Exhibit 10.52

 

Execution Copy

 

FIRST AMENDMENT TO

SENIOR SECURED CREDIT AGREEMENT

 

This FIRST AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT, dated as of August 17, 2017 (this “First Amendment”), is entered into by and among Global Power Equipment Group Inc. (“Borrower”), each financial institution from time to time party hereto as lender (each, a “Lender” and collectively, the “Lenders”), and CENTRE LANE PARTNERS MASTER CREDIT FUND II, L.P., a Delaware limited partnership, as administrative agent for the Lenders (in such capacity, and together with its successors and assigns, the “Administrative Agent”) and as collateral agent for the Lenders (in such capacity, and together with its successors and assigns, the “Collateral Agent”).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders identified on signatures pages thereto, the Administrative Agent and the Collateral Agent are parties to that certain Senior Secured Credit Agreement, dated as of June 16, 2017 (the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this First Amendment, the “Credit Agreement”); and

 

WHEREAS, the Borrower, the Lenders, the Administrative Agent and the Collateral Agent desire to amend certain provisions of the Existing Credit Agreement in the manner and on the terms and conditions provided for herein.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants and the agreements herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE I

Definitions

 

Section 1.1.     Certain Definitions.  Capitalized terms used herein but not otherwise defined herein or otherwise amended hereby shall have the meanings ascribed thereto in the Credit Agreement.

 

ARTICLE II

Amendments

 

Section 2.1.     Amendments to Credit Agreement.  Upon satisfaction of the conditions set forth in Section 3 hereof, the Existing Credit Agreement is hereby amended as follows:

 

(a)     In Annex A hereto, deletions of text in the Existing Credit Agreement as amended by this First Amendment are indicated by struck-through red text, and insertions of text as amended by this First Amendment are indicated by underlined blue text;

 

(b)     Schedule 2.1 to the Existing Credit Agreement is deleted in its entirety and Schedules 2.1(a) and 2.1(b) attached to this First Amendment are substituted in lieu thereof.


 

(c)     Schedule 10.02 to the Existing Credit Agreement is deleted in its entirety and Schedule 10.02 attached to this First Amendment is substituted in lieu thereof.

 

ARTICLE III

Representations and Warranties

 

Section 3.1.     Representations and Warranties. In order to induce the Agents and the Lenders to enter into this First Amendment, each Loan Party hereby represents and warrants to the Agents and each Lender as follows:

 

(a)     After giving effect to this First Amendment, the representations and warranties of the Borrower and each other Loan Party contained in Article V of the Existing Credit Agreement or any other Loan Document shall be true and correct in all material respects on and as of the First Amendment Effective Date (before and after giving effect to the proposed Credit Extension); provided that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

 

(b)     The execution, delivery and performance of this First Amendment have been duly authorized by all necessary action on the part of, and duly executed and delivered by each of the Loan Parties.

 

(c)     The Loan Parties are in full compliance with each of the Loan Documents.

 

(d)     There has been no Material Adverse Effect in the financial condition and business performance of the Borrower since the Closing Date.

 

(e)     No Default or Event of Default currently exists, shall be in existence immediately after giving effect to this First Amendment or would result from the proposed Credit Extension or from the application of the proceeds therefrom.

 

ARTICLE IV

Effectiveness

 

Section 4.1.     Effectiveness.  This First Amendment shall become effective as of the date (the “First Amendment Effective Date”), on which each of the following conditions is satisfied:

 

(a)     The Administrative Agent’s receipt of the following, each properly executed by a Responsible Officer of the signing Loan Party, if applicable, and each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:

 

(i)     executed counterparts of this First Amendment;

 

(ii)     an original Note in respect of the First-Out Loans executed by the Borrower in favor of each Lender that has requested in writing a Note;

 

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(iii)     such certificates (including a certificate substantially in the form of Exhibit I to the Existing Credit Agreement) of resolutions or other corporate action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this First Amendment;

 

(iv)     an opinion of Thompson Hine LLP, counsel to the Loan Parties; and

 

(v)     copies of a recent Lien searches in each jurisdiction reasonably requested by the Collateral Agent with respect to the Loan Parties.

 

(b)     Payment by the Borrower of all accrued costs, fees and expenses (including, without limitation, applicable Attorney Costs and the reasonable and documented out-of-pocket fees and expenses of any other advisors to the Administrative Agent and the Lenders) and any other compensation due and payable to the Administrative Agent and Lenders on the First Amendment Effective Date shall have been received. 

 

(c)     Conditions set forth in Section 4.2 of the Credit Agreement shall have been satisfied or waived in accordance with Section 10.01 of the Credit Agreement.

 

ARTICLE V

Acknowledgements and Consent

 

Section 5.1.     Collateral.  The Loan Parties hereby acknowledge, ratify and reaffirm (i) the validity and enforceability of the Existing Credit Agreement and the other Loan Documents and all liens and security interests granted thereunder to the Collateral Agent for the benefit of the Lenders as collateral security for the Obligations and (ii) that all such liens and security interests continue to secure the Obligations under the Existing Credit Agreement, as amended by this First Amendment and all collateral pledged as security for the Obligations continue to be and remain collateral for the Obligations from and after the date hereof.

 

ARTICLE VI

Miscellaneous

 

Section 6.1.     Reference to and Effect on the Loan Documents.  

 

(a)     On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Existing Credit Agreement after giving effect to this First Amendment.

 

(b)     Except as specifically amended by this First Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

 

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(c)     The execution, delivery and performance of this First Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent, the Collateral Agent or any Lender under the Existing Credit Agreement or any of the other Loan Documents.

 

(d)     The amendments to the Credit Agreement set forth herein shall be deemed by the parties to have effect from and after the First Amendment Effective Date.

 

Section 6.2.     Release.  As a material part of the consideration for the Administrative Agent, the Collateral Agent and the Lenders entering into this First Amendment, the Borrower and each other Loan Party (collectively, the “Releasors”) agree as follows (the “Release Provision”):

 

(a)     The Releasors, jointly and severally, hereby release and forever discharge the Administrative Agent, the Collateral Agent, each Lender and the Administrative Agent’s, the Collateral Agent’s and each Lender’s predecessors, successors, assigns, participants, officers, managers, directors, shareholders, employees, agents, attorneys and other professionals, representatives, parent corporations, subsidiaries, and affiliates (hereinafter all of the above collectively referred to as the “Lender Group”), from any and all claims, counterclaims, demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities, accounts, offsets, rights, actions, and causes of action of any nature whatsoever and whether arising at law or in equity, presently possessed, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, presently accrued, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted arising out of, arising under or related to the Loan Documents (collectively, the “Claims”), that Releasors may have or allege to have against any or all of the Lender Group and that arise from events occurring before the date hereof.

 

(b)     The Releasors agree not to sue any of the Lender Group nor in any way assist any other person or entity in suing the Lender Group with respect to any of the Claims released herein.  The Release Provision may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit, or other proceeding which may be instituted, prosecuted, or attempted in breach of the release contained herein.

 

(c)     The Releasors acknowledge, warrant, and represent to Lender Group that:

 

(i)     The Releasors have read and understand the effect of the Release Provision.  The Releasors have had the assistance of independent counsel of their own choice, or have had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the terms of the Release Provision; and if counsel was retained, counsel for Releasors has read and considered the Release Provision and advised Releasors with respect to the same.  Before execution of this Amendment, the Releasors have had adequate opportunity to make whatever investigation or inquiry they may deem necessary or desirable in connection with the subject matter of the Release Provision.

 

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(ii)     The Releasors are not acting in reliance on any representation, understanding, or agreement not expressly set forth herein.  The Releasors acknowledge that Lender Group has not made any representation with respect to the Release Provision except as expressly set forth herein.

 

(iii)     The Releasors have executed this Amendment and the Release Provision thereof as a free and voluntary act, without any duress, coercion, or undue influence exerted by or on behalf of any person or entity.

 

(iv)     The Releasors are the sole owners of the Claims released by the Release Provision, and the Releasors have not heretofore conveyed or assigned any interest in any such Claims to any other person or entity.

 

(d)     The Releasors understand that the Release Provision was a material consideration in the agreement of the Administrative Agent, the Collateral Agent and each Lender to enter into this First Amendment.

 

(e)     It is the express intent of the Releasors that the release and discharge set forth in the Release Provision be construed as broadly as possible in favor of Lender Group so as to foreclose forever the assertion by the Releasors of any Claims released hereby against Lender Group.

 

(f)     If any term, provision, covenant, or condition of the Release Provision is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remainder of the provisions shall remain in full force and effect.

 

(g)     The Releasors acknowledge that they may hereafter discover facts in addition to or different from those that they now know or believe with respect to the Claims released herein, but the Releasors expressly shall have and intend to fully, finally and forever have released and discharged any and all such Claims.  The Releasors expressly waive any provision of statutory or decisional law to the effect that a general release does not extend to Claims that the releasing party does not know or suspect to exist in such party’s favor at the time of executing the release.

 

Section 6.3.     Guarantor’s Acknowledgement and Agreement. By signing below, each Guarantor (a) acknowledges, consents and agrees to this First Amendment, (b) acknowledges and agrees to any amendment to its obligations in respect of the Guarantee made pursuant to this First Amendment, (c) acknowledges and agrees that its obligations in respect of the Guarantee, the Security Agreement and the other Collateral Documents are not released, diminished, waived, modified or impaired in any manner by this First Amendment or any of the provisions contemplated herein, (d) ratifies and confirms its obligations under the Guarantee, the Security Agreement and the other Collateral Documents, and (e) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims to, the Guarantee, the Security Agreement, any other Collateral Documents or any other Loan Documents or Obligations.

 

Section 6.4.     Fees. The Borrower hereby affirms its obligation under the Credit Agreement to reimburse the Administrative Agent, the Collateral Agent and the Lenders for all reasonable and documented out‑of‑pocket costs and expenses incurred in connection with the

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preparation, negotiation, execution and delivery of this First Amendment, including but not limited to all Attorney Costs.

 

Section 6.5.     Headings.  The headings in this First Amendment are included for convenience of reference only and will not affect in any way the meaning or interpretation of this First Amendment.

 

Section 6.6.     Governing Law.  This First Amendment, and all claims, disputes and matters arising hereunder or thereunder or related hereto or thereto, will be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed entirely within that state.

 

Section 6.7.     Counterparts.  This First Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same First Amendment.  Delivery of an executed counterpart of this First Amendment by facsimile or a scanned copy by electronic mail shall be equally as effective as delivery of an original executed counterpart of this First Amendment.

 

Section 6.8.     Severability.  If any term or other provision of this First Amendment is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this First Amendment will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify this First Amendment so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.  

 

Section 6.9.     Binding Effect.  This First Amendment will be binding upon and inure to the benefit of and is enforceable by the respective successors and permitted assigns of the parties hereto.

 

[Remainder of page intentionally left blank; signatures on following pages.]

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

 

 

GLOBAL POWER EQUIPMENT GROUP INC.,

 

as Borrower,

 

 

 

 

By:

/s/ Craig Holmes

 

Name:

Craig Holmes

 

Title:

Co-President and Co-Chief Executive Officer

 

 

 

 

 

 

 

Acknowledged and agreed:

 

 

 

 

GLOBAL POWER PROFESSIONAL SERVICES INC.

 

 

 

 

BRADEN CONSTRUCTION SERVICES, INC.

 

 

 

 

GLOBAL POWER TECHNICAL SERVICES, INC.

 

 

 

 

WILLIAMS GLOBAL SERVICES, INC.

 

 

 

 

WILLIAMS INDUSTRIAL SERVICES GROUP, L.L.C.

 

 

 

 

WILLIAMS INDUSTRIAL SERVICES, LLC

 

 

 

 

WILLIAMS SPECIALTY SERVICES, LLC

 

 

 

 

WILLIAMS PLANT SERVICES, LLC

 

 

 

 

KOONTZ-WAGNER CUSTOM CONTROLS HOLDINGS LLC

 

 

 

 

CONSTRUCTION & MAINTENANCE PROFESSIONALS, LLC

 

 

 

 

BRADEN MANUFACTURING, L.L.C.

 

 

each as Guarantor

 

 

 

 

 

 

 

By:

/s/ Erin Gonzalez

 

Name:

Erin Gonzalez

 

Title:

Vice President and Treasurer

 

 

 

[Signature Page to First Amendment to Senior Secured Credit Agreement]


 

 

 

 

 

BRADEN HOLDINGS, LLC

 

GPEG, LLC

 

 

each as Guarantor

 

 

 

 

 

 

 

By:

/s/ Erin Gonzalez

 

 

Erin Gonzalez

 

 

President and Treasurer

 

 

 

 

 

 

 

STEAM ENTERPRISES, L.L.C.

 

 

as Guarantor

 

 

 

 

 

 

 

By:

/s/ Tracy D. Pagliara

 

 

Tracy D. Pagliara

 

 

Vice President and Secretary

 

[Signature Page to First Amendment to Senior Secured Credit Agreement]


 

 

 

 

 

CENTRE LANE PARTNERS MASTER CREDIT FUND II, L.P.,

 

as Administrative Agent and Collateral Agent, and as a Lender

 

 

 

 

 

 

 

By:

/s/ Luke Gosselin

 

Name:

Luke Gosselin

 

Title:

Managing Director

 

 

 

 

 

 

 

CENTRE LANE PARTNERS IV, L.P.,

 

as Lender

 

 

 

 

 

 

 

By:

/s/ Quinn Morgan

 

Name:

Quinn Morgan

 

Title:

Managing Director

 

 

 

[Signature Page to First Amendment to Senior Secured Credit Agreement]


 

 

Annex A

 

Conformed Credit Agreement

 

 

 


 

 

Conformed Copy

First Amendment dated August 17, 2017

 

 

$45,000,000

 

SENIOR SECURED CREDIT AGREEMENT

 

Dated as of June 16, 2017

 

Among

 

GLOBAL POWER EQUIPMENT GROUP INC.,

as Borrower,

 

THE LENDERS PARTY HERETO,

 

and

 

CENTRE LANE PARTNERS MASTER CREDIT FUND II, L.P.

as Administrative Agent and Collateral Agent

 

 

 

 


 

 

Table of Contents

 

 

 

Page

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

2

 

 

 

Section 1.01

Defined Terms

2

Section 1.02

Other Interpretive Provisions

35

Section 1.03

Accounting Terms

36

Section 1.04

Rounding

37

Section 1.05

References to Agreements, Laws, Etc.

37

Section 1.06

Times of Day

37

Section 1.07

Timing of Payment or Performance

37

Section 1.08

Currency Equivalents Generally

37

 

 

 

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

37

 

 

 

Section 2.01

The Loans

37

Section 2.02

Prepayments

38

Section 2.03

Repayment of Loans

42

Section 2.04

Interest

43

Section 2.05

Fees

44

Section 2.06

Computation of Interest and Fees

44

Section 2.07

Evidence of Indebtedness

45

Section 2.08

Payments Generally

45

Section 2.09

Sharing of Payments

47

 

 

 

ARTICLE III

TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

48

 

 

 

Section 3.01

Taxes

48

Section 3.02

Illegality

52

Section 3.03

Increased Cost and Reduced Return; Capital Adequacy

53

Section 3.04

Matters Applicable to All Requests for Compensation

54

Section 3.05

Survival

54

 

 

 

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

54

 

 

54

Section 4.01

Conditions to the Closing Date

58

Section 4.02

Conditions to All Credit Extensions

 

 

 

58

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

 

 

58

Section 5.01

Existence, Qualification and Power; Compliance with Laws

59

Section 5.02

Authorization; No Contravention

59

Section 5.03

Governmental Authorization; Other Consents

59

Section 5.04

Binding Effect

59

Section 5.05

Financial Statements; No Material Adverse Effect

59

Section 5.06

Litigation

60

Section 5.07

Ownership of Property; Liens

61

Section 5.08

Perfection of Security Interests

61

Section 5.09

Environmental Compliance

61

Section 5.10

Taxes

63

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Section 5.11

Compliance with ERISA

63

Section 5.12

Labor Matters

64

Section 5.13

Insurance

64

Section 5.14

Subsidiaries; Equity Interests

64

Section 5.15

Margin Regulations; Investment Company Act; PATRIOT Act

64

Section 5.16

Disclosure

 

Section 5.17

Intellectual Property

65

Section 5.18

Solvency

65

Section 5.19

Material Agreements

66

 

 

 

ARTICLE VI

AFFIRMATIVE COVENANTS

66

 

 

 

Section 6.01

Financial Statements

66

Section 6.02

Certificates; Reports; Other Information

69

Section 6.03

Notice Requirements; Other Information

70

Section 6.04

Environmental Matters

72

Section 6.05

Maintenance of Existence

74

Section 6.06

Maintenance of Properties

74

Section 6.07

Maintenance of Insurance

75

Section 6.08

Compliance with Laws

75

Section 6.09

Books and Records

75

Section 6.10

Inspection Rights/Lender Meetings

75

Section 6.11

Covenant to Guarantee Obligations and Give Security

76

Section 6.12

Use of Proceeds

78

Section 6.13

Further Assurances; Post‑Closing Undertakings

79

Section 6.14

Taxes

79

Section 6.15

End of Fiscal Years; Fiscal Quarters

80

Section 6.16

ERISA

80

Section 6.17

Permitted Servicing Joint Ventures

81

Section 6.18

Chief Restructing Officer

81

 

 

 

ARTICLE VII

NEGATIVE COVENANTS

81

 

 

 

Section 7.01

Liens

81

Section 7.02

Investments

83

Section 7.03

Indebtedness

85

Section 7.04

Fundamental Changes

87

Section 7.05

Dispositions

88

Section 7.06

Restricted Payments

89

Section 7.07

Change in Nature of Business

89

Section 7.08

Transactions with Affiliates

89

Section 7.09

Prepayments of Certain Indebtedness; Modifications of Certain Indebtedness and Material Agreements

90

Section 7.10

Negative Pledge

90

Section 7.11

Amendments to Constitutive Documents

91

Section 7.12

Financial Covenant

91

Section 7.13

Sale Leasebacks

94

Section 7.14

Accounting Changes

94

Section 7.15

OFAC

94

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Section 7.16

Braden Holdings, LLC

94

 

 

 

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

94

 

 

 

Section 8.01

Events of Default

94

Section 8.02

Remedies Upon Event of Default

97

Section 8.03

Application of Funds

97

Section 8.04

Other Amounts Due

99

 

 

 

ARTICLE IX

ADMINISTRATIVE AGENT AND OTHER AGENTS

99

 

 

 

Section 9.01

Appointment and Authorization of Agents

99

Section 9.02

Delegation of Duties

101

Section 9.03

Liability of Agents

101

Section 9.04

Reliance by Agents

101

Section 9.05

Notice of Default

102

Section 9.06

Credit Decision; Disclosure of Information by Agents

102

Section 9.07

Indemnification of Agents

103

Section 9.08

Agents in their Individual Capacities

103

Section 9.09

Successor Agents

103

Section 9.10

Administrative Agent May File Proofs of Claim

104

Section 9.11

Release of Collateral and Guaranty

105

 

 

 

ARTICLE X

MISCELLANEOUS

106

 

 

 

Section 10.01

Amendments, Etc.

106

Section 10.02

Notices and Other Communications; Facsimile and Electronic Copies

108

Section 10.03

No Waiver; Cumulative Remedies

109

Section 10.04

Costs and Expenses

110

Section 10.05

Indemnification by the Borrower

110

Section 10.06

Payments Set Aside

112

Section 10.07

Successors and Assigns

112

Section 10.08

Confidentiality

115

Section 10.09

Setoff

116

Section 10.10

Counterparts

116

Section 10.11

Integration

117

Section 10.12

Survival of Representations and Warranties

117

Section 10.13

Severability

117

Section 10.14

GOVERNING LAW

117

Section 10.15

WAIVER OF RIGHT TO TRIAL BY JURY

118

Section 10.16

Binding Effect

118

Section 10.17

Lender Action

118

Section 10.18

PATRIOT Act

119

Section 10.19

No Advisory or Fiduciary Responsibility

119

 

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SCHEDULES

 

 

 

 

Schedule 1

Guarantors

Schedule 2.01(a)

Initial Loan Commitments

Schedule 2.01(b)

First-Out Loan Commitments

Schedule 5.02

Authorizations; No Contravention

Schedule 5.03

Governmental Authorization; Other Consents

Schedule 5.06

Litigation

Schedule 5.07(b)

Real Property/Leasehold Property

Schedule 5.08

Collateral Filings and Perfection Matters

Schedule 5.09

Environmental Compliance

Schedule 5.10(a)

Taxes

Schedule 5.10(b)

Taxes

Schedule 5.13

Insurance Policies

Schedule 5.14

Subsidiaries and Other Equity Investments

Schedule 5.17

Intellectual Property

Schedule 5.19

Material Agreements

Schedule 6.13

Post‑Closing Undertakings

Schedule 7.01(b)

Existing Liens

Schedule 7.02(d)

Existing Investments

Schedule 7.03(b)

Surviving Indebtedness

Schedule 7.03(c)

Existing Capital Leases

Schedule 7.03(i)

Intercompany Notes

Schedule 7.03(l)

Existing Letters of Credit

Schedule 7.05

Subsidiary Transaction

Schedule 7.13

Existing Sale Leasebacks

Schedule 10.02

Administrative Agent’s Office, Certain Addresses for Notices

 

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EXHIBITS

 

 

 

 

Exhibit A

Form of Prepayment Notice

Exhibit B

Form of Note

Exhibit C

Form of Compliance Certificate

Exhibit D

Form of Assignment and Assumption

Exhibit E

Form of Guaranty

Exhibit F

Form of Security Agreement

Exhibit G

Form of Securities Pledge Agreement

Exhibit H

Form of Intellectual Property Security Agreement

Exhibit I

Form of Officer’s Certificate

Exhibit J

Form of Solvency Certificate

Exhibit K

Form of Mortgage

 

 

 

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SENIOR SECURED CREDIT AGREEMENT

 

This SENIOR SECURED CREDIT AGREEMENT (“Agreement”) is entered into as of June 16, 2017 among GLOBAL POWER EQUIPMENT GROUP INC., a Delaware corporation (the “Company” or the “Borrower”), each financial institution from time to time party hereto as lender (each, a “Lender” and collectively, the “Lenders”), and CENTRE LANE PARTNERS MASTER CREDIT FUND II, L.P., a Delaware limited partnership, as administrative agent for the Lenders (in such capacity, and together with its successors and assigns, the “Administrative Agent”) and as collateral agent for the Lenders (in such capacity, and together with its successors and assigns, the “Collateral Agent”).

 

RECITALS

 

WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Article I hereof;

 

WHEREAS, Lenders have agreed to extend Loans to the Borrower in an aggregate principal amount not to exceed $45,000,000, the proceeds of which will be used to (a) to refund, refinance and replace the existing secured asset-based revolving credit facility on the Closing Date, (b) to provide working capital and for other general corporate purposes permitted hereunder and (c) for fees and expenses related to the Transaction;

 

WHEREAS, the Borrower has agreed to secure all of its Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a Lien on substantially all of its assets, including a first priority pledge of all of the Equity Interests of each of its Domestic Subsidiaries and each Specified Foreign Subsidiary, and 65% of the voting Equity Interests of each of its direct Foreign Subsidiaries (other than the Specified Foreign Subsidiaries); and

 

WHEREAS, the Guarantors have agreed to guarantee the obligations of the Borrower hereunder and to secure their respective Obligations by granting to Collateral Agent, for the benefit of Secured Parties, a Lien on substantially all of their respective assets, including a first priority pledge of all of the Equity Interests of each of their respective Domestic Subsidiaries (including Company) and each Specified Foreign Subsidiary, and 65% of the voting Equity Interests of each of their respective direct Foreign Subsidiaries (other than the Specified Foreign Subsidiaries).

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and of the Loans and extensions of credit herein referred to, the parties hereto agree as follows:

 

 

 


 

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01     Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

2017 Filed Financial Statements” has the meaning specified in Section 6.01(b).

 

2018 Amortization Payment” has the meaning specified in Section 2.03(b).

 

ABN AMRO Facility” means the asset-based facility made available to Braden-Europe B.V., Global Power Professional Services Netherlands B.V. and Global Power Netherlands B.V. (collectively, “Global Power Netherlands”), pursuant to the terms of that certain Credit Agreement, dated as of June 13, 2008, by and among ABN AMRO Bank N.V., as lender, and Global Power Netherlands, as borrowers, as previously amended and as may be further amended or supplemented from time to time in accordance with the terms of this Agreement.

 

Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).

 

Administrative Agent” has the meaning specified in the first paragraph of this Agreement or any successor administrative agent appointed in accordance with Section 9.09.

 

Administrative Agent’s Office” means, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.

 

Affiliate” means, in respect of any Person:

 

(a)     any Person which, directly or indirectly, controls, is controlled by or is under common control with such Person; and for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” or “under common control with”) means the power to direct or cause the direction of the management and policies of any Person, whether through the ownership of voting Equity Interests or by contract or otherwise;

 

(b)     any Person who beneficially owns or holds 10% or more of any class of shares (or, in the case of a Person that is not a corporation, 10% or more of the partnership or other Equity Interests) of such Person; or

 

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(c)     any Person, 10% or more of any class of shares (or in the case of a Person that is not a corporation, 10% or more of the partnership or other Equity Interests) of which is beneficially owned or held by such Person or a Subsidiary of such Person.

 

Agent‑Related Persons” means the Agents, together with their respective Affiliates, and the officers, directors, employees, partners, agents and attorneys‑in‑fact of such Persons and Affiliates.

 

Agents” means, collectively, the Administrative Agent and the Collateral Agent.

 

Aggregate Commitments” means, collectively, the Initial Loan Commitments and First-Out Loan Commitments of all the Lenders as in effect from time to time. 

 

Agreement” has the meaning specified in the introductory paragraph hereto.

 

Applicable Lending Office” means for any Lender, such Lender’s office, branch or affiliate as notified to the Administrative Agent and the Borrower or as otherwise specified in the Assignment and Assumption pursuant to which such Lender became a party hereto, any of which offices may, subject to Section 3.01(e) and Section 3.02, be changed by such Lender upon ten (10) days’ prior written notice to the Administrative Agent and the Borrower; provided that for the purposes of the definition of “Excluded Taxes” and Section 3.01, any such change shall be deemed an assignment made pursuant to an Assignment and Assumption.

 

Approved Fund” means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or Affiliate of an entity that administers, advises or manages a Lender.

 

Assignees” has the meaning specified in Section 10.07(b).

 

Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit D.

 

Attorney Costs” means and includes all reasonable and documented fees, out‑of‑pocket expenses and actual disbursements of any law firm or other external legal counsel.

 

Attributable Indebtedness” means, at any date, (a) in respect of any Capital Lease Obligation (other than a lease resulting from a Sale Leaseback) of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation of any Person, the capitalized or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement were accounted for as a Capital Lease, (c) in respect of any Sale Leaseback, the lesser of (i) the present value, discounted in accordance with GAAP at the interest rate implicit in the related lease, of the obligations of the lessee for net rental payments over the remaining term of such lease (including any period for which such lease has

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been extended or may, at the option of the lessor be extended) and (ii) the fair market value of the assets subject to such transaction, and (d) all Synthetic Debt of such Person. 

 

Audited Financial Statements” means the audited financial statements described in Section 4.01(e).

 

Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”.

 

Borrower” has the meaning specified in the introductory paragraph hereto.

 

Borrowing” means a borrowing consisting of Loans made by the Lenders pursuant to Section 2.01.  

 

Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required to close under the Laws of, or are in fact closed in, the State of New York; provided,  however, that when used in connection with determining the LIBO Rate, the term “Business Day” shall exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

Capital Expenditures” means, for any period and with respect to any Person, any and all expenditures made by such Person or any of its Subsidiaries in such period for assets added to or reflected in its property, plant and equipment accounts or other similar capital asset accounts or comparable items or any other capital expenditures that are, or should be, set forth as “additions to plant, property and equipment” on the consolidated financial statements of such Person and its Subsidiaries prepared in accordance with GAAP, whether such asset is purchased for cash or financed as an account payable or by the incurrence of Indebtedness, accrued as a liability or otherwise.

 

Capital Lease” means, with respect to any Person, any leasing or similar arrangement conveying the right to use any property, whether real or personal property, or a combination thereof, by that Person as lessee that, in conformity with GAAP, is required to be accounted for as a capital lease on the balance sheet of such Person.

 

Capital Lease Obligation” means, with respect to any Person, all monetary or financial obligations of such Person and its Subsidiaries under any Capital Leases, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date on which such lease may be terminated by the lessee without payment of a penalty; provided that any obligations that were not required to be included on the balance sheet of such Person as capital lease obligations when incurred but are subsequently re‑characterized as capital lease obligations due to a change in accounting rules after the Closing Date shall for all purposes hereunder not be treated as a Capital Lease Obligation.

 

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Cash Equivalents” means any of the following, to the extent owned by the Borrower or any of its Subsidiaries free and clear of all Liens other than Liens created under the Collateral Documents and having a maturity of not greater than 365 days from the date of acquisition thereof: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) insured certificates of deposit of or time deposits with any domestic commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the Government of the United States, (d) securities with maturities of 365 days or less from the date of acquisition that are issued or fully guaranteed by any state, district or territory of the United States, by any political subdivision or taxing authority of any such state, district or territory or by any foreign government, the securities of which state, district or territory, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (e) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (b) of this definition, (f) money market mutual or similar funds that invest substantially all of their assets in one or more type of securities satisfying the requirements of clauses (a) through (e) of this definition, or (g) Investments, classified in accordance with GAAP as Current Assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by financial institutions having capital of at least $500,000,000, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a) and (b) of this definition.

 

Cash Flow Budget” has the meaning specified in Section 6.01(c)(iii).

 

Cash Interest” has the meaning specified in Section 2.04(a).

 

Cash Interest Expense” means, for any period and with respect to any Person, Consolidated Interest Expense of such Person for such period that is paid in cash.

 

Casualty Event” means any casualty, loss, damage, destruction or other similar loss with respect to real or personal property or improvements.

 

CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

 

CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

 

CFC” means an entity that is a controlled foreign corporation within the meaning of Section 957 of the Code and with respect to which the Borrower is a “United States shareholder,” within the meaning of Section 951(b) of the Code; provided that for purposes of this Agreement, no Specified Foreign Subsidiary shall be regarded as a CFC.

 

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CFC Pledge Restrictions” has the meaning specified in Section 6.11(h).

 

Change in Law” means (a) the adoption of any law, treaty, order, policy, rule or regulation after the date of this Agreement, (b) any change in any law, treaty, order, policy, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) the making or issuance of any guideline, request or directive issued or made after the date hereof by any central bank or other Governmental Authority (whether or not having the force of law); provided that notwithstanding anything herein to the contrary, (x) the Dodd‑Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in implementation thereof and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented; provided that increased costs as a result of a Change in Law pursuant to clauses (x) and (y) above shall only be reimbursable by the Borrower to a Lender to the extent such Lender is requiring reimbursement therefor generally from similarly situated borrowers under comparable syndicated credit facilities.

 

Change of Control” means (i) any Person or “group” (within the meaning of Rules 13d‑3 and 13d‑5 under the Exchange Act) (a) shall have acquired beneficial ownership of 25% or more on a fully diluted basis of the voting and/or economic interest in the Equity Interests of the Company or (b) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of the Company; or (ii) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of the Company cease to be occupied by Persons who either (a) were members of the board of directors of the Company on the Closing Date, or (b) were nominated for election by the board of directors of the Company, a majority of whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors.

 

Chief Restructuring Officer” has the meaning specified in Section 6.19.

 

Closing Date” means the date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

 

Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

Collateral” means all the “Collateral” as defined in any Collateral Document and all other property or assets that are required under the terms of the Loan Documents to be subject to Liens in favor of the Administrative Agent and/or the Collateral Agent for the benefit of the Secured Parties and shall include the Mortgaged Properties, if any.

 

Collateral Agent” has the meaning specified in the first paragraph of this Agreement or any successor collateral agent appointed in accordance with Section 9.09.

 

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Collateral and Guarantee Requirement” means, at any time, the requirement that:

 

(a)     the Collateral Agent shall have received each Collateral Document required to be delivered on the Closing Date pursuant to Section 4.01 or pursuant to Section 6.11 or Section 6.13 at such time set forth in each such Section, in each case duly executed by each Loan Party party thereto;

 

(b)     all Obligations shall have been unconditionally guaranteed (the “Guarantees”) jointly and severally on a senior basis by each Domestic Subsidiary of the Borrower (other than any Subsidiary that is treated as an entity disregarded from its owner for U.S. federal income tax purposes and is Wholly-owned by a CFC, subject to Section 6.11(h)), including, as of the Closing Date, those that are listed on Schedule 1 hereto (each, a “Guarantor”);

 

(c)     the Obligations and the Guarantees shall have been secured by a first priority security interest, in (i) all the Equity Interests of any direct or indirect Domestic Subsidiary of the Borrower (other than any Subsidiary that is treated as an entity disregarded from its owner for U.S. federal income tax purposes and is Wholly-owned by a CFC), (ii) 65% of the issued and outstanding voting Equity Interests and 100% of the non‑voting Equity Interests of each Subsidiary that is treated as a CFC for U.S. federal income tax purposes and that is directly held by the Borrower or by any Domestic Subsidiary of the Borrower; provided that any Equity Interests constituting “stock entitled to vote” within the meaning of Treasury Regulations Section 1.956‑2(c)(2) shall be treated as voting Equity Interests for purposes of this clause (c), and (iii) all of the Equity Interests of any Subsidiary that is a Foreign Subsidiary other than a CFC that is directly held by the Borrower or by any Subsidiary of the Borrower (other than any Subsidiary that is a CFC or that is treated as an entity disregarded from its owner for U.S. federal income tax purposes and is Wholly-owned by a CFC), and, in the case of each of clauses (i), (ii) and (iii) above, the Collateral Agent shall have received all certificates or other instruments (if any) representing such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

 

(d)     the Obligations and the Guarantees shall have been secured by a first‑priority security interest, in all Indebtedness of the Borrower and each Subsidiary that is owing to any Loan Party, which shall be (to the extent required by the Collateral Documents) evidenced by a promissory note or an instrument and shall have been pledged pursuant to the applicable Collateral Document, and the Collateral Agent shall have received all such promissory notes or certificated instruments, together with note powers or other instruments of transfer with respect thereto endorsed in blank;

 

(e)     except to the extent otherwise provided hereunder or under any Collateral Document, the Obligations and the Guarantees shall have been secured by a perfected first priority security interest (subject to Liens permitted under Section 7.01) in, and mortgages on, substantially all tangible and intangible assets of the Borrower and each Guarantor (including but not limited to accounts receivable, deposit accounts, inventory, machinery and equipment, investment property, cash, Intellectual Property, other general

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intangibles, owned real property, intercompany Indebtedness and proceeds of the foregoing); provided,  however, that (v) no security interest in fee‑owned real property other than Material Owned Property shall be required, (w) no security interest in motor vehicles and other assets subject to certificates of title shall be required, (x) subject to Section 6.13, no security interests (including in respect of interests in partnerships, joint ventures and other non‑Wholly‑owned entities) to the extent (and for the duration) that the granting of a security interest in such asset would be prohibited by applicable law or agreements containing enforceable anti‑assignment clauses not overridden by the Uniform Commercial Code or other applicable law shall be required, (y) any security interest in Intellectual Property shall exclude any intent‑to‑use trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent‑to‑use trademark application under applicable federal law and (z) no security interest in property created or incurred pursuant to Section 7.01(h) subject to Capital Lease or purchase money financing permitted under Section 7.03(c) to the extent (and for the duration) that the granting of a security interest in such asset would be prohibited under the agreement evidencing or otherwise governing the related Indebtedness and not overridden by the Uniform Commercial Code or other applicable law (the assets described in the foregoing clauses (v) through (z), collectively, “Excluded Property”).

 

(f)     none of the Collateral shall be subject to any Liens other than Liens permitted by Section 7.01; and

 

(g)     The Administrative Agent shall have received the Mortgages with respect to each Material Owned Property and with respect to each Leasehold Property required to be delivered pursuant to this Collateral and Guarantee Requirement or Section 6.11 at such time as set forth therein (the “Mortgaged Properties”), together with:

 

(i)     evidence that counterparts of the Mortgages with respect to the Mortgaged Properties have been duly executed, acknowledged and delivered and are in form suitable for filing or recording in all filing or recording offices as necessary to create a valid first and subsisting Lien on the property described therein in favor of the Collateral Agent for the benefit of the Secured Parties (subject only to Liens of the nature referred to in Section 5.07(b)) along with evidence reasonably satisfactory to the Administrative Agent that all filing and recording taxes and fees payable with respect to the Mortgages have been paid or received by the issuer of the Mortgage Policies (or, in the event that the Administrative Agent waives a Mortgage Policy for any Mortgaged Property, an escrow agent reasonably satisfactory to the Administrative Agent);

 

(ii)     fully paid American Land Title Association Lender’s Extended Coverage (or other reasonably satisfactory coverage if such coverage is not available in the applicable jurisdiction) title insurance policies (the “Mortgage Policies”) in form and substance reasonably satisfactory to the Administrative Agent, together with such endorsements that are reasonably required by the

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Administrative Agent and which lenders typically receive in the jurisdiction where the Mortgaged Property is located, in an amount reasonably acceptable to the Administrative Agent, issued by title insurers reasonably acceptable to the Administrative Agent and insuring the Mortgages to be valid first and subsisting Liens on the real property described therein, in a customary form in the jurisdiction where the Mortgaged Property is located free and clear of all Liens (including, but not limited to, mechanics’ and materialmen’s Liens) and encumbrances (provided that if a survey is not available pursuant to paragraph (iii) below, such Mortgage Policies may include the standard survey exception and the Administrative Agent shall not require any endorsement that will require delivery of a survey), except Liens of the nature referred to in Section 5.07(b);

 

(iii)     American Land Title Association/American Congress on Surveying and Mapping form surveys, for which all necessary fees (where applicable) have been paid, dated no more than ninety (90) days before the date of delivery of such surveys (or such date as the Administrative Agent agrees in its reasonable discretion), certified to the Administrative Agent and the issuer of the Mortgage Policies in a manner reasonably satisfactory to the Administrative Agent by a land surveyor duly registered and licensed in the States in which the real property described in such surveys is located, showing no material defects except Liens of the nature referred to in Section 5.07(b) and otherwise reasonably acceptable to the Administrative Agent;

 

(iv)     satisfactory evidence of insurance required to be maintained pursuant to Section 6.07, or otherwise required by the terms of the Mortgages, in respect of Mortgaged Properties;

 

(v)     favorable opinions of local counsel for the Loan Parties (i) in states in which the Mortgaged Properties are located, with respect to the enforceability and perfection of the Mortgages and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent and (ii) in states in which the Loan Parties to the Mortgages are organized or formed, with respect to the valid existence, corporate power and authority of such Loan Parties in the granting of the Mortgages, in form and substance reasonably satisfactory to the Administrative Agent;

 

(vi)     (A) evidence as to whether each Material Owned Property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood Hazard Property”) pursuant to a standard flood hazard determination form ordered and received by the Collateral Agent, and (B) if such Material Owned Property is a Flood Hazard Property, (1) evidence as to whether the community in which such Material Owned Property is located is participating in the National Flood Insurance Program, (2) the applicable Loan Party’s written acknowledgment of receipt of written notification from the Collateral Agent as to the fact that such Material Owned Property is a Flood

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Hazard Property and as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (3) copies of the applicable Loan Party’s application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance satisfactory to the Collateral Agent and naming the Collateral Agent as sole loss payee on behalf of the Secured Parties; and

 

(vii)     such consents and agreements of other third parties, such estoppel letters and other confirmations, and such other actions that, in each case, the Administrative Agent and the Collateral Agent may reasonably deem necessary in order to create valid and subsisting Liens on the property described in the Mortgages shall have been delivered or taken, in each case to the extent the same can be obtained or taken with the use of commercially reasonable efforts.

 

The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the delivery of particular documents with respect to, particular assets if and for so long as the Administrative Agent and the Borrower mutually agree in their reasonable discretion that the cost of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or surveys in respect of such assets shall be excessive in relation to the benefits to be obtained by the Lenders therefrom. 

 

The Administrative Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance and surveys with respect to particular assets (including extensions beyond the time as set forth therein for the perfection of security interests in the assets of the Loan Parties on such date) where it reasonably determines, in its discretion, that perfection cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Collateral Documents.

 

Collateral Documents” means, collectively, the Security Agreement, the Securities Pledge Agreement, the Intellectual Property Security Agreement, the Mortgages, any collateral assignments, any security agreements, pledge agreements or other similar agreements, or any supplements to any of the foregoing, delivered to the Collateral Agent and the Lenders pursuant to the Collateral and Guarantee Requirement, Section 4.01(a)(iii),  Section 6.11, or Section 6.13, the Guaranty and each of the other agreements, instruments or documents that creates or purports to create a Lien or Guarantee in favor of the Collateral Agent for the benefit of the Secured Parties.

 

Collateral Questionnaire means a certificate in form satisfactory to Collateral Agent that provides information with respect to the personal or mixed property of each Loan Party.

 

Commitment” means, as to each Lender, such Lender’s Initial Loan Commitment and its First-Out Loan Commitment.

 

Communications” has the meaning specified in Section 10.02(e).

 

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Company” has the meaning specified in the first paragraph of this Agreement.

 

Compensation Period” has the meaning specified in Section 2.08(c)(ii).

 

Competitor” means any Person that is engaged in the same or substantially similar business as the business conducted by the Borrower and its Subsidiaries on the Closing Date and any other Person designated by the Borrower as a “competitor” of the Borrower or any of its Subsidiaries (excluding any bank, financial institution, debt fund or investment vehicle that is engaged in making, purchasing, holding or otherwise investing in loans, commitments and similar extensions of credit in the ordinary course of its business) by written notice delivered to the Administrative Agent from time to time.

 

Compliance Certificate” means a certificate substantially in the form of Exhibit C.

 

Consolidated Adjusted EBITDA” means, for any period and with respect to any Person, Consolidated Net Income of such Person and its Subsidiaries for such period, plus 

 

(a)      without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of:

 

(i)      Consolidated Interest Expense, deferred financing fees, non‑cash interest expenses, upfront financing and other agent or lender fees and any amortization of original issue discount in connection with the Facility and any other Indebtedness permitted under this Agreement of such Person and its Subsidiaries for such period;

 

(ii)      consolidated income and franchise tax expense of such Person and its Subsidiaries for such period;

 

(iii)      all amounts properly attributable to depreciation and amortization and other non-cash items for such period, including any non-cash write-downs or non-cash write-offs including fixed asset impairments or write-downs, intangible asset impairments and deferred tax asset write-offs (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future) of such Person and its Subsidiaries for such period;

 

(iv)      amounts incurred in Fiscal Years ending 2017 and 2018 that are necessary to pay any and all documented fees, expenses, commissions, costs or other charges attributable to the restatement of the Company’s financial statements; provided that such amounts shall not exceed $4,000,000 in Fiscal Year 2017 and $1,000,000 in Fiscal Year 2018;

 

(v)     any extraordinary losses and unusual or non‑recurring charges, or any integration, facilities closing or relocation costs and curtailments or modifications to pension and post‑retirement employee benefit plans in an aggregate amount not to exceed $1,000,000 in any Fiscal Year;

 

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(vi)      any severance costs incurred prior to the end of Fiscal Year 2017, in an aggregate amount not to exceed $2,000,000;

 

(vii)     amounts necessary to pay any documented fees, expenses, commissions, costs or other charges related to consulting or advisory services provided to the Company or its Subsidiaries, together with any waiver or amendment fees incurred in connection with the Company’s existing secured asset-based revolving credit facility, in each case, prior to the Closing Date in an aggregate amount not to exceed $1,000,000;

 

(viii)      non-cash stock compensation expense;

 

(ix)     non‑cash expenses recognized due to purchase accounting;

 

(x)      any bank fees, expenses, commissions, costs or other charges related to the Indebtedness being refinanced in connection with the Transaction;

 

(xi)     any losses attributable to foreign currency translation or exchange;

 

(xii)     one-time, non-recurring customary and documented costs and expenses deducted from net income during such period in connection with the consummation of the Transaction and the negotiation, execution and delivery of the Loan Documents;

 

minus

 

(b)      without duplication and to the extent included in determining such Consolidated Net Income of such Person and its Subsidiaries, any non‑cash additions to Consolidated Net Income of such Person and its Subsidiaries for such period (other than (i) the accrual of revenue or recording of receivables in the ordinary course of business and (ii) the reversal of any accrual of a reserve referred to clause (a)(iv) above); minus 

 

(c)      any gains attributable to foreign currency translation or exchange; minus

 

(d)     without duplication and to the extent included in determining such Consolidated Net Income of such Person and its Subsidiaries, any extraordinary or non-recurring non‑cash gains (or plus extraordinary non‑cash losses) for such period and any gains (or plus losses) realized in connection with any Disposition of such Person and its Subsidiaries during such period, all determined on a consolidated basis in accordance with GAAP. 

 

Consolidated Interest Expense” means, for any period and with respect to any Person, the total consolidated interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP excluding deferred financing fees (including any Upfront First-Out Fee PIK Amount and any Upfront Initial Fee PIK Amount), non‑cash interest expense (including any accreting PIK Interest), non‑cash debt amortization, upfront financing fees and any amortization of original issue discount in connection with the Facility and any other Indebtedness permitted under this Agreement plus, without duplication (i) imputed interest on Capital Lease Obligations of such Person and its Subsidiaries for such

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period; (ii) commissions, discounts, and participation fees payable pursuant to this Agreement and issuance fees and other fees and charges owed by such Person or any of its Subsidiaries with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings for such period; provided that, in respect of any letters of credit secured by cash collateral, the amount of such commissions, discounts and other fees and charges shall be determined on a net basis after accounting for any interest income on deposited amounts with respect thereto; (iii) cash contributions to any employee stock ownership plan or similar trust made by such Person or any of its Subsidiaries to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than such Person or a Wholly‑Owned Subsidiary of such Person) in connection with Indebtedness incurred by such plan or trust for such period; (iv) all interest paid or payable with respect to discontinued operations of such Person or any of its Subsidiaries for such period; (v) the interest portion of any deferred payment obligations of such Person or any of its Subsidiaries for such period; and (vi) all interest on any Indebtedness of such Person or any of its Subsidiaries of the type described in clause (f) or (g) of the definition of “Indebtedness” for such period, to the extent actually paid by such Person or any of its Subsidiaries; provided that Consolidated Interest Expense shall be calculated after giving effect to Swap Contracts (including associated costs), but excluding unrealized gains and losses with respect to Swap Contracts.

 

Consolidated Net Income” means, for any period and for any Person, the net income or loss of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded for any such Person therefrom (i) the income or loss of any Person (other than consolidated Subsidiaries of such Person)) in which any other Person (other than such Person or any of its Subsidiaries) has an interest, except to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Subsidiaries by such Person during such period, (ii) the cumulative effect of a change in accounting principles during such period, (iii) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with such Person or any of its Subsidiaries or that Person’s assets are acquired by such Person or any of its Subsidiaries, (iv) gains and losses from the early extinguishment of Indebtedness and (v) (to the extent not included in clauses (i) through (iv) above) any net extraordinary gains or net extraordinary losses. In no event shall “Consolidated Net Income” include the income or loss of any Permitted Servicing Joint Venture, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries by a Permitted Servicing Joint Venture during such period.

 

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

 

Credit Extension” means a Borrowing.

 

Current Assets”  means, at any date, all assets of the Loan Parties which under GAAP would be classified as current assets (excluding any cash or Cash Equivalents).

 

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Current Liabilities” means, at any date, all liabilities of the Loan Parties which under GAAP would be classified as current liabilities, other than current maturities of long term Indebtedness which is not then in default or otherwise due and payable.

 

Debt Equivalents” means, in respect of any Person, (i) any Equity Interest of such Person which by its terms (or by the terms of any security for which it is convertible or for which it is exchangeable or exercisable), or upon the happening of any event or otherwise (including an event which would constitute a Change of Control), (A) matures or is mandatorily redeemable or subject to any mandatory repurchase requirement, pursuant to a sinking fund or otherwise, (B) is convertible into or exchangeable for Indebtedness or Debt Equivalents, or (C) is redeemable or subject to any repurchase requirement arising at the option of the holder thereof, in whole or in part, on or prior to the first anniversary following the Maturity Date, (ii) if such Person is a Subsidiary of the Borrower, any preferred stock of such Person which by its terms is mandatorily redeemable or redeemable at the option of the holder prior to the date which is one hundred eighty (180) days after the applicable maturity date provided in clause (i) above and (iii) any Disqualified Equity Interests of such Person.

 

Debt Service” means, for any period, Cash Interest Expense of Borrower and its Subsidiaries for such period plus scheduled principal amortization of all Indebtedness of Borrower and its Subsidiaries for such period, excluding any principal repaid on or about the Closing Date with proceeds of the Loans.

 

Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, fraudulent transfer, reorganization, or similar debtor relief Laws of the United States or any similar foreign, federal or state law for the relief of debtors from time to time in effect and affecting the rights of creditors generally.

 

Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

Default Rate” means an interest rate equal to the interest rate otherwise applicable to such Loan plus 5.0% per annum, in each case, to the fullest extent permitted by applicable Laws.

 

Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any asset or property by a Loan Party (including any Sale Leaseback and any sale of Equity Interests, but excluding any issuance by a Loan Party of its own Equity Interests), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that Dispositions shall include (x) the sale or other disposition for value of any contracts or (y) the early termination or modification of any contract resulting in the receipt by any Loan Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification).

 

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Disqualified Equity Interests” means, with respect to any Person, any Equity Interest of such Person which, by its terms, or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable, or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the Maturity Date; provided that, if such Equity Interests are issued pursuant to a plan for the benefit of employees of Borrower or any of its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by Borrower or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

Dollars” means lawful money of the United States.

 

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

 

ECF Percentage” has the meaning specified in Section 2.02(b)(i).

 

Eligible Assignee” means, in respect of an assignment made by a Lender pursuant to Section 10.07, and in addition to those Persons approved as required thereunder, (a) a Lender and (b) an Approved Fund; provided, that in no event shall (x) a natural person or (y) the Borrower or any of its Affiliates be an “Eligible Assignee”; provided,  further, that so long as no Event of Default pursuant to Section 8.01(a) or (f) has occurred and is continuing, no Competitor shall be an “Eligible Assignee”.

 

Environmental Action” means any action, suit, demand, demand letter, claim, notice of non‑compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged exposure, injury or threat to health and safety as it relates to any Hazardous Material or the environment, including, without limitation, (a) by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages relating to Releases of Hazardous Materials or actual or alleged violations of Environmental Laws and (b) by any Governmental Authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

 

Environmental Laws” means any and all applicable federal, provincial, local and foreign Laws, decrees, consent orders, consent agreements or other governmental restrictions relating to the environment, human health and safety or to the manufacture, processing,

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distribution, use, treatment, storage, disposal, transport, Release or handling of, or exposure to, Hazardous Materials.

 

Environmental Liability” in respect of any Person, any and all legal obligations and liabilities under Environmental Laws, including for any Release caused by such Person or which is discovered or uncovered during the ownership or control of any real property by such Person and which adversely impacts any Person, property or the environment whether or not caused by a breach of applicable laws (including Environmental Laws).

 

Environmental Permit” means any permit, approval, hazardous waste identification number, license or other authorization issued by or submitted to a Governmental Authority and required under any Environmental Law.

 

Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and Treasury regulations promulgated and rulings issued thereunder.

 

ERISA Affiliate” means any trade or business (whether or not incorporated) that is under common control with any Loan Party and is treated as a single employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations at any facility of any Loan Party or ERISA Affiliate as described in Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan, notification of any Loan Party or ERISA Affiliate concerning the imposition of Withdrawal Liability or notification that a Multiemployer Plan is insolvent or is in reorganization within the meaning of Title IV of ERISA (or that is in endangered or critical status, within the meaning of Section 305 of ERISA); (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under

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Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (g) a determination that any Pension Plan is, or is expected to be, in “at‑risk” status (within the meaning of Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); or (h) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to any Pension Plan.

 

Event of Default” has the meaning specified in Section 9.01.

 

Excess” has the meaning specified in Section 3.02(b).

 

Excess Cash Flow” means, for the most recently completed Test Period ending on the last day of a Fiscal Year, Consolidated Adjusted EBITDA of Borrower and its Subsidiaries for such period, minus, without duplication:

 

(a)     Debt Service for such period;

 

(b)     permanent repayments of Indebtedness (so long as not already reflected in Debt Service) made with cash by Borrower and its Subsidiaries during such period (it being understood that the foregoing deductions shall not duplicate deductions from Excess Cash Flow taken pursuant to Section 2.02(b)(i));

 

(c)     income and franchise taxes of Borrower and its Subsidiaries that were paid in cash during such period or will be paid within six months after the end of such period and for which reserves have been established;

 

(d)     the absolute value of the difference, if negative, of the amount of Net Working Capital at the end of the prior Test Period in excess of the amount of Net Working Capital at the end of such period;

 

(e)     amounts included in Consolidated Adjusted EBITDA by operation of clause (a)(iv), (a)(vi) and (a)(vii) of the definition thereof; and

 

(f)     losses excluded from the calculation of Consolidated Adjusted EBITDA by operation of clause (c) of the definition thereof that are paid in cash during such period;

 

provided that any amount deducted pursuant to any of the foregoing clauses that will be paid after the close of such period shall not be deducted again in a subsequent period; plus, without duplication:

 

(1)     the difference, if positive, of the amount of Net Working Capital at the end of the prior period in excess of the amount of Net Working Capital at the end of such period;

 

(2)     gross proceeds received (or, in lieu of receipt, paid to a third party on behalf of Borrower or any of its Subsidiaries) during such period of any Indebtedness to

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the extent used to finance any Capital Expenditure (other than Indebtedness under this Agreement to the extent there is no corresponding deduction to Excess Cash Flow above in respect of the use of such borrowings); and

 

(3)     income or gain excluded from the calculation of Consolidated Adjusted EBITDA by operation of clause (c) of the definition thereof that is realized in cash during such Excess Cash Flow period.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

Exchange Rate” means on any day with respect to any currency other than Dollars, the rate at which such currency may be exchanged into Dollars, as set forth at approximately 12:00 noon (New York, New York time) on such day on the Reuters Fedspot page for such currency; in the event that such rate does not appear on any Reuters page, the Exchange Rate shall be determined by the Administrative Agent to be the rate quoted by it at the spot rate for Dollars purchased by it with Euros through its principal foreign exchange trading office at approximately 12:00 noon (New York, New York time) on the date as of which the foreign computation is made.

 

Excluded Property” has the meaning specified in the definition of “Collateral and Guarantee Requirement.”

 

Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Foreign Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.01, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

Existing Letters of Credit” means those letters of credit outstanding as of the date hereof and set forth on Schedule 7.03(l), issued by Wells Fargo Bank National Association for the account of the Borrower or any of its Subsidiaries.

 

Exit Fee” has the meaning set forth in Section 2.05(c).

 

Facility” means the facility provided under this Agreement.

 

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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), 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, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

 

Financial Covenants” means the covenants set forth in Section 7.12.

 

First Amendment” means the First Amendment to Senior Secured Credit Agreement, dated as of August 17, 2017, among the Borrower, the other Loan Parties party thereto, the Administrative Agent and the Lenders party thereto.

 

First Amendment Effective Date” means the date all the conditions precedent to effectiveness of the First Amendment as set forth therein are satisfied or waived in accordance therewith.

 

First-Out Loan Commitment” has the meaning specified in Section 2.01(b).  As of the First Amendment Effective Date, and prior to the making of any First-Out Loans on the First Amendment Effective Date, the amount of the First-Out Loan Commitments is $10,000,000.

 

First-Out Loan Repayment Date” means September 30, 2018.

 

First-Out Loans” has the meaning specified in Section 2.01(b).  

 

Fiscal Year” means the fiscal year of the Borrower, the Company and their Subsidiaries, as applicable, ending on December 31 of each calendar year.

 

Fixed Charge Coverage Ratio” means with respect to any Test Period, the ratio of (a) Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for such Test Period to (b) Debt Service for such Test Period (excluding the amortization of non-cash financing expenses to the extent such expenses would otherwise be included in calculating Debt Service of the Borrower and its Subsidiaries).

 

Flood Hazard Property” has the meaning specified in clause (g)(vi) of the definition of “Collateral and Guarantee Requirement.”

 

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Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is a resident or organized under the laws of a jurisdiction other than that in which the Borrower is a resident for tax purposes.

 

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

 

FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

Fund” means any Person (other than an individual) that is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

 

GAAP” means generally accepted accounting principles in the United States, as in effect from time to time.

 

Global Power Netherlands” has the meaning assigned in the definition of “ABN AMRO Facility”.

 

Governmental Authority” means any nation or government, any provincial, state, local, municipal or other political subdivision thereof, and any entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

Governmental Authorization” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Governmental Authority.

 

Granting Lender” has the meaning specified in Section 10.07(g).

 

Guarantee” has the meaning specified in the definition of “Collateral and Guarantee Requirement” and shall be substantially in the form of Exhibit E.

 

Guarantee Obligations” means, with respect to any Person, any obligation or arrangement of such Person to guarantee or intended to guarantee any Indebtedness or other payment obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co‑making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the obligation to make take‑or‑pay or similar payments, if required, regardless of non‑performance by any other party or parties to an agreement or (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for

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the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof.  The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Guarantee Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

 

Guarantor Subsidiary” means each Guarantor that is a Domestic Subsidiary.

 

Guarantors” has the meaning specified in the definition of “Collateral and Guarantee Requirement.”

 

Guaranty” means, collectively, (a) the Guarantee and (b) each other guaranty and guaranty supplement delivered pursuant to the Collateral and Guarantee Requirement or Section 6.11.

 

Hazardous Materials” means any material, substance or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” a “pollutant,” a “contaminant,” a “deleterious substance,” “dangerous goods,” “radioactive” or words of similar meaning or effect, including petroleum and its by‑products, asbestos, polychlorinated biphenyls, radon, greenhouse gases, mold, urea formaldehyde insulation, chlorofluorocarbons and all other ozone‑depleting substances.

 

Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (i) accounts payable and other accrued liabilities incurred in the ordinary course of business not past due for more than one hundred twenty (120) days after its stated due date (except for accounts payable contested in good faith), (ii) any earn‑out obligation until such obligation is both required to be reflected as a liability on the balance sheet of such Person in accordance with GAAP and not paid after becoming due and payable and (iii) deferred or equity compensation arrangements entered into in the ordinary course of business and payable to directors, officers or employees), (e) all Indebtedness (excluding prepaid interest thereon) of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed but, in the case of Indebtedness which is not

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assumed by such Person, limited to the lesser of (x) the amount of such Indebtedness and (y) the fair market value of such property, (f) all Guarantee Obligations by such Person of Indebtedness of others, (g) all Attributable Indebtedness of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty (excluding the portion thereof that has been fully cash collateralized in a manner permitted by this Agreement), (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, surety bonds and performance bonds, whether or not matured, (j) all Debt Equivalents of such Person, (k) all obligations in respect of the Upfront First-Out Fee, the Upfront Initial Fee, the Upfront First-Out Fee PIK Amount and the Upfront Initial Fee PIK Amount and (l) the Swap Termination Value under outstanding Swap Contracts at such time to which such Person is a party.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is directly liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.  Anything herein to the contrary notwithstanding, obligations in respect of any Indebtedness that has been irrevocably defeased (either covenant or legal) or satisfied and discharged pursuant to the terms of the instrument creating or governing such Indebtedness shall not constitute Indebtedness.

 

Indemnified Liabilities” has the meaning specified in Section 10.05.

 

Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

Indemnitees” has the meaning specified in Section 10.05.

 

Information” has the meaning specified in Section 10.08.  

 

Initial Loan Commitment” has the meaning specified in Section 2.01(a).  As of the Closing Date, and prior to making any Initial Loans on the Closing Date, the aggregate principal amount of the Initial Loan Commitments is $45,000,000.

 

Initial Loans” has the meaning specified in Section 2.01(a).

 

Initial Subsidiary Transaction” means the first occurrence of a Subsidiary Transaction.

 

Intellectual Property” has the meaning specified in Section 5.17.

 

Intellectual Property Security Agreement” means, collectively, (a) the Intellectual Property Security Agreement executed by certain Loan Parties in the form of Exhibit H, and (b) each other Intellectual Property Security Agreement Supplement executed and delivered pursuant to the Collateral and Guarantee Requirement or Section 6.11.

 

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Intellectual Property Security Agreement Supplement” has the meaning specified in Section 6.11.

 

interest” has the meaning specified in Section 3.02(b).

 

Interest Payment Date” means the last day of each calendar month, subject to Section 1.07.

 

Interest Period” means (i) as to the Initial Loans (A) initially, the period beginning on (and including) the Closing Date and ending on (and including) the last day of the calendar month in which the Closing Date occurs and (B) thereafter, the period beginning on (and including) the first day of each succeeding calendar month and ending on the earlier of (and including) (x) the last day of such calendar month and (y) the Maturity Date, and (ii) as to the First-Out Loans, (A) initially, the period beginning on (and including) the First Amendment Effective Date and ending on (and including) the last day of the calendar month in which the First Amendment Effective Date occurs and (B) thereafter, the period beginning on (and including) the first day of each succeeding calendar month and ending on the earlier of (and including) (x) the last day of such calendar month and (y) the First-Out Loan Repayment Date.

 

Investment” in any Person, means (i) any direct or indirect purchase or other acquisition by a Loan Party of, or of a beneficial interest in, any of the Equity Interests of any other Person (other than a Guarantor Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Subsidiary of the Company from any Person (other than the Company or any Guarantor Subsidiary), of any Equity Interests of such Person; and (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contributions by the Company or any of its Subsidiaries to any other Person (other than the Company or any Guarantor Subsidiary), including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business.  The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write‑ups, write‑downs or write‑offs with respect to such Investment.

 

Joint Venture” shall have the meaning specified in the definition of “Permitted Servicing Joint Venture”.

 

Landlord Consent and Estoppel” means, with respect to any Leasehold Property, a letter, certificate or other instrument in writing from the lessor under the relevant lease, pursuant to which, among other things, the landlord consents to the granting of a Mortgage on such Leasehold Property by the Loan Party tenant, such Landlord Consent and Estoppel to be in form and substance acceptable to Collateral Agent in its reasonable discretion.

 

Laws” means, collectively, all international, foreign, federal, state, provincial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any

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Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

 

Leasehold Property” means the leasehold interests listed on Schedule 5.07(b) and any leasehold interest of any Loan Party as lessee under any lease of real property, other than any such leasehold interest designated from time to time by Collateral Agent in its sole discretion as not being required to be included in the Collateral.

 

Lender” means any Lender that is a party to this Agreement from time to time and, in the case of each such Lender, including their respective successors and assigns as permitted hereunder (each of which is referred to herein as a “Lender”).

 

LIBO Rate” means, for any Interest Period, the rate per annum equal to the London interbank offered for deposits in Dollars for the applicable Interest Period normally published in the Money Rates section of The Wall Street Journal or another national publication selected by the Administrative Agent, two Business Days prior to the commencement of such Interest Period; provided, that in no event shall the LIBO Rate be less than 1.00%.

 

Lien” means any assignment, mortgage, charge, pledge, lien, encumbrance, title retention agreement (including Capital Leases but excluding operating leases) or any other security interest whatsoever, howsoever created or arising, whether fixed or floating, legal or equitable, perfected or not, but specifically excludes any legal, contractual or equitable right of set‑off.

 

Liquidity” means, as of any date of calculation, unrestricted cash and Cash Equivalents permitted in accordance with GAAP, plus any undrawn commitments, including, the Commitments, in each case as of such date.

 

Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of an Initial Loan or a First-Out Loan.

 

Loan Documents”  means, collectively, (i) this Agreement, (ii) the Notes, (iii) [reserved], (iv) the Collateral Documents, (v) any Guarantee, (vi) any agency fee letter entered into between the Borrower and the Administrative Agent in connection with the Facility and (vii) all other instruments and documents executed and delivered from time to time by or on behalf of the Borrower or any of its Subsidiaries in connection herewith or therewith.

 

Loan Parties” means, collectively, (i) the Borrower and (ii) each Guarantor.

 

Master Agreement” has the meaning specified in the definition of “Swap Contract.”

 

Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Borrower and its Subsidiaries, taken as a whole, (b) the rights and remedies of the Administrative Agent or any Lender under any Loan

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Document or (c) the ability of the Borrower or any Guarantor to perform its obligations under any Loan Document; provided that for purposes of determining compliance with Article V hereof, the incurrence of obligations or liabilities (other than those permitted by Sections 7.02 and 7.03) by the Borrower or any of its Subsidiaries in excess of the Threshold Amount shall be deemed to result in a Material Adverse Effect.

 

Material Agreements” means, collectively, (a) the agreements which are listed in Schedule 5.19 and (b) all other agreements to which any Loan Party or any of its properties are bound, from time to time, the absence or termination of any of which would reasonably be expected to result in a Material Adverse Effect.

 

Material Owned Property” means (i) the real properties owned by any Loan Party listed on Schedule 5.07(b) and (ii) any other real property owned by any Loan Party with a fair market value in excess of $1,000,000.

 

Maturity Date” means December 16, 2021.

 

Maximum Legal Rate” has the meaning specified in Section 3.02(b).

 

Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

Mortgage” means collectively, the deeds of trust, trust deeds, deeds to secure debt, Landlord Consents and Estoppels and mortgages creating and evidencing a Lien on a Mortgaged Property made by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties, substantially in the form of Exhibit K (with such changes as may be reasonably satisfactory to the Collateral Agent and its counsel to account for local law matters) or otherwise in form and substance reasonably satisfactory to the Collateral Agent, executed and delivered pursuant to Section 4.01(a)(iii) (if applicable), Section 6.11 or Section 6.13, in each case as amended, restated, supplemented or otherwise modified from time to time.

 

Mortgage Policies” has the meaning specified in paragraph (h)(ii) of the definition of “Collateral and Guarantee Requirement.”

 

Mortgaged Properties” has the meaning specified in paragraph (h) of the definition of “Collateral and Guarantee Requirement.”

 

Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

 

Net Cash Proceeds” means:

 

(a)     with respect to the Disposition of any asset by any Loan Party or any Casualty Event the excess, if any, of (i) the sum of cash and Cash Equivalents received in

25


 

 

connection with such Disposition or Casualty Event (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received and, with respect to any Casualty Event, any insurance proceeds or condemnation awards in respect of such Casualty Event actually received by or paid to or for the account of the Borrower or any of its Subsidiaries) over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by the asset subject to such Disposition or Casualty Event and that is repaid (and is timely repaid) in connection therewith (other than Indebtedness under the Loan Documents), (B) the reasonable out‑of‑pocket expenses actually incurred and paid by the Borrower or any of its Subsidiaries in connection with such Disposition or Casualty Event (including, reasonable attorney’s, accountant’s and other similar professional advisor’s fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant, and other customary fees) to third parties (other than the Loan Parties or any of their Affiliates), (C) taxes paid or reasonably estimated to be actually payable or that are actually accrued in connection therewith with respect to the current tax year as a result of any gain recognized in connection therewith by such Person or any of the direct or indirect stockholders thereof and attributable to such Disposition or Casualty Event; provided that, if the amount of any estimated taxes pursