014 and December 31, 2015, and the fiscal period in its current fiscal year ended September 30, 2016;

			

 

	 	
			(ii)

				
			the terms and conditions of all Material Contracts and Material Permits relating to the eNom Companies, specifically including the existing contracts for their top five (5) customers;

			

 

	 	
			(iii)

				
			review of sales revenue and gross margin percentages for the top ten (10) customers of the eNom Companies;

			

 

	 	
			(iv)

				
			system and process compatibility between the other Companies and the eNom Companies;

			

 

	 	
			(v)

				
			review of the transaction costs estimated to be $5,000,000 associated with the eNom acquisition and validation of these as one-time, non-recurring costs;

			

 

 

 

 

	 	
			(vi)

				
			review of the headcount reduction numbers at eNom and validation of the feasibility of same given synergies at Tucows;

			

 

	 	
			(vii)

				
			comparative analysis between the eNom Companies and the other Companies with respect to the gross margin percentages of the two businesses;

			

 

	 	
			(viii)

				
			validation of the domain registration renewal percentages for the eNom Companies and the other Companies and comparison of the same with industry standards; and

			

 

	 	
			(ix)

				
			consideration of the threat of new entrants (such as Amazon or Google) on established registrars (the eNom Companies and the other Companies) with respect to client retention and growth prospects;

			

 

	 	
			(c)

				
			the Lenders shall have completed and shall be satisfied with their due diligence in respect of the eNom Purchase Transaction, specifically including the terms and conditions of the eNom Purchase Agreement, the management retention agreement for Mr. Jason Silverstein, the transition services agreement and all other eNom Purchase Documents (both as to legal and business matters);

			

 

	 	
			(d)

				
			the purchase price for the eNom Shares shall not exceed Eighty-Three Million Five Hundred Thousand Dollars ($83,500,000), subject to post-closing adjustments as provided in the eNom Purchase Agreement;

			

 

	 	
			(e)

				
			the Agent shall have received a certificate from an officer of Tucows.com Co. confirming that (i) upon payment to the eNom Vendor Parties of the purchase price payable under the eNom Purchase Agreement all transactions contemplated therein will be completed, (ii) the Credit Parties are not aware of any information inconsistent in any material respect with any of the representations or warranties provided by the eNom Vendor Parties in the eNom Purchase Agreement or which could reasonably be expected to be material to a purchaser of the eNom Shares; (iii) the eNom Purchaser Parties have not waived any material conditions precedent contained in the eNom Purchase Agreement for their benefit, (iv) all documents required to complete the eNom Purchase Transaction have been executed and delivered in escrow and shall be automatically released from escrow upon receipt by the eNom Vendor Parties of the said purchase price, and (v) all approvals from Governmental Authorities or third parties which are necessary in connection therewith have been given unconditionally and without containing any onerous terms;

			

 

	 	
			(f)

				
			not less than three (3) days prior to the date of the said Advance under Facility D, the Lenders shall have received a pro forma Compliance Certificate which evidences compliance with all financial covenants under this Agreement as if the transactions contemplated herein had been completed and the said Advance under Facility D had been made;

			

 

	 	
			(g)

				
			no litigation is pending or threatened in writing against one or more of the eNom Companies that, if decided against the applicable eNom Companies, could constitute a Material Adverse Change;

			

 

 

 

 

	 	
			(h)

				
			to the extent requested by the Agent, the Agent and the Lenders shall have received (i) an environmental questionnaire in the Agent’s standard form in respect of each Owned Property owned by the eNom Companies and Material Leased Property leased by the eNom Companies completed by a knowledgeable officer of Tucows Inc.; and (ii) if the information contained therein is inconsistent in any material respect with the representations in Section 8.01(p) herein, a phase I environmental report in respect of such Owned Property or Material Leased Property;

			

 

	 	
			(i)

				
			arrangements satisfactory to the Agent shall have been made in order that immediately upon completion of the eNom Purchase Transaction: (i) all Security required to be provided by the eNom Secured Companies shall be executed and delivered, including an officer's certificate and certified copies of resolutions of the board of directors of each eNom Secured Company concerning the due authorization, execution and delivery of such Security; (ii) all registrations necessary or desirable in connection therewith shall be made; and (iii) all legal opinions and other documentation required by the Lenders in connection therewith shall be executed and delivered; all in form and substance satisfactory to the Agent and the Lenders in their sole discretion;

			

 

	 	
			(j)

				
			arrangements satisfactory to the Agent shall have been made in order that the proceeds of the Advance under Facility D shall, to the extent required, be applied to repay all Funded Debt owing by the eNom Companies and (ii) all indebtedness of the eNom Vendor Parties secured by Liens against the eNom Purchased Shares or the shares of any other eNom Company;

			

 

	 	
			(k)

				
			the Agent and the Lenders shall have received satisfactory evidence that immediately after the completion of the eNom Purchase Transaction there will be no Liens affecting any of the eNom Companies or their respective assets, except for Permitted Liens;

			

 

	 	
			(l)

				
			if requested by the Agent, the Agent and the Lenders shall have received particulars of all Permitted Liens affecting the eNom Companies or their respective assets, specifically including the assets encumbered thereby, the amounts due thereunder, and confirmation from the holders thereof that the terms thereof are being complied with;

			

 

	 	
			(m)

				
			the Agent and the Lenders shall have received satisfactory evidence that there are no Liens affecting the eNom Shares or the shares of any other eNom Companies, except to the extent that any such Liens will be released and discharged concurrently with the completion of the eNom Purchase Transaction;

			

 

	 	
			(n)

				
			the property and assets of the eNom Companies shall be insured in accordance with the requirements of this Agreement;

			

 

	 	
			(o)

				
			the Agent shall have received a certificate of status, certificate of compliance or similar certificate for each eNom Secured Company issued by its governing jurisdiction and each other jurisdiction in which it carries on business or holds any material assets;

			

 

	 	
			(p)

				
			the eNom Purchase Agreement shall include confirmation by the eNom Vendor Parties that no approvals from Governmental Authorities are required in connection with the eNom Purchase Transaction;

			

 

	 	
			(q)

				
			the eNom Companies shall have satisfied all requirements of the Agent and each Lender under AML Legislation;

			

 

 

 

 

	 	
			(r)

				
			the Borrowers shall have paid to the Agent all fees and expenses (including the Agent’s reasonable third party legal expenses)relating to the establishment of Facility D, specifically including all underwriting fees, arrangement fees and similar fees as agreed in writing between the Borrowers and the Agent; and

			

 

	 	
			(s)

				
			the Agent and the Lenders shall have received such additional evidence, documents or undertakings as they may require to complete the transactions contemplated hereby in accordance with the terms and conditions contained herein.

			

 

 

 

 

ARTICLE XII - DEFAULT AND REMEDIES

 

	
			12.01

				
			Events of Default

			

 

The occurrence of any one or more of the following events, after the expiry of any applicable cure period set out below, shall constitute an event of default under this Agreement (an “Event of Default”):

 

	 	
			(a)

				
			any Borrower fails to pay any Interest due hereunder within three (3) Business Days after the date such Interest is due, or fails to pay any principal or other amount hereunder when due;

			

 

	 	
			(b)

				
			any representation or warranty provided by a Company to the Agent or the Lenders herein or in any other Loan Document was incorrect in any material respect on the date on which such representation or warranty was made;

			

 

	 	
			(c)

				
			Tucows Inc. is not in compliance with any of the financial covenants set out in Section 9.03;

			

 

	 	
			(d)

				
			any Company fails to perform or comply with any of its covenants or obligations contained in this Agreement, the Security or any other agreement made between it and any Lenders (other than those set out in paragraphs (a), (b) and (c) above) after receipt of notice of such non-compliance from the Agent; provided that if such non-compliance is capable of remedy within fifteen (15) days and such Company diligently attempts to remedy such non-compliance and continually informs the Agent of its efforts in this regard, and such non-compliance is remedied within such period, then such non-compliance shall be deemed not to constitute an Event of Default;

			

 

	 	
			(e)

				
			any Company is in default in the payment of any indebtedness under any Material Agreement or any agreement relating to Funded Debt (after the expiry of any grace or cure periods relating thereto) and such default involves an amount or potential liability equal to or greater than Five Hundred Thousand Dollars ($500,000); or any Company agrees to the surrender or termination of any Material Agreement prior to the expiry date expressly set out therein (unless it is concurrently replaced by another Material Agreement containing substantially similar terms);

			

 

	 	
			(f)

				
			an Insolvency Event occurs in respect of any Company;

			

 

	 	
			(g)

				
			any Person takes possession of any property of a Company that is material to its financial condition, undertaking or operations by way of or in contemplation of enforcement of security; or a distress or execution or similar process is levied or enforced against any such property; except to the extent that: such matter is being diligently contested by such Company in good faith and on reasonable grounds; such Company provides the Agent with all information relating to such matter as it may reasonably request from time to time; a reserve satisfactory to the Required Lenders has been established; and the amount in dispute is not material, as determined by the Required Lenders (and without restricting the generality of the foregoing, an amount in dispute in excess of Five Hundred Thousand Dollars ($500,000) shall be deemed to be material);

			

 

	 	
			(h)

				
			one or more final judgments or decrees for the payment of money shall have been obtained or entered against any one or more of the Companies in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate and shall not be paid, discharged, vacated, bonded or stayed within ninety (90) days;

			

 

 

 

 

	 	
			(i)

				
			any Governmental Authority shall take any action to condemn, seize or appropriate any property of any Company that is material to the financial condition, business or operations of the Companies taken as a whole;

			

 

	 	
			(j)

				
			any Loan Document or any material provision thereof is or is declared by any court of competent jurisdiction to be unenforceable, or any Secured Company terminates or purports to terminate its liability under any Loan Document or disputes the validity or enforceability of such Loan Document;

			

 

	 	
			(k)

				
			any agreement which comprises part of the Security granted by a Secured Company ceases to constitute a valid First-Ranking Security Interest in respect of the property intended to be subject thereto, except as otherwise expressly permitted herein;

			

 

	 	
			(l)

				
			any Company which is presently a Subsidiary of Tucows Inc. ceases to be a Subsidiary of Tucows Inc. (except as a result of an amalgamation or merger with another Company or a winding-up into another Company), unless the Lenders in their discretion otherwise agree in writing;

			

 

	 	
			(m)

				
			any Person or group of Persons acting in concert has Control of any Company at any time;

			

 

	 	
			(n)

				
			any report of the auditors of Tucows Inc. in the Year-end Financial Statements contains a going-concern qualification or other qualification relating to the creditworthiness of the Companies on a consolidated basis;

			

 

	 	
			(o)

				
			any of the following events shall occur or exist under ERISA with respect to any U.S. Company or any member of a Controlled Group: any Reportable Event shall occur; complete or partial withdrawal from any Multiemployer Plan shall occur; any Prohibited Transaction shall occur; a notice of intent to terminate a Plan shall be filed, or a Plan shall be terminated; or circumstances shall exist which constitute grounds entitling the PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute such proceedings; and in each case above, such event or condition, together with all other events or conditions, if any, could subject such U.S. Company to any tax, penalty, or other liability which would reasonably be expected to result in a Material Adverse Change; or

			

 

	 	
			(p)

				
			an event occurs which constitutes a Material Adverse Change.

			

 

	
			12.02

				
			Acceleration; Additional Interest

			

 

	 	
			(a)

				
			Upon the occurrence of an Insolvency Event, the Obligations shall become immediately due and payable, without the necessity of any demand upon or notice to the Credit Parties by the Agent.

			

 

	 	
			(b)

				
			Upon the occurrence and during the continuation of any Event of Default other than an Insolvency Event, the Agent shall, if instructed of the Required Lenders, issue a written notice to the Credit Parties (a "Acceleration Notice") declaring all of the Obligations to be immediately due and payable.

			

 

 

 

 

	 	
			(c)

				
			At any time on or after the Acceleration Date the Agent may exercise any and all rights and remedies hereunder and under any other Loan Documents, including the enforcement of all or any portion of the Security.

			

 

	 	
			(d)

				
			From and after the date of the occurrence of an Event of Default and for so long as such Event of Default continues, both before and after the Acceleration Date, all Outstanding Advances shall bear interest or fees at the rates otherwise applicable plus two percent (2%) per annum in order to compensate the Lenders for the additional risk.

			

 

	
			12.03

				
			Acceleration of Certain Contingent Obligations

			

 

Upon the occurrence of an Event of Default which is continuing, any Lender which has issued or made a Bankers' Acceptance, BA Equivalent Note, LIBOR Loan or Letter of Credit or entered into a Hedging Agreement with a Borrower may make a Canadian Prime Rate Loan or U.S. Base Rate Loan to such Borrower in an amount equal to the face amount of such Bankers' Acceptance, BA Equivalent Note, LIBOR Loan or Letter of Credit, or the amount required to unwind such Hedging Agreement (such amount to be determined in accordance with the terms thereof), as the case may be; and the proceeds of any such Loan shall be held by such Lender and used to satisfy the Lender's obligations under the said Bankers' Acceptance, BA Equivalent Note, LIBOR Loan or Letter of Credit as such becomes due, or to effect the unwinding of such Hedging Agreement. Any such Loan shall bear interest at the rate and in the manner applicable to Canadian Prime Rate Loans or U.S. Base Rate Loans, as applicable, under the Facility under which the said Bankers' Acceptance, BA Equivalent Note, LIBOR Loan or Letter of Credit was issued.

 

	
			12.04

				
			Combining Accounts, Set-Off

			

 

Upon the occurrence and during the continuation of Event of Default, in addition to and not in limitation of any rights now or hereafter granted under applicable law, each Lender may without notice to any Company at any time and from time to time:

 

	 	
			(a)

				
			combine, consolidate or merge any or all of the deposits or other accounts maintained with such Lender by such Company (whether term, notice, demand or otherwise and whether matured or unmatured) and such Company’s obligations to such Lender hereunder; and

			

 

	 	
			(b)

				
			set-off, apply or transfer any or all sums standing to the credit of any such deposits or accounts in or towards the satisfaction of such obligations.

			

 

	
			12.05

				
			Appropriation of Monies

			

 

After the occurrence and during the continuation of an Event of Default, the Agent may from time to time, but subject to Section 13.03, apply any Proceeds of Realization of the Security against any portion or portions of the Obligations, and the Borrowers may not require any different application. The taking of a judgment or any other action or dealing whatsoever by the Agent or the Lenders in respect of the Security shall not operate as a merger of any of the Obligations hereunder or in any way affect or prejudice the rights, remedies and powers which the Agent or the Lenders may have, and the foreclosure, surrender, cancellation or any other dealing with any Security or the said obligations shall not release or affect the liability of the Borrowers or any other Person in respect of the remaining portion of the Obligations.

 

 

 

 

	
			12.06

				
			No Further Advances

			

 

The Lenders shall not be obliged to make any further Advances (including honouring any cheques drawn by the Borrowers which are presented for payment) from and after the earliest to occur of the following: (i) delivery by the Agent to the Borrowers of a written notice that an Event of Default has occurred and is continuing and that as a result thereof no further Advances will be made (whether or not such notice also requires immediate repayment of the Obligations; (ii) the occurrence of an Insolvency Event; and (iii) receipt by the Agent or any Lender of any garnishment notice or other notice of similar effect in respect of any Company pursuant to the Income Tax Act (Canada), the Excise Tax Act (Canada) or any similar notice under any other statute in effect in any jurisdiction.

 

	
			12.07

				
			Judgment Currency

			

 

If for the purposes of obtaining judgment in any court in any jurisdiction with respect to this Agreement it becomes necessary for a Lender to convert into the currency of such jurisdiction (in this Section called the “Judgment Currency”) any amount due to the Lender by the Borrowers hereunder in any currency other than the Judgment Currency, the conversion shall be made at the Exchange Rate prevailing on the Business Day before the day on which judgment is given. In the event that there is a change in the Exchange Rate prevailing between the Business Day before the day on which the judgment is given and the date of payment of the amount due, the Borrowers will, on the date of payment, pay such additional amounts (if any) or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure that the amount paid on such date is the amount in the Judgment Currency which when converted at the Exchange Rate prevailing on the date of payment is the amount then due under this Agreement in such other currency. Any additional amount due by the Borrowers under this Section will be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Agreement.

 

	
			12.08

				
			Remedies Cumulative

			

 

All rights and remedies granted to the Agent and the Lenders in this Agreement, and any other documents or instruments in existence between the parties or contemplated hereby, and any other rights and remedies available to the Agent and the Lenders at law or in equity, shall be cumulative. The exercise or failure to exercise any of the said remedies shall not constitute a waiver or release thereof or of any other right or remedy, and shall be non-exclusive.

 

	
			12.09

				
			Performance of Covenants by Agent

			

 

If the Borrowers fail to perform any covenant or obligation to be performed by them pursuant to this Agreement, the Agent may in its sole discretion, after written notice to the Borrowers, perform any of the said obligations but shall be under no obligation to do so; and any amounts reasonably expended or advanced by the Agent for such purpose shall be payable by the Borrowers upon demand together with interest at the rate applicable to Canadian Prime Rate Loans under Facility A.

 

 

 

 

 

ARTICLE XIII - THE AGENT AND THE LENDERS

 

	
			13.01

				
			Lenders’ Decisions

			

 

	 	
			(a)

				
			Any amendment to this Agreement relating to the following matters, and the granting of any waiver or consent by the Lenders in respect of such matters, shall require the unanimous agreement of the Lenders:

			

 

	 	
			(i)

				
			changes to the interest rates and fees payable in respect of the Facilities;

			

 

	 	
			(ii)

				
			increases in the maximum amount of credit available under the Facilities;

			

 

	 	
			(iii)

				
			extensions of the Maturity Date;

			

 

	 	
			(iv)

				
			changes to the scheduled dates or the scheduled amounts for Repayments hereunder;

			

 

	 	
			(v)

				
			releases of all or any portion of the Security, except to the extent provided in paragraph (c) below;

			

 

	 	
			(vi)

				
			the definitions of “Required Lenders” and “Proportionate Share” in Section 1.01;

			

 

	 	
			(vii)

				
			any provision of this Agreement which expressly states that the unanimous consent of the Lenders is required in connection with any action to be taken or consent to be provided by the Lenders; and

			

 

	 	
			(viii)

				
			this Section 13.01.

			

 

	 	
			(b)

				
			Except for the matters described in paragraph (a) above, any amendment to this Agreement shall be effective if made among the Credit Parties, the Agent and the Required Lenders, and for greater certainty any such amendment which is agreed to by the Required Lenders shall be final and binding upon all Lenders.

			

 

	 	
			(c)

				
			The Agent may from time to time without notice to or the consent of the Lenders execute and deliver partial releases of the Security in respect of any item of Collateral (whether or not the proceeds of sale thereof are received by the Agent) which the Companies are permitted to dispose of pursuant to this Agreement without obtaining the prior written consent of the Lenders; and in releasing any such security the Agent may rely upon and assume the correctness of all information contained in any certificate or document provided by any Credit Party, without further enquiry. Otherwise, any release or discharge in respect of the Security or any portion thereof shall require the written consent of the Lenders acting unanimously.

			

 

	 	
			(d)

				
			Except for the matters which require the unanimous consent of the Lenders as set out in the foregoing paragraphs of this Section 13.01, and except as otherwise specifically provided in this Agreement, any action to be taken or decision to be made by the Lenders pursuant to this Agreement (specifically including for greater certainty the issuance of written notice to the Credit Parties of the occurrence of an Event of Default, the issuance of a demand for payment of the Obligations, a decision to make an Advance despite any condition precedent relating thereto not being satisfied, the provision of any waiver in respect of a breach of any covenant or the granting of any consent) shall be effective if approved by the Required Lenders; and any such decision or action shall be final and binding upon all the Lenders.

			

 

 

 

 

	 	
			(e)

				
			Any action to be taken or decision to be made by the Lenders pursuant to this Agreement which is required to be unanimous shall be made either (i) at a meeting of the Lenders called by the Agent pursuant to Section 13.06(l) or (ii) by a written instrument executed by all of the Lenders. Any action to be taken or decision to be made by the Lenders pursuant to this Agreement which is required to be made by the Required Lenders shall be made either (i) at a meeting of the Lenders called by the Agent pursuant to Section 13.06(l) or (ii) by a written instrument executed by the Required Lenders. Any such instrument may be executed by fax or pdf and in counterparts.

			

 

	
			13.02

				
			Security

			

 

	 	
			(a)

				
			Except to the extent provided in paragraph (b), the Security shall be granted in favour of and held by the Agent for and on behalf of the Lenders in accordance with the provisions of this Agreement. The Agent shall, in accordance with its usual practices in effect from time to time, take all steps required to perfect and maintain the Security, including: taking possession of the certificates representing the securities required to be pledged hereunder; filing renewals and change notices in respect of such Security; and ensuring that the name of the Agent is noted as loss payee or mortgagee on all property insurance policies covering the Collateral. If the Agent becomes aware of any matter concerning the Security which it considers to be material, it shall promptly inform the Lenders. The Agent shall comply with all instructions provided by the Lenders in connection with the enforcement or release of the Security which it holds. The Agent agrees to permit each Lender to review and make photocopies of the original documents comprising the Security from time to time upon reasonable notice.

			

 

	 	
			(b)

				
			Any security which may be granted by a Company in favour of any Lender directly (such as but not limited to security provided in favour of BMO prior to the date hereof and security granted in favour of any Lender under the Bank Act (Canada)) shall be deemed to constitute part of the Security. Each Lender which holds any such item of security agrees that it shall not enforce such security unless and until the Required Lenders have made a determination to enforce the Security pursuant to Section 13.01(d), and such Lender agrees to remit to the Agent all amounts received by it in connection with the enforcement thereof. All such amounts shall be deemed to constitute Proceeds of Realization and shall be dealt with as provided in Section 13.03.

			

 

	
			13.03

				
			Application of Proceeds of Realization

			

 

Notwithstanding any other provision of this Agreement, the Proceeds of Realization of the Security or any portion thereof shall be distributed in the following order:

 

	 	
			(a)

				
			first, in payment of all costs and expenses incurred by the Agent and the Lenders in connection with such realization, including legal, accounting and receivers' fees and disbursements;

			

 

	 	
			(b)

				
			second, against the remaining Obligations (except those referred to in paragraph (c) below), on a pari passu basis among the Lenders to whom such Obligations are payable;

			

 

 

 

 

	 	
			(c)

				
			third, to pay any Obligations owed to Non-Funding Lenders, on a pari passu basis among the Non-Funding Lenders to whom such Obligations are payable; and

			

 

	 	
			(d)

				
			fourth, if all obligations of the Borrowers listed above have been paid and satisfied in full, any surplus Proceeds of Realization shall be paid in accordance with Applicable Law.

			

 

	
			13.04

				
			Payments by Agent

			

 

	 	
			(a)

				
			The following provisions shall apply to all payments made by the Agent to the Lenders hereunder:

			

 

	 	
			(i)

				
			the Agent shall be under no obligation to make any payment (whether in respect of principal, interest, fees or otherwise) to any Lender until an amount in respect of such payment has been received by the Agent from the Borrowers;

			

 

	 	
			(ii)

				
			if the Agent receives a payment of principal, interest, fees or other amount owing by a Borrower under any Facility or Tranche which is less than the full amount of any such payment due, the Agent shall distribute such amount received among the Lenders under such Facility or Tranche in each Lender's Proportionate Share thereof;

			

 

	 	
			(iii)

				
			if any Lender has advanced more or less than its Proportionate Share of any Facility or Tranche, such Lender's entitlement to a payment of principal, interest, fees or other amount owing by a Borrower under such Facility or Tranche shall be increased or reduced, as the case may be, to reflect the amount actually advanced by such Lender;

			

 

	 	
			(iv)

				
			if a Lender's Proportionate Share of an Advance under any Facility or Tranche has been advanced for less than the full period to which any payment by a Borrower relates, such Lender's entitlement to receive a portion of any payment of interest or fees under such Facility or Tranche shall be reduced in proportion to the length of time such Lender's Proportionate Share has actually been outstanding (unless such Lender has paid all interest required to have been paid by it to the Agent pursuant to the CBA Model Provisions);

			

 

	 	
			(v)

				
			the Agent acting reasonably and in good faith shall, after consultation with the Lenders in the case of any dispute, determine in all cases the amount of all payments to which each Lender is entitled and such determination shall be deemed to be prima facie correct;

			

 

	 	
			(vi)

				
			upon request, the Agent shall deliver a statement detailing any of the payments to the Lenders referred to herein;

			

 

	 	
			(vii)

				
			all payments by the Agent to a Lender hereunder shall be made to such Lender at its address set out herein unless notice to the contrary is received by the Agent from such Lender; and

			

 

	 	
			(viii)

				
			if the Agent has received a payment from a Borrower on a Business Day (not later than the time required for the receipt of such payment as set out in this Agreement) and fails to remit such payment to any Lender entitled to receive its Proportionate Share of such payment on such Business Day, the Agent agrees to pay interest on such late payment at a rate determined by the Agent in accordance with prevailing banking industry practice on interbank compensation.

			

 

 

 

 

	 	
			(b)

				
			The Agent may in its sole discretion from time to time make adjustments in respect of any Lender's share of a Drawdown, Conversion, Rollover or Repayment under any Facility or Tranche in order that the Outstanding Advances due to such Lender under such Facility or Tranche shall be approximately in accordance with such Lender's Proportionate Share of such Facility or Tranche.

			

 

	
			13.05

				
			Protection of Agent

			

 

	 	
			(a)

				
			Unless the Agent has actual knowledge or actual notice to the contrary, it may assume that each Lender's address set out in Exhibit A attached hereto is correct, unless and until it has received from such Lender a notice designating a different address.

			

 

	 	
			(b)

				
			The Agent may engage and pay for the advice or services of any lawyers, accountants or other experts whose advice or services may to it seem necessary, expedient or desirable and rely upon any advice so obtained (and to the extent that such costs are not recovered from the Borrowers pursuant to this Agreement, each Lender agrees to reimburse the Agent in such Lender's Proportionate Share of such costs).

			

 

	 	
			(c)

				
			Unless the Agent has actual knowledge or actual notice to the contrary, it may rely as to matters of fact which might reasonably be expected to be within the knowledge of any Company upon a statement contained in any Loan Document.

			

 

	 	
			(d)

				
			Unless the Agent has actual knowledge or actual notice to the contrary, it may rely upon any communication or document believed by it to be genuine.

			

 

	 	
			(e)

				
			The Agent may refrain from exercising any right, power or discretion vested in it under this Agreement unless and until instructed by the Required Lenders as to whether or not such right, power or discretion is to be exercised and, if it is to be exercised, as to the manner in which it should be exercised (provided that such instructions shall be required to be provided by all of the Lenders in respect of any matter for which the unanimous consent of the Lenders is required as set out herein).

			

 

	 	
			(f)

				
			The Agent may refrain from exercising any right, power or discretion vested in it which would or might in its sole and unfettered opinion be contrary to any law of any jurisdiction or any directive or otherwise render it liable to any Person, and may do anything which is in its opinion in its sole discretion necessary to comply with any such law or directive.

			

 

	 	
			(g)

				
			The Agent may refrain from acting in accordance with any instructions of the Required Lenders to begin any legal action or proceeding arising out of or in connection with this Agreement or take any steps to enforce or realize upon any Security, until it shall have received such security as it may reasonably require (whether by way of payment in advance or otherwise) against all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such instructions.

			

 

	 	
			(h)

				
			The Agent shall not be bound to disclose to any Person any information relating to the Companies or any Related Person if such disclosure would or might in its opinion in its sole discretion constitute a breach of any law or regulation or be otherwise actionable at the suit of any Person.

			

 

 

 

 

	 	
			(i)

				
			The Agent shall not accept any responsibility for the accuracy and/or completeness of any information supplied in connection herewith or for the legality, validity, effectiveness, adequacy or enforceability of any Loan Document and shall not be under any liability to any Lender as a result of taking or omitting to take any action in relation to any Loan Document except in the case of the Agent's gross negligence or wilful misconduct.

			

 

	
			13.06

				
			Duties of Agent

			

 

The Agent shall:

 

	 	
			(a)

				
			as a non-fiduciary agent for the Borrowers, maintain a record of the Outstanding Advances owing to each Lender (including the interest of each Lender in all outstanding Syndicated Letters of Credit), which record shall conclusively be presumed to be correct and accurate, absent manifest error;

			

 

	 	
			(b)

				
			hold and maintain the Security to the extent provided in Section 13.02;

			

 

	 	
			(c)

				
			provide to each Lender copies of all financial information received from the Borrowers promptly after receipt thereof, and copies of any Draw Requests, Conversion Notices, Rollover Notices, Repayment Notices and other notices received by the Agent from the Borrowers upon request by any Lender;

			

 

	 	
			(d)

				
			promptly advise each Lender of Advances required to be made by it hereunder and disburse all Repayments to the Lenders hereunder in accordance with the terms of this Agreement;

			

 

	 	
			(e)

				
			promptly notify each Lender of the occurrence of any Event of Default of which the Agent has actual knowledge or actual notice;

			

 

	 	
			(f)

				
			at the time of engaging any agent, receiver, receiver-manager, consultant, monitor or other party in connection with the Security or the enforcement thereof, obtain the agreement of such party to comply with the applicable terms of this Agreement in carrying out any such enforcement activities and dealing with any Proceeds of Realization;

			

 

	 	
			(g)

				
			account for any monies received by it in connection with this Agreement, the Security and any other agreement delivered in connection herewith or therewith;

			

 

	 	
			(h)

				
			each time a Borrower requests the written consent of the Lenders in connection with any matter, use its best efforts to obtain and communicate to such Borrower the response of the Lenders in a reasonably prompt and timely manner having due regard to the nature and circumstances of the request;

			

 

	 	
			(i)

				
			give written notice to the Borrowers in respect of any other matter in respect of which notice is required in accordance with or pursuant to this Agreement, promptly or promptly after receiving the consent of the Lenders, if required under the terms of this Agreement;

			

 

 

 

 

	 	
			(j)

				
			except as otherwise provided in this Agreement, act in accordance with any instructions given to it by the Required Lenders;

			

 

	 	
			(k)

				
			refrain from exercising any right, power or discretion vested in it under this Agreement or any document incidental thereto if so instructed by the Required Lenders (in respect of any matter which requires the consent of the Required Lenders), or by all of the Lenders (in respect of any matter which requires the unanimous consent of the Lenders); and

			

 

	 	
			(l)

				
			call a meeting of the Lenders at any time not earlier than five (5) days and not later than thirty (30) days after receipt of a written request for a meeting provided by any Lender.

			

 

	
			13.07

				
			Lenders’ Obligations Several; No Partnership

			

 

The obligations of each Lender under this Agreement are several. The failure of any Lender to carry out its obligations hereunder shall not relieve the other Lenders of any of their respective obligations hereunder. No Lender shall be responsible for the obligations of any other Lender hereunder. Neither the entering into of this Agreement nor the completion of any transactions contemplated herein shall constitute the Lenders a partnership.

 

	
			13.08

				
			Sharing of Information

			

 

The Agent and the Lenders may share among themselves any information they may have from time to time concerning the Companies whether or not such information is confidential; but shall have no obligation to do so (except for any obligations of the Agent to provide information to the extent required in this Agreement).

 

	
			13.09

				
			Acknowledgement by Borrowers

			

 

Each Credit Party hereby acknowledges notice of the terms of the provisions of this Article XIII and agrees to be bound hereby to the extent of its obligations hereunder.

 

	
			13.10

				
			Amendments to Article XIII

			

 

The Agent and the Lenders may amend any provision in this Article XIII, except Section 13.01, without prior notice to or the consent of the Borrowers, and the Agent shall provide a copy of any such amendment to the Borrowers reasonably promptly thereafter; provided however if any such amendment would materially adversely affect any rights, entitlements, obligations or liabilities of the Borrowers, such amendment shall not be effective until the Borrowers provides their written consent thereto, such consent not to be unreasonably withheld or arbitrarily delayed.

 

	
			13.11

				
			Deliveries, etc.

			

 

As between the Companies on the one hand, and the Agent and the Lenders on the other hand:

 

	 	
			(a)

				
			all statements, certificates, consents and other documents which the Agent purports to deliver to a Company on behalf of the Lenders shall be binding on each of the Lenders, and none of the Companies shall be required to ascertain or confirm the authority of the Agent in delivering such documents;

			

 

 

 

 

	 	
			(b)

				
			all certificates, statements, notices and other documents which are delivered by a Company to the Agent in accordance with this Agreement shall be deemed to have been duly delivered to each of the Lenders; and

			

 

	 	
			(c)

				
			all payments which are delivered by the Borrowers to the Agent in accordance with this Agreement shall be deemed to have been duly delivered to each of the Lenders.

			

 

	
			13.12

				
			Agency Fees

			

 

	 	
			(a)

				
			The Borrowers hereby jointly and severally agree to pay to the Agent an annual agency fee in the amount of Seven Thousand Five Hundred Dollars ($7,500) per Lender, payable in advance on the date of this Agreement and annually on each anniversary date thereafter during the term of this Agreement.

			

 

	 	
			(b)

				
			Each Lender which assigns its interests to another Person agrees to pay an assignment fee of Five Thousand Dollars ($5,000) or the Canadian Dollar equivalent thereof, to the Agent.

			

 

	
			13.13

				
			Non-Funding Lender

			

 

	 	
			(a)

				
			Each Non-Funding Lender shall be required to provide to the Agent, immediately upon receipt of a written request from the Agent, (A) cash in an amount equal to 105% of such Non-Funding Lender's Proportionate Share of the face amount of outstanding Letters of Credit, and (B) cash in an amount, as shall be determined from time to time by the Agent in its discretion, equal to all other obligations of such Non-Funding Lender to the Agent that are owing or may become owing pursuant to this Agreement, including, without limitation, such Non-Funding Lender's obligation to pay its Proportionate Share of any indemnification or expense reimbursement amounts not paid by the Borrowers. Such cash shall be held by the Agent in one or more accounts in the name of the Agent and shall not be required to be interest-bearing. The Agent shall be entitled to apply such cash from time to time in satisfaction of all or any portion of such obligations of such Non-Funding Lender, as determined by the Agent in its discretion.

			

 

	 	
			(b)

				
			The Agent shall be entitled to set off any Non-Funding Lender's Proportionate Share of all payments received from the Borrowers against such Non-Funding Lender's obligations to fund payments and Advances required to be made by it and to purchase participations required to be purchased by it in each case under this Agreement and the other Loan Documents. The Agent shall be entitled to withhold and deposit in one or more non-interest bearing accounts in the name of the Agent all amounts (whether principal, interest, fees or otherwise) received by the Agent from the Borrowers and due to such Non-Funding Lender pursuant to this Agreement, which amounts shall be used by the Agent (A) first, to reimburse the Agent for any amounts owing to it by such Non-Funding Lender pursuant to this Agreement or any other Loan Document, (B) second, to reimburse the other Lenders in respect of any Advances which may have been made by them in their discretion in order to fund, in whole or in part, any shortfall in Advances which were required to have been made by such Non-Funding Lender (and to the extent that any said Advance made by a Lender is so reimbursed, such Advance shall be deemed to have been assigned by such Lender to the Non-Funding Lender), (C) third, to be held in such account and applied by the Agent from time to time against all other obligations of such Non-Funding Lender to the Agent owing pursuant to this Agreement in such amount as shall be determined from time to time by the Agent in its discretion including, without limitation, such Non-Funding Lender's obligation to pay its Proportionate Share of any indemnification or expense reimbursement amounts not paid by the Borrowers, and (D) fourth, at the Agent's discretion, to fund from time to time such Non-Funding Lender's Proportionate Share of Advances under any Facility.

			

 

 

 

 

	 	
			(c)

				
			A Non-Funding Lender shall have no voting or consent rights with respect to matters under this Agreement or the other Loan Documents, unless and until it is no longer a Non-Funding Lender. Accordingly, the Commitments and the aggregate unpaid principal amount of the Advances owing to any Non-Funding Lender shall be disregarded in the determination of the Required Lenders.

			

 

	 	
			(d)

				
			Neither the Agent nor any of its Affiliates nor any of their respective officers, directors, employees, agents or representatives shall be liable to any Lender (including, without limitation, a Non-Funding Lender) for any action taken or omitted to be taken by them in connection with amounts payable by the Borrowers to a Non-Funding Lender and received by the Agent and applied in accordance with the provisions of this Agreement, save and except for the negligence or wilful misconduct of the Agent as determined by a final non-appealable judgment of a court of competent jurisdiction.

			

 

 

 

 

 

ARTICLE XIV - CBA MODEL PROVISIONS

 

	
			14.01

				
			CBA Model Provisions Incorporated by Reference

			

 

The CBA Model Provisions (except for the footnotes contained therein) form part of this Agreement and are incorporated herein by reference, subject to the following variations:

 

	 	
			(a)

				
			Each term set out below which is used as a defined term in the CBA Model Provisions shall be deemed to have been replaced as set out below; and for greater certainty the said replacement term shall have the meaning ascribed thereto in Section 1.01 of this Agreement:

			

 

	 	
			●

				
			“Administrative Agent” shall be replaced by “Agent”;

			

 

	 	
			●

				
			“Applicable Percentage” shall be replaced by “Proportionate Share”;

			

 

	 	
			●

				
			“Base Rate Loans” shall be replaced by “U.S. Base Rate Loans”;

			

 

	 	
			●

				
			“Borrower” shall mean all or any of the Borrowers as the context requires;

			

 

	 	
			●

				
			“LIBO Rate Loan” shall be replaced by “LIBOR Loan”;

			

 

	 	
			●

				
			“Loans” shall be replaced by “Advances”;

			

 

	 	
			●

				
			“Obligors” shall be replaced by “Credit Parties”; and

			

 

	 	
			●

				
			“Provisions” shall be replaced by “CBA Model Provisions”.

			

 

	 	
			(b)

				
			The defined term “Foreign Lender” in the CBA Model Provisions does not include a lender that is resident under the laws of Canada for purposes of the Income Tax Act, Canada.

			

 

	 	
			(c)

				
			"Pro rata share", "rateably" and similar terms in the CBA Model Provisions shall have the meaning ascribed to the term "Proportionate Share" as defined in Section 1.01 of this Agreement, if the context requires.

			

 

	 	
			(d)

				
			The terms "Related Parties" and "Related Party" in the CBA Model Provisions shall be deemed to have the meanings ascribed to the defined terms "Related Persons" and "Related Person" in this Agreement, respectively. 

			

 

	 	
			(e)

				
			In the third line of subsection 7.7(1) of the CBA Model Provisions, the phrase "...in consultation with the Borrower..." is hereby amended to read "...upon notice to the Borrowers...".

			

 

	 	
			(f)

				
			In the eleventh and twelfth lines of Section 10(b)(i) of the CBA Model Provisions, the following phrase is hereby deleted: "...in the case of any assignment in respect of a revolving facility, or $1,000,000, in the case of any assignment in respect of a term facility ...".

			

 

 

 

 

	 	
			(g)

				
			The parties hereby acknowledge and agree that the indemnity contained in clause 9(b)(iii) of the CBA Model Provisions is in addition to and not in substitution for the indemnity contained in Section 15.04 of this Agreement.

			

 

	
			14.02

				
			Inconsistencies with CBA Model Provisions

			

 

To the extent that there is any inconsistency between a provision of this Agreement and a provision of the CBA Model Provisions, the provision of this Agreement shall govern. For greater certainty, a provision of this Agreement and a provision of the CBA Model Provisions shall be considered to be inconsistent if both relate to the same subject-matter and the provision in the CBA Model Provisions imposes more onerous obligations or restrictions than the corresponding provision in this Agreement.

 

 

 

 

 

ARTICLE XV - GENERAL

 

	
			15.01

				
			Waivers

			

 

The failure or delay by the Agent or any Lender in exercising any right or privilege with respect to the non-compliance with any provisions of this Agreement by the Borrowers and any course of action on the part of the Agent or any Lender, shall not operate as a waiver of any rights of the Agent or such Lender unless made in writing by the Agent or such Lender. Any such waiver shall be effective only in the specific instance and for the purpose for which it is given and shall not constitute a waiver of any other rights and remedies of the Agent or such Lender with respect to any other or future non-compliance.

 

	
			15.02

				
			Expenses; Debit Authorization

			

 

Whether or not the transactions contemplated by this Agreement are completed or any Advance has been made, the Credit Parties agree to pay on demand by the Agent from time to time all reasonable expenses incurred by the Agent and the Lenders in connection with this Agreement, the Security and all documents contemplated hereby, specifically including: reasonable expenses incurred by the Agent and the Lenders in respect of due diligence, appraisals, insurance consultations, credit reporting and responding to demands of any Governmental Authority, reasonable legal expenses in connection with the preparation and interpretation of this Agreement and the Security and the administration of the Facilities generally, including the preparation of waivers and partial discharges of Security; and all reasonable legal expenses in connection with the protection and enforcement of the Security. Each Credit Party hereby authorizes the Agent to debit any account maintained by it with the Agent, and to set off and compensate against any and all accounts, credits and balances maintained by it with the Agent, in order to pay (i) any interest or other amounts payable by the Credit Parties from time to time pursuant to this Agreement when due; and (ii) any expenses referred to herein which are not paid by the Credit Parties within ten (10) days after delivery to them of a written request from the Agent for payment of such expenses. The Agent agrees to give written notice to the Credit Parties of any such debit promptly thereafter.

 

	
			15.03

				
			General Indemnity

			

 

In addition to any other liability of the Borrowers hereunder, each Borrower hereby agrees to indemnify and save harmless the Indemnitees from and against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (including reasonable legal fees on a solicitor and his own client basis) of any kind or nature whatsoever (but excluding any consequential damages and damages for loss of profit) which may be imposed on, incurred by or asserted against the Indemnitees (except to the extent arising from the negligence or wilful misconduct of such Indemnitees) which relate to or arise out of or result from:

 

	 	
			(a)

				
			any failure by any Borrower to pay and satisfy its obligations hereunder including, without limitation, any costs or expenses incurred by reason of the liquidation or re-employment in whole or in part of deposits or other funds required by the Lenders to fund or maintain the Facilities or as a result of such Borrower’s failure to take any action on the date required hereunder or specified by it in any notice given hereunder;

			

 

	 	
			(b)

				
			any investigation by Governmental Authorities or any litigation or other similar proceeding related to any use made or proposed to be made by the Borrowers of the proceeds of any Advance; and

			

 

 

 

 

	 	
			(c)

				
			any instructions given to any Lender to stop payment on any cheque issued by any Borrower or to reverse any wire transfer or other transaction initiated by such Lender at the request of any Borrower;

			

 

provided, however, that such indemnity shall not be available to any Indemnitee to the extent that such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (i) are determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of Indemnitee or (ii) result from a claim brought by the Credit Parties against any Indemnitee for breach in bad faith of such Indemnitee’s obligations under any Loan Document.

 

	
			15.04

				
			Environmental Indemnity

			

 

In addition to any other liability of the Borrowers hereunder, each Borrower hereby agrees to indemnify and save harmless the Indemnitees from and against:

 

	 	
			(a)

				
			any losses suffered by them for, in connection with, or as a direct or indirect result of, the failure of any of the Companies to comply with all Requirements of Environmental Law;

			

 

	 	
			(b)

				
			any losses suffered by the Indemnitees for, in connection with, or as a direct or indirect result of, the presence of any Hazardous Material situated in, on or under any property owned by any of the Companies or upon which they on business; and

			

 

	 	
			(c)

				
			any and all liabilities, losses, damages, penalties, expenses (including reasonable legal fees) and claims which may be paid, incurred or asserted against the Indemnitees for, in connection with, or as a direct or indirect result of, any legal or administrative proceedings with respect to the presence of any Hazardous Material on or under any property owned by any of the Companies or upon which they carry on business, or the discharge, emission, spill, radiation or disposal by any of them of any Hazardous Material into or upon any Land, the atmosphere, or any watercourse or body of water; including the costs of defending and/or counterclaiming or claiming against third parties in respect of any action or matter and any cost, liability or damage arising out of a settlement entered into by the Indemnitees of any such action or matter;

			

 

except to the extent arising from the negligence or wilful misconduct of such Indemnitees. The obligations of each Borrower under this Section shall survive the termination of this Agreement.

 

	
			15.05

				
			Survival of Certain Obligations despite Termination of Agreement

			

 

The termination of this Agreement shall not relieve the Borrowers from their obligations to the Agent and the Lenders arising prior to such termination, such as obligations arising as a result of or in connection with any breach of this Agreement, any failure to comply with this Agreement or the inaccuracy of any representations and warranties made or deemed to have been made prior to such termination, and obligations arising pursuant to all indemnity obligations contained herein. Without limiting the generality of the foregoing, the obligations of the Borrowers to the Agent and the Lenders arising under or in connection with Sections 15.03 and 15.04 of this Agreement and Section 3.2 of the CBA Model Provisions shall continue in full force and effect despite any termination of this Agreement.

 

 

 

 

	
			15.06

				
			Interest on Unpaid Costs and Expenses

			

 

If any Borrower fails to pay when due any amount in respect of costs or expenses or any other amount required to be paid by it hereunder (other than principal or interest on any Advance), it shall pay interest on such unpaid amount from the time such amount is due until paid at the interest rate applicable to Canadian Prime Rate Loans under Facility A.

 

	
			15.07

				
			Notice

			

 

Without prejudice to any other method of giving notice, all communications provided for or permitted hereunder shall be in writing and given to the applicable addressee by prepaid private courier or by facsimile or electronic mail to its address, facsimile number or email address and to the attention of the officer of the addressee as follows:

 

	 	
			(a)

				
			to any Credit Party

			

 

96 Mowat Avenue.

Toronto, Ontario

M6k 3M1

Attention: President

Fax no.: (416) 531-1257

Email: dsingh@tucows.com

 

	 	
			(b)

				
			Drawdown Requests, Conversion Notices, Rollover Notices and Repayment Notices, to the Agent at the following address:

			

 

Bank of Montreal

Agent Bank Services

234 Simcoe Street

Toronto, Ontario

M5T 1T4

Attention: Manager, Agent Bank Services (re Tucows Inc.)

Fax No: 416-598-6218

Email:  BMOCCLO.AgencyToronto@bmo.com

 

	 	
			(c)

				
			all other communications to the Agent:

			

 

Bank of Montreal

234 Simcoe Street, 3rd Floor

Toronto, Ontario

M5T 1T4

Attention: Kathryn Choi (re Tucows Inc.)

Fax No. 416-598-6320

Email: kathryn.choi@bmo.com

 

	 	
			(d)

				
			to any Lender, at its address noted on Exhibit “A” attached hereto.

			

 

Any communication transmitted by prepaid private courier shall be deemed to have been validly and effectively given or delivered on the Business Day after which it is submitted for delivery. Any communication transmitted by facsimile shall be deemed to have been validly and effectively given or delivered on the day on which it is transmitted, if transmitted on a Business Day on or before 5:00 p.m. (local time of the intended recipient), and otherwise on the next following Business Day. Any party may change its address for service by notice given in the foregoing manner.

 

 

 

 

	
			15.08

				
			Severability

			

 

Any provision of this Agreement which is illegal, prohibited or unenforceable in any jurisdiction, in whole or in part, shall not invalidate the remaining provisions hereof; and any such illegality, prohibition or unenforceability in any such jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

	
			15.09

				
			Further Assurances

			

 

Each Credit Party shall, at its expense, promptly execute and deliver or cause to be executed and delivered to the Agent upon request, acting reasonably, from time to time all such other and further documents, agreements, opinions, certificates and instruments in compliance with this Agreement, or if necessary or desirable to more fully record or evidence the obligations intended to be entered into herein, or to make any recording, file any notice or obtain any consent.

 

	
			15.10

				
			Time of the Essence

			

 

Time shall be of the essence of this Agreement.

 

	
			15.11

				
			Promotion and Marketing

			

 

For the purpose of promotion and marketing each Credit Party hereby authorizes and consents to the reproduction, disclosure and use by the Lenders and the Agent of its name, identifying logo and the Facilities to enable the Lenders to publish promotional “tombstones”, subject to prior review by the Credit Parties. Each Credit Party acknowledges and agrees that the Lenders shall be entitled to determine, in their sole discretion, whether to use such information; that no compensation will be payable by the Lenders or the Agent in connection therewith; and that the Lenders and the Agent shall have no liability whatsoever to it or any of its employees, officers, directors, affiliates or shareholders in obtaining and using such information as contemplated herein.

 

	
			15.12

				
			Amendment and Restatement

			

 

This Agreement amends, restates, consolidates and supplements certain provisions of the 2016 Credit Agreement and shall not be considered a novation thereof. Any provision hereof which differs from or is inconsistent with any provision contained the 2016 Credit Agreement shall constitute an amendment thereto, with such amendment being effective as and from the date hereof. The provisions of the 2016 Credit Agreement as amended hereby have been consolidated and restated in this Agreement. This Agreement will not discharge or constitute a novation of any debt, obligation, covenant or agreement contained in the 2016 Credit Agreement or in any security, agreements, certificates and other documents executed and delivered by or on behalf of any Person in respect thereof or in connection therewith, all of which shall remain in full force and effect except to the extent amended by the provisions of this Agreement. All representations and warranties set out in this Agreement are freshly made on the date hereof. Each Borrower hereby represents, warrants, acknowledges and agrees with the Agent that all Security Documents executed and delivered by it to the Agent prior to the date of this Agreement continues in full force and effect and remains valid and enforceable in accordance with its terms. Any reference to the 2016 Credit Agreement in any Security Document delivered pursuant to the 2016 Credit Agreement shall be a reference to this Agreement.

 

 

 

 

	
			15.13

				
			Entire Agreement; Waivers and Amendments to be in Writing

			

 

This Agreement supersedes all discussion papers, term sheets and other writings which may have been issued by the Agent or the Lenders prior to the date hereof relating to the Facilities, which shall have no force or effect; and this Agreement and any other documents or instruments contemplated herein or therein shall constitute the entire agreement and understanding among the Borrowers, the Lenders and the Agent relating to the subject-matter hereof. Subject to Section 13.01(b), no provision of this Agreement, or any other document or instrument in existence among the parties may be modified, waived or terminated except by an instrument in writing executed by the party against whom such modification waiver or termination is sought to be enforced.

 

	
			15.14

				
			Inconsistencies with Security

			

 

To the extent that there is any inconsistency between a provision of this Agreement and a provision of any document constituting part of the Security, the provision of this Agreement shall govern. For greater certainty, a provision of this Agreement and a provision of the Security shall be considered to be inconsistent if both relate to the same subject-matter and the provision in the Security imposes more onerous obligations or restrictions than the corresponding provision in this Agreement.

 

	
			15.15

				
			Confidentiality; Public Filing of Agreement

			

 

The Credit Parties agree not to publicly disclose any information contained herein, including a copy of this Agreement, except (i) on a confidential basis to their respective officers, directors, employees, accountants, lawyers and other professional advisors; (ii) to any bona fide prospective purchaser of the shares of Tucows Inc. or all or substantially all of the assets of the Companies, provided that such Person executes and delivers a confidentiality agreement in form and substance acceptable to the Companies; and (iii) as may be required pursuant to Applicable Law (including without limitation filing a copy of this Agreement on EDGAR and SEDAR). If any such disclosure is required pursuant to Applicable Law, the Credit Parties will provide at least two (2) Business Days' prior written notice to the Agent before making such disclosure if doing so would not cause any Company to breach Applicable Law, and during such period the Agent and the Lenders acting reasonably may indicate to the Credit Parties which portions of such Loan Documents they wish not be disclosed in order to protect the rights of the Agent and the Lenders to maintain the confidentiality of information which the Agent and the Lenders believe is confidential and proprietary to the Agent and the Lenders. The Credit Parties shall comply with any such request unless such compliance would, in the good faith judgment of the Credit Parties and their legal counsel, contravene Applicable Law. The terms of this Section shall survive the termination of this Agreement.

 

	
			15.16

				
			Governing Law

			

 

This Agreement shall be interpreted in accordance with the laws of the Province of Ontario. Without prejudice to the right of the Agent and the Lenders to commence any proceedings with respect to this Agreement in any other proper jurisdiction, the parties hereby attorn and submit to the non-exclusive jurisdiction of the courts of the Province of Ontario.

 

	
			15.17

				
			Execution and Counterparts

			

 

This Agreement may be executed in several counterparts, each of which, when so executed, shall be deemed to be an original and which counterparts together shall constitute one and the same Agreement. This Agreement may be executed by facsimile or pdf, and any signature contained hereon by facsimile or pdf shall be deemed to be equivalent to an original signature for all purposes.

 

 

 

 

	
			15.18

				
			Binding Effect

			

 

This Agreement shall be binding upon and shall enure to the benefit of the parties and their respective successors and permitted assigns; “successors” includes any corporation resulting from the amalgamation of any party with any other corporation.

 

[The balance of this page is intentionally left blank; signature pages follow]

 

 

 

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement.

 

 

 

	
			TUCOWS INC.

			 

			By:/s/ Michael Cooperman

			name: Michael Cooperman

			title: CFO

			 

				
			TING FIBER, INC.

			 

			By:/s/ Michael Cooperman

			name: Michael Cooperman

			title: CFO

			 

			
	 	 
	 	 
	
			TUCOWS.COM CO.

			 

			By:/s/ Michael Cooperman

			name: Michael Cooperman

			title: CFO

			 

				
			TING INC.

			 

			By:/s/ Michael Cooperman

			name: Michael Cooperman

			title: CFO

			 

			
	 	 
	 	 
	
			TUCOWS (DELAWARE) INC.

			 

			By:/s/ Michael Cooperman

			name: Michael Cooperman

			title: CFO

			 

				
			TUCOWS (EMERALD), LLC

			by its sole member, TING FIBER, INC.

			 

			By:/s/ Michael Cooperman

			name: Michael Cooperman

			title: CFO

			 

			

 

 

[signatures continued on next page]

 

 

 

 

 

	
			BANK OF MONTREAL, as Administrative Agent

			 

			By: /s/ Francois Wentzel

			name: Francois Wentzel

			title: Managing Director

			 

			By: /s/ James Di Giacomo

			name: James Di Giacomo

			title: Managing Director

				
			BANK OF MONTREAL, as a Lender

			 

			By: /s/ Aditya Sapru

			name: Aditya Sapru

			title: Managing Director

			 

			By: /s/ Grace Lam

			name: Grace Lam

			title: Director

			
	 	 
	
			BANK OF MONTREAL, Chicago Branch, as a Lender

			 

			By: /s/ Randon Gardley

			name: Randon Gardley

			title: Vice President

			 

				
			ROYAL BANK OF CANADA, as a Lender

			 

			By: /s/ Kerry O’Neill

			name: Kerry O’Neill

			title: Authorized Signatory

			 

			
	 	 
	
			THE BANK OF NOVA SCOTIA, as a Lender

			 

			By: /s/ Alicia Mair

			name: Alicia Mair

			title: Director

			 

			By: /s/ Angela Bai

			name: Angela Bai

			title: DirectorExhibit 10.1

 

	
 
    

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

 

DATED AS OF JANUARY 20, 2017,

 

 

AMONG

 

 

WILLDAN GROUP, INC.,

 

 

THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

 

 

AND

 

 

BMO HARRIS BANK N.A.

	
 
    

 

 

TABLE OF CONTENTS

 

	
SECTION
    	
 
    	
HEADING
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 1.
    	
 
    	
DEFINITIONS;   INTERPRETATION
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 1.1.
    	
 
    	
Definitions
    	
 
    	
1
    
	
Section 1.2.
    	
 
    	
Interpretation
    	
 
    	
26
    
	
Section 1.3.
    	
 
    	
Change   in Accounting Principles
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 2.
    	
 
    	
THE FACILITY
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.1.
    	
 
    	
[Reserved]
    	
 
    	
27
    
	
Section 2.2.
    	
 
    	
Revolving   Facility
    	
 
    	
27
    
	
Section 2.3.
    	
 
    	
Letters   of Credit
    	
 
    	
27
    
	
Section 2.4.
    	
 
    	
Applicable   Interest Rates
    	
 
    	
29
    
	
Section 2.5.
    	
 
    	
Minimum   Borrowing Amounts; Maximum Eurodollar Loans
    	
 
    	
29
    
	
Section 2.6.
    	
 
    	
Manner   of Borrowing Loans and Designating Applicable Interest Rates
    	
 
    	
30
    
	
Section 2.7.
    	
 
    	
Maturity   of Loans
    	
 
    	
31
    
	
Section 2.8.
    	
 
    	
Prepayments
    	
 
    	
31
    
	
Section 2.9.
    	
 
    	
Default   Rate
    	
 
    	
33
    
	
Section 2.10.
    	
 
    	
Evidence   of Indebtedness
    	
 
    	
34
    
	
Section 2.11.
    	
 
    	
Commitment   Terminations
    	
 
    	
34
    
	
Section 2.12.
    	
 
    	
Increase   in Revolving Credit Commitments
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 3.
    	
 
    	
FEES
    	
 
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 3.1.
    	
 
    	
Fees
    	
 
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 4.
    	
 
    	
TAXES; CHANGE IN CIRCUMSTANCES, INCREASED   COSTS, AND FUNDING INDEMNITY
    	
 
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 4.1.
    	
 
    	
Taxes
    	
 
    	
36
    
	
Section 4.2.
    	
 
    	
Change   of Law
    	
 
    	
37
    
	
Section 4.3.
    	
 
    	
Unavailability   of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR
    	
 
    	
38
    
	
Section 4.4.
    	
 
    	
Increased   Costs
    	
 
    	
38
    
	
Section 4.5.
    	
 
    	
Funding   Indemnity
    	
 
    	
39
    
	
Section 4.6.
    	
 
    	
Discretion   of the Bank as to Manner of Funding
    	
 
    	
40
    
	
Section 4.7.
    	
 
    	
Lending   Offices; Mitigation Obligations
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 5.
    	
 
    	
PLACE AND APPLICATION   OF PAYMENTS
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 5.1.
    	
 
    	
Place   and Application of Payments
    	
 
    	
40
    
	
Section 5.2.
    	
 
    	
Non-Business   Days
    	
 
    	
41
    
	
Section 5.3.
    	
 
    	
Payments   Set Aside
    	
 
    	
41
    
	
Section 5.4.
    	
 
    	
Account   Debit
    	
 
    	
41
    

 

i

 

	
SECTION 6.
    	
 
    	
REPRESENTATIONS AND   WARRANTIES
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.1.
    	
 
    	
Organization   and Qualification
    	
 
    	
41
    
	
Section 6.2.
    	
 
    	
Subsidiaries
    	
 
    	
41
    
	
Section 6.3.
    	
 
    	
Authority   and Validity of Obligations
    	
 
    	
42
    
	
Section 6.4.
    	
 
    	
Use   of Proceeds; Margin Stock
    	
 
    	
42
    
	
Section 6.5.
    	
 
    	
Financial   Reports
    	
 
    	
43
    
	
Section 6.6.
    	
 
    	
No Material   Adverse Change
    	
 
    	
43
    
	
Section 6.7.
    	
 
    	
Full   Disclosure
    	
 
    	
43
    
	
Section 6.8.
    	
 
    	
Trademarks,   Franchises, and Licenses
    	
 
    	
43
    
	
Section 6.9.
    	
 
    	
Governmental   Authority and Licensing
    	
 
    	
44
    
	
Section 6.10.
    	
 
    	
Good   Title
    	
 
    	
44
    
	
Section 6.11.
    	
 
    	
Litigation   and Other Controversies
    	
 
    	
44
    
	
Section 6.12.
    	
 
    	
Taxes
    	
 
    	
44
    
	
Section 6.13.
    	
 
    	
Approvals
    	
 
    	
44
    
	
Section 6.14.
    	
 
    	
Affiliate   Transactions
    	
 
    	
44
    
	
Section 6.15.
    	
 
    	
Investment   Company
    	
 
    	
45
    
	
Section 6.16.
    	
 
    	
ERISA
    	
 
    	
45
    
	
Section 6.17.
    	
 
    	
Compliance   with Laws
    	
 
    	
45
    
	
Section 6.18.
    	
 
    	
OFAC
    	
 
    	
46
    
	
Section 6.19.
    	
 
    	
Labor   Matters
    	
 
    	
46
    
	
Section 6.20.
    	
 
    	
Other   Agreements
    	
 
    	
46
    
	
Section 6.21.
    	
 
    	
Solvency
    	
 
    	
46
    
	
Section 6.22.
    	
 
    	
No   Default
    	
 
    	
46
    
	
Section 6.23.
    	
 
    	
No   Broker Fees
    	
 
    	
46
    
	
Section 6.24.
    	
 
    	
Security   Documents
    	
 
    	
46
    
	
Section 6.25.
    	
 
    	
Bonding   Capacity
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 7.
    	
 
    	
CONDITIONS PRECEDENT
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 7.1.
    	
 
    	
All   Credit Events
    	
 
    	
47
    
	
Section 7.2.
    	
 
    	
Initial   Credit Event
    	
 
    	
48
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 8.
    	
 
    	
COVENANTS
    	
 
    	
49
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 8.1.
    	
 
    	
Maintenance   of Business
    	
 
    	
49
    
	
Section 8.2.
    	
 
    	
Maintenance   of Properties
    	
 
    	
50
    
	
Section 8.3.
    	
 
    	
Taxes   and Assessments
    	
 
    	
50
    
	
Section 8.4.
    	
 
    	
Insurance
    	
 
    	
50
    
	
Section 8.5.
    	
 
    	
Financial   Reports
    	
 
    	
51
    
	
Section 8.6.
    	
 
    	
Inspection;   Field Audits
    	
 
    	
53
    
	
Section 8.7.
    	
 
    	
Borrowings   and Guaranties
    	
 
    	
53
    
	
Section 8.8.
    	
 
    	
Liens
    	
 
    	
55
    
	
Section 8.9.
    	
 
    	
Investments,   Acquisitions, Loans and Advances
    	
 
    	
57
    
	
Section 8.10.
    	
 
    	
Mergers,   Consolidations and Sales
    	
 
    	
57
    
	
Section 8.11.
    	
 
    	
Maintenance   of Subsidiaries
    	
 
    	
58
    
	
Section 8.12.
    	
 
    	
Dividends   and Certain Other Restricted Payments
    	
 
    	
58
    

 

ii

 

	
Section 8.13.
    	
 
    	
ERISA
    	
 
    	
59
    
	
Section 8.14.
    	
 
    	
Compliance   with Laws
    	
 
    	
59
    
	
Section 8.15.
    	
 
    	
Compliance   with OFAC Sanctions Programs
    	
 
    	
60
    
	
Section 8.16.
    	
 
    	
Burdensome   Contracts With Affiliates
    	
 
    	
60
    
	
Section 8.17.
    	
 
    	
No   Changes in Fiscal Year
    	
 
    	
61
    
	
Section 8.18.
    	
 
    	
Formation   of Subsidiaries; Guaranty Requirements
    	
 
    	
61
    
	
Section 8.19.
    	
 
    	
Change   in the Nature of Business
    	
 
    	
61
    
	
Section 8.20.
    	
 
    	
Use   of Proceeds
    	
 
    	
61
    
	
Section 8.21.
    	
 
    	
No   Restrictions
    	
 
    	
61
    
	
Section 8.22.
    	
 
    	
Subordinated   Debt
    	
 
    	
61
    
	
Section 8.23.
    	
 
    	
Financial   Covenants
    	
 
    	
61
    
	
Section 8.24.
    	
 
    	
Modification   of Certain Documents
    	
 
    	
62
    
	
Section 8.24.
    	
 
    	
Post-Closing   Covenant
    	
 
    	
62
    
	
Section 8.25.
    	
 
    	
Bonding   Capacity
    	
 
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 9.
    	
 
    	
EVENTS OF DEFAULT AND   REMEDIES
    	
 
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 9.1.
    	
 
    	
Events   of Default
    	
 
    	
62
    
	
Section 9.2.
    	
 
    	
Non-Bankruptcy   Defaults
    	
 
    	
66
    
	
Section 9.3.
    	
 
    	
Bankruptcy   Defaults
    	
 
    	
66
    
	
Section 9.4.
    	
 
    	
Collateral   for Undrawn Letters of Credit
    	
 
    	
66
    
	
Section 9.5.
    	
 
    	
Post-Default   Collections
    	
 
    	
67
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 10.
    	
 
    	
THE GUARANTEES
    	
 
    	
67
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 10.1.
    	
 
    	
The   Guarantees
    	
 
    	
67
    
	
Section 10.2.
    	
 
    	
Guarantee   Unconditional
    	
 
    	
68
    
	
Section 10.3.
    	
 
    	
Discharge   Only upon Payment in Full; Reinstatement in Certain Circumstances
    	
 
    	
69
    
	
Section 10.4.
    	
 
    	
Subrogation
    	
 
    	
69
    
	
Section 10.5.
    	
 
    	
Subordination
    	
 
    	
69
    
	
Section 10.6.
    	
 
    	
Waivers
    	
 
    	
69
    
	
Section 10.7.
    	
 
    	
Limit   on Recovery
    	
 
    	
70
    
	
Section 10.8.
    	
 
    	
Stay   of Acceleration
    	
 
    	
70
    
	
Section 10.9.
    	
 
    	
Benefit   to Guarantors
    	
 
    	
70
    
	
Section 10.10.
    	
 
    	
Keepwell
    	
 
    	
70
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 11.
    	
 
    	
COLLATERAL
    	
 
    	
70
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 11.1.
    	
 
    	
Collateral
    	
 
    	
70
    
	
Section 11.2.
    	
 
    	
Depository   Banks
    	
 
    	
71
    
	
Section 11.3.
    	
 
    	
Liens   on Real Property
    	
 
    	
71
    
	
Section 11.4.
    	
 
    	
Further   Assurances
    	
 
    	
72
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SECTION 12.
    	
 
    	
MISCELLANEOUS
    	
 
    	
72
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 12.1.
    	
 
    	
Notices
    	
 
    	
72
    
	
Section 12.2.
    	
 
    	
Amendments,   Etc.
    	
 
    	
73
    

 

iii

 

	
Section 12.3
    	
 
    	
Costs   and Expenses; Indemnification
    	
 
    	
73
    
	
Section 12.4.
    	
 
    	
No   Waiver, Cumulative Remedies
    	
 
    	
75
    
	
Section 12.5.
    	
 
    	
Right   of Setoff
    	
 
    	
75
    
	
Section 12.6.
    	
 
    	
Survival   of Representations
    	
 
    	
75
    
	
Section 12.7.
    	
 
    	
Survival   of Indemnities
    	
 
    	
75
    
	
Section 12.8.
    	
 
    	
Counterparts, Integration;   Effectiveness
    	
 
    	
75
    
	
Section 12.9.
    	
 
    	
Headings
    	
 
    	
76
    
	
Section 12.10.
    	
 
    	
Severability   of Provisions
    	
 
    	
76
    
	
Section 12.11.
    	
 
    	
Construction
    	
 
    	
76
    
	
Section 12.12
    	
 
    	
Excess   Interest
    	
 
    	
76
    
	
Section 12.13.
    	
 
    	
No   Advisory or Fiduciary Responsibility
    	
 
    	
77
    
	
Section 12.14.
    	
 
    	
Binding   Nature; Governing Law; Jurisdiction; Consent to Service of Process
    	
 
    	
77
    
	
Section 12.15.
    	
 
    	
Waiver   of Jury Trial
    	
 
    	
78
    
	
Section 12.16.
    	
 
    	
USA   Patriot Act
    	
 
    	
78
    
	
Section 12.17.
    	
 
    	
Confidentialilty
    	
 
    	
78
    
	
Section 12.18.
    	
 
    	
Amendment   and Restatement
    	
 
    	
79
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signature   Page
    	
 
    	
 
    	
 
    	
S-1
    

 

 

	
EXHIBIT A
    	
 
    	
—
    	
 
    	
Notice of Borrowing
    
	
EXHIBIT B
    	
 
    	
—
    	
 
    	
Notice of Continuation/Conversion
    
	
EXHIBIT C-1
    	
 
    	
—
    	
 
    	
[Reserved]
    
	
EXHIBIT C-2
    	
 
    	
—
    	
 
    	
Revolving Note
    
	
EXHIBIT D
    	
 
    	
—
    	
 
    	
[Reserved]
    
	
EXHIBIT E
    	
 
    	
—
    	
 
    	
Compliance Certificate
    
	
EXHIBIT F
    	
 
    	
—
    	
 
    	
Additional Guarantor Supplement
    
	
EXHIBIT G
    	
 
    	
—
    	
 
    	
Share Repurchase Compliance Certificate
    
	
EXHIBIT H
    	
 
    	
—
    	
 
    	
Increase Request
    
	
SCHEDULE 1.1
    	
 
    	
—
    	
 
    	
Fiscal Quarters
    
	
SCHEDULE 6.2
    	
 
    	
—
    	
 
    	
Subsidiaries
    
	
SCHEDULE 8.9
    	
 
    	
—
    	
 
    	
Permitted Investments
    

 

iv

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This Amended and Restated Credit Agreement is entered into as of January 20, 2017, by and among WILLDAN GROUP, INC., a Delaware corporation (the “Borrower”), the direct and indirect Subsidiaries of the Borrower from time to time party to this Agreement, as Guarantors, and BMO HARRIS BANK N.A., a national banking association (the “Bank”), as the lender as provided herein.

 

PRELIMINARY STATEMENT

 

The Borrower, certain direct and indirect Subsidiaries of the Borrower, as Guarantors thereunder, and the Bank are party to that certain Credit Agreement dated as of March 24, 2014 (as heretofore amended, restated, supplemented or otherwise modified from time to time, the “Prior Credit Agreement”), pursuant to which the Bank agreed, among other things, to extend certain credit facilities to the Borrower on the terms and conditions set forth therein.

 

The Borrower has requested, and the Bank has agreed to extend, certain credit facilities on the terms and conditions of this Agreement.

 

Furthermore, the Loan Parties have requested that certain amendments be made to the Prior Credit Agreement, and for the sake of clarity and convenience, that the Prior Credit Agreement be restated in its entirety as so amended, and the Bank has agreed to such requests on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.                                             DEFINITIONS; INTERPRETATION.

 

Section 1.1.                                    Definitions.  The following terms when used herein shall have the following meanings:

 

“Acquired Business” means the entity or assets acquired by the Borrower or another Loan Party in an Acquisition, whether before or after the date hereof.

 

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person (other than a Person that is a Subsidiary), or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that the Borrower or another Loan Party is the surviving entity.

 

 

“Adjusted LIBOR” means, for any Borrowing of Eurodollar Loans, a rate per annum determined in accordance with the following formula:

 

	
Adjusted LIBOR
    	
=
    	
LIBOR
    	
 
    
	
 
    	
 
    	
1 - Eurodollar Reserve   Percentage
    	
 
    

 

“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; provided that, in any event for purposes of this definition, any Person that owns, directly or indirectly, 5% or more of the securities having the ordinary voting power for the election of directors or governing body of a corporation or 5% or more of the partnership or other ownership interest of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.

 

“Agreement” means this Amended and Restated Credit Agreement, as the same may be amended, modified, restated or supplemented from time to time pursuant to the terms hereof.

 

“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, Letter of Credit Fees, and the commitment fees payable under Section 3.1(a), until the first Pricing Date, the rates per annum shown opposite Level III below, and thereafter from one Pricing Date to the next the Applicable Margin means the rates per annum determined in accordance with the following schedule:

 

	
LEVEL
    	
 
    	
TOTAL LEVERAGE
   RATIO FOR SUCH
   PRICING DATE
    	
 
    	
APPLICABLE MARGIN FOR
   BASE RATE LOANS
   UNDER REVOLVING
   FACILITY AND
   REIMBURSEMENT
   OBLIGATIONS SHALL BE:
    	
 
    	
APPLICABLE
   MARGIN FOR
   EURODOLLAR
   LOANS UNDER
   REVOLVING
   FACILITY AND
   FINANCIAL LETTER
   OF CREDIT FEES
   SHALL BE:
    	
 
    	
APPLICABLE MARGIN
   FOR PERFORMANCE
   LETTER OF CREDIT
   FEES SHALL BE:
    	
 
    	
APPLICABLE
   MARGIN FOR
   COMMITMENT FEE
   SHALL BE:
    	
 
    
	
I
    	
 
    	
Less than 0.75 to 1.0
    	
 
    	
0.25
    	
%
    	
1.25
    	
%
    	
0.94
    	
%
    	
0.20
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
II
    	
 
    	
Less than 1.50 to 1.0, but   greater than or equal to 0.75 to 1.0
    	
 
    	
0.50
    	
%
    	
1.50
    	
%
    	
1.13
    	
%
    	
0.25
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
III
    	
 
    	
Less than 2.00 to 1.0, but   greater than or equal to 1.50 to 1.0
    	
 
    	
0.75
    	
%
    	
1.75
    	
%
    	
1.31
    	
%
    	
0.30
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
IV
    	
 
    	
Greater than or equal to   2.00
    	
 
    	
1.00
    	
 
    	
2.00
    	
%
    	
1.50
    	
%
    	
0.35
    	
%
    

 

2

 

For purposes hereof, the term “Pricing Date” means, for any Fiscal Quarter ending on or after the 4th Fiscal Quarter of 2016 the date on which the Bank is in receipt of the Borrower’s most recent financial statements (and, in the case of the Fiscal Year-end financial statements, audit report) for the Fiscal Quarter then ended, pursuant to Section 8.5.  The Applicable Margin shall be established based on the Total Leverage Ratio for the most recently completed Fiscal Quarter and the Applicable Margin established on a Pricing Date shall remain in effect until the next Pricing Date.  If the Borrower has not delivered its financial statements by the date such financial statements (and, in the case of the Fiscal Year-end financial statements, audit report) are required to be delivered under Section 8.5, until such financial statements and audit report are delivered, the Applicable Margin shall be the highest Applicable Margin (i.e., Level IV shall apply).  If the Borrower subsequently delivers such financial statements before the next Pricing Date, the Applicable Margin shall be determined on the date of delivery of such financial statements and remain in effect until the next Pricing Date.  In all other circumstances, the Applicable Margin shall be in effect from the Pricing Date that occurs immediately after the end of the Fiscal Quarter covered by such financial statements until the next Pricing Date.  Each determination of the Applicable Margin made by the Bank in accordance with the foregoing shall be conclusive and binding on the Borrower if reasonably determined.

 

“Application” is defined in Section 2.3(b).

 

“Assigned Accounts” is defined in Section 11.2.

 

“Authorized Representative” means those persons shown on the list of officers provided by the Borrower pursuant to Section 7.2 or on any update of any such list provided by the Borrower to the Bank, or any further or different officers of the Borrower so named by any Authorized Representative of the Borrower in a written notice to the Bank.

 

“Bank” means BMO Harris Bank N.A., in its capacity as the lender hereunder, and any successor in such capacity.

 

“Bank Products” means each and any of the following bank products and services provided to any Loan Party by the Bank or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, and (c) depository, cash management, and treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

 

“Bank Product Obligations” of the Loan Parties means any and all of their obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Bank Products.

 

“Base Rate” means, for any day, the rate per annum equal to the greatest of:  (a) the rate of interest announced or otherwise established by the Bank from time to time as its prime commercial rate as in effect on such day, with any change in the Base Rate resulting from a change in said prime commercial rate to be effective as of the date of the relevant change in said prime commercial rate (it being acknowledged and agreed that such rate may not be the Bank’s best or lowest rate), (b) the sum of (i) the rate determined by the Bank to be the average (rounded 

 

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upward, if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the Bank at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or more Federal funds brokers selected by the Bank for sale to the Bank at face value of Federal funds in the secondary market in an amount equal or comparable to the principal amount for which such rate is being determined, plus (ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such day plus 1.00%.  As used herein, the term “LIBOR Quoted Rate” means, for any day, the rate per annum equal to the quotient of (i) the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a one-month interest period which appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) divided by (ii) one (1) minus the Eurodollar Reserve Percentage.

 

“Base Rate Loan” means a Loan bearing interest at a rate specified in Section 2.4(a).

 

“Bonding Agreement” means, collectively, all contractual arrangements entered into by the Borrower or any of its Subsidiaries with providers of bid, performance or payment bonds.

 

“Bonds” means, collectively, all bonds issued by any Surety pursuant to a Bonding Agreement.

 

“Borrower” is defined in the introductory paragraph of this Agreement.

 

“Borrowing” means the total of Loans of a single type advanced, continued for an additional Interest Period, or converted from a different type into such type by the Bank under a Facility on a single date and, in the case of Eurodollar Loans, for a single Interest Period.  A Borrowing is “advanced” on the day the Bank advances funds comprising such Borrowing to the Borrower, is “continued” on the date a new Interest Period for the same type of Loans commences for such Borrowing, and is “converted” when such Borrowing is changed from one type of Loans to the other, all as determined pursuant to Section 2.6.

 

“Business Day” means any day (other than a Saturday or Sunday) on which banks are not authorized or required to close in Chicago, Illinois and, if the applicable Business Day relates to the advance or continuation of, or conversion into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar deposits in the interbank eurodollar market in London, England.

 

“Capital Expenditures” means, with respect to any Person for any period, the aggregate amount of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period for the acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to property, plant, or equipment (including replacements, capitalized repairs, and improvements) which should be capitalized on the balance sheet of such Person in accordance with GAAP.

 

“Capital Lease” means any lease of Property which in accordance with GAAP is required to be capitalized on the balance sheet of the lessee.

 

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“Capitalized Lease Obligation” means, for any Person, the amount of the liability shown on the balance sheet of such Person in respect of a Capital Lease determined in accordance with GAAP.

 

“Cash Collateralize” means, to pledge and deposit with or deliver to the Bank, as collateral for L/C Obligations, cash or deposit account balances subject to a first priority perfected security interest in favor of the Bank or, if the Bank agrees in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Bank.

 

“Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within one (1) year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s, (c) commercial paper maturing within one (1) year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within one (1) year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) deposit accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is fully insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven (7) days, with respect to securities satisfying the criteria in clauses (a) or (d) above, provided all such agreements require physical delivery of the securities securing such repurchase agreement, except those delivered through the Federal Reserve Book Entry System, and (g) investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (f) above.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and any future amendments.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, 

 

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rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall  Street Reform and Consumer Protection Act and all requests, rules, regulations, 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 the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means any of (a) the acquisition by any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) at any time of beneficial ownership of 25% or more of the outstanding capital stock or other equity interests of the Borrower on a fully-diluted basis, (b) the failure of individuals who are members of the board of directors (or similar governing body) of the Borrower on the Closing Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the directors who were either directors on the Closing Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of the Borrower, or (c) any “Change of Control” (or words of like import), as defined in any agreement or indenture relating to any issue of Material Indebtedness of any Loan Party or any Subsidiary of a Loan Party, shall occur.

 

“Closing Date” means the date of this Agreement or such later Business Day upon which each condition described in Section 7.2 shall be satisfied or waived in a manner acceptable to the Bank in its discretion.

 

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

 

“Collateral” means all properties, rights, interests, and privileges from time to time subject to the Liens granted to the Bank, or any security trustee therefor, by the Collateral Documents.

 

“Collateral Account” is defined in Section 9.4(b).

 

“Collateral Access Agreement” means any landlord waiver, warehouse, processor or other bailee letter or other agreement, in form and substance satisfactory to the Bank, between the Bank and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of the Borrower or any Subsidiary for any real property where any Collateral is located, as such landlord waiver, bailee letter or other agreement may be amended, restated, or otherwise modified from time to time.

 

“Collateral Documents” means the Mortgages, the Security Agreement, and all other mortgages, deeds of trust, security agreements, pledge agreements, assignments, financing statements, control agreements, and other documents as shall from time to time secure or relate to the Secured Obligations or any part thereof.

 

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“Commitments” means the Revolving Credit Commitments.

 

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

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes.

 

“Constituent Documents” means, with respect to any Person, collectively and, in each case, together with any modification of any term thereof, (a) the articles of incorporation, certificate of incorporation, constitution or certificate of formation of such Person, (b) the bylaws, operating agreement or joint venture agreement of such Person, (c) any other constitutive, organizational or governing document of such Person, whether or not equivalent, and (d) any other document setting forth the manner of election or duties of the directors, officers or managing members of such Person or the designation, amount or relative rights, limitations and preferences of any Voting Stock of such Person.

 

“Construction Joint Venture” means an investment made in the ordinary course of business in connection with joint ventures (including legal entity joint ventures) or a similar pooling of efforts in respect of a specific project or series of related specific projects for a limited or fixed duration which is formed to conduct business of the type in which any Loan Party is presently engaged and which procures the services necessary to conduct its business (other than incidental services) through the owners of such joint venture or pooling of efforts or through subcontractors to the owners of such joint venture.

 

“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.

 

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

 

“Credit Event” means the advancing of any Loan, or the issuance of, or extension of the expiration date or increase in the amount of, any Letter of Credit.

 

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

 

“Default” means any event or condition which constitutes an Event of Default or any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.

 

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“Designated Disbursement Account” means the account of the Borrower maintained with the Bank or its Affiliate and designated in writing to the Bank as the Borrower’s Designated Disbursement Account (or such other account as the Borrower and the Bank may otherwise agree).

 

“Disposition” means the sale, lease, conveyance or other disposition of Property, other than (a) the sale or lease of inventory in the ordinary course of business, and (b) the sale, transfer, lease or other disposition of Property of a Loan Party to another Loan Party in the ordinary course of its business.

 

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

 

“Earn Out Obligations” means any cash earn out obligations, performance payments or similar obligations to a seller in respect of any Permitted Acquisition as partial consideration in connection with such Permitted Acquisition, but excluding any working capital adjustments or payments for services or licenses provided by such seller.

 

“EBITDA” means, with reference to any period, (i) Net Income for such period (consistently determined in accordance with the Fiscal Year of 2015 audited financial statements delivered to the Bank (the “2015 Audited Financials”)) plus all amounts deducted in arriving at such Net Income amount in respect of (a) Interest Expense for such period, (b) federal, state, and local income taxes for such period, (c) depreciation of fixed assets and amortization of intangible assets for such period, and (d) non-cash charges and other pro forma adjustments for such period deducted in the determination of Net Income for such period and reasonably acceptable to the Bank, minus (ii) all amounts included in the calculation of Net Income with respect to such period in respect of non-cash gains and other pro forma adjustments included in the calculation of Net Income with respect to such period (calculated consistent with GAAP in effect as of the 2015 Audited Financials).  EBITDA shall be calculated on a pro forma basis giving effect to any Permitted Acquisition or disposition of a Subsidiary or business segment during such period and including pro forma cost savings to the extent such cost savings are approved in the reasonable discretion of the Bank.

 

“Eligible Line of Business” means any business engaged in as of the date of this Agreement by the Borrower or any other Loan Party or any business reasonably related thereto.

 

“Environmental Claim” means any investigation, notice, violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding or claim (whether administrative, judicial or private in nature) arising (a) pursuant to, or in connection with an actual or alleged violation of, any Environmental Law, (b) in connection with any Hazardous Material, (c) from any abatement, removal, remedial, investigative, corrective or response action in connection with a Hazardous Material, Environmental Law or order of a Governmental Authority or (d) from any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

 

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“Environmental Law” means any current or future Legal Requirement pertaining to (a) the protection of health, safety and the indoor or outdoor environment, (b) the conservation, management, protection or use of natural resources and wildlife, (c) the protection or use of surface water or groundwater, (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, investigation, remediation or handling of, or exposure to, any Hazardous Material or (e) pollution (including any Release to air, land, surface water or groundwater), and any amendment, rule, regulation, order or directive issued thereunder.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, costs of compliance, penalties or indemnities), of any Loan Party or any Subsidiary of a Loan Party directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other legally enforceable consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.

 

“Eurodollar Loan” means a Loan bearing interest at the rate specified in Section 2.4(b).

 

“Eurodollar Reserve Percentage” means the maximum reserve percentage, expressed as a decimal, at which reserves (including, without limitation, any emergency, marginal, special, and supplemental reserves) are imposed by the Board of Governors of the Federal Reserve System (or any successor) on “eurocurrency liabilities”, as defined in such Board’s Regulation D (or any successor thereto), subject to any amendments of such reserve requirement by such Board or its successor, taking into account any transitional adjustments thereto.  For purposes of this definition, the relevant Loans shall be deemed to be “eurocurrency liabilities” as defined in Regulation D without benefit or credit for any prorations, exemptions or offsets under Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any such reserve percentage.

 

“Event of Default” means any event or condition identified as such in Section 9.1.

 

“Event of Loss” means, with respect to any Property, any of the following:  (a) any loss, destruction or damage of such Property or (b) any condemnation, seizure, or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.

 

“Excess Interest” is defined in Section 12.12 hereof.

 

“Excluded Deposit Account” means a deposit account the balance of which consists exclusively of (and is identified when established as an account established solely for the purposes of) (a) withheld income Taxes and federal, state, local or foreign employment Taxes in such amounts as are required in the reasonable judgment of a Loan Party to be paid to the 

 

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Internal Revenue Service or any other U.S., federal, state or local or foreign government agencies within  the following month with respect to employees of such Loan Party, (b) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of any Loan Party, (c) amounts which are required to be pledged or otherwise provided as security pursuant to any requirement of any Governmental Authority or foreign pension requirement, (d) amounts to be used to fund payroll obligations (including, but not limited to, amounts payable to any employment contracts between any Loan Party and their respective employees), and (e) other deposit accounts maintained in the ordinary course of business containing cash amounts that do not exceed at any time $100,000 for any such account and $250,000 in the aggregate for all such accounts under this clause (e), unless requested by the Bank after the occurrence and during the continuation of an Event of Default.

 

“Excluded Equity Issuances” means (a) the issuance by any Subsidiary of equity securities to the Borrower or any Guarantor, as applicable, (b) the issuance of equity securities by the Borrower to any Person that is an equity holder of the Borrower prior to such issuance (a “Subject Holder”) so long as such Subject Holder did not acquire any equity securities of the Borrower so as to become a Subject Holder concurrently with, or in contemplation of, the issuance of such equity securities to such Subject Holder, (c) the issuance of equity securities of the Borrower to directors, officers and employees of the Borrower and its Subsidiaries pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Borrower’s Board of Directors, and (d) the issuance of equity securities of the Borrower in order to finance the purchase consideration (or a portion thereof) in connection with a Permitted Acquisition or Capital Expenditures.

 

“Excluded Property” means (a) any fee-owned real property with a fair market value of less than $500,000 in the aggregate, unless requested by the Bank after the occurrence and during the continuation of an Event of Default; (b) any leased real property; (c) any equipment securing purchase money indebtedness or Capitalized Lease Obligations if the granting of a Lien to any third party is prohibited by the agreement(s) setting forth the terms and conditions applicable to such Indebtedness but only if such Indebtedness and the Liens securing the same are permitted by Sections 8.7(b) and 8.8(d) of the Credit Agreement, provided that if and when the prohibition which prevents the granting of a Lien in any such Property is removed, terminated or otherwise becomes unenforceable as a matter of law (including, without limitation, the termination of any such security interest resulting from the satisfaction of the Indebtedness secured thereby), and notwithstanding any previous release of Lien provided by the Bank requested in connection with respect to any such Indebtedness, the Excluded Property will no longer include such Property and the Bank will be deemed to have, and at all times to have had, a security interest in such property and the Collateral will be deemed to include, and at all times to have included, such Property without further action or notice by any Person; (d) any permit or license issued to any Loan Party as the permit holder or licensee thereof or any lease to which any Loan Party is lessee thereof, in each case only to the extent and for so long as the terms of such permit, license, or lease effectively (after giving effect to Sections 9-406 through 9-409, inclusive, of the Uniform Commercial Code in the applicable state (or any successor provision or provisions) or any other applicable law) prohibit the creation by such Loan Party of a security interest in such permit, license, or lease in favor of the Bank or would result in an effective invalidation, termination or breach of the terms of any such permit, license or lease (after giving effect to Sections 9-406

 

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through 9-409, inclusive, of the Uniform Commercial Code in the applicable state (or any successor provision or provisions) or any other applicable law), in each case unless and until any required consents are obtained, provided that the Excluded Property will not include, and the Collateral shall include and the security interest granted in the Collateral shall attach to, (x) all proceeds, substitutions or replacements of any such excluded items referred to herein unless such proceeds, substitutions or replacements would constitute excluded items hereunder, (y) all rights to payment due or to become due under any such excluded items referred to herein, and (z) if and when the prohibition which prevents the granting of a security interest in any such Property is removed, terminated, or otherwise becomes unenforceable as a matter of law, the Bank will be deemed to have, and at all times to have had, a security interest in such property, and the Collateral will be deemed to include, and at all times to have included, such Property without further action or notice by any Person; (e) equity interests of any Foreign Subsidiary which, if granted, would cause a material adverse effect on the Borrower’s federal income tax liability, unless requested by the Bank after the occurrence and during the continuation of an Event of Default, provided that Excluded Property shall not include, and the Collateral shall include, (x) non-voting equity interests of a first-tier Foreign Subsidiary owned by any Loan Party and (y) voting equity interests of a first-tier Foreign Subsidiary owned by any Loan Party representing not more than 66% of the total voting power of all outstanding voting equity interests of such Foreign Subsidiary, with equity interests of such Foreign Subsidiary constituting “stock entitled to vote” within the meaning of Treasury regulation section 1.956-2(c)(2) being treated as voting equity interests of such Foreign Subsidiary for purposes of this clause (e); and (f) Excluded Deposit Accounts.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such  exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a the Bank or required to be withheld or deducted from a payment to the Bank, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of the Bank being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of the Bank with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) the Bank acquires such interest in the Loan or Commitment or (ii) the Bank changes its lending office, except in each case to the extent that, pursuant to Section 4.1 amounts with respect to such Taxes were payable to the Bank immediately before it changed its lending office, and (c) any U.S. federal withholding Taxes imposed under FATCA.

 

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“Facility” means the Revolving Facility.

 

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

 

“Federal Funds Rate” means the fluctuating interest rate per annum described in part (i) of clause (b) of the definition of Base Rate.

 

“Financial Officer” of any Person means the chief financial officer, principal accounting officer, treasurer or controller of such Person.

 

“Financial Standby Letters of Credit” shall mean letters of credit and bank guarantees in which the underlying performance being supported thereby is financial in nature, as determined by the Bank, which determination shall be conclusive and binding upon the Borrower absent manifest error.

 

“Fiscal Month” means, for the first and second Fiscal Month in any Fiscal Quarter, a four-week period of the Borrower, and for the third Fiscal Month in any Fiscal Quarter, a five-week period of the Borrower, where such week begins on Saturday.

 

“Fiscal Quarter” means a three—Fiscal Month period of the Borrower.  For the sake of clarity, the last day of each Fiscal Quarter shall be those dates set forth on Schedule 1.1, which schedule shall be updated by the Borrower from time to time upon request of the Bank.

 

“Fiscal Year” means a four Fiscal Quarter period of the Borrower, which period commences on the first Saturday after the last Fiscal Month of the Fiscal Year.  For the sake of clarity, the Fiscal Year of 2017 commences on December 31, 2016.

 

“Fixed Charge Coverage Ratio” means, at any time the same is to be determined, the ratio of (a) EBITDA for the four (4) consecutive Fiscal Quarters most recently then ended less Unfinanced Capital Expenditures of the Loan Parties and their Subsidiaries during such period to (b) the sum of Fixed Charges for the same four (4) consecutive Fiscal Quarters then ended.

 

“Fixed Charges” means, with reference to any period, the sum of (a) all scheduled payments of principal paid or required to be paid during such period with respect to Indebtedness of the Loan Parties and their Subsidiaries, (b) Interest Expense paid or required to be paid in cash for such period, (c) federal, state, and local income taxes (and franchise taxes in lieu of income taxes) paid or required to be paid in cash by the Loan Parties and their Subsidiaries during such period, and (d) Restricted Payments paid in cash by the Loan Parties and their Subsidiaries during such period.

 

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“Foreign Subsidiary” means each Subsidiary that (a) is organized under the laws of a jurisdiction other than the United States of America or any state thereof or the District of Columbia, (b) conducts substantially all of its business outside of the United States of America, and (c) has substantially all of its assets outside of the United States of America.

 

“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

 

“Genesys Acquisition” means the Acquisition by the Borrower of Genesys Engineering, P.C.

 

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

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

 

“Guaranty Agreements” means and includes the Guarantee of the Loan Parties provided for in Section 10, and any other guaranty agreement executed and delivered in order to guarantee the Secured Obligations or any part thereof in form and substance acceptable to the Bank.

 

“Guarantors” means and includes each Subsidiary of the Borrower, and the Borrower, in its capacity as a guarantor of the Secured Obligations of another Loan Party; provided, however, that unless otherwise required by the Bank during the existence of any Event of Default, a Foreign Subsidiary shall not be required to be a Guarantor hereunder if providing such Guaranty Agreement would cause a material adverse effect on the Borrower’s federal income tax liability.

 

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“Hazardous Material” means any substance, chemical, compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which is hazardous, toxic, or a pollutant and includes, without limitation, (a)  asbestos, polychlorinated biphenyls and petroleum (including crude oil or any fraction thereof) and (b) any material classified or regulated as “hazardous,” “toxic,” or a “pollutant” or words of like import pursuant to an Environmental Law.

 

“Hazardous Material Activity” means any activity, event or occurrence involving a Hazardous Material, including, without limitation, the manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation, handling of or corrective or response action to any Hazardous Material.

 

“Hedging Agreement” means 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 any Loan Party or its Subsidiaries shall be a Hedging Agreement.

 

“Hedging Liability” means the liability of any Loan Party to the Bank or any Affiliates of the Bank in respect of any Hedging Agreement as such Loan Party may from time to time enter into with the Bank or its Affiliates, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor); provided, however, that, with respect to any Guarantor, Hedging Liability Guaranteed by such Guarantor shall exclude all Excluded Swap Obligations.

 

“Hostile Acquisition” means the acquisition of the capital stock or other equity interests of a Person through a tender offer or similar solicitation of the owners of such capital stock or other equity interests which has not been approved (prior to such acquisition) by resolutions of the Board of Directors of such Person or by similar action if such Person is not a corporation, or as to which such approval has been withdrawn.

 

“Indebtedness” means for any Person (without duplication) (a) all indebtedness created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt securities), (b) all indebtedness for the deferred purchase price of property or services (including any Earn Out Obligations but excluding trade accounts payable arising in the ordinary course of business which are not more than sixty (60) days past due), (c) all indebtedness secured by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (d) all Capitalized Lease Obligations of such Person, (e) all obligations of such Person on or with respect to letters of credit, bankers’ acceptances and other extensions of credit whether or not representing obligations for borrowed money, (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any equity interest in such Person or any other Person or any warrant, right or option to acquire such equity interest, valued, in the case of 

 

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a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (g) all net obligations (determined as of any time based on the termination value thereof) of such Person under any interest rate, foreign currency, and/or commodity swap, exchange, cap, collar, floor, forward, future or option agreement, or any other similar interest rate, currency or commodity hedging arrangement; and (h) all Guarantees of such Person in respect of any of the foregoing.  For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

 

“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Information” is defined in Section 12.17 hereof.

 

“Interest Expense” means, with reference to any period, the sum of all interest charges (including imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense) of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

 

“Interest Payment Date” means (a) with respect to any Eurodollar Loan, the last day of each Interest Period with respect to such Eurodollar Loan and on the maturity date and, if the applicable Interest Period is longer than three (3) three months, on each day occurring every three (3) months after the commencement of such Interest Period, and (b) with respect to any Base Rate Loan, the last day of every calendar month and on the maturity date.

 

“Interest Period” means the period commencing on the date a Borrowing of Eurodollar Loans is advanced, continued, or created by conversion and ending in the case of Eurodollar Loans, one (1), two (2), three (3), or six (6) months thereafter, provided, however, that:

 

(i)                          no Interest Period shall extend beyond the final maturity date of the relevant Loans;

 

(ii)                          [reserved];

 

(iii)                           whenever the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall be extended to the next succeeding Business Day, provided that, if such extension would cause the last day of an Interest Period for a Borrowing of Eurodollar Loans to occur in the following calendar month, the last day of such Interest Period shall be the immediately preceding Business Day; and

 

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(iv)                         for purposes of determining an Interest Period for a Borrowing of Eurodollar Loans, a month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no numerically corresponding day in the month in which such an Interest Period is to end or if such an Interest Period begins on the last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which such Interest Period is to end.

 

“IRS” means the United States Internal Revenue Service.

 

“L/C Obligations” means the aggregate undrawn face amounts of all outstanding Letters of Credit and all unpaid Reimbursement Obligations.

 

“L/C Sublimit” means $10,000,000, as reduced or otherwise amended pursuant to the terms hereof.

 

“Legal Requirement” means any treaty, convention, statute, law, common law, rule regulation, ordinance, license, permit, governmental approval, injunction, judgment, order, consent decree or other requirement of any Governmental Authority, whether federal, state, or local.

 

“Lending Office” is defined in Section 4.7.

 

“Letter of Credit” is defined in Section 2.3(a).

 

“Letter of Credit Fee” is defined in Section 3.1(b).

 

“LIBOR” means, for an Interest Period for a Borrowing of Eurodollar Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds are offered to the Bank at 11:00 a.m. (London, England time) two (2) Business Days before the beginning of such Interest Period by three (3) or more major banks in the interbank eurodollar market selected by the Bank for delivery on the first day of and for a period equal to such Interest Period and in an amount equal or comparable to the principal amount of the Eurodollar Loan scheduled to be made as part of such Borrowing.

 

“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a period equal to such Interest Period, which appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on the day two (2) Business Days before the commencement of such Interest Period.

 

“LIBOR01 Page” means the display designated as “LIBOR01 Page” on the Reuters Service (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 Bank from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market).

 

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“Lien” means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of any Property, including the interests of a vendor or lessor under any conditional sale, Capital Lease or other title retention arrangement.

 

“Liquidity” means, with reference to any period, the aggregate amount of Unrestricted Cash of the Loan Parties and undrawn availability under any revolving credit facilities, including the Revolving Facility.

 

“Loan” means any Revolving Loan, whether outstanding as a Base Rate Loan or Eurodollar Loan or otherwise, each of which is a “type” of Loan hereunder.

 

“Loan Documents” means this Agreement, the Notes (if any), the Applications, the Collateral Documents, the Guaranty Agreements, and each other instrument or document to be delivered hereunder or thereunder or otherwise in connection therewith.

 

“Loan Party” means the Borrower and each of the Guarantors.

 

“Material Adverse Effect” means (a) a material adverse change in, or material adverse effect upon, the operations, business, Property, condition (financial or otherwise) or prospects of the Borrower or of the Loan Parties and their Subsidiaries taken as a whole, (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document or the rights and remedies of the Bank thereunder or (ii) the perfection or priority of any Lien granted under any Collateral Document.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of the Loan Parties and its Subsidiaries in an aggregate principal amount exceeding $500,000.  For purposes of determining Material Indebtedness, the “obligations” of any Loan Party or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

 

“Material Plan” is defined in Section 9.1(h) hereof.

 

“Maximum Rate” is defined in Section 12.12 hereof.

 

“Minimum Liquidity” means Liquidity of not less than $7,000,000.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgages” means, collectively, each mortgage or deed of trust delivered to the Bank pursuant to Section 11.3 from time to time, as the same may be amended, modified, supplemented or restated from time to time.

 

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“Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) reasonable direct costs relating to such Disposition, (ii) sale, use or other transactional taxes paid or payable by such Person as a direct result of such Disposition, and (iii) the principal amount of any Indebtedness permitted hereby which is secured by a prior perfected Lien on the asset subject to such Disposition and is required to be repaid in connection with such Disposition, (b) with respect to any Event of Loss of a Person, cash and cash equivalent proceeds received by or for such Person’s account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of reasonable direct costs incurred in connection with the collection of such proceeds, awards or other payments, and (c) with respect to any offering of equity securities of a Person or the issuance of any Indebtedness by a Person,  cash and cash equivalent proceeds received by or for such Person’s account, net of reasonable legal, underwriting, and other fees and expenses incurred as a direct result thereof.

 

“Net Income” means, with reference to any period, the net income (or net loss) of the Borrower and its Subsidiaries for such period computed on a consolidated basis in accordance with GAAP; provided that there shall be excluded from Net Income (a) the net income (or net loss) of any Person accrued prior to the date it becomes a Subsidiary of, or has merged into or consolidated with, the Borrower or another Subsidiary, (b) the net income (or net loss) of any Person (other than a Subsidiary) in which the Borrower or any of its Subsidiaries has an equity interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries during such period, and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or requirement of law applicable to such Subsidiary.

 

“Net Worth” means, for any Person and at any time the same is to be determined, total shareholder’s equity (including capital stock, additional paid-in capital, and retained earnings after deducting treasury stock) which would appear on the balance sheet of such Person in accordance with GAAP.

 

“Note” is defined in Section 2.10.

 

“Obligations” means all obligations of the Borrower to pay principal and interest on the Loans, all Reimbursement Obligations owing under the Applications, all fees and charges payable hereunder, and all other payment obligations of the Borrower or any other Loan Party arising under or in relation to any Loan Document, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.

 

“OFAC” means the United States Department of Treasury Office of Foreign Assets Control.

 

“OFAC Event” means the event specified in Section 8.15(c).

 

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“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders administered by OFAC, including without limitation, the Bank Secrecy Act, anti-money laundering laws (including, without limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA Patriot Act)), and all economic and trade sanction programs administered by OFAC, any and all similar United States federal laws, regulations or Executive Orders, and any similar laws, regulations or orders adopted by any State within the United States.

 

“OFAC SDN List” means the list of the Specially Designated Nationals and Blocked Persons maintained by OFAC.

 

“Other Connection Taxes” means, with respect to the Bank, Taxes imposed as a result of a present or former connection between the Bank and the jurisdiction imposing such Tax (other than connections arising from the Bank having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

 

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

 

“Perfection Certificate” means that certain Perfection Certificate dated as of the Closing Date from the Borrower to the Bank.

 

“Performance Standby Letters of Credit” shall mean all standby letters of credit and bank guarantees other than Financial Standby Letters of Credit, as determined by the Bank, which determination shall be conclusive and binding upon the Borrower and the Bank absent manifest error.

 

“Permitted Acquisition” means any Acquisition with respect to which all of the following conditions shall have been satisfied:

 

(a)                        the Acquired Business is in an Eligible Line of Business and has its primary operations within the United States of America;

 

(b)                         such Acquisition shall be structured as (1) an asset acquisition by a Borrower or Guarantor of all or substantially all of the assets of the Person whose assets are being acquired (or all or substantially all of a line or lines of business of such Person), (2) a merger of the Person to be acquired and into a Borrower or a Guarantor, with such Borrower or Guarantor as the surviving corporation in such merger, or (3) a purchase of no less than 100% of the equity interests of the Person to be acquired by a Borrower or Guarantor;

 

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(c)                         the Acquisition shall not be a Hostile Acquisition;

 

(d)                         the Total Consideration for the Acquired Business shall not exceed $10,000,000 and, when taken together with the Total Consideration for all Acquired Businesses during the term of this Agreement, shall not exceed $20,000,000 in the aggregate;

 

(e)                         the Borrower shall have notified the Bank not less than thirty (30) days prior to any such Acquisition and furnished to the Bank at such time (i) details as to such Acquisition as are reasonably satisfactory to the Bank (including sources and uses of funds therefor) and (ii) audited financial statements of the Acquired Business or other financial statements of the Acquired Business as reasonably satisfactory to the Bank;

 

(f)                        if a new Subsidiary is formed or acquired as a result of or in connection with the Acquisition, the Borrower shall have complied with the requirements of Section 8.18, Section 10 and Section 11 in connection therewith;

 

(g)                          the Borrower shall have delivered to the Bank a certificate with covenant compliance calculations reasonably satisfactory to the Bank demonstrating that after giving effect to the Acquisition and any Credit Event in connection therewith, (i) no Default or Event of Default shall exist, and (ii) the Borrower shall be in compliance with the financial covenants contained in Section 8.23 on a pro forma basis (for the four (4) consecutive Fiscal Quarters most recently then ended as if the Acquisition occurred on the first day of such period and after giving effect to the payment of the purchase price for the Acquired Business and, in the case of the Total Leverage Ratio, the Total Leverage Ratio before and after giving effect to the Acquisition shall not exceed the covenant compliance level set forth in Section 8.23 for the prevailing period, less 0.25);

 

(h)                         after giving effect to the Acquisition and any Credit Event in connection therewith, the Borrower shall have not less than $5,000,000 of Liquidity;

 

(i)                          the Acquired Business must have a positive EBITDA including pro forma cost savings to the extent such cost savings are approved in the reasonable discretion of the Bank for the twelve most recently completed calendar months; and

 

(j)                         there shall not have been more than six (6) Permitted Acquisitions in the twelve consecutive Fiscal Month period ended as of the date of such Acquisition.

 

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

 

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“Plan” means any employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code that either (a) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group or (b) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.

 

“Premises” means the real property owned or leased by any Loan Party or any Subsidiary of a Loan Party, including without limitation the real property and improvements thereon owned by any Loan Party subject to the Lien of the Mortgages or any other Collateral Documents.

 

“Property” means, as to any Person, all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent balance sheet of such Person and its subsidiaries under GAAP.

 

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

 

“RCRA” means the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901 et seq., and any future amendments.

 

“Reimbursement Obligation” is defined in Section 2.3(c).

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, or disposing into the indoor or outdoor environment, including, without limitation, the abandonment or discarding of barrels, drums, containers, tanks or other receptacles containing or previously containing any Hazardous Material.

 

“Repurchase Conditions” means with respect to any purchase, redemption or other acquisition or retiring any of the Borrower’s capital stock or other equity interests (as contemplated by Section 8.12 hereof) (each a “Share Repurchase”), the following conditions:

 

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(i)         after giving effect to such Share Repurchase, the Borrower shall demonstrate pro forma compliance with Section 8.23 of the Credit Agreement and the then prevailing financial covenant compliance levels permitted as of the last day of the most recently ended fiscal quarter for which financial statements were required to be delivered under the Credit Agreement;

 

(ii)         after giving effect to such Share Repurchase, the Borrower shall demonstrate Liquidity in an amount no less than the Minimum Liquidity;

 

(iii)         the aggregate amount of all such Share Repurchases under Section 8.12 made following the Third Amendment Date shall not exceed $8,000,000; and

 

(iv)        no Default or Event of Default exists or would arise after giving effect to such Share Repurchase.

 

“Responsible Officer” of any person means any executive officer or Financial Officer of such Person and any other officer, general partner or managing member or similar official thereof with responsibility for the administration of the obligations of such person in respect of this Agreement whose signature and incumbency shall have been certified to the Bank on or after the Closing Date pursuant to an incumbency certificate of the type contemplated by Section 7.2.

 

“Restricted Payments” has the meaning set forth in Section 8.12 hereof.

 

“Revolving Facility” means the credit facility for making Revolving Loans and issuing Letters of Credit described in Sections 2.2 and 2.3.

 

“Revolving Credit Commitment” means the obligation of the Bank to make Revolving Loans and to participate in Letters of Credit issued for the account of the Borrower hereunder in an aggregate principal or face amount at any one time outstanding not to exceed the amount set forth in Section 2.2, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof.

 

“Revolving Credit Exposure” means, at any time, the aggregate principal amount at such time of the Bank’s outstanding Revolving Loans and L/C Obligations at such time.

 

“Revolving Credit Termination Date” means January 20, 2020, or such earlier date on which the Revolving Credit Commitment is terminated in whole pursuant to Section 2.11, 9.2 or 9.3.

 

“Revolving Loan” is defined in Section 2.2 and, as so defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Revolving Loan hereunder.

 

“Revolving Note” is defined in Section 2.10.

 

“S&P” means Standard & Poor’s Ratings Services Group, a Standard & Poor’s Financial Services LLC business.

 

“Second Amendment Effective Date” means January 14, 2015.

 

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“Secured Obligations” means the Obligations, Hedging Liability, and Bank Product Obligations, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired (including all interest, costs, fees, and charges after the entry of an order for relief against any Loan Party in a case under the United States Bankruptcy Code or any similar proceeding, whether or not such interest, costs, fees and charges would be an allowed claim against such Loan Party in any such proceeding); provided, however, that, with respect to any Guarantor, Secured Obligations Guaranteed by such Guarantor shall exclude all Excluded Swap Obligations.

 

“Security Agreement” means that certain Security Agreement dated the date of this Agreement among the Loan Parties and the Bank, as the same may be amended, modified, supplemented or restated from time to time.

 

“Seller Note” means any promissory note or notes issued by a Loan Party to the seller in respect of any Permitted Acquisition as partial consideration in connection with such Permitted Acquisition.

 

“Share Repurchase” is defined in the definition of “Repurchase Conditions”.

 

“Subordinated Debt” means Indebtedness which is subordinated in right of payment to the prior payment of the Secured Obligations pursuant to subordination provisions approved in writing by the Bank and is otherwise pursuant to documentation that is, which is in an amount that is, and which contains interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies and other material terms that are in form and substance, in each case satisfactory to the Bank.

 

“Subsidiary” of a Person means any corporation, limited liability company, partnership, association or other entity (x) more than 50% of the outstanding Voting Stock of which is at the time directly or indirectly owned by or (y) that is otherwise under the Control of, such Person or by any one or more other entities which are themselves subsidiaries of such Person.  Unless otherwise expressly noted herein, the term “Subsidiary” means a Subsidiary of the Borrower or of any of its direct or indirect Subsidiaries.  As used in this definition, “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.

 

“Surety” means, collectively, any surety party to a Bonding Agreement.

 

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

 

“Sweep Depository” shall have the meaning set forth in the definition of Sweep to Loan Arrangement.

 

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“Sweep to Loan Arrangement” means a cash management arrangement established by the Borrower with the Bank or an Affiliate of the Bank, as depositary (in such capacity, the “Sweep Depositary”), pursuant to which the Bank is authorized (a) to make advances of Revolving Loans hereunder, the proceeds of which are deposited by the Bank into a designated account of the Borrower maintained at the Sweep Depositary, and (b) to accept as prepayments of the Revolving Loans hereunder proceeds of excess targeted balances held in such designated account at the Sweep Depositary, which cash management arrangement is subject to such agreement(s) and on such terms acceptable to the Sweep Depositary and the Bank.

 

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

 

“Third Amendment” means that certain Third Amendment to Credit Agreement and Consent dated as of the Third Amendment Date, among the Borrower, the Guarantors and the Bank.

 

“Third Amendment Date” means February 26, 2016.

 

“Total Consideration” means, with respect to an Acquisition, the sum (but without duplication) of (a) cash paid or payable in connection with any Acquisition, whether paid at or prior to or after the closing thereof, (b) indebtedness payable to the seller in connection with such Acquisition, including all “earn-out” and other future payment obligations subject to the occurrence of any contingency (provided that, in the case of any future payment subject to a contingency, such shall be considered part of the Total Consideration to the extent of the reserve, if any, required under GAAP to be established in respect thereof by any Loan Party or any Subsidiary of a Loan Party), (c) the fair market value of any equity securities, including any warrants or options therefor, delivered in connection with any Acquisition, (d) the present value of covenants not to compete entered into in connection with such Acquisition or other future payments which are required to be made over a period of time and are not contingent upon any Loan Party or its Subsidiary meeting financial performance objectives (exclusive of salaries paid in the ordinary course of business) (discounted at the Base Rate), but only to the extent not included in clause (a), (b) or (c) above, and (e) the amount of indebtedness assumed in connection with such Acquisition.

 

“Total Credit Exposure” means, at any time, the unused Commitments and Revolving Credit Exposure of the Bank at such time.

 

“Total Funded Debt” means, at any time the same is to be determined, the sum (but without duplication) of (a) all Indebtedness of the Borrower and its Subsidiaries at such time described in clauses (a)-(f), both inclusive, of the definition thereof, and (b) all Indebtedness of any other Person which is directly or indirectly Guaranteed by the Borrower or any of its Subsidiaries or which the Borrower or any of its Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which the Borrower or any of its Subsidiaries has otherwise assured a creditor against loss, provided, however, that for the avoidance of doubt, obligations of the Borrower or any of its Subsidiaries with respect to Performance Standby Letters of Credit shall be excluded from the calculation of Total Funded Debt.

 

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“Total Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a) Total Funded Debt of the Borrower and its Subsidiaries as of the last day of such Fiscal Quarter to (b) EBITDA of the Borrower and its Subsidiaries for the period of four (4) consecutive Fiscal Quarters then ended.

 

“TTM EBITDA” means EBITDA of the Loan Parties and their Subsidiaries for the twelve consecutive Fiscal Month period ended as of the date so specified.

 

“Unfinanced Capital Expenditures” means, with respect to any period, the aggregate amount of Capital Expenditures made by the Borrower and its Subsidiaries during such period to the extent permitted by this Agreement and not financed with proceeds of Indebtedness; provided that any Capital Expenditures financed under the Revolving Facility shall be considered Unfinanced Capital Expenditures.

 

“Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.

 

“Unrestricted Cash” means, at any time the same is to be determined, all cash and cash equivalents of the Loan Parties on deposit with a financial institution and readily accessible by a Loan Party.

 

“U.S. Dollars” and “$” each means the lawful currency of the United States of America.

 

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“Voting Stock” of any Person means capital stock or other equity interests of any class or classes (however designated) having ordinary power for the election of directors or other similar governing body of such Person, other than stock or other equity interests having such power only by reason of the happening of a contingency.

 

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

 

“Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares as required by law) or other equity interests are owned by the Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of this definition.

 

“Withholding Agent” means any Loan Party and the Bank.

 

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Section 1.2.            Interpretation.  The foregoing definitions are equally applicable to both 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 meaning and effect as the word “shall.”  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.  All references to time of day herein are references to Chicago, Illinois, time unless otherwise specifically provided.  Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement.  The Borrower covenants and agrees with the Bank that whether or not the Borrower may at any time adopt Accounting Standards Codification 825 or account for assets and liabilities acquired in an acquisition on a fair value basis pursuant to Accounting Standards Codification 805, all determinations of compliance with the terms and conditions of this Agreement shall be made on the basis that the Borrower has not adopted Accounting Standards Codification 825 or Accounting Standards Codification 805.

 

Section 1.3.            Change in Accounting Principles.  If, after the date of this Agreement, there shall occur any change in GAAP from those used in the preparation of the financial statements referred to in Section 6.5 and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Agreement, either the Borrower or the Bank may by notice to the Bank or the Borrower, respectively, require that the Bank and the Borrower negotiate in good faith to amend such covenants, standards, and terms so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial condition of the Borrower and its Subsidiaries shall be the same as if such change had not been made.  No delay by the Borrower or the Bank in requiring such negotiation shall limit their right to so require such a negotiation at any time after such a change in accounting principles.  Until any such covenant, standard, or term is amended in accordance with this Section, financial covenants shall be computed and determined in accordance with GAAP in effect prior to such change in accounting principles.  Without limiting the generality of the foregoing, the Borrower shall neither be deemed to be in compliance with any financial covenant hereunder nor out of compliance with any financial covenant hereunder if such state of compliance or noncompliance, as the case may be, would not exist but for the occurrence of a change in accounting principles after the date hereof.

 

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SECTION 2.                                             THE FACILITY.

 

Section 2.1.            [Reserved].

 

Section 2.2.            Revolving Facility.  Subject to the terms and conditions hereof, the Bank agrees to make a loan or loans (individually a “Revolving Loan” and collectively, the “Revolving Loans”) in U.S. Dollars to the Borrower from time to time on a revolving basis up to $35,000,000, subject to any reductions thereof pursuant to the terms hereof, before the Revolving Credit Termination Date.  The sum of the aggregate principal amount of Revolving Loans and L/C Obligations at any time outstanding shall not exceed the Revolving Credit Commitment in effect at such time.  As provided in Section 2.6(a), the Borrower may elect that each Borrowing of Revolving Loans be either Base Rate Loans or Eurodollar Loans.  Revolving Loans may be repaid and the principal amount thereof reborrowed before the Revolving Credit Termination Date, subject to the terms and conditions hereof.

 

Section 2.3.            Letters of Credit.  (a) General Terms.  Subject to the terms and conditions hereof, as part of the Revolving Facility, the Bank (or one of its Affiliates) shall issue standby and commercial letters of credit (each a “Letter of Credit”) for the account of the Borrower and one or more of its Subsidiaries in an aggregate undrawn face amount up to the L/C Sublimit.  Letters of Credit shall constitute usage of the Revolving Credit Commitment in an amount equal to the L/C Obligations then outstanding.

 

(b)           Applications.  At any time before the Revolving Credit Termination Date, the Bank (or one of its Affiliates) shall, at the request of the Borrower, issue one or more Letters of Credit in U.S. Dollars, in a form satisfactory to the Bank, with expiration dates no later than the earlier of 12 months from the date of issuance (or which are cancelable not later than 12 months from the date of issuance and each renewal) in an aggregate face amount as set forth above, upon the receipt of an application duly executed by the Borrower and, if such Letter of Credit is for the account of one of its Subsidiaries, such Subsidiary for the relevant Letter of Credit in the form then customarily prescribed by the Bank for the Letter of Credit requested (each an “Application”).  The Borrower agrees that if ten (10) days prior to the Revolving Credit Termination Date any Letters of Credit remain outstanding the Borrower shall then deliver to the Bank, without notice or demand, Cash Collateral in an amount equal to 105% of the aggregate amount of each Letter of Credit then outstanding (which shall be held by the Bank pursuant to the terms of Section 9.4).  Notwithstanding anything contained in any Application to the contrary: (i) the Borrower shall pay fees in connection with each Letter of Credit as set forth in Section 3.1(b), (ii) except as otherwise provided herein or in Section 2.8, unless an Event of Default exists, the Bank will not call for the funding by the Borrower of any amount under a Letter of Credit before being presented with a drawing thereunder, and (iii) if the Bank is not timely reimbursed for the amount of any drawing under a Letter of Credit on the date such drawing is paid, except as otherwise provided for in Section 2.6(b), the Borrower’s obligation to reimburse the Bank for the amount of such drawing shall bear interest (which the Borrower hereby promises to pay) from and after the date such drawing is paid at a rate per annum equal to 

 

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the sum of the Applicable Margin plus the Base Rate from time to time in effect (computed on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed).  If the Bank issues any Letter of Credit with an expiration date that is automatically extended unless the Bank gives notice that the expiration date will not so extend beyond its then scheduled expiration date, the Bank will give such notice of non-renewal before the time necessary to prevent such automatic extension if before such required notice date:  (i) the Revolving Credit Commitment has been terminated, or (ii) an Event of Default exists.  The Bank agrees to issue amendments to the Letter(s) of Credit increasing the amount, or extending the expiration date, thereof at the request of the Borrower subject to the conditions of Section 7 and the other terms of this Section.

 

(c)           The Reimbursement Obligations.  Subject to Section 2.3(b), the obligation of the Borrower to reimburse the Bank for all drawings under a Letter of Credit (a “Reimbursement Obligation”) shall be governed by the Application related to such Letter of Credit, except that reimbursement shall be made by no later than 12:00 Noon (Chicago time) on the date when each drawing is to be paid if the Borrower has been informed of such drawing by the Bank on or before 11:00 a.m. (Chicago time) on the date when such drawing is to be paid or, if notice of such drawing is given to the Borrower after 11:00 a.m. (Chicago time) on the date when such drawing is to be paid, by no later than 12:00 Noon (Chicago time) on the following Business Day, in immediately available funds at the Bank’s principal office in Chicago, Illinois, or such other office as the Bank may designate in writing to the Borrower (who shall thereafter cause to be distributed to the Bank such amount(s) in like funds).

 

(d)           Obligations Absolute.  The Borrower’s obligation to reimburse L/C Obligations shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and the relevant Application under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Bank under a Letter of Credit against presentation of a draft or other document that does not strictly comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. The Bank shall not have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Bank; provided that the foregoing shall not be construed to excuse the Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower and each other Loan Party to the extent permitted by applicable law) suffered by the Borrower or any Loan Party that are caused by the Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit 

 

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comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Bank (as determined by a court of competent jurisdiction by final and nonappealable judgment), the Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

(e)           Manner of Requesting a Letter of Credit.  The Borrower shall provide at least five (5) Business Days’ advance written notice to the Bank of each request for the issuance of a Letter of Credit, such notice in each case to be accompanied by an Application for such Letter of Credit properly completed and executed by the Borrower and, in the case of an extension or amendment or an increase in the amount of a Letter of Credit, a written request therefor, in a form acceptable to the Bank, in each case, together with the fees called for by this Agreement.

 

Section 2.4.            Applicable Interest Rates.  (a) Base Rate Loans.  Each Base Rate Loan made or maintained by the Bank shall bear interest (computed on the basis of a year of 360 days and the actual days elapsed on the unpaid principal amount thereof from the date such Loan is advanced, or created by conversion from a Eurodollar Loan, until maturity (whether by acceleration or otherwise) at a rate per annum equal to the sum of the Applicable Margin plus the Base Rate from time to time in effect, payable by the Borrower on each Interest Payment Date and at maturity (whether by acceleration or otherwise).

 

(b)           Eurodollar Loans.  Each Eurodollar Loan made or maintained by the Bank shall bear interest during each Interest Period it is outstanding (computed on the basis of a year of 360 days and actual days elapsed) on the unpaid principal amount thereof from the date such Loan is advanced or continued, or created by conversion from a Base Rate Loan, until maturity (whether by acceleration or otherwise) at a rate per annum equal to the sum of the Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period, payable by the Borrower on each Interest Payment Date and at maturity (whether by acceleration or otherwise).

 

(c)           Rate Determinations.  The Bank shall determine each interest rate applicable to the Loans and the Reimbursement Obligations hereunder, and its determination thereof shall be conclusive and binding except in the case of manifest error.

 

Section 2.5.            Minimum Borrowing Amounts; Maximum Eurodollar Loans.  Each Borrowing of Base Rate Loans advanced under the Facility shall be in an amount not less than $50,000.  Each Borrowing of Eurodollar Loans advanced, continued or converted under the Facility shall be in an amount equal to $150,000 or such greater amount which is an integral multiple of $150,000.  Without the Bank’s consent, there shall not be more than five (5) Borrowings of Eurodollar Loans outstanding hereunder at any one time.

 

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Section 2.6.            Manner of Borrowing Loans and Designating Applicable Interest Rates.  (a) Notice to the Bank.  The Borrower shall give notice to the Bank by no later than 12:00 Noon (Chicago time):  (i) at least three (3) Business Days before the date on which the Borrower requests the Bank to advance a Borrowing of Eurodollar Loans and (ii) on the date the Borrower requests the Bank to advance a Borrowing of Base Rate Loans.  The Loans included in each Borrowing shall bear interest initially at the type of rate specified in such notice of a new Borrowing.  Thereafter, subject to the terms and conditions hereof, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Borrowing or, subject to the minimum amount requirement for each outstanding Borrowing set forth in Section 2.5, a portion thereof, as follows:  (i) if such Borrowing is of Eurodollar Loans, on the last day of the Interest Period applicable thereto, the Borrower may continue part or all of such Borrowing as Eurodollar Loans or convert part or all of such Borrowing into Base Rate Loans or (ii) if such Borrowing is of Base Rate Loans, on any Business Day, the Borrower may convert all or part of such Borrowing into Eurodollar Loans for an Interest Period or Interest Periods specified by the Borrower.  The Borrower shall give all such notices requesting the advance, continuation or conversion of a Borrowing to the Bank by telephone, telecopy, or other telecommunication device acceptable to the Bank (which notice shall be irrevocable once given and, if by telephone, shall be promptly confirmed in writing in a manner acceptable to the Bank), substantially in the form attached hereto as Exhibit A (Notice of Borrowing) or Exhibit B (Notice of Continuation/Conversion), as applicable, or in such other form acceptable to the Bank.  Notice of the continuation of a Borrowing of Eurodollar Loans for an additional Interest Period or of the conversion of part or all of a Borrowing of Base Rate Loans into Eurodollar Loans must be given by no later than 12:00 Noon (Chicago time) at least three (3) Business Days before the date of the requested continuation or conversion.  All such notices concerning the advance, continuation or conversion of a Borrowing shall specify the date of the requested advance, continuation or conversion of a Borrowing (which shall be a Business Day), the amount of the requested Borrowing to be advanced, continued or converted, the type of Loans to comprise such new, continued or converted Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the Interest Period applicable thereto.  Upon notice to the Borrower by the Bank (or, in the case of an Event of Default under Section 9.1(j) or 9.1(k) with respect to the Borrower, without notice), no Borrowing of Eurodollar Loans shall be advanced, continued, or created by conversion if any Default then exists.  The Borrower agrees that the Bank may rely on any such telephonic, telecopy or other telecommunication notice given by any person the Bank in good faith believes is an Authorized Representative without the necessity of independent investigation, and in the event any such notice by telephone conflicts with any written confirmation such telephonic notice shall govern if the Bank has acted in reliance thereon.

 

(b)           Borrower’s Failure to Notify.  If the Borrower fails to give notice pursuant to Section 2.6(a) above of the continuation or conversion of any outstanding principal amount of a Borrowing of Eurodollar Loans before the last day of its then current Interest Period within the period required by Section 2.6(a) and such Borrowing is not prepaid in accordance with Section 2.8(a), such Borrowing shall automatically be converted into a Borrowing of Base Rate Loans.  In the event the Borrower fails to give notice pursuant to Section 2.6(a) above of a Borrowing equal to the amount of a Reimbursement Obligation and has not notified the Bank by 12:00 noon (Chicago time) on the day such Reimbursement Obligation becomes due that it intends to repay such Reimbursement Obligation through funds not borrowed under this Agreement, the Borrower shall be deemed to have requested a Borrowing of Base Rate Loans under the Revolving Facility on such day in the amount of the Reimbursement Obligation then due, which Borrowing shall be applied to pay the Reimbursement Obligation then due.

 

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(c)                                  Disbursement of Loans.  The Bank shall make the proceeds of each new Borrowing available to the Borrower at the Bank’s principal office in Chicago, Illinois (or at such other location as the Bank shall designate), by depositing or wire transferring such proceeds to the credit of the Borrower’s Designated Disbursement Account or as the Borrower and the Bank may otherwise agree.

 

(d)                                 Sweep to Loan Arrangement.  So long as a Sweep to Loan Arrangement is in effect, and subject to the terms and conditions thereof, Revolving Loans may be advanced and prepaid hereunder notwithstanding any notice, minimum amount, or funding and payment location requirements hereunder for any advance of Revolving Loans or for any prepayment of any Revolving Loans. The making of any such Revolving Loans shall otherwise be subject to the other terms and conditions of this Agreement. All Revolving Loans advanced or prepaid pursuant to such Sweep to Loan Arrangement shall be Base Rate Loans. The Bank shall have the right in its sole discretion to suspend or terminate the making and/or prepayment of Revolving Loans pursuant to such Sweep to Loan Arrangement with notice to the Sweep Depositary and the Borrower (which may be provided on a same-day basis), whether or not any Default or Event of Default exists. The Bank shall not be liable to the Borrower or any other Person for any losses directly or indirectly resulting from events beyond the Bank’s reasonable control, including without limitation any interruption of communications or data processing services or legal restriction or for any special, indirect, consequential or punitive damages in connection with any Sweep to Loan Arrangement.

 

Section 2.7.                                    Maturity of Loans.  (a) [Reserved].

 

(b)                                 Revolving Loans.  Each Revolving Loan, both for principal and interest not sooner paid, shall mature and be due and payable by the Borrower on the Revolving Credit Termination Date.

 

Section 2.8.                                    Prepayments.  (a) Optional.  The Borrower may prepay in whole or in part (but, if in part, then: (i) if such Borrowing is of Base Rate Loans, in an amount not less than $100,000, (ii) if such Borrowing is of Eurodollar Loans, in an amount not less than $500,000, and (iii) in each case, in an amount such that the minimum amount required for a Borrowing pursuant to Section 2.5 remains outstanding) upon not less than three (3) Business Days prior notice by the Borrower to the Bank in the case of any prepayment of a Borrowing of Eurodollar Loans and notice delivered by the Borrower to the Bank no later than 12:00 Noon (Chicago time) on the date of prepayment in the case of a Borrowing of Base Rate Loans (or, in any case, such shorter period of time then agreed to by the Bank), such prepayment to be made by the payment of the principal amount to be prepaid and, in the case of any Eurodollar Loans, accrued interest thereon to the date fixed for prepayment plus any amounts due the Bank under Section 4.5.

 

(b)                                 Mandatory.  (i) The Borrower shall, on each date the Revolving Credit Commitment is reduced pursuant to Section 2.11, prepay the Revolving Loans, and, if necessary, prefund the L/C Obligations by the amount, if any, necessary to reduce the sum of the aggregate principal amount of Revolving Loans and L/C Obligations then outstanding to the amount to which the Revolving Credit Commitment has been so reduced.

 

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(ii)                                  [Reserved].

 

(iii)                               If the Borrower or any Subsidiary shall at any time or from time to time make or agree to make a Disposition or shall suffer an Event of Loss with respect to any Property, then the Borrower shall promptly notify the Bank of such proposed Disposition or Event of Loss (including the amount of the estimated Net Cash Proceeds to be received by the Borrower or such Subsidiary in respect thereof) and, promptly upon receipt by the Borrower or such Subsidiary of the Net Cash Proceeds of such Disposition or Event of Loss, the Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of all such Net Cash Proceeds; provided that (x) so long as no Default then exists, this subsection shall not require any such prepayment with respect to Net Cash Proceeds received on account of an Event of Loss so long as such Net Cash Proceeds are applied to replace or restore the relevant Property in accordance with the relevant Collateral Documents, (y) this subsection shall not require any such prepayment with respect to Net Cash Proceeds received on account of Dispositions during any Fiscal Year of the Borrower not exceeding $200,000 in the aggregate so long as no Default then exists, and (z) in the case of any Disposition not covered by clause (y) above, so long as no Default then exists, if the Borrower states in its notice of such event that the Borrower or the relevant Subsidiary intends to reinvest, within 90 days of the applicable Disposition, the Net Cash Proceeds thereof in assets similar to the assets which were subject to such Disposition, then the Borrower shall not be required to make a mandatory prepayment under this subsection in respect of such Net Cash Proceeds to the extent such Net Cash Proceeds are actually reinvested in such similar assets with such 90-day period.  Promptly after the end of such 90-day period, the Borrower shall notify the Bank whether the Borrower or such Subsidiary has reinvested such Net Cash Proceeds in such similar assets, and, to the extent such Net Cash Proceeds have not been so reinvested, the Borrower shall promptly prepay the Obligations in the amount of such Net Cash Proceeds not so reinvested.  If the Bank so requests, all proceeds of such Disposition or Event of Loss shall be deposited with the Bank (or its agent) and held by it in the Collateral Account.  So long as no Default exists, the Bank is authorized to disburse amounts representing such proceeds from the Collateral Account to or at the Borrower’s direction for application to or reimbursement for the costs of replacing, rebuilding or restoring such Property.

 

(iv)                              If after the Closing Date the Borrower or any Subsidiary shall issue new equity securities (whether common or preferred stock or otherwise), other than Excluded Equity Issuances, the Borrower shall promptly notify the Bank of the estimated Net Cash Proceeds of such issuance to be received by or for the account of the Borrower or such Subsidiary in respect thereof.  Promptly upon receipt by the Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds.  The amount of each such prepayment shall be applied to the Revolving Facility.  The Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of the Bank for any breach of Section 8.11 (Maintenance of Subsidiaries) or Section 9.1(i) (Change of Control) or any other terms of the Loan Documents.

 

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(v)                                 If after the Closing Date the Borrower or any Subsidiary shall issue any Indebtedness, other than Indebtedness permitted by Section 8.7(a)-(j), the Borrower shall promptly notify the Bank of the estimated Net Cash Proceeds of such issuance to be received by or for the account of the Borrower or such Subsidiary in respect thereof.  Promptly upon receipt by the Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds.  The amount of each such prepayment shall be applied to the Revolving Facility.  The Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of the Bank for any breach of Section 8.7 or any other terms of the Loan Documents.

 

(vi)                              If after the Closing Date the Borrower or any Subsidiary shall issue any Subordinated Debt, the Borrower shall promptly notify the Bank of the estimated Net Cash Proceeds of such issuance to be received by or for the account of the Borrower or such Subsidiary in respect thereof.  Promptly upon receipt by the Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay the Obligations in an aggregate amount equal to 100% of the amount of such Net Cash Proceeds.  The amount of each such prepayment shall be applied to the Revolving Facility.  The Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of the Bank for any breach of Section 8.7 or any other terms of the Loan Documents.

 

(vii)                           [Reserved].

 

(viii)                        Unless the Borrower otherwise directs, prepayments of Loans under this Section 2.8(b) shall be applied first to Borrowings of Base Rate Loans until payment in full thereof with any balance applied to Borrowings of Eurodollar Loans in the order in which their Interest Periods expire.  Each prepayment of Loans under this Section 2.8(b) shall be made by the payment of the principal amount to be prepaid and, in the case of any Eurodollar Loans, accrued interest thereon to the date of prepayment together with any amounts due the Bank under Section 4.5.  Each prefunding of L/C Obligations shall be made in accordance with Section 9.4.

 

(c)                                  Any amount of Revolving Loans paid or prepaid before the Revolving Credit Termination Date may, subject to the terms and conditions of this Agreement, be borrowed, repaid and borrowed again.

 

Section 2.9.                                    Default Rate.  Notwithstanding anything to the contrary contained herein, while any Event of Default exists or after acceleration, the Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all Loans and Reimbursement Obligations, letter of credit fees and other amounts at a rate per annum equal to:

 

(a)                        for any Base Rate Loan, the sum of 2.0% plus the Applicable Margin plus the Base Rate from time to time in effect;

 

(b)                        for any Eurodollar Loan, the sum of 2.0% plus the rate of interest in effect thereon at the time of such Event of Default until the end of the Interest Period applicable thereto and, thereafter, at a rate per annum equal to the sum of 2.0% plus the Applicable Margin for Base Rate Loans plus the Base Rate from time to time in effect;

 

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(c)                         for any Reimbursement Obligation, the sum of 2.0% plus the amounts due under Section 2.3 with respect to such Reimbursement Obligation;

 

(d)                        for any Letter of Credit, the sum of 2.0% plus the Letter of Credit Fee due under Section 3.1(b) with respect to such Letter of Credit; and

 

(e)                         for any other amount owing hereunder not covered by clauses (a) through (d) above, the sum of 2% plus the Applicable Margin plus the Base Rate from time to time in effect;

 

provided, however, that in the absence of acceleration pursuant to Section 9.2 or 9.3, any adjustments pursuant to this Section shall be made at the election of the Bank, with written notice to the Borrower (which election may be retroactively effective to the date of such Event of Default).  While any Event of Default exists or after acceleration, interest shall be paid on demand of the Bank.

 

Section 2.10.                             Evidence of Indebtedness.  (a) The Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower resulting from each Loan made by the Bank from time to time, including the amounts of principal and interest payable and paid to the Bank from time to time hereunder.

 

(b)                                  The Bank shall also maintain accounts in which it will record (i) the amount of each Loan made hereunder, the type thereof and the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to the Bank hereunder and (iii) the amount of any sum received by the Bank hereunder from the Borrower.

 

(c)                                   The entries maintained in the accounts maintained pursuant to subsections (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Bank to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms.

 

(d)                                  The Borrower shall prepare, execute and deliver to the Bank a promissory note payable to the Bank or its registered assigns in the form of Exhibit C-2 (referred to herein as a “Revolving Note” or a “Note”).

 

Section 2.11.                             Commitment Terminations. (a) Optional Terminations.  The Borrower shall have the right at any time and from time to time, upon five (5) Business Days prior written notice to the Bank (or such shorter period of time agreed to by the Bank), to terminate the Revolving Credit Commitment without premium or penalty and in whole or in part, any partial termination to be in an amount not less than $500,000, provided that the Revolving Credit Commitment may not be reduced to an amount less than the sum of the aggregate principal amount of Revolving Loans and L/C Obligations then outstanding.  Any termination of the Revolving Credit Commitment below the L/C Sublimit then in effect shall reduce the L/C Sublimit by a like amount.

 

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(b)                                  [Reserved].

 

(c)                                   Any termination of the Commitments pursuant to this Section may not be reinstated.

 

Section 2.12.                             Increase in Revolving Credit Commitments .  The Borrower may, on any Business Day prior to the Revolving Credit Termination Date, with the written consent of the Bank, increase the aggregate amount of the Revolving Credit Commitments by delivering an Increase Request substantially in the form attached hereto as Exhibit H (or in such other form acceptable to the Bank) to the Bank at least 30 days prior to the desired effective date of such increase (the “Revolver Increase”) identifying the amount of the increase in the Revolving Credit Commitment of the Bank; provided, however, that:

 

(a)                        the aggregate amount of all such Revolver Increases shall not exceed $25,000,000 and any such Revolver Increase shall be in an amount not less than $5,000,000 (or such lesser amount then agreed to by the Bank);

 

(b)                        no Default shall have occurred and be continuing at the time of the request or the effective date of the Revolver Increase; and

 

(c)                         each of the representations and warranties set forth in Section 6 and in the other Loan Documents shall be and remain true and correct in all material respects on the effective date of such Revolver Increase (where not already qualified by materiality, otherwise in all respects), except to the extent the same expressly relate to an earlier date, in which case they shall be true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as of such earlier date.

 

The effective date of the Revolver Increase shall be agreed upon by the Borrower and the Bank.   It shall be a condition to such effectiveness that the Borrower shall not have terminated any portion of the Revolving Credit Commitments pursuant to Section 2.11.  The Borrower agrees to pay the expenses of the Bank (including reasonable attorneys’ fees) relating to any Revolver Increase.  Notwithstanding anything herein to the contrary, the Bank shall have no obligation to increase its Revolving Credit Commitment and the Bank’s Revolving Credit Commitment shall not be increased without its consent thereto, and the Bank may at its option, unconditionally and without cause, decline to increase its Revolving Credit Commitment.  The Borrower may request a lender other than the Bank provide the increase in the Revolving Credit Commitment.  Upon such request, if the Bank consents to such increase and such new lender becoming a party hereto in its sole discretion, the Borrower and the Bank shall enter into amendments hereto to contemplate such new lender and provide for customary provisions that are typical of a syndicated credit agreement.

 

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SECTION 3.                                             FEES.

 

Section 3.1.                                    Fees.  (a) Commitment Fees.  The Borrower shall pay to the Bank a commitment fee at the rate per annum equal to the Applicable Margin (computed on the basis of a year of 360 days and the actual number of days elapsed) times the daily amount by which (i) the Revolving Credit Commitment exceeds the principal amount of Revolving Loans and L/C Obligations then outstanding.  Such commitment fee shall be payable quarterly in arrears on the last day of each March, June, September, and December in each year (commencing on the first such date occurring after the Closing Date) and on the Revolving Credit Termination Date, unless the Revolving Credit Commitment is terminated in whole on an earlier date, in which event the commitment fee for the period to the date of such termination in whole shall be paid on the date of such termination.

 

(b)                                 Letter of Credit Fees.   Quarterly in arrears, on the last day of each March, June, September, and December, commencing on the first such date occurring after the Closing Date, the Borrower shall pay to the Bank a letter of credit fee (the “Letter of Credit Fee”) at a rate per annum equal to the Applicable Margin (computed on the basis of a year of 360 days and the actual number of days elapsed) in effect during each day of such quarter applied to the daily average face amount of Letters of Credit outstanding during such quarter.  In addition, the Borrower shall pay to the Bank the Bank’s standard issuance, drawing, negotiation, amendment, assignment, and other administrative fees for each Letter of Credit as established by the Bank from time to time.

 

(c)                                  Closing Fee.  The Borrower shall pay to the Bank the fees set forth in that certain Fee Letter dated as of January 20, 2017.

 

SECTION 4.                                             TAXES; CHANGE IN CIRCUMSTANCES, INCREASED COSTS, AND FUNDING INDEMNITY.

 

Section 4.1.                                    Taxes.  (a) Certain Defined Terms.  For purposes of this Section, the term “applicable law” includes FATCA.

 

(b)                                 Payments Free of Taxes.  Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the Bank receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

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(c)                                  Payment of Other Taxes by the Loan Parties.  The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Bank timely reimburse it for the payment of, any Other Taxes.

 

(d)                                 Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally indemnify the Bank, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by the Bank or required to be withheld or deducted from a payment to the Bank and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by the Bank shall be conclusive absent manifest error.

 

(e)                                  Evidence of Payments.  As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section, such Loan Party shall deliver to the Bank 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 Bank.

 

(f)                                   Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this subsection (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this subsection (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid.  This subsection shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

 

(g)                                  Survival.  Each party’s obligations under this Section shall survive any assignment of rights by the Bank, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

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Section 4.2.                                    Change of Law.  Notwithstanding any other provisions of this Agreement or any other Loan Document, if at any time any Change in Law makes it unlawful for the Bank to make or continue to maintain any Eurodollar Loans or to perform its obligations as contemplated hereby, the Bank shall promptly give notice thereof to the Borrower and the Bank’s obligations to make or maintain Eurodollar Loans under this Agreement shall be suspended until it is no longer unlawful for the Bank to make or maintain Eurodollar Loans.  The Borrower shall prepay on demand the outstanding principal amount of any such affected Eurodollar Loans, together with all interest accrued thereon and all other amounts then due and payable to the Bank under this Agreement; provided, however, subject to all of the terms and conditions of this Agreement, the Borrower may then elect to borrow the principal amount of the affected Eurodollar Loans from the Bank by means of Base Rate Loans.

 

Section 4.3.                                    Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.  If on or prior to the first day of any Interest Period for any Borrowing of Eurodollar Loans:

 

(a)                        the Bank determines that deposits in U.S. Dollars (in the applicable amounts) are not being offered to it in the interbank eurodollar market for such Interest Period, or that by reason of circumstances affecting the interbank eurodollar market adequate and reasonable means do not exist for ascertaining the applicable LIBOR, or

 

(b)                        the Bank determines that (i) LIBOR as determined by the Bank will not adequately and fairly reflect the cost to the Bank of funding Eurodollar Loans for such Interest Period or (ii) that the making or funding of Eurodollar Loans become impracticable,

 

then the Bank shall forthwith give notice thereof to the Borrower, whereupon until the Bank notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Bank to make Eurodollar Loans shall be suspended.

 

Section 4.4.                                    Increased Costs.  (a) Increased Costs Generally.  If any Change in Law shall:

 

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

 

(ii)                          subject the Bank to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)                           impose on the Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by the Bank or any Letter of Credit or participation therein;

 

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and the result of any of the foregoing shall be to increase the cost to the Bank of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to the Bank of issuing or maintaining any Letter of Credit (or of maintaining its obligation to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by the Bank hereunder (whether of principal, interest or any other amount) then, upon request of the Bank, the Borrower will pay to the Bank such additional amount or amounts as will compensate the Bank for such additional costs incurred or reduction suffered.

 

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

 

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

 

(d)                                 Delay in Requests.  Failure or delay on the part of the Bank to demand compensation pursuant to this Section shall not constitute a waiver of the Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Bank pursuant to this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that the Bank notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of the Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

Section 4.5.                                    Funding Indemnity.  If the Bank shall incur any loss, cost or expense (including, without limitation, any loss, cost or expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired by the Bank to fund or maintain any Eurodollar Loan or the relending or reinvesting of such deposits or amounts paid or prepaid to the Bank) as a result of:

 

(a)                        any payment, prepayment or conversion of a Eurodollar Loan on a date other than the last day of its Interest Period,

 

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(b)                        any failure (because of a failure to meet the conditions of Section 7 or otherwise) by the Borrower to borrow or continue a Eurodollar Loan, or to convert a Base Rate Loan into a Eurodollar Loan on the date specified in a notice given pursuant to Section 2.6(a) or 2.2(b),

 

(c)                         any failure by the Borrower to make any payment of principal on any Eurodollar Loan when due (whether by acceleration or otherwise), or

 

(d)                        any acceleration of the maturity of a Eurodollar Loan as a result of the occurrence of any Event of Default hereunder,

 

then, upon the demand of the Bank, the Borrower shall pay to the Bank such amount as will reimburse the Bank for such loss, cost or expense.  If the Bank makes such a claim for compensation, it shall provide to the Borrower a certificate setting forth the amount of such loss, cost or expense in reasonable detail and the amounts shown on such certificate shall be conclusive absent manifest error.

 

Section 4.6.                                    Discretion of the Bank as to Manner of Funding.  Notwithstanding any other provision of this Agreement, the Bank shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder with respect to Eurodollar Loans shall be made as if the Bank had actually funded and maintained each Eurodollar Loan through the purchase of deposits in the interbank eurodollar market having a maturity corresponding to such Loan’s Interest Period, and bearing an interest rate equal to LIBOR for such Interest Period.

 

Section 4.7.                                    Lending Offices; Mitigation Obligations.  The Bank may, at its option, elect to make its Loans hereunder at the branch, office or affiliate specified on the appropriate signature page hereof (each a “Lending Office”) for each type of Loan available hereunder or at such other of its branches, offices or affiliates as it may from time to time elect and designate in a written notice to the Borrower.  If the Bank requests compensation under Section 4.4, or requires the Borrower to pay any Indemnified Taxes or additional amounts to the Bank or any Governmental Authority for the account of the Bank pursuant to Section 4.1, then the Bank shall (at the request of the Borrower) 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 the Bank, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.1 or 4.4, as the case may be, in the future, and (ii) would not subject the Bank to any unreimbursed cost or expense and would not otherwise be disadvantageous to the Bank.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by the Bank in connection with any such designation or assignment.

 

SECTION 5.                                             PLACE AND APPLICATION OF PAYMENTS.

 

Section 5.1.                                    Place and Application of Payments.  All payments of principal of and interest on the Loans and the Reimbursement Obligations, and all other Obligations payable by the Borrower under this Agreement and the other Loan Documents, shall be made by the Borrower to the Bank by no later than 12:00 Noon (Chicago time) on the due date thereof at the office of the Bank in Chicago, Illinois (or such other location as the Bank may designate to the

 

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Borrower).  Any payments received after such time shall be deemed to have been received by the Bank on the next Business Day.  All such payments shall be made in U.S. Dollars, in immediately available funds at the place of payment, in each case without set-off or counterclaim.

 

Section 5.2.                             Non-Business Days.  Subject to the definition of Interest Period, if any payment hereunder becomes due and payable on a day which is not a Business Day, the due date of such payment shall be extended to the next succeeding Business Day on which date such payment shall be due and payable.  In the case of any payment of principal falling due on a day which is not a Business Day, interest on such principal amount shall continue to accrue during such extension at the rate per annum then in effect, which accrued amount shall be due and payable on the next scheduled date for the payment of interest.

 

Section 5.3.                             Payments Set Aside. To the extent that any payment by or on behalf of the Borrower or any other Loan Party is made to the Bank or the Bank exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Bank in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred

 

Section 5.4.                             Account Debit.  The Borrower hereby irrevocably authorizes the Bank to charge any of the Borrower’s deposit accounts maintained with the Bank for the amounts from time to time necessary to pay any then due Obligations; provided that the Bank acknowledges and agrees that the Bank shall not be under an obligation to do so and the Bank shall not incur any liability to the Borrower or any other Person for the Bank’s failure to do so.

 

SECTION 6.                                             REPRESENTATIONS AND WARRANTIES.

 

Each Loan Party represents and warrants to the Bank as follows:

 

Section 6.1.                             Organization and Qualification.  Each Loan Party is duly organized, validly existing, and in good standing as a corporation, limited liability company, or partnership, as applicable, under the laws of the jurisdiction in which it is organized, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualifying, except where the failure to do so would not have a Material Adverse Effect.

 

Section 6.2.                             Subsidiaries.  Each Subsidiary that is not a Loan Party is duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is organized, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such 

 

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licensing or qualifying, except where the failure to do so would not have a Material Adverse Effect.  Schedule 6.2 hereto identifies each Subsidiary (including Subsidiaries that are Loan Parties), the jurisdiction of its organization, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by any Loan Party and its Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class of its authorized capital stock and other equity interests and the number of shares of each class issued and outstanding.  All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity interests indicated on Schedule 6.2 as owned by the relevant Loan Party or another Subsidiary are owned, beneficially and of record, by such Loan Party or such Subsidiary free and clear of all Liens other than the Liens granted in favor of the Bank pursuant to the Collateral Documents or otherwise permitted by this Agreement.  There are no outstanding commitments or other obligations of any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Subsidiary.

 

Section 6.3.                             Authority and Validity of Obligations.  Each Loan Party has full right and authority to enter into this Agreement and the other Loan Documents executed by it, to make the borrowings herein provided for (in the case of the Borrower), to guarantee the Secured Obligations (in the case of each Guarantor), to grant to the Bank the Liens described in the Collateral Documents executed by such Loan Party, and to perform all of its obligations hereunder and under the other Loan Documents executed by it.  The Loan Documents delivered by the Loan Parties and their Subsidiaries have been duly authorized, executed, and delivered by such Persons and constitute valid and binding obligations of such Loan Parties and their Subsidiaries enforceable against each of them in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law); and this Agreement and the other Loan Documents do not, nor does the performance or observance by any Loan Party or any Subsidiary of any of the matters and things herein or therein provided for, (a) contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon any Loan Party or any Subsidiary of a Loan Party or any provision of the organizational documents (e.g., charter, certificate or articles of incorporation and by-laws, certificate or articles of association and operating agreement, partnership agreement, or other similar organizational documents) of any Loan Party or any Subsidiary of a Loan Party, (b) contravene or constitute a default under any covenant, indenture or agreement of or affecting any Loan Party or any Subsidiary of a Loan Party or any of their respective Property, in each case where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (c) result in the creation or imposition of any Lien on any Property of any Loan Party or any Subsidiary of a Loan Party other than the Liens granted in favor of the Bank pursuant to the Collateral Documents.

 

Section 6.4.                             Use of Proceeds; Margin Stock.  The Borrower shall use the proceeds of the Revolving Facility to refinance existing Indebtedness outstanding on the Closing Date, pay the transaction expenses related to the Loan Documents, to finance Permitted Acquisitions, to finance Capital Expenditures and for its general working capital purposes and for such other 

 

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legal and proper purposes as are consistent with all applicable laws.  No Loan Party nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan or any other extension of credit made hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.  Margin stock (as hereinabove defined) constitutes less than 25% of the assets of the Loan Parties and their Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder.

 

Section 6.5.                             Financial Reports.  The consolidated balance sheet of the Loan Parties and their Subsidiaries as at January 1, 2016, and the related consolidated statements of income, retained earnings and cash flows of the Loan Parties and their Subsidiaries for the Fiscal Year then ended, and accompanying notes thereto, which financial statements are accompanied by the audit report of Ernst & Young LLP, independent public accountants, and the unaudited interim consolidated balance sheet of the Loan Parties and their Subsidiaries as at the Fiscal Quarter ended September 30, 2016, and the related consolidated statements of income, retained earnings and cash flows of the Loan Parties and their Subsidiaries for the 3 Fiscal Quarters then ended, heretofore furnished to the Bank, fairly present the consolidated financial condition of the Loan Parties and their Subsidiaries as at said dates and the consolidated results of their operations and cash flows for the periods then ended in conformity with GAAP applied on a consistent basis.  No Loan Party nor any of its Subsidiaries has contingent liabilities which are material to it other than as indicated on such financial statements or, with respect to future periods, on the financial statements furnished pursuant to Section 8.5.

 

Section 6.6.                             No Material Adverse Change.  Since September 30, 2016, there has been no change in the condition (financial or otherwise) or business prospects of any Loan Party or any Subsidiary of a Loan Party except those occurring in the ordinary course of business, none of which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

Section 6.7.                             Full Disclosure.  The statements and information furnished to the Bank in connection with the negotiation of this Agreement and the other Loan Documents and the commitment by the Bank to provide all or part of the financing contemplated hereby do not contain any untrue statements of a material fact or omit a material fact necessary to make the material statements contained herein or therein not misleading, the Bank acknowledging that as to any projections furnished to the Bank, the Loan Parties only represent that the same were prepared on the basis of information and estimates the Loan Parties believed to be reasonable.

 

Section 6.8.                             Trademarks, Franchises, and Licenses.  The Loan Parties and their Subsidiaries own, possess, or have the right to use all necessary patents, licenses, franchises, trademarks, trade names, trade styles, copyrights, trade secrets, know how, and confidential commercial and proprietary information to conduct their businesses as now conducted, without known conflict with any patent, license, franchise, trademark, trade name, trade style, copyright or other proprietary right of any other Person.

 

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Section 6.9.                                    Governmental Authority and Licensing.  The Loan Parties and their Subsidiaries have received all licenses, permits, and approvals of all federal, state, and local governmental authorities, if any, necessary to conduct their businesses, in each case where the failure to obtain or maintain the same could reasonably be expected to have a Material Adverse Effect.  No investigation or proceeding which, if adversely determined, could reasonably be expected to result in revocation or denial of any material license, permit or approval is pending or, to the knowledge of the any Loan Party, threatened.

 

Section 6.10.                             Good Title.  The Loan Parties and their Subsidiaries have good and defensible title (or valid leasehold interests) to their assets as reflected on the most recent consolidated balance sheet of the Loan Parties and their Subsidiaries furnished to the Bank (except for sales of assets in the ordinary course of business), subject to no Liens other than such thereof as are permitted by Section 8.8.

 

Section 6.11.                             Litigation and Other Controversies.  There is no litigation or governmental or arbitration proceeding or labor controversy pending, nor to the knowledge of any Loan Party threatened, against any Loan Party or any Subsidiary of a Loan Party or any of their respective Property, other than what has already been disclosed to the Bank in writing, which if adversely determined, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 6.12.                             Taxes.  All Tax returns required to be filed by any Loan Party or any Subsidiary of a Loan Party in any jurisdiction have, in fact, been filed, and all Taxes upon any Loan Party or any Subsidiary of a Loan Party or upon any of their respective Property, income or franchises, which are shown to be due and payable in such returns, have been paid, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and as to which adequate reserves established in accordance with GAAP have been provided.  No Loan Party knows of any proposed additional Tax assessment against it or its Subsidiaries for which adequate provisions in accordance with GAAP have not been made on their accounts.  Adequate provisions in accordance with GAAP for Taxes on the books of each Loan Party and each of its Subsidiaries have been made for all open years, and for its current fiscal period.

 

Section 6.13.                             Approvals.  No authorization, consent, license or exemption from, or filing or registration with, any court or governmental department, agency or instrumentality, nor any approval or consent of any other Person, is or will be necessary to the valid execution, delivery or performance by any Loan Party or any Subsidiary of a Loan Party of any Loan Document, except for (i) such approvals which have been obtained prior to the date of this Agreement and remain in full force and effect and (ii) filings which are necessary to perfect the security interests under the Collateral Documents.

 

Section 6.14.                             Affiliate Transactions.  No Loan Party nor any of its Subsidiaries is a party to any contracts or agreements with any of its Affiliates on terms and conditions which are less favorable to such Loan Party or such Subsidiary than would be usual and customary in similar contracts or agreements between Persons not affiliated with each other.

 

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Section 6.15.                             Investment Company.  No Loan Party nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 6.16.                             ERISA.  Each Loan Party and each other member of its Controlled Group has fulfilled its obligations under the minimum funding standards of and is in compliance in all material respects with ERISA and the Code to the extent applicable to it and has not incurred any liability to the PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.  No Loan Party nor any of its Subsidiaries has any contingent liabilities with respect to any post-retirement benefits under a Welfare Plan, other than liability for continuation coverage described in article 6 of Title I of ERISA.

 

Section 6.17.                             Compliance with Laws.  (a) The Loan Parties and their Subsidiaries are in compliance with all Legal Requirements applicable to or pertaining to their Property or business operations, where any such non-compliance, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Except for such matters, individually or in the aggregate, which could not reasonably be expected to result in a Material Adverse Effect, the Loan Parties represent and warrant that:  (i) the Loan Parties and their Subsidiaries, and each of the Premises, comply in all material respects with all applicable Environmental Laws; (ii) the Loan Parties and their Subsidiaries have obtained, maintain and are in compliance with all approvals, permits, or authorizations of Governmental Authorities required for their operations and each of the Premises; (iii) the Loan Parties and their Subsidiaries have not, and no Loan Party has knowledge of any other Person who has, caused any Release, threatened Release or disposal of any Hazardous Material at, on, or from any of the Premises in any material quantity and, to the knowledge of each Loan Party, none of the Premises are adversely affected by any such Release, threatened Release or disposal of a Hazardous Material; (iv) the Loan Parties and their Subsidiaries are not subject to and have no notice or knowledge of any Environmental Claim involving any Loan Party or any Subsidiary of a Loan Party or any of the Premises, and there are no conditions or occurrences at any of the Premises which could reasonably be anticipated to form the basis for such an Environmental Claim; (v) none of the Premises contain and have contained any:  (1) underground storage tanks, (2) material amounts of asbestos containing building material, (3) landfills or dumps, (4) hazardous waste management facilities as defined pursuant to any Environmental Law, or (5) sites on or nominated for the National Priority List or similar state list; (vi) the Loan Parties and their Subsidiaries have not used a material quantity of any Hazardous Material and have conducted no Hazardous Material Activity at any of the Premises;(vii) none of the Premises are subject to any, and no Loan Party has knowledge of any imminent restriction on the ownership, occupancy, use or transferability of the Premises in connection with any (1) Environmental Law or (2) Release, threatened Release or disposal of a Hazardous Material; and (viii) there are no conditions or circumstances at any of the Premises which pose an unreasonable risk to the environment or the health or safety of Persons; and (ix) the Loan Parties and their Subsidiaries have no knowledge of any capital expenditures necessary to bring the Premises or their respective business or equipment into compliance with Environmental Laws.  The Loan Parties have delivered to the Bank complete and accurate copies of all material environmental reports, studies, assessments and investigation results in the Loan Parties’ possession or control and that relate to any Loan Party’s or Subsidiary’s operations or to any of the Premises.

 

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Section 6.18.                             OFAC.  (a) Each Loan Party is in compliance in all material respects with the requirements of all OFAC Sanctions Programs applicable to it, (b) each Subsidiary of each Loan Party is in compliance in all material respects with the requirements of all OFAC Sanctions Programs applicable to such Subsidiary, (c) each Loan Party has provided to the Bank all information requested by them regarding such Loan Party and its Affiliates and Subsidiaries necessary for the Bank to comply with all applicable OFAC Sanctions Programs, and (d) to the best of each Loan Party’s knowledge, no Loan Party nor any of its Affiliates or Subsidiaries is, as of the date hereof, named on the current OFAC SDN List.

 

Section 6.19.                             Labor Matters.  There are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary of a Loan Party pending or, to the knowledge of any Loan Party, threatened.  There are no collective bargaining agreements in effect between any Loan Party or any Subsidiary of a Loan Party and any labor union; and no Loan Party nor any of its Subsidiaries is under any obligation to assume any collective bargaining agreement to or conduct any negotiations with any labor union with respect to any future agreements.  Each Loan Party and its Subsidiaries have remitted on a timely basis all amounts required to have been withheld and remitted (including withholdings from employee wages and salaries relating to income tax, employment insurance, and pension plan contributions), goods and services tax and all other amounts which if not paid when due could result in the creation of a Lien against any of its Property, except for Liens permitted by Section 8.8.

 

Section 6.20.                             Other Agreements.  No Loan Party nor any of its Subsidiaries is in default under the terms of any covenant, indenture or agreement of or affecting such Person or any of its Property, which default if uncured could reasonably be expected to have a Material Adverse Effect.

 

Section 6.21.                             Solvency.  The Loan Parties and their Subsidiaries are solvent, able to pay their debts as they become due, and have sufficient capital to carry on their business and all businesses in which they are about to engage.

 

Section 6.22.                             No Default.  No Default has occurred and is continuing.

 

Section 6.23.                             No Broker Fees. No broker’s or finder’s fee or commission will be payable with respect hereto or any of the transactions contemplated thereby; and the Loan Parties hereby agree to indemnify the Bank against, and agree that they will hold the Bank harmless from, any claim, demand, or liability for any such broker’s or finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses (including reasonable attorneys’ fees) arising in connection with any such claim, demand, or liability.

 

Section 6.24.                             Security Documents.  (a) The Security Agreement is effective to create in favor of the Bank legal, valid and enforceable Liens on, and security interests in, the Collateral (as defined in the Security Agreement) and, (i) when financing statements and other filings in appropriate form are filed in the appropriate offices, and (ii) upon the taking of possession or 

 

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control by the Bank of the Collateral (as defined in the Security Agreement) with respect to which a security interest may be perfected only by possession or control, the Liens created by the Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors thereunder in the Collateral (as defined in the Security Agreement) (other than (A) the patents, trademarks, tradestyles, copyrights, and other intellectual property rights (including all registrations and applications therefor) and (B) such Collateral (as defined in the Security Agreement) in which a security interest cannot be perfected under the UCC as in effect at the relevant time in the relevant jurisdiction or in respect of which perfection is not required at such time by this Agreement or the Security Agreement), in each case subject to no Liens other than those permitted by Section 8.8 hereof.

 

(b)                                  When (i) the Security Agreement or a short form thereof is filed in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, and (ii) financing statements and other filings in appropriate form are filed in the applicable offices, the Liens created by such Security Agreement shall constitute fully perfected Liens on, and security interests in, all right, title and interest of the grantors thereunder in the patents, trademarks, tradestyles, copyrights, and other intellectual property rights (including all registrations and applications therefor), in each case subject to no Liens other than those permitted by Section 8.8 hereof.

 

Section 6.25.                             Bonding Capacity.  The Borrower and its Subsidiaries have available bonding capacity under one or more Bonding Agreements in an amount sufficient to operate their respective businesses in the ordinary course.  The Borrower and its Subsidiaries are in compliance in all material respects with all terms and conditions set forth in each Bonding Agreement and no default has occurred thereunder.

 

SECTION 7.                                             CONDITIONS PRECEDENT.

 

Section 7.1.                                    All Credit Events.  At the time of each Credit Event hereunder:

 

(a)                        each of the representations and warranties set forth herein and in the other Loan Documents shall be and remain true and correct in all material respects as of said time (where not already qualified by materiality, otherwise in all respects), except to the extent the same expressly relate to an earlier date, in which case they shall be true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as of such earlier date;

 

(b)                         no Default shall have occurred and be continuing or would occur as a result of such Credit Event;

 

(c)                         after giving effect to such extension of credit the aggregate principal amount of all Revolving Loans and L/C Obligations outstanding under this Agreement shall not exceed the Revolving Credit Commitment;

 

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(d)                         in the case of a Borrowing the Bank shall have received the notice required by Section 2.6, in the case of the issuance of any Letter of Credit the Bank shall have received a duly completed Application for such Letter of Credit together with any fees called for by Section 3.1, and, in the case of an extension or increase in the amount of a Letter of Credit, a written request therefor in a form acceptable to the Bank together with fees called for by Section 3.1;

 

(e)                         [reserved]; and

 

(f)                        such Credit Event shall not violate any order, judgment or decree of any court or other authority or any provision of law or regulation applicable to the Bank (including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System) as then in effect.

 

Each request for a Borrowing hereunder and each request for the issuance of, increase in the amount of, or extension of the expiration date of, a Letter of Credit shall be deemed to be a representation and warranty by the Borrower on the date on such Credit Event as to the facts specified in subsections (a) through (d), both inclusive, of this Section; provided, however, that the Bank may continue to make advances under the Revolving Facility in its sole discretion, notwithstanding the failure of the Borrower to satisfy one or more of the conditions set forth above and any such advances so made shall not be deemed a waiver of any Default or other condition set forth above that may then exist.

 

Section 7.2.                                    Initial Credit Event.  Before or concurrently with the effectiveness of this Amended and Restated Credit Agreement:

 

(a)                        the Bank shall have received this Agreement duly executed by the Borrower and its Domestic Subsidiaries, as Guarantors, and the Bank;

 

(b)                        the Bank shall have received the duly executed Note of the Borrower dated the date hereof and otherwise in compliance with the provisions of Section 2.10;

 

(c)                         the Bank shall have received a duly completed and executed Perfection Certificate and an executed reaffirmation of the Security Agreement and the other Collateral Documents duly executed by the Loan Parties, together with, solely to the extent the following items were not previously delivered to the Bank, (i) original stock certificates or other similar instruments or securities representing all of the issued and outstanding shares of capital stock or other equity interests in each Subsidiary (limited in the case of any first tier Foreign Subsidiary to 66% of the Voting Stock and 100% of any other equity interests as provided in Section 11.1) as of the Closing Date, (ii) stock powers executed in blank and undated for the Collateral consisting of the stock or other equity interest in each Subsidiary, (iii) UCC financing statements to be filed against each Loan Party, as debtor, in favor of the Bank, as secured party, (iv) patent, trademark, and copyright collateral agreements to the extent requested by the Bank, (v) deposit account, securities account, and commodity account control agreements to the extent requested by the Bank, and (vi) Collateral Access Agreements to the extent requested by the Bank;

 

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(d)                         the Bank shall have received copies of each Loan Party’s articles of incorporation and bylaws (or comparable organizational documents) and any amendments thereto, certified in each instance by its Secretary or Assistant Secretary (or comparable Responsible Officer);

 

(e)                         the Bank shall have received copies of resolutions of each Loan Party’s Board of Directors (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, together with specimen signatures of the persons authorized to execute such documents on each Loan Party’s behalf, all certified in each instance by its Secretary or Assistant Secretary (or comparable Responsible Officer);

 

(f)                        the Bank shall have received copies of the certificates of good standing for each Loan Party (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state of its incorporation or organization and of each state in which it is qualified to do business as a foreign corporation or organization;

 

(g)                          the Bank shall have received the initial fees called for by Section 3.1;

 

(h)                         the Bank shall have received a certificate from a Responsible Officer of the Borrower certifying that (i) the solvency of the Loan Parties and their Subsidiaries as of the Closing Date after giving effect to the initial Credit Event and the transactions contemplated hereby and payment of all costs and expenses in connection therewith; (ii) since September 30, 2016, no Material Adverse Effect has occurred; (iii) the TTM EBITDA as of September 30, 2016 is not less than $12,6000,000 and (iv) the Total Leverage Ratio is not greater than 1.30 to 1.00, on a pro forma basis calculated based on TTM EBITDA as of September 30, 2016, and after giving effect to all extensions of Credit made on the Closing Date;

 

(i)                          the Bank shall have received the favorable written opinion of counsel to each Loan Party, in form and substance satisfactory to the Bank; and

 

(j)                         the Bank shall have received such other agreements, instruments, documents, certificates, and opinions as the Bank may reasonably request.

 

SECTION 8.                                             COVENANTS.

 

Each Loan Party agrees that, so long as any credit is available to or in use by the Borrower hereunder, except to the extent compliance in any case or cases is waived in writing by the Bank:

 

Section 8.1.                                    Maintenance of Business.  Each Loan Party shall, and shall cause each of its Subsidiaries to, preserve and maintain its existence, except as otherwise provided in Section 8.10(c); provided, however, that nothing in this Section shall prevent the Borrower from dissolving any of its Subsidiaries if such action is, in the reasonable business judgment of the 

 

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Borrower, desirable in the conduct of its business and is not disadvantages in any material respect to the Bank.  Each Loan Party shall, and shall cause each of its Subsidiaries to, preserve and keep in force and effect all licenses, permits, franchises, approvals, patents, trademarks, trade names, trade styles, copyrights, and other proprietary rights necessary to the proper conduct of its business where the failure to do so could reasonably be expected to have a Material Adverse Effect.

 

Section 8.2.                                    Maintenance of Properties.  Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain, preserve, and keep its property, plant, and equipment in good repair, working order and condition (ordinary wear and tear excepted), and shall from time to time make all needful and proper repairs, renewals, replacements, additions, and betterments thereto so that at all times the efficiency thereof shall be fully preserved and maintained, except to the extent that, in the reasonable business judgment of such Person, any such Property is no longer necessary for the proper conduct of the business of such Person.

 

Section 8.3.                                    Taxes and Assessments.  Each Loan Party shall duly pay and discharge, and shall cause each of its Subsidiaries to duly pay and discharge, all Taxes, rates, assessments, fees, and governmental charges upon or against it or its Property, in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves are provided therefor.

 

Section 8.4.                                    Insurance.  Each Loan Party shall insure and keep insured, and shall cause each of its Subsidiaries to insure and keep insured, with good and responsible insurance companies, all insurable Property owned by it which is of a character usually insured by Persons similarly situated and operating like Properties against loss or damage from such hazards and risks (including flood insurance with respect to any improvements on real Property consisting of building or parking facilities in an area designated by a governmental body as having special flood hazards), and in such amounts, as are insured by Persons similarly situated and operating like Properties, but in no event at any time in an amount less than the replacement value of the Collateral.  Each Loan Party shall also maintain, and shall cause each of its Subsidiaries to maintain, insurance with respect to the business of such Loan Party and its Subsidiaries, covering commercial general liability, statutory worker’s compensation and occupational disease, statutory structural work act liability, and business interruption and such other risks with good and responsible insurance companies, in such amounts and on such terms as the Bank shall reasonably request, but in any event as and to the extent usually insured by Persons similarly situated and conducting similar businesses.  The Loan Parties shall in any event maintain insurance on the Collateral to the extent required by the Collateral Documents.  All such policies of insurance shall contain satisfactory mortgagee/lender’s loss payable endorsements, naming the Bank (or its security trustee) as mortgagee or a loss payee, assignee or additional insured, as appropriate, as its interest may appear, and showing only such other loss payees, assignees and additional insureds as are satisfactory to the Bank.  Each policy of insurance or endorsement shall contain a clause requiring the insurer to give not less than thirty (30) days’ (ten (10) days’ in the case of nonpayment of insurance premiums) prior written notice to the Bank in the event of cancellation of the policy for any reason whatsoever and a clause specifying that the interest of the Bank shall not be impaired or invalidated by any act or neglect of any Loan Party or any

 

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Subsidiary of a Loan Party, or the owner of the premises or Property or by the occupation of the premises for purposes more hazardous than are permitted by said policy.  The Borrower shall deliver to the Bank (a) on the Closing Date and at such other times as the Bank shall reasonably request, certificates evidencing the maintenance of insurance required hereunder, (b) prior to the termination of any such policies, certificates evidencing the renewal thereof, and (c) promptly following request by the Bank, copies of all insurance policies of the Loan Parties and their Subsidiaries.  The Borrower also agrees to deliver to the Bank, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies.

 

Section 8.5.                             Financial Reports.  The Loan Parties shall, and shall cause each of their Subsidiaries to, maintain proper books of records and accounts reasonably necessary to prepare financial statements required to be delivered pursuant to this Section in accordance with GAAP and shall furnish to the Bank:

 

(a)                        [reserved];

 

(b)                         [reserved];

 

(c)                         as soon as available, and in any event no later than 45 days after the last day of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the consolidated balance sheet of the Loan Parties and their Subsidiaries as of the last day of such Fiscal Quarter and the consolidated statements of income, retained earnings, and cash flows of the Loan Parties and their Subsidiaries for the Fiscal Quarter and for the Fiscal Year-to-date period then ended, each in reasonable detail showing in comparative form the figures for the corresponding date and period in the previous Fiscal Year, prepared by the Borrower in accordance with GAAP (subject to the absence of footnote disclosures and Fiscal Year-end audit adjustments) and certified to by a Financial Officer of the Borrower together with Fiscal Quarter backlog reports and an accounts receivable and accounts payable aging;

 

(d)                        as soon as available, and in any event no later than 90 days after the last day of each Fiscal Year of the Borrower, a copy of the consolidated and consolidating balance sheet of the Loan Parties and their Subsidiaries as of the last day of the Fiscal Year then ended and the consolidated and consolidating statements of income, retained earnings, and cash flows of the Loan Parties and their Subsidiaries for the Fiscal Year then ended, and accompanying notes thereto, each in reasonable detail showing in comparative form the figures for the previous Fiscal Year, accompanied in the case of the consolidated financial statements by an unqualified opinion of KPMG US LLP or another firm of independent public accountants of recognized standing, selected by the Borrower and reasonably satisfactory to the Bank, to the effect that the consolidated financial statements have been prepared in accordance with GAAP and present fairly in accordance with GAAP the consolidated financial condition of the Loan Parties and their Subsidiaries as of the close of such Fiscal Year and the results of their operations and cash flows for the Fiscal Year then ended and that an examination of such accounts in connection with such financial statements has been made in accordance with generally accepted auditing standards and, accordingly, such examination included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances, together with Fiscal Quarter backlog reports and an accounts receivable and accounts payable aging;

 

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(e)                         promptly after receipt thereof, any additional written reports, management letters or other detailed information contained in writing concerning significant aspects of any Loan Party’s or any of its Subsidiary’s operations and financial affairs given to it by its independent public accountants;

 

(f)                        promptly after receipt thereof, a copy of each audit made by any regulatory agency of the books and records of any Loan Party or any Subsidiary of a Loan Party or of notice of any material noncompliance with any applicable law, regulation or guideline relating to any Loan Party or any Subsidiary of a Loan Party or their respective business;

 

(g)                          as soon as available, and in any event no later than 90 days after the end of each Fiscal Year of the Borrower, a copy of the consolidated and consolidating business plan for the Loan Parties and their Subsidiaries for following Fiscal Year, such business plan to show the projected consolidated and consolidating revenues, expenses and balance sheet of the Loan Parties and their Subsidiaries on a Fiscal Quarter-by-Fiscal Quarter basis, such business plan to be in reasonable detail prepared by the Borrower and in form satisfactory to the Bank (which shall include a summary of all assumptions made in preparing such business plan);

 

(h)                         notice of any Change of Control;

 

(i)                          promptly after knowledge thereof shall have come to the attention of any Responsible Officer of any Loan Party, written notice of (i) any threatened or pending litigation or governmental or arbitration proceeding or labor controversy against any Loan Party or any Subsidiary of a Loan Party or any of their Property which, if adversely determined, could reasonably be expected to have a Material Adverse Effect, (ii) the occurrence of any Material Adverse Effect, (iii) the occurrence of any Default, (iv) any material amendment or other modification to any Bonding Agreement (together with a copy of such amendment or modification) and copies of any notices received under any Bonding Agreement, (v) any new Bonding Agreement entered into after the Closing Date (together with a copy of such agreement), or (vi) any event or change in circumstance that occurs regarding the bonding capacity or bonding requirements of either Borrower or any Subsidiary, including without limitation notice of (A) each reduction in the aggregate bonding capacity of the Borrower and its Subsidiaries of 20% or more of the aggregate bonding capacity of the Borrower and its Subsidiaries as in effect on the Second Amendment Effective Date, individually or in the aggregate, and (B) any failure or inability of the Borrower or a Subsidiary to obtain bonding for any new project that is committed to by the Borrower or a Subsidiary or the refusal of any bonding company or any other Surety to provide bonding for any such project;

 

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(j)                         with each of the financial statements delivered pursuant to subsections (c) and (d) above, a written certificate in the form attached hereto as Exhibit E signed by a Financial Officer of the Borrower to the effect that to the best of such officer’s knowledge and belief no Default has occurred during the period covered by such statements or, if any such Default has occurred during such period, setting forth a description of such Default and specifying the action, if any, taken by the relevant Loan Party or its Subsidiary to remedy the same.  Such certificate shall also set forth the calculations supporting such statements in respect of Section 8.23 (Financial Covenants) in the form attached as Schedule I to such Exhibit E hereto and shall be accompanied by a work-in-process report detailing the aging of current underbillings; and

 

(k)                         promptly, from time to time, such other information regarding the operations, business affairs and financial condition of any Loan Party or any Subsidiary of a Loan Party, or compliance with the terms of any Loan Document, including but not limited to an updated schedule of all Bonds outstanding, as the Bank may reasonably request.

 

Section 8.6.                             Inspection; Field Audits.  Each Loan Party shall, and shall cause each of its Subsidiaries to, permit the Bank and each of their duly authorized representatives and agents to visit and inspect any of its Property, corporate books, and financial records, to examine and make copies of its books of accounts and other financial records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers, employees and independent public accountants (and by this provision the Loan Parties hereby authorize such accountants to discuss with the Bank the finances and affairs of the Loan Parties and their Subsidiaries) at such reasonable times and intervals as the Bank may designate and, so long as no Default exists, with reasonable prior notice to the Borrower.  The Borrower shall pay to the Bank charges for field audits of the Collateral, inspections and visits to Property, inspections of corporate books and financial records, examinations and copies of books of accounts and financial record and other activities permitted in this Section performed by the Bank or its agents or third party firms, in such amounts as the Bank may from time to time request (the Bank acknowledging and agreeing that any internal charges for such audits and inspections shall be computed in the same manner as it at the time customarily uses for the assessment of charges for similar collateral audits); provided, however, that in the absence of any Default, the Borrower shall not be required to pay the Bank for more than one (1) such audit per Fiscal Year.

 

Section 8.7.                             Borrowings and Guaranties.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, issue, incur, assume, create or have outstanding any Indebtedness, or incur liabilities under any Hedging Agreement, or be or become liable as endorser, guarantor, surety or otherwise for any Indebtedness or undertaking of any Person, or otherwise agree to provide funds for payment of the obligations of another, or supply funds thereto or invest therein or otherwise assure a creditor of another against loss, or apply for or become liable to the issuer of a letter of credit which supports an obligation of another, or subordinate any claim or demand it may have to the claim or demand of any Person; provided, however, that the foregoing shall not restrict nor operate to prevent:

 

(a)                        the Secured Obligations of the Loan Parties and their Subsidiaries owing to the Bank (and its Affiliates);

 

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(b)                         purchase money indebtedness and Capitalized Lease Obligations of the Loan Parties and their Subsidiaries in an amount not to exceed $1,000,000 in the aggregate at any one time outstanding;

 

(c)                         obligations of the Loan Parties and their Subsidiaries arising out of interest rate, foreign currency, and commodity Hedging Agreements entered into with financial institutions in connection with bona fide hedging activities in the ordinary course of business and not for speculative purposes;

 

(d)                         endorsement of items for deposit or collection of commercial paper received in the ordinary course of business;

 

(e)                         intercompany advances from time to time owing between the Loan Parties in the ordinary course of business to finance their working capital needs;

 

(f)                        indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits (including contractual and statutory benefits) or property, casualty, liability or credit insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

 

(g)                          indebtedness in respect of bids, trade contracts (other than for debt for borrowed money), leases (other than Capitalized Lease Obligations), statutory obligations, surety, stay, customs and appeal bonds, performance, performance and completion and return of money bonds, government contracts and similar obligations, in each case, provided in the ordinary course of business;

 

(h)                         indebtedness in respect of netting services, overdraft protection and similar arrangements, in each case, in connection with cash management and deposit accounts;

 

(i)                          indebtedness arising from agreements of a Loan Party or its Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with a Permitted Acquisition;

 

(j)                         [reserved];

 

(k)                         unsecured indebtedness of the Loan Parties and their Subsidiaries not otherwise permitted by this Section in an amount not to exceed $3,000,000 in the aggregate at any one time outstanding;

 

(l)                          indebtedness arising from Seller Notes; provided that all Indebtedness arising from any such Seller Notes shall be unsecured and subordinated to the Secured Obligations pursuant to subordination provisions or subordination agreements satisfactory to the Bank;

 

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(m)                        indebtedness arising from Earn Out Obligations; provided that all Indebtedness arising from any such Earn Out Obligations shall be unsecured and subordinated to the Secured Obligations pursuant to subordination provisions or subordination agreements satisfactory to the Bank;

 

(n)                         guarantee obligations of the Borrower with respect to indebtedness arising from Seller Notes permitted by Section 8.7(l); provided that such guarantee shall be unsecured and subordinated to the Secured Obligations pursuant to subordination provisions or subordination agreements satisfactory to the Bank; and

 

(o)                         installment payments that constitute partial consideration for the Genesys Acquisition; provided that (x) all such installment payments shall be unsecured, and (y) the aggregate principal amount of all such installment payments shall not at any time exceed $3,432,000 minus any and all installments payments (or any portion thereof) paid prior to the date of determination.

 

Section 8.8.                             Liens.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, create, incur or permit to exist any Lien of any kind on any Property owned by any such Person; provided, however, that the foregoing shall not apply to nor operate to prevent:

 

(a)                        Liens arising by statute in connection with worker’s compensation, unemployment insurance, old age benefits, social security obligations, Taxes, assessments, statutory obligations or other similar charges (other than Liens arising under ERISA), good faith cash deposits in connection with tenders, contracts or leases to which any Loan Party or any Subsidiary of a Loan Party is a party or other cash deposits required to be made in the ordinary course of business, provided in each case that the obligation is not for borrowed money and that the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves have been established therefor;

 

(b)                         mechanics’, workmen’s, materialmen’s, landlords’, carriers’ or other similar Liens arising in the ordinary course of business with respect to obligations which are not due or which are being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest;

 

(c)                         judgment liens and judicial attachment liens not constituting an Event of Default under Section 9.1(g) and the pledge of assets for the purpose of securing an appeal, stay or discharge in the course of any legal proceeding, provided that the aggregate amount of such judgment liens and attachments and liabilities of the Loan Parties and their Subsidiaries secured by a pledge of assets permitted under this subsection, including interest and penalties thereon, if any, shall not be in excess of $500,000 at any one time outstanding;

 

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(d)                         Liens on equipment of any Loan Party or any Subsidiary of a Loan Party created solely for the purpose of securing indebtedness permitted by Section 8.7(b), representing or incurred to finance the purchase price of such Property; provided that no such Lien shall extend to or cover other Property of such Loan Party or such Subsidiary other than the respective Property so acquired, and the principal amount of indebtedness secured by any such Lien shall at no time exceed the purchase price of such Property, as reduced by repayments of principal thereon;

 

(e)                         any interest or title of a lessor under any operating lease, including the filing of Uniform Commercial Code financing statements solely as a precautionary measure in connection with operating leases entered into by any Loan Party or any Subsidiary of a Loan Party in the ordinary course of its business;

 

(f)                        easements, rights-of-way, restrictions, and other similar encumbrances against real property incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of any Loan Party or any Subsidiary of a Loan Party;

 

(g)                          bankers’ Liens, rights of setoff and other similar Liens (including under Section 4-210 of the Uniform Commercial Code) in one or more deposit accounts maintained by any Loan Party or any Subsidiary of a Loan Party, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

 

(h)                         Liens granted in favor of the Bank pursuant to the Collateral Documents;

 

(i)                          [reserved];

 

(j)                         non-exclusive licenses of intellectual property granted in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of any Loan Party or any Subsidiary of a Loan Party; and

 

(k)                         Liens on equipment of any Loan Party or any Subsidiary of a Loan Party created solely for the purpose of securing indebtedness pursuant to a Bonding Agreement; provided that no such Lien shall extend to or cover other Property of such Loan Party or such Subsidiary other than the respective Property so connected to the applicable Bond (including assets used in connection with the related project or proceeds of the related project).

 

Section 8.9.                             Investments, Acquisitions, Loans and Advances.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, make, retain or have outstanding any investments (whether through purchase of stock or obligations or otherwise) in, or loans or advances to (other than for travel advances and other similar cash advances made to employees in the ordinary course of business), any other Person, or acquire all or any substantial part of the assets or business of any other Person or division thereof; provided, however, that the foregoing shall not apply to nor operate to prevent:

 

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(a)                        Cash Equivalents;

 

(b)                         the Loan Parties’ existing investments in their respective Subsidiaries outstanding on the Closing Date;

 

(c)                         intercompany advances made from time to time between the Loan Parties in the ordinary course of business to finance their working capital needs;

 

(d)                         intercompany advances from time to time owing between a Loan Party and any Subsidiary that is not a Guarantor hereunder in the ordinary course of business to finance their working capital needs, provided that the aggregate amount of such advances to any Subsidiaries that are not Guarantors hereunder together with any investments therein do not exceed $250,000 at any one time outstanding;

 

(e)                         Permitted Acquisitions;

 

(f)                        other investments existing on the Closing Date not otherwise permitted above and listed and identified on Schedule 8.9;

 

(g)                          investments in Construction Joint Ventures which are made in the ordinary course of business; provided, however, that the aggregate investments in Construction Joint Ventures shall not at any time exceed 15% of the combined consolidated Net Worth of the Borrower and its Subsidiaries;

 

(h)                         loans and advances to employees of the Loan Parties in an amount not to exceed $1,250,000 in the aggregate at any one time outstanding; and

 

(i)                             other investments, loans, and advances in addition to those otherwise permitted by this Section in an amount not to exceed $250,000 in the aggregate at any one time outstanding.

 

In determining the amount of investments, acquisitions, loans, and advances permitted under this Section, investments and acquisitions shall always be taken at the original cost thereof (regardless of any subsequent appreciation or depreciation therein), and loans and advances shall be taken at the principal amount thereof then remaining unpaid.

 

Section 8.10.                             Mergers, Consolidations and Sales.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, be a party to any merger or consolidation or amalgamation, or sell, transfer, lease or otherwise dispose of all or any part of its Property, including any disposition of Property as part of a sale and leaseback transaction, or in any event sell or discount (with or without recourse) any of its notes or accounts receivable; provided, however, that this Section shall not apply to nor operate to prevent:

 

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(a)                        the sale or lease of inventory in the ordinary course of business;

 

(b)                         the sale, transfer, lease or other disposition of Property of any Loan Party to one another in the ordinary course of its business;

 

(c)                         the merger of any Loan Party with and into the Borrower or any other Loan Party, provided that, in the case of any merger involving the Borrower, the Borrower is the corporation surviving the merger;

 

(d)                         the sale of delinquent notes or accounts receivable in the ordinary course of business for purposes of collection only (and not for the purpose of any bulk sale or securitization transaction);

 

(e)                         the sale, transfer or other disposition of any tangible personal property that, in the reasonable business judgment of the relevant Loan Party or its Subsidiary, has become obsolete or worn out, and which is disposed of in the ordinary course of business; and

 

(f)                        the Disposition of Property of any Loan Party or any Subsidiary of a Loan Party (including any Disposition of Property as part of a sale and leaseback transaction) aggregating for all Loan Parties and their Subsidiaries not more than $500,000 during any Fiscal Year of the Borrower, provided that (i) each such Disposition shall be made for fair value and (ii) at least 80% of the total consideration received at the closing of such Disposition shall consist of cash and at least 80% of the total consideration received after taking into account all final purchase price adjustments and/or contingent payments (including working capital adjustment or earn-out provisions) expressly contemplated by the transaction documents, when received shall consist of cash.

 

Section 8.11.                             Maintenance of Subsidiaries.  No Loan Party shall assign, sell or transfer, nor shall it permit any of its Subsidiaries to issue, assign, sell or transfer, any shares of capital stock or other equity interests of a Subsidiary; provided, however, that the foregoing shall not operate to prevent (a) the issuance, sale, and transfer to any person of any shares of capital stock of a Subsidiary solely for the purpose of qualifying, and to the extent legally necessary to qualify, such person as a director of such Subsidiary, (b) any transaction permitted by Section 8.10(c) above, and (c) Liens on the capital stock or other equity interests of Subsidiaries granted to the Bank pursuant to the Collateral Documents.

 

Section 8.12.                             Dividends and Certain Other Restricted Payments.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, (a) declare or pay any dividends on or make any other distributions in respect of any class or series of its capital stock or other equity interests (other than dividends or distributions payable solely in its capital stock or other equity interests), or (b) directly or indirectly purchase, redeem, or otherwise acquire or retire any of its capital stock or other equity interests or any warrants, options, or similar instruments to acquire the same (collectively referred to herein as “Restricted Payments”); provided, however, that the foregoing shall not operate to prevent the making of (i) dividends or distributions by any Subsidiary to any Borrower or (ii) Share Repurchases by the Borrower, following the Borrower’s delivery of a compliance certificate in the form of Exhibit G attached hereto (or in such other form acceptable to the Bank) to the Bank certifying that the Repurchase Conditions have been satisfied in connection with any such share redemption or purchase.

 

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Section 8.13.                             ERISA.  Each Loan Party shall, and shall cause each of its Subsidiaries to, promptly pay and discharge all obligations and liabilities arising under ERISA of a character which if unpaid or unperformed could reasonably be expected to result in the imposition of a Lien against any of its Property.  Each Loan Party shall, and shall cause each of its Subsidiaries to, promptly notify the Bank of:  (a) the occurrence of any reportable event (as defined in ERISA) with respect to a Plan, (b) receipt of any notice from the PBGC of its intention to seek termination of any Plan or appointment of a trustee therefor, (c) its intention to terminate or withdraw from any Plan, and (d) the occurrence of any event with respect to any Plan which would result in the incurrence by any Loan Party or any Subsidiary of a Loan Party of any material liability, fine or penalty, or any material increase in the contingent liability of any Loan Party or any Subsidiary of a Loan Party with respect to any post-retirement Welfare Plan benefit.

 

Section 8.14.                             Compliance with Laws.  (a) Each Loan Party shall, and shall cause each of its Subsidiaries to, comply in all respects with all Legal Requirements applicable to or pertaining to its Property or business operations, where any such non-compliance, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or result in a Lien upon any of its Property.

 

(b)                                  Without limiting Section 8.14(a) above, each Loan Party shall, and shall cause each of its Subsidiaries to, at all times, do the following to the extent the failure to do so, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect:  (i) comply in all material respects with, and maintain each of the Premises in compliance in all material respects with, all applicable Environmental Laws; (ii) require that each tenant and subtenant, if any, of any of the Premises or any part thereof comply in all material respects with all applicable Environmental Laws; (iii) obtain and maintain in full force and effect all material governmental approvals required by any applicable Environmental Law for the operation of their business and each of the Premises; (iv) cure any material violation by it or at any of the Premises of applicable Environmental Laws; (v) not allow the presence or operation at any of the Premises of any (1) landfill or dump or (2) hazardous waste management facility or solid waste disposal facility as defined pursuant to applicable Environmental Law; (vi) not manufacture, use, generate, transport, treat, store, Release, dispose or handle any Hazardous Material (or allow any tenant or subtenant to do any of the foregoing) at any of the Premises except in the ordinary course of its business, in de minimis amounts, and in compliance with all applicable Environmental Laws; (vii) within ten (10) Business Days notify the Bank in writing of and provide any reasonably requested documents upon learning of any of the following in connection with any Loan Party or any Subsidiary of a Loan Party or any of the Premises:  (1) any material Environmental Liability; (2) any material Environmental Claim; (3) any material violation of an Environmental Law or material Release, threatened Release or disposal of a Hazardous Material; (4) any restriction on the ownership, occupancy, use or transferability of any Premises arising from or in connection with any (x) Release, threatened Release or disposal of a Hazardous Material or (y) Environmental Law; or (5) any environmental, natural resource, health or safety condition, which individually or in the aggregate could reasonably be expected to have a Material Adverse 

 

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Effect; (viii) conduct at its expense any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other corrective or response action necessary to remove, remediate, clean up, correct or abate any material Release, threatened Release or violation of any applicable Environmental Law, (ix) abide by and observe any restrictions on the use of the Premises imposed by any Governmental Authority as set forth in a deed or other instrument affecting any Loan Party’s or any of its Subsidiary’s interest therein; (x) promptly provide or otherwise make available to the Bank any reasonably requested environmental record concerning the Premises which any Loan Party or any Subsidiary of a Loan Party possesses or can reasonably obtain; and (xi) perform, satisfy, and implement any operation, maintenance or corrective actions or other requirements of any Governmental Authority or Environmental Law, or included in any no further action letter or covenant not to sue issued by any Governmental Authority under any Environmental Law.

 

Section 8.15.                             Compliance with OFAC Sanctions Programs.  (a) Each Loan Party shall at all times comply with the requirements of all OFAC Sanctions Programs applicable to such Loan Party and shall cause each of its Subsidiaries to comply with the requirements of all OFAC Sanctions Programs applicable to such Subsidiary.

 

(b)                                  Each Loan Party shall provide the Bank any information regarding the Loan Parties, their Affiliates, and their Subsidiaries necessary for the Bank to comply with all applicable OFAC Sanctions Programs; subject however, in the case of Affiliates, to such Loan Party’s ability to provide information applicable to them.

 

(c)                                  If any Loan Party obtains actual knowledge or receives any written notice that any Loan Party, any Affiliate or any Subsidiary of any Loan Party is named on the then current OFAC SDN List (such occurrence, an “OFAC Event”), such Loan Party shall promptly (i) give written notice to the Bank of such OFAC Event, and (ii) comply in all material respects with all applicable laws with respect to such OFAC Event (regardless of whether the party included on the OFAC SDN List is located within the jurisdiction of the United States of America), including the OFAC Sanctions Programs, and each Loan Party hereby authorizes and consents to the Bank taking any and all steps the Bank deems necessary, in their sole but reasonable discretion, to avoid violation of all applicable laws with respect to any such OFAC Event, including the requirements of the OFAC Sanctions Programs (including the freezing and/or blocking of assets and reporting such action to OFAC).

 

Section 8.16.                             Burdensome Contracts With Affiliates.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, enter into any contract, agreement or business arrangement with any of its Affiliates on terms and conditions which are less favorable to such Loan Party or such Subsidiary than would be usual and customary in similar contracts, agreements or business arrangements between Persons not affiliated with each other; provided that the foregoing restriction shall not apply to transactions between or among the Loan Parties.

 

Section 8.17.                             No Changes in Fiscal Year.  The Borrower shall not, nor shall it permit any Subsidiary to, change its current Fiscal Year reporting method.

 

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Section 8.18.                             Formation of Subsidiaries; Guaranty Requirements.  Promptly upon the formation or acquisition of any Subsidiary, the Loan Parties shall provide the Bank notice thereof (at which time Schedule 6.2 shall be deemed amended to include reference to such Subsidiary).  The payment and performance of the Secured Obligations of the Borrower shall at all times be guaranteed by the Subsidiaries of the Borrower pursuant to Section 11 hereof or pursuant to one or more Guaranty Agreements in form and substance reasonably acceptable to the Bank, as the same may be amended, modified or supplemented from time to time.  The Loan Parties shall, and shall cause their Subsidiaries to, timely comply with the requirements of Sections 10 and 11 with respect to any Subsidiary that is required to become a Guarantor hereunder.  Except for Foreign Subsidiaries existing on the Closing Date and identified on Schedule 6.2, no Loan Party, nor shall it permit any of its Subsidiaries to, form or acquire any Foreign Subsidiary.

 

Section 8.19.                             Change in the Nature of Business.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, engage in any business or activity if as a result the general nature of the business of such Loan Party or any of its Subsidiaries would be changed in any material respect from the general nature of the business engaged in by it as of the Closing Date.

 

Section 8.20.                             Use of Proceeds.  The Borrower shall use the credit extended under this Agreement solely for the purposes set forth in, or otherwise permitted by, Section 6.4.

 

Section 8.21.                             No Restrictions.  Except as provided herein, no Loan Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Loan Party or any Subsidiary of a Loan Party to:  (a) pay dividends or make any other distribution on any Subsidiary’s capital stock or other equity interests owned by such Loan Party or any other Subsidiary, (b) pay any indebtedness owed to any Loan Party or any other Subsidiary, (c) make loans or advances to any Loan Party or any Subsidiary, (d) transfer any of its Property to any Loan Party or any other Subsidiary, or (e) guarantee the Secured Obligations and/or grant Liens on its assets to the Bank as required by the Loan Documents.

 

Section 8.22.                             Subordinated Debt.  No Loan Party shall, nor shall it permit any of its Subsidiaries to, (a) amend or modify any of the terms or conditions relating to Subordinated Debt, (b) make any voluntary prepayment of Subordinated Debt or effect any voluntary redemption thereof, or (c) make any payment on account of Subordinated Debt which is prohibited under the terms of any instrument or agreement subordinating the same to the Obligations.  Notwithstanding the foregoing, the Loan Parties may agree to a decrease in the interest rate applicable thereto or to a deferral of repayment of any of the principal of or interest on the Subordinated Debt beyond the current due dates therefor.

 

Section 8.23.                             Financial Covenants.  (a) Total Leverage Ratio.  As of the last day of each Fiscal Quarter, the Borrower shall not permit the Total Leverage Ratio to be greater than 3.00 to 1.00.

 

(b)                                  [Reserved].

 

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(c)                                  Fixed Charge Coverage Ratio.  The Borrower shall maintain a Fixed Charge Coverage Ratio of not less than (i) 1.25 to 1.00 as of the last day of each Fiscal Quarter ending on or prior to December 29, 2017 and (ii) 1.30 to 1.00 as of the last day of each Fiscal Quarter ending thereafter.

 

Section 8.24.                             Modification of Certain Documents.  No Loan Party shall do any of the following:

 

(a)                        waive or otherwise modify any term of any Constituent Document of, or otherwise change the capital structure of, any Loan Party (including the terms of any of their outstanding Voting Stock), in each case except for those modifications and waivers that (x) do not elect, or permit the election, to treat the Voting Stock of any limited liability company (or similar entity) as certificated unless such certificates are delivered to the Bank to the extent they represent Voting Stock pledged under the Security Agreement and (y) do not affect the interests of the Bank under the Loan Documents or in the Collateral in a materially adverse manner;

 

(b)                         permit the Obligations to cease qualifying as “Senior Debt”, “Designated Senior Debt” or a similar term under and as defined in any documentation governing any Subordinated Debt; and

 

(c)                         modify any term of any Bonding Agreement such that the Property subject to any Lien in favor of any Surety attaches to Property that is not in direct connection with the applicable Bond.

 

Section 8.24.                             Post-Closing Covenant.  Notwithstanding anything to the contrary contained in any Loan Document, the Borrower shall deliver, upon request of the Bank, landlord’s waivers, in form and substance reasonably satisfactory to the Bank, with respect to the Loan Parties’ leased property.

 

Section 8.25.                             Bonding Capacity.  The Borrower and its Subsidiaries shall (i) have available bonding capacity under one or more Bonding Agreements in an amount sufficient to operate their respective businesses in the ordinary course, and (ii) be in compliance in all material respects with all terms and conditions set forth in each Bonding Agreement and shall not permit a default to occur thereunder, as set forth in, or otherwise permitted by, Section 6.25.

 

SECTION 9.                                             EVENTS OF DEFAULT AND REMEDIES.

 

Section 9.1.                                    Events of Default.  Any one or more of the following shall constitute an “Event of Default” hereunder:

 

(a)                        default in the payment when due of all or any part of the principal of any Loan (whether at the stated maturity thereof or at any other time provided for in this 

 

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Agreement) or of any Reimbursement Obligation, or default for a period of three (3) Business Days in the payment when due of any interest, fee or other Obligation payable hereunder or under any other Loan Document;

 

(b)                         default in the observance or performance of any covenant set forth in Sections 8.1, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.17, 8.18, 8.19, 8.21, 8.22, 8.23 or 8.24 of this Agreement or of any provision in any Loan Document dealing with the use, disposition or remittance of the proceeds of Collateral or requiring the maintenance of insurance thereon;

 

(c)                         default in the observance or performance of any other provision hereof or of any other Loan Document which is not remedied within thirty (30) days after the earlier of (i) the date on which such failure shall first become known to any Responsible Officer of any Loan Party or (ii) written notice thereof is given to the Borrower by the Bank;

 

(d)                         any representation or warranty made herein or in any other Loan Document or in any certificate furnished to the Bank pursuant hereto or thereto or in connection with any transaction contemplated hereby or thereby proves untrue in any material respect as of the date of the issuance or making or deemed making thereof;

 

(e)                         (i) any event occurs or condition exists (other than those described in subsections (a) through (d) above) which is specified as an event of default under any of the other Loan Documents, or (ii) any of the Loan Documents shall for any reason not be or shall cease to be in full force and effect or is declared to be null and void, or (iii) any of the Collateral Documents shall for any reason fail to create a valid and perfected first priority Lien in favor of the Bank in any Collateral purported to be covered thereby except as expressly permitted by the terms hereof, or (iv) any Loan Party takes any action for the purpose of terminating, repudiating or rescinding any Loan Document executed by it or any of its obligations thereunder, or (v) any Loan Party or any Subsidiary of a Loan Party makes any payment on account of any Subordinated Debt which is prohibited under the terms of any instrument subordinating such Subordinated Debt to any Secured Obligations, or any subordination provision in any document or instrument (including, without limitation, any intercreditor or subordination agreement) relating to any Subordinated Debt shall cease to be in full force and effect, or any Person (including the holder of any Subordinated Debt) shall contest in any manner the validity, binding nature or enforceability of any such provision;

 

(f)                        default shall occur under any Material Indebtedness issued, assumed or guaranteed by any Loan Party or any Subsidiary of a Loan Party, or under any indenture, agreement or other instrument under which the same may be issued, and such default shall continue for a period of time sufficient to permit the acceleration of the maturity of any such Material Indebtedness (whether or not such maturity is in fact accelerated), or any such Material Indebtedness shall not be paid when due (whether by demand, lapse of time, acceleration or otherwise);

 

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(g)                          (i) any final judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, shall be entered or filed against any Loan Party or any Subsidiary of a Loan Party, or against any of their respective Property, in an aggregate amount for all such Persons in excess of $500,000 (except to the extent fully covered by insurance pursuant to which the insurer has accepted liability therefor in writing), and which remains undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days, or any action shall be legally taken by a judgment creditor to attach or levy upon any Property of any Loan Party or any Subsidiary of a Loan Party to enforce any such judgment, or (ii) any Loan Party or any Subsidiary of a Loan Party shall fail within sixty (60) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

 

(h)                         any Loan Party or any Subsidiary of a Loan Party, or any member of its Controlled Group, shall fail to pay when due an amount or amounts aggregating for all such Persons in excess of $250,000 which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities in excess of $250,000 (collectively, a “Material Plan”) shall be filed under Title IV of ERISA by any Loan Party or any Subsidiary of a Loan Party, or any other member of its Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be instituted by a fiduciary of any Material Plan against any Loan Party or any Subsidiary of a Loan Party, or any member of its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within thirty (30) days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated;

 

(i)                          any Change of Control shall occur;

 

(j)                         any Loan Party or any Subsidiary of a Loan Party shall (i) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) not pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate or similar action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 9.1(k);

 

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(k)                         a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for any Loan Party or any Subsidiary of a Loan Party, or any substantial part of any of its Property, or a proceeding described in Section 9.1(j)(v) shall be instituted against any Loan Party or any Subsidiary of a Loan Party, and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 days; or

 

(l)                          Bonding Agreements:

 

(i)                                     any Surety for the Borrower or any of its Subsidiaries for any reason ceases to issue bonds, undertakings or instruments of guaranty and the amount of such reduction in bonding capacity exceeds 20% or more of the aggregate bonding capacity of the Borrower and its Subsidiaries and the Borrower and its Subsidiaries shall fail to cause another Person reasonably acceptable to the Bank (provided that any such Person shall be deemed to be acceptable if its bonds, undertakings or instruments of guaranty are accepted by contract providers for the Borrower and its Subsidiaries) to issue bonds, undertakings or instruments of guaranty within 30 days of the date that such original Surety ceased to issue bonds, undertakings or instruments of guaranty; or

 

(ii)                                  (A) at any time, any Surety for the Borrower or any of its Subsidiaries shall violate any term of any agreement with the Bank to which it is a party, which violation would adversely affect the rights or interests of the Bank under the Loan Documents and such violation shall continue for a period of five (5) Business Days after the Bank’s delivery of written notice thereof to such Surety and the Borrower, (B) any Surety exercises any rights or remedies as a secured party with respect to any Collateral in excess of $100,000, or (C) any Surety takes possession of any Collateral in excess of $100,000 and such action continues for a period of ten (10) Business Days after the earlier of (A) the Bank’s delivery of written notice thereof to the Borrower and (B) a Responsible Officer of the Borrower having obtained knowledge thereof; or

 

(iii)                               the Borrower or any of its Subsidiaries defaults in the payment when due of any amount due under any Bonding Agreement or breaches or defaults with respect to any other term of any Bonding Agreement, if the effect of such failure to pay, default or breach is to cause the related Surety to take possession of the work under any of the bonded contracts of the Borrower or any of its Subsidiaries and value of the contract or project that has been taken over by the related Surety exceeds $100,000; or

 

(iv)                              the Borrower or any Subsidiary breaches or defaults with respect to any term under any of the bonded contracts of the Borrower or such Subsidiary, if the effect of such default or breach is to cause the related Surety to take possession of the work under such bonded contract and value of the contract or project that has been taken over by the related Surety exceeds $100,000.

 

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Section 9.2.                             Non-Bankruptcy Defaults.  When any Event of Default (other than those described in subsection (j) or (k) of Section 9.1 with respect to the Borrower) has occurred and is continuing, the Bank may, by written notice to the Borrower: (a) terminate the remaining Commitments and all other obligations of the Bank hereunder on the date stated in such notice (which may be the date thereof); (b) declare the principal of and the accrued interest on all outstanding Loans to be forthwith due and payable and thereupon all outstanding Loans, including both principal and interest thereon, shall be and become immediately due and payable together with all other amounts payable under the Loan Documents without further demand, presentment, protest or notice of any kind; and (c) demand that the Borrower immediately deliver to the Bank Cash Collateral in an amount equal to 105% of the aggregate amount of each Letter of Credit then outstanding, and the Borrower agrees to immediately make such payment and acknowledges and agrees that the Bank would not have an adequate remedy at law for failure by the Borrower to honor any such demand and that the Bank shall have the right to require the Borrower to specifically perform such undertaking whether or not any drawings or other demands for payment have been made under any Letter of Credit.  In addition, the Bank may exercise all rights and remedies available to it under the Loan Documents or applicable law or equity when any such Event of Default has occurred and is continuing.

 

Section 9.3.                             Bankruptcy Defaults.  When any Event of Default described in subsections (j) or (k) of Section 9.1 with respect to the Borrower has occurred and is continuing, then all outstanding Loans shall immediately become due and payable together with all other amounts payable under the Loan Documents without presentment, demand, protest or notice of any kind, the obligation of the Bank to extend further credit pursuant to any of the terms hereof shall immediately terminate and the Borrower shall immediately deliver to the Bank Cash Collateral in an amount equal to 105% of the aggregate amount of each Letter of Credit then outstanding, the Borrower acknowledging and agreeing that the Bank would not have an adequate remedy at law for failure by the Borrower to honor any such demand and that the Bank shall have the right to require the Borrower to specifically perform such undertaking whether or not any draws or other demands for payment have been made under any of the Letters of Credit.  In addition, the Bank may exercise all rights and remedies available to it under the Loan Documents or applicable law or equity when any such Event of Default has occurred and is continuing.

 

Section 9.4.                             Collateral for Undrawn Letters of Credit.  (a) If the prepayment of the amount available for drawing under any or all outstanding Letters of Credit is required under any of Sections 2.3(b), 2.8(b), 9.2 or 9.3 above, the Borrower shall forthwith pay the amount required to be so prepaid, to be held by the Bank as provided in subsection (b) below.

 

(b)                                  All amounts prepaid pursuant to subsection (a) above shall be held by the Bank in one or more separate collateral accounts (each such account, and the credit balances, properties, and any investments from time to time held therein, and any substitutions for such account, any certificate of deposit or other instrument evidencing any of the foregoing and all proceeds of and earnings on any of the foregoing being collectively called the “Collateral Account”) as security for, and for application by the Bank (to the extent available) to, the reimbursement of any payment under any Letter of Credit then or thereafter made by the Bank, and to the payment of the unpaid balance of all other Secured Obligations.  The Collateral Account shall be held in the 

 

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name of and subject to the exclusive dominion and control of the Bank.  If and when requested by the Borrower, the Bank shall invest funds held in the Collateral Account from time to time in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America with a remaining maturity of one year or less, provided that the Bank is irrevocably authorized to sell investments held in the Collateral Account when and as required to make payments out of the Collateral Account for application to amounts due and owing from the Borrower to the Bank.  If the Borrower shall have made payment of all obligations referred to in subsection (a) above required under Section 2.8(b), at the request of the Borrower the Bank shall release to the Borrower amounts held in the Collateral Account so long as at the time of the release and after giving effect thereto no Default exists.  After all Letters of Credit have expired or been cancelled and the expiration or termination of all Commitments, at the request of the Borrower, the Bank shall release any remaining amounts held in the Collateral Account following payment in full in cash of all Secured Obligations.

 

Section 9.5.                                    Post-Default Collections.  Anything contained herein or in the other Loan Documents to the contrary notwithstanding (including, without limitation, Section 2.8(b)), all payments and collections received in respect of the Obligations and all proceeds of the Collateral and payments made under or in respect of the Guaranty Agreements received, in each instance, by the Bank after acceleration or the final maturity of the Obligations or termination of the Commitments as a result of an Event of Default shall be remitted to the Bank and applied in the Bank’s discretion.

 

SECTION 10.                                      THE GUARANTEES.

 

Section 10.1.                             The Guarantees.  To induce the Bank to provide the credits described herein and in consideration of benefits expected to accrue to the Borrower by reason of the Commitments and for other good and valuable consideration, receipt of which is hereby acknowledged, the Borrower and each Subsidiary party hereto (including any Subsidiary executing an Additional Guarantor Supplement in the form attached hereto as Exhibit F or such other form acceptable to the Bank) and the Borrower (as to the Secured Obligations of another Loan Party) hereby unconditionally and irrevocably guarantees jointly and severally to the Bank and its Affiliates, the due and punctual payment of all present and future Secured Obligations, including, but not limited to, the due and punctual payment of principal of and interest on the Loans, the Reimbursement Obligations, and the due and punctual payment of all other Obligations now or hereafter owed by the Borrower under the Loan Documents and the due and punctual payment of all Hedging Liability and Bank Product Obligations, in each case as and when the same shall become due and payable, whether at stated maturity, by acceleration, or otherwise, according to the terms hereof and thereof (including all interest, costs, fees, and charges after the entry of an order for relief against the Borrower or such other obligor in a case under the United States Bankruptcy Code or any similar proceeding, whether or not such interest, costs, fees and charges would be an allowed claim against the Borrower or any such obligor in any such proceeding); provided, however, that, with respect to any Guarantor, its Guarantee of Hedging Liability of any Loan Party shall exclude all Excluded Swap Obligations.  In case of failure by the Borrower or other obligor punctually to pay any Secured Obligations guaranteed hereby, each Guarantor hereby unconditionally agrees to make such payment or to cause such payment to be made punctually as and when the same shall become due and payable, whether at stated maturity, by acceleration, or otherwise, and as if such payment were made by the Borrower or such obligor.

 

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Section 10.2.                             Guarantee Unconditional.  The obligations of each Guarantor under this Section 10 shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged, or otherwise affected by:

 

(a)                        any extension, renewal, settlement, compromise, waiver, or release in respect of any obligation of any Loan Party or other obligor or of any other guarantor under this Agreement or any other Loan Document or by operation of law or otherwise;

 

(b)                         any modification or amendment of or supplement to this Agreement or any other Loan Document or any agreement relating to Hedging Liability or Bank Product Obligations;

 

(c)                         any change in the corporate existence, structure, or ownership of, or any insolvency, bankruptcy, reorganization, or other similar proceeding affecting, any Loan Party or other obligor, any other guarantor, or any of their respective assets, or any resulting release or discharge of any obligation of any Loan Party or other obligor or of any other guarantor contained in any Loan Document;

 

(d)                         the existence of any claim, set-off, or other rights which any Loan Party or other obligor or any other guarantor may have at any time against the Bank or any other Person, whether or not arising in connection herewith;

 

(e)                         any failure to assert, or any assertion of, any claim or demand or any exercise of, or failure to exercise, any rights or remedies against any Loan Party or other obligor, any other guarantor, or any other Person or Property;

 

(f)                        any application of any sums by whomsoever paid or howsoever realized to any obligation of any Loan Party or other obligor, regardless of what obligations of any Loan Party or other obligor remain unpaid;

 

(g)                          any invalidity or unenforceability relating to or against any Loan Party or other obligor or any other guarantor for any reason of this Agreement or of any other Loan Document or any agreement relating to Hedging Liability or Bank Product Obligations or any provision of applicable law or regulation purporting to prohibit the payment by any Loan Party or other obligor or any other guarantor of the principal of or interest on any Loan or any Reimbursement Obligation or any other amount payable under the Loan Documents or any agreement relating to Hedging Liability or Bank Product Obligations; or

 

(h)                         any other act or omission to act or delay of any kind by the Bank or any other Person or any other circumstance whatsoever that might, but for the provisions of this subsection, constitute a legal or equitable discharge of the obligations of any Guarantor under this Section 10.

 

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Section 10.3.                             Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances.  Each Guarantor’s obligations under this Section 10 shall remain in full force and effect until the Commitments are terminated, all Letters of Credit have expired, and the principal of and interest on the Loans and all other amounts payable by the Borrower and the other Loan Parties under this Agreement and all other Loan Documents and, if then outstanding and unpaid, all Hedging Liability and Bank Product Obligations shall have been paid in full.  If at any time any payment of the principal of or interest on any Loan or any Reimbursement Obligation or any other amount payable by any Loan Party or other obligor or any guarantor under the Loan Documents or any agreement relating to Hedging Liability or Bank Product Obligations is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or reorganization of such Loan Party or other obligor or of any guarantor, or otherwise, each Guarantor’s obligations under this Section 10 with respect to such payment shall be reinstated at such time as though such payment had become due but had not been made at such time.

 

Section 10.4.                             Subrogation.  Each Guarantor agrees it will not exercise any rights which it may acquire by way of subrogation by any payment made hereunder, or otherwise, until all the Secured Obligations shall have been paid in full subsequent to the termination of all the Commitments and expiration of all Letters of Credit.  If any amount shall be paid to a Guarantor on account of such subrogation rights at any time prior to the later of (x) the payment in full of the Secured Obligations and all other amounts payable by the Loan Parties hereunder and the other Loan Documents and (y) the termination of the Commitments and expiration of all Letters of Credit, such amount shall be held in trust for the benefit of the Bank (and its Affiliates) and shall forthwith be paid to the Bank (and its Affiliates) or be credited and applied upon the Secured Obligations, whether matured or unmatured, in accordance with the terms of this Agreement.

 

Section 10.5.                             Subordination.   Each Guarantor (each referred to herein as a “Subordinated Creditor”) hereby subordinates the payment of all indebtedness, obligations, and liabilities of the Borrower or other Loan Party owing to such Subordinated Creditor, whether now existing or hereafter arising, to the indefeasible payment in full in cash of all Secured Obligations.  During the existence of any Event of Default, subject to Section 10.4, any such indebtedness, obligation, or liability of the Borrower or other Loan Party owing to such Subordinated Creditor shall be enforced and performance received by such Subordinated Creditor as trustee for the benefit of the holders of the Secured Obligations and the proceeds thereof shall be paid over to the Bank for application to the Secured Obligations (whether or not then due), but without reducing or affecting in any manner the liability of such Guarantor under this Section 10.

 

Section 10.6.                             Waivers.  Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest, and any notice not provided for herein, as well as any requirement that at any time any action be taken by the Bank or any other Person against the Borrower or any other Loan Party or other obligor, another guarantor, or any other Person.

 

Section 10.7.                             Limit on Recovery.  Notwithstanding any other provision hereof, the right of recovery against each Guarantor under this Section 10 shall not exceed $1.00 less than the lowest amount which would render such Guarantor’s obligations under this Section 10 void or voidable under applicable law, including, without limitation, fraudulent conveyance law.

 

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Section 10.8.                             Stay of Acceleration.  If acceleration of the time for payment of any amount payable by the Borrower or other Loan Party or other obligor under this Agreement or any other Loan Document, or under any agreement relating to Hedging Liability or Bank Product Obligations, is stayed upon the insolvency, bankruptcy or reorganization of the Borrower or such other Loan Party or obligor, all such amounts otherwise subject to acceleration under the terms of this Agreement or the other Loan Documents, or under any agreement relating to Hedging Liability or Bank Product Obligations, shall nonetheless be payable by the Guarantors hereunder forthwith on demand by the Bank.

 

Section 10.9.                             Benefit to Guarantors.  The Loan Parties are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of the Borrower and the other Loan Parties has a direct impact on the success of each other Loan Party.  Each Guarantor will derive substantial direct and indirect benefit from the extensions of credit hereunder, and each Guarantor acknowledges that this guarantee is necessary or convenient to the conduct, promotion and attainment of its business.

 

Section 10.10.                      Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section, or otherwise under this Guaranty, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until discharged in accordance with Section 10.3.  Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

SECTION 11.                                      COLLATERAL.

 

Section 11.1.                             Collateral.  The Secured Obligations shall be secured by valid, perfected, and enforceable Liens on all right, title, and interest of each Loan Party in all of its real property, personal property, and fixtures, whether now owned or hereafter acquired or arising, and all proceeds thereof; provided, however, that:  (i) the Collateral shall not include Excluded Property, (ii) until an Event of Default has occurred and is continuing and thereafter until otherwise required by the Bank, Liens on vehicles or other goods which are subject to a certificate of title law need not be perfected provided that the total value of such property at any one time not so perfected shall not exceed $500,000 in the aggregate, and (iii) the Collateral need not include (or be perfected if a Lien is granted) those assets of any Loan Party as to which the Bank in its sole discretion determines that the cost of obtaining a security interest in or perfection thereof are excessive in relation to the value of the security to be afforded thereby.  Each Loan Party acknowledges and agrees that the Liens on the Collateral shall be granted to the Bank and shall be valid and perfected first priority Liens (to the extent perfection by filing, registration, recordation, possession or control is required herein or in any other Loan Document) subject to the proviso appearing at the end of the preceding sentence and to Liens permitted by Section 8.8, in each case pursuant to one or more Collateral Documents from such Persons, each in form and substance satisfactory to the Bank.

 

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Section 11.2.                             Depository Banks.  Each Loan Party shall maintain the Bank (or one of its Affiliates) as its primary depository bank, including for its principal operating, administrative, cash management, lockbox arrangements, collection activity, and other deposit accounts for the conduct of its business.  Except for Excluded Deposit Accounts, all deposit accounts shall be maintained with the Bank or such other bank(s) reasonably acceptable to the Bank subject to deposit account control agreements in favor of the Bank on terms reasonably satisfactory to the Bank (all such deposit accounts maintained with the Bank or with such other bank(s) subject to a deposit account control agreement being hereinafter collectively referred to as the “Assigned Accounts”), provided, however, that deposit accounts acquired by a Loan Party as part of a Permitted Acquisition shall not be required to be maintained with the Bank until the date that is one hundred eighty (180) days after the date such deposit accounts were acquired by such Loan Party.  Each Loan Party shall make such arrangements as may be reasonably requested by the Bank to assure that all proceeds of the Collateral are deposited (in the same form as received) in one or more Assigned Accounts.  Any proceeds of Collateral received by any Loan Party shall be promptly deposited into an Assigned Account and, until so deposited, shall be held by it in trust for the Bank.  Each Loan Party acknowledges and agrees that the Bank has (and is hereby granted to the extent it does not already have) a Lien on each Assigned Account and all funds contained therein to secure the Secured Obligations.  The Bank agrees with the Loan Parties that if and so long as no Default has occurred or is continuing, amounts on deposit in the Assigned Accounts will (subject to the rules and regulations as from time to time in effect applicable to such demand deposit accounts) be made available to the relevant Loan Party for use in the conduct of its business.  Upon the occurrence of a Default, the Bank may apply the funds on deposit in any and all such Assigned Accounts to the Secured Obligations (whether or not then due).

 

Section 11.3.                             Liens on Real Property.  In the event that any Loan Party owns or hereafter acquires any real property (other than Excluded Property), such Loan Party shall execute and deliver to the Bank a mortgage or deed of trust acceptable in form and substance to the Bank for the purpose of granting to the Bank (or a security trustee therefor) a Lien on such real property to secure the Secured Obligations, shall pay all taxes, costs, and expenses incurred by the Bank in recording such mortgage or deed of trust, and shall supply to the Bank at the Borrower’s cost and expense a survey, environmental report, hazard insurance policy, appraisal report, and a mortgagee’s policy of title insurance from a title insurer acceptable to the Bank insuring the validity of such mortgage or deed of trust and its status as a first Lien (subject to Liens permitted

by this Agreement) on the real property encumbered thereby and such other instrument, documents, certificates, and opinions reasonably required by the Bank in connection therewith.

 

Section 11.4.                             Further Assurances.  Each Loan Party agrees that it shall, from time to time at the request of the Bank, execute and deliver such documents and do such acts and things as the Bank may reasonably request in order to provide for or perfect or protect such Liens on the Collateral.  In the event any Loan Party forms or acquires any other Subsidiary after the date hereof, except as otherwise provided in the definition of Guarantor, the Loan Parties shall promptly upon such formation or acquisition cause such newly formed or acquired Subsidiary to execute a Guaranty Agreement and such Collateral Documents as the Bank may then require, and the Loan Parties shall also deliver to the Bank, or cause such Subsidiary to deliver to the Bank, at the Borrower’s cost and expense, such other instruments, documents, certificates, and opinions reasonably required by the Bank in connection therewith.

 

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SECTION 12.                                                                     MISCELLANEOUS.

 

Section 12.1.                             Notices.  (a) Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email as follows:

 

(i)                          if to the Borrower or any other Loan Party, to it at Willdan Group, Inc., 2401 East Katella Avenue, Suite 300, Anaheim, California 92806, Attention of Stacy McLaughlin (Telephone No. (714) 940-6349), email: smclaughlin@willdan.com; and

 

(ii)                          if to the Bank, to BMO Harris Bank N.A. at 111 West Monroe, Chicago, Illinois 60603, Attention of Doug Chinery (Telephone No. (312) 461-3016), email: Doug.Chinery@bmo.com.

 

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

 

(b)                                  Electronic Communications.  The Bank or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.  Unless the Bank otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

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

 

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Section 12.2.                             Amendments, Etc.  No amendment, modification, termination or waiver of any provision of this Agreement or of any other Loan Document, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank.  No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

 

Section 12.3.                             Costs and Expenses; Indemnification.  (a) Costs and Expenses.  The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Bank and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Bank), and shall pay all fees and time charges and disbursements for attorneys who may be employees of the Bank, in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), including, without limitation, such fees and expenses incurred in connection with (x) the creation, perfection or protection of the Liens under the Loan Documents (including all title insurance fees and all search, filing and recording fees) and (y) environmental assessments, insurance reviews, collateral audits and valuations, and field exams as provided herein, (ii) all reasonable out-of-pocket expenses incurred by the Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and (iii) all out-of-pocket expenses incurred by the Bank (including the fees, charges and disbursements of any counsel for the Bank), and shall pay all fees and time charges for attorneys who may be employees of the Bank, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit (including all such costs and expenses incurred in connection with any proceeding under the United States Bankruptcy Code involving the Borrower or any other Loan Party as a debtor thereunder).

 

(b)                                  Indemnification by the Loan Parties.  Each Loan Party shall indemnify the Bank and its Related Parties (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), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any third party or the Borrower or any other Loan Party) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, the administration and enforcement of this Agreement and the other Loan Documents (including all such costs and expenses incurred in connection with any proceeding under the United States Bankruptcy Code involving the Borrower or any other Loan Party as a debtor thereunder), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of 

 

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Credit), (iii) any Environmental Claim or Environmental Liability, including with respect to the actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by any Loan Party or any of its Subsidiaries, related in any way to any Loan Party or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto (including, without limitation, any settlement arrangement arising from or relating to the foregoing); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  This subsection (b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)                                  Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the Loan Parties shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit, or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(d)                                  Payments.  All amounts due under this Section shall be payable promptly after demand therefor.

 

(e)                                  Survival.  Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

 

Section 12.4.                             No Waiver, Cumulative Remedies.  No delay or failure on the part of the Bank or on the part of the holder or holders of any of the Obligations in the exercise of any power or right under any Loan Document shall operate as a waiver thereof or as an acquiescence in any default, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right.  The rights and remedies hereunder of the Bank and of the holder or holders of any of the Obligations are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have.

 

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Section 12.5.                             Right of Setoff.  In addition to any rights now or hereafter granted under the Loan Documents or applicable law and not by way of limitation of any such rights, if an Event of Default shall have occurred and be continuing, the Bank and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by the Bank or any such Affiliate, to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such the Bank or their its Affiliates, irrespective of whether or not the Bank or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch, office or Affiliate of the Bank different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness.  The rights of the Bank and its respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that the Bank or its respective Affiliates may have.  The Bank agrees to notify the Borrower promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

Section 12.6.                             Survival of Representations.  All representations and warranties made herein or in any other Loan Document or in certificates given pursuant hereto or thereto shall survive the execution and delivery of this Agreement and the other Loan Documents, and shall continue in full force and effect with respect to the date as of which they were made as long as any credit is in use or available hereunder.

 

Section 12.7.                             Survival of Indemnities.  All indemnities and other provisions relative to reimbursement to the Bank of amounts sufficient to protect the yield of the Bank with respect to the Loans and Letters of Credit, including, but not limited to, Sections 4.1, 4.4, 4.5, and 12.3, shall survive the termination of this Agreement and the other Loan Documents and the payment of the Obligations.

 

Section 12.8.                             Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Bank, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 7.2, this Agreement shall become effective when it shall have been executed by the Bank and when the Bank shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

 

Section 12.9.                             Headings. Section headings used in this Agreement are for reference only and shall not affect the construction of this Agreement.

 

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Section 12.10.                             Severability of Provisions.  Any provision of any Loan Document which is unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.  All rights, remedies and powers provided in this Agreement and the other Loan Documents may be exercised only to the extent that the exercise thereof does not violate any applicable mandatory provisions of law, and all the provisions of this Agreement and other Loan Documents are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement or the other Loan Documents invalid or unenforceable.

 

Section 12.11.                             Construction.  The parties acknowledge and agree that the Loan Documents shall not be construed more favorably in favor of any party hereto based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation of the Loan Documents.  The provisions of this Agreement relating to Subsidiaries shall only apply during such times as the Borrower has one or more Subsidiaries.  NOTHING CONTAINED HEREIN SHALL BE DEEMED OR CONSTRUED TO PERMIT ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF ANY COLLATERAL DOCUMENT, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING IN ADDITION TO AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS CONTAINED IN THE COLLATERAL DOCUMENTS.

 

Section 12.12.                             Excess Interest.  Notwithstanding any provision to the contrary contained herein or in any other Loan Document, no such provision shall require the payment or permit the collection of any amount of interest in excess of the maximum amount of interest permitted by applicable law to be charged for the use or detention, or the forbearance in the collection, of all or any portion of the Loans or other obligations outstanding under this Agreement or any other Loan Document (“Excess Interest”).  If any Excess Interest is provided for, or is adjudicated to be provided for, herein or in any other Loan Document, then in such event (a) the provisions of this Section shall govern and control, (b) neither the Borrower nor any guarantor or endorser shall be obligated to pay any Excess Interest, (c) any Excess Interest that the Bank may have received hereunder shall, at the option of the Bank, be (i) applied as a credit against the then outstanding principal amount of Obligations hereunder and accrued and unpaid interest thereon (not to exceed the maximum amount permitted by applicable law), (ii) refunded to the Borrower, or (iii) any combination of the foregoing, (d) the interest rate payable hereunder or under any other Loan Document shall be automatically subject to reduction to the maximum lawful contract rate allowed under applicable usury laws (the “Maximum Rate”), and this Agreement and the other Loan Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction in the relevant interest rate, and (e) neither the Borrower nor any guarantor or endorser shall have any action against the Bank for any damages whatsoever arising out of the payment or collection of any Excess Interest.  Notwithstanding the foregoing, if for any period of time interest on any of Borrower’s Obligations is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest payable on the Borrower’s Obligations shall remain at the Maximum Rate until the Bank has received the amount of interest which the Bank would have received during such period on the Borrower’s Obligations had the rate of interest not been limited to the Maximum Rate during such period.

 

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Section 12.13.                             No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between any Loan Party and its Subsidiaries and the the Bank is intended to be or has been created in respect of the transactions contemplated hereby or by the other Loan Documents, irrespective of whether the Bank has advised or is advising any Loan Party or any of its Subsidiaries on other matters, (ii) the arranging and other services regarding this Agreement provided by the Bank are arm’s-length commercial transactions between such Loan Parties and their Affiliates, on the one hand, and the Bank, on the other hand, (iii) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent that it has deemed appropriate and (iv) each Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and (b) (i) the Bank is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Loan Party or any of its Affiliates, or any other Person; (ii) the Bank has no obligation to any Loan Party or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Bank and its respective Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of any Loan Party and its Affiliates, and the Bank has no obligation to disclose any of such interests to any Loan Party or its Affiliates.  To the fullest extent permitted by law, each Loan Party hereby waives and releases any claims that it may have against the Bank with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

Section 12.14.                             Binding Nature; Governing Law; Jurisdiction; Consent to Service of Process.  (a) THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE SPECIFIED THEREIN), AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

(b)                                  Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the United States District Court for the Northern District of Illinois and of any Illinois State court sitting in the City of Chicago, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each party hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Illinois State court or, to the extent permitted by applicable Legal Requirements, in such federal court.  Each party hereto hereby agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Legal Requirements.  Nothing in this Agreement or any other Loan Document or otherwise shall affect any right that the Bank may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any Guarantor or its respective properties in the courts of any jurisdiction.

 

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(c)                                  Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Legal Requirements, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Section 12.14(b).  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable Legal Requirements, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(d)                                  Each party to this Agreement irrevocably consents to service of process in any action or proceeding arising out of or relating to any Loan Document, in the manner provided for notices (other than telecopy or e-mail) in Section 12.1.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable Legal Requirements.

 

Section 12.15.                             Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LEGAL REQUIREMENTS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 12.16.                             USA Patriot Act.  The Bank 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 “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 the Bank to identify the Borrower in accordance with the Act.

 

Section 12.17.                             Confidentiality.  The Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (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 required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to an 

 

78

 

agreement containing provisions substantially the same as those of this Section, to any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any rating agency in connection with rating any Loan Party or its Subsidiaries or the Facility or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facility; (h) with the consent of the Borrower; or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) becomes available to the Bank or any of its respective Affiliates on a nonconfidential basis from a source other than the Borrower.  For purposes of this Section, “Information” means all information received from a Loan Party or any of its Subsidiaries relating to a Loan Party or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Bank on a nonconfidential basis prior to disclosure by a Loan Party or any of its Subsidiaries; provided that, in the case of information received from a Loan Party or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

Section 12.18.                             Amendment and Restatement.  This Agreement shall become effective on the Closing Date and shall supersede all provisions of the Prior Credit Agreement as of such date.  From and after the Closing Date, all references made to the Prior Credit Agreement or the Notes in any Loan Document or in any other instrument or document shall, without more, be deemed to refer to this Agreement or the Note issued hereunder, as applicable.   This Agreement amends and restates the Prior Credit Agreement and is not intended to be or operate as a novation or an accord and satisfaction of the Prior Credit Agreement or the indebtedness, obligations and liabilities of Loan Parties evidenced or provided for thereunder.  Without limiting the generality of the foregoing, the Loan Parties hereby reaffirm their pledge and liability under the Security Agreement, and the Loan Parties agree that notwithstanding the execution and delivery of this Agreement, the Liens previously granted to the Bank pursuant to the Collateral Documents shall be and remain in full force and effect and that any rights and remedies of the Bank thereunder and obligations of the Loan Parties thereunder shall be and remain in full force and effect, shall not be affected, impaired or discharged hereby and shall secure all of the Loan Parties’ indebtedness, obligations and liabilities to the Bank under the Prior Credit Agreement as amended and restated hereby.  Nothing herein contained shall in any manner affect or impair the priority of the liens and security interests created and provided for by the Collateral Documents as to the indebtedness which would be secured thereby prior to giving effect to this Agreement.

 

[SIGNATURE PAGES TO FOLLOW]

 

79

 

This Amended and Restated Credit Agreement is entered into between us for the uses and purposes hereinabove set forth as of the date first above written.

 

	
 
    	
“BORROWER”
    
	
 
    	
 
    
	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
“GUARANTORS”
    
	
 
    	
 
    
	
 
    	
ELECTROTEC OF NY   ELECTRICAL INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
PUBLIC AGENCY RESOURCES
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN ENERGY   SOLUTIONS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN ENGINEERING
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    

 

[Signature Page to Amended and Restated Credit Agreement]

 

 

	
 
    	
WILLDAN ENGINEERS AND   CONSTRUCTORS
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN FINANCIAL   SERVICES
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN HOMELAND   SOLUTIONS
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN INFRASTRUCTURE
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN   LIGHTING & ELECTRIC, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
WILLDAN   LIGHTING & ELECTRIC OF CALIFORNIA
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    

 

[Signature Page to Amended and Restated Credit Agreement]

 

 

	
 
    	
WILLDAN LIGHTING & ELECTRIC OF WASHINGTON, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    
	
 
    	
GENESYS ENGINEERING,   P.C.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Stacy McLaughlin
    
	
 
    	
 
    	
Name
    	
Stacy McLaughlin
    
	
 
    	
 
    	
Title
    	
Treasurer
    
	
 
    	
 
    
	
 
    	
ABACUS RESOURCE   MANAGEMENT COMPANY
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Thomas D. Brisbin
    
	
 
    	
 
    	
Name
    	
Thomas D. Brisbin
    
	
 
    	
 
    	
Title
    	
Chairman of the Board
    
	
 
    	
 
    

 

[Signature Page to Amended and Restated Credit Agreement]

 

 

	
 
    	
“BANK”
    
	
 
    	
 
    
	
 
    	
BMO HARRIS   BANK N.A.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Maria Wisniewski
    
	
 
    	
 
    	
Name
    	
Maria Wisniewski
    
	
 
    	
 
    	
Title
    	
Director
    

 

[Signature Page to Amended and Restated Credit Agreement]

 

 

EXHIBIT A

 

NOTICE OF BORROWING

 

Date:                         , 201   

 

To:                             BMO Harris Bank N.A., as lender under the Amended and Restated Credit Agreement dated as of January 20, 2017 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), by and among Willdan Group, Inc. (the “Borrower”), the Guarantors party thereto, and BMO Harris Bank N.A. (the “Bank”)

 

Ladies and Gentlemen:

 

The Borrower refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives the Bank notice irrevocably, pursuant to Section 2.6 of the Credit Agreement, of the Borrowing specified below:

 

1.        The Business Day of the proposed Borrowing is            , 201   .

 

2.        The aggregate amount of the proposed Borrowing is $                   .

 

3.        The Borrowing is being advanced under the Revolving Facility.

 

4.        The Borrowing is to be comprised of $            of [Base Rate] [Eurodollar] Loans.

 

[5.        The duration of the Interest Period for the Eurodollar Loans included in the Borrowing shall be              months.]

 

The Borrower hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Borrowing, before and after giving effect thereto and to the application of the proceeds therefrom:

 

(a)        the representations and warranties contained in Section 6 of the Credit Agreement are true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as of such earlier date); and

 

 

(b)        no Default has occurred and is continuing or would result from such proposed Borrowing.

 

	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name
    	
 
    
	
 
    	
 
    	
Title
    	
 
    

 

2

 

EXHIBIT B

 

NOTICE OF CONTINUATION/CONVERSION

 

Date:              , 201   

 

To:                             BMO Harris Bank N.A., as lender under the Amended and Restated Credit Agreement dated as of January 20, 2017 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), by and among Willdan Group, Inc. (the “Borrower”), the Guarantors party thereto, and BMO Harris Bank N.A. (the “Bank”)

 

Ladies and Gentlemen:

 

The Borrower refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives the Bank notice irrevocably, pursuant to Section 2.6 of the Credit Agreement, of the [conversion] [continuation] of the Loans specified herein, that:

 

1.        The conversion/continuation Date is           , 201 .

 

2.        The aggregate amount of the Revolving Loans to be [converted] [continued] is $              .

 

3.        The Loans are to be [converted into] [continued as] [Eurodollar] [Base Rate] Loans.

 

4.        [If applicable:]  The duration of the Interest Period for the Revolving Loans included in the [conversion] [continuation] shall be           months.

 

	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name
    	
 
    
	
 
    	
 
    	
Title
    	
 
    

 

 

EXHIBIT C-1

 

[Reserved]

 

 

EXHIBIT C-2

 

REVOLVING NOTE

 

	
U.S. $35,000,000
    	
January 20,   2017
    

 

FOR VALUE RECEIVED, the undersigned, WILLDAN GROUP, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to BMO Harris Bank N.A. (the “Bank”) or its registered assigns on the Revolving Credit Termination Date of the hereinafter defined Credit Agreement, at the principal office of the Bank in Chicago Illinois (or such other location as the Bank may designate to the Borrower), in immediately available funds, the principal sum of Thirty-Five Million and 00/100 Dollars ($35,00,000) or, if less, the aggregate unpaid principal amount of all Revolving Loans made by the Bank to the Borrower pursuant to the Credit Agreement, together with interest on the principal amount of each Revolving Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Credit Agreement.

 

This Revolving Note (this “Note”) is the Revolving Note referred to in the Amended and Restated Credit Agreement dated as of January 20, 2017, by and among the Borrower, the Guarantors party thereto, and the Bank (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), and this Note and the holder hereof are entitled to all the benefits and security provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof.  All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Credit Agreement.  This Note shall be governed by and construed in accordance with the internal laws of the State of Illinois.

 

Voluntary prepayments may be made hereon, certain prepayments are required to be made hereon, and this Note may be declared due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Credit Agreement.

 

The Borrower hereby waives demand, presentment, protest or notice of any kind hereunder.

 

	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name
    	
 
    
	
 
    	
 
    	
Title
    	
 
    

 

 

EXHIBIT D

 

[Reserved]

 

 

EXHIBIT E

 

WILLDAN GROUP, INC.

 

COMPLIANCE CERTIFICATE

 

To:                             BMO Harris Bank N.A., as lender under the Amended and Restated Credit Agreement dated as of January 20, 2017 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), by and among Willdan Group, Inc. (the “Borrower”), the Guarantors party thereto, and BMO Harris Bank N.A. (the “Bank”)

 

This Compliance Certificate is furnished to the Bank pursuant to the Credit Agreement.  Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit Agreement.

 

THE BORROWER HEREBY CERTIFIES THAT:

 

1.       I am the duly elected              of Willdan Group, Inc.;

 

2.       I have reviewed the terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;

 

3.       The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Compliance Certificate, except as set forth below;

 

4.       The financial statements required by Section 8.5 of the Credit Agreement and being furnished to the Bank concurrently with this Compliance Certificate are true, correct and complete as of the date and for the periods covered thereby; and

 

5.       The Schedule I hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Credit Agreement.

 

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:

 

 

 

 

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Compliance Certificate in support hereof, are made and delivered this        day of                    201  .

 

	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name
    	
 
    
	
 
    	
 
    	
Title
    	
 
    

 

2

 

SCHEDULE I

TO COMPLIANCE CERTIFICATE

 

WILLDAN GROUP, INC.

 

COMPLIANCE CALCULATIONS

FOR AMENDED AND RESTATED CREDIT AGREEMENT
 DATED AS OF JANUARY 20, 2017

 

CALCULATIONS AS OF              , 201

 

	
A.
    	
Total Leverage Ratio (Section 8.23(a))
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.
    	
Total Funded Debt
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
2.
    	
Net Income for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
3.
    	
Interest Expense for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
4.
    	
Income taxes for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
5.
    	
Depreciation and Amortization Expense for past 4   quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
6.
    	
Non-cash charges acceptable to Bank for past 4   quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
7.
    	
Non-cash gains and other pro forma adjustments for   past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
8.
    	
Sum of Lines A2, A3, A4, A5 and A6 minus Line A7 (“EBITDA”)
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
9.
    	
Ratio of Line A1 to A8
    	
 
    	
:1.0
    	
 
    
	
 
    	
10.
    	
Line A9 ratio must not exceed
    	
 
    	
3.00:1.0
    	
 
    
	
 
    	
11.
    	
The Borrower is in compliance (circle yes or no)
    	
 
    	
yes/no
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
B.
    	
[Reserved]
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
C.
    	
Fixed Charge Coverage Ratio (Section 8.23(c))
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.
    	
Line A8 above
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
2.
    	
Unfinanced Capital Expenditures for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
3.
    	
Line C1 plus Line C2 minus Line C3
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
4.
    	
Principal payments for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
5.
    	
Interest Expense paid in cash for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
6.
    	
Income taxes paid in cash for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    

 

 

	
 
    	
7.
    	
Restricted Payments paid in cash for past 4 quarters
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
8.
    	
Sum of Lines C4, C5, C6, and C7
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
9.
    	
Ratio of Line C3 to Line C8
    	
 
    	
:1.0
    	
 
    
	
 
    	
10.
    	
Line C9 ratio must not be less than
    	
 
    	
1.25:1.0 on or before   December 31, 2017, and 1.3:1.0 thereafter
    	
 
    
	
 
    	
11.
    	
The Borrower is in compliance (circle yes or no)
    	
 
    	
yes/no
    	
 
    

 

2

 

EXHIBIT F

 

ADDITIONAL GUARANTOR SUPPLEMENT

 

Date:              , 201    

 

To:                             BMO Harris Bank N.A., as lender under the Amended and Restated Credit Agreement dated as of January 20, 2017 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), by and among Willdan Group, Inc. (the “Borrower”), the Guarantors party thereto, and BMO Harris Bank N.A. (the “Bank”)

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement described above.  Terms not defined herein which are defined in the Credit Agreement shall have for the purposes hereof the meaning provided therein.  The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of incorporation or organization] hereby elects to be a “Guarantor” for all purposes of the Credit Agreement, effective from the date hereof.  The undersigned confirms that the representations and warranties set forth in Section 6 of the Credit Agreement are true and correct [in all material respects (where not already qualified by materiality, otherwise in all respects)] as to the undersigned as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as of such earlier date) and the undersigned shall comply with each of the covenants set forth in Section 8 of the Credit Agreement applicable to it.

 

Without limiting the generality of the foregoing, the undersigned hereby agrees to perform all the obligations of a Guarantor under, and to be bound in all respects by the terms of, the Credit Agreement, including without limitation Section 10 thereof, to the same extent and with the same force and effect as if the undersigned were a signatory party thereto.

 

The undersigned acknowledges that this Agreement shall be effective upon its execution and delivery by the undersigned to the Bank, and it shall not be necessary for the Bank or any of its Affiliates entitled to the benefits hereof, to execute this Agreement or any other acceptance hereof.  [This Agreement may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement.  Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original.]  Delivery of a counterpart [hereof/this Agreement] by facsimile transmission or by e-mail transmission of an Adobe portable document format file (also known as a “PDF” file) shall be effective as delivery of a manually executed counterpart hereof.  This Agreement shall be construed in accordance with and governed by the internal laws of the State of Illinois.

 

	
 
    	
Very truly yours,
    

 

 

	
 
    	
[NAME OF SUBSIDIARY   GUARANTOR]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name
    	
 
    
	
 
    	
 
    	
Title
    	
 
    

 

2

 

EXHIBIT G

 

WILLDAN GROUP, INC.

 

SHARE REPURCHASE COMPLIANCE CERTIFICATE

 

To:                             BMO Harris Bank N.A., as lender under the Amended and Restated Credit Agreement dated as of January 20, 2017 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), by and among Willdan Group, Inc. (the “Borrower”), the Guarantors party thereto, and BMO Harris Bank N.A. (the “Bank”)

 

This Share Repurchase Compliance Certificate is furnished to the Bank pursuant to the Credit Agreement.  Unless otherwise defined herein, the terms used in this Share Repurchase Compliance Certificate have the meanings ascribed thereto in the Credit Agreement.

 

THE BORROWER HEREBY CERTIFIES THAT:

 

1.       I am the duly elected              of Willdan Group, Inc.;

 

2.       I have reviewed the terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;

 

3.       The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Share Repurchase Compliance Certificate, except as set forth below; and

 

4.       The Schedule I hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Credit Agreement.

 

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:

 

 

 

 

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Share Repurchase Compliance Certificate in support hereof, are made and delivered this        day of           , 201 .

 

 

	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

2

 

EXHIBIT H

 

INCREASE REQUEST

 

Date:              , 201

 

To:                             BMO Harris Bank N.A., as lender under the Amended and Restated Credit Agreement dated as of January 20, 2017 (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), by and among Willdan Group, Inc. (the “Borrower”), the Guarantors party thereto, and BMO Harris Bank N.A. (the “Bank”)

 

Ladies and Gentlemen:

 

The undersigned hereby refers to the Credit Agreement and requests that the Bank consent to an increase in the aggregate Revolving Credit Commitments (the “Revolver Increase”), in accordance with Section 2.12 of the Credit Agreement.  Capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.

 

After giving effect to such Revolver Increase, the Revolving Credit Commitment of the Bank shall be $         .

 

THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.

 

The Revolver Increase shall be effective when the executed consent of the Bank is received or otherwise in accordance with Section 2.12 of the Credit Agreement, but not in any case prior to [                   , 201   ].  It shall be a condition to the effectiveness of the Revolver Increase that all expenses referred to in Section 2.12 of the Credit Agreement shall have been paid.

 

The Borrower hereby certifies that (a) no Default has occurred and is continuing and (b) the representations and warranties set forth in Section 6 of the Credit Agreement and in the other Loan Documents are and remain true and correct in all material respects (where not already qualified by materiality, otherwise in all respects), except to the extent the same expressly relate to an earlier date, in which case they shall be true and correct in all material respects (where not already qualified by materiality, otherwise in all respects) as of such earlier date

 

[SIGNATURE PAGES TO FOLLOW]

 

 

Please indicate your consent to such Revolver Increase by signing the enclosed copy of this letter in the space provided below.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WILLDAN   GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name
    	
 
    
	
 
    	
 
    	
Title
    	
 
    

 

	
The   undersigned hereby consents on this      day of            , 201 , to the   above-requested Revolver Increase
    	
 
    
	
 
    	
 
    
	
BMO HARRIS BANK N.A., as Bank
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    
	
 
    	
Name
    	
 
    	
 
    
	
 
    	
Title
    	
 
    	
 
    

 

 

SCHEDULE 1.1

 

FISCAL QUARTERS

 

	
FISCAL QUARTER
    	
 
    	
LAST DAY OF SUCH FISCAL QUARTER
    
	
1st Fiscal Quarter of   2017
    	
 
    	
March 31, 2017
    
	
2nd Fiscal Quarter of   2017
    	
 
    	
June 30, 2017
    
	
3rd Fiscal Quarter of   2017
    	
 
    	
September 29, 2017
    
	
4th Fiscal Quarter of   2017
    	
 
    	
December 29, 2017
    
	
1st Fiscal Quarter of   2018
    	
 
    	
March 30, 2018
    
	
2nd Fiscal Quarter of   2018
    	
 
    	
June 29, 2018
    
	
3rd Fiscal Quarter of   2018
    	
 
    	
September 28, 2018
    
	
4th Fiscal Quarter of   2018
    	
 
    	
December 28, 2018
    
	
1st Fiscal Quarter of   2019
    	
 
    	
March 29, 2019
    
	
2nd Fiscal Quarter of   2019
    	
 
    	
June 28, 2019
    
	
3rd Fiscal Quarter of   2019
    	
 
    	
September 27, 2019
    
	
4th Fiscal Quarter of   2019
    	
 
    	
December 27, 2019
    

 

 

SCHEDULE 6.2

 

SUBSIDIARIES

 

	
NAME
    	
 
    	
JURISDICTION OF
   ORGANIZATION
    	
 
    	
PERCENTAGE
   OWNERSHIP
    	
 
    	
OWNER
    	
 
    
	
Electrotec of NY   Electrical Inc.
    	
 
    	
New York
    	
 
    	
100
    	
%
    	
Willdan   Lighting & Electric, Inc.
    	
 
    
	
Genesys Engineering,   P.C.
    	
 
    	
New York
    	
 
    	
 
    	
*
    	
Willdan   Group, Inc.
    	
 
    
	
Public Agency   Resources
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Group, Inc.
    	
 
    
	
Willdan Energy   Solutions
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Group, Inc.
    	
 
    
	
Willdan   Engineering
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Group, Inc.
    	
 
    
	
Willdan Engineers   and Constructors
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Group, Inc.
    	
 
    
	
Willdan   Financial Services
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Group, Inc.
    	
 
    
	
Willdan Homeland   Solutions
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Group, Inc.
    	
 
    
	
Willdan   Infrastructure
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan Group, Inc.
    	
 
    
	
Willdan   Lighting & Electric, Inc.
    	
 
    	
Delaware
    	
 
    	
100
    	
%
    	
Willdan Energy   Solutions
    	
 
    
	
Willdan   Lighting & Electric of California
    	
 
    	
California
    	
 
    	
100
    	
%
    	
Willdan   Lighting & Electric, Inc.
    	
 
    
	
Willdan   Lighting & Electric of Washington, Inc.
    	
 
    	
Washington
    	
 
    	
100
    	
%
    	
Willdan   Lighting & Electric, Inc.
    	
 
    

 

* Control pursuant to a Shareholder Succession Agreement covering 100% of stock ownership and an Administration Agreement.

 

 

SCHEDULE 8.9

 

PERMITTED INVESTMENTS

 

None.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}]]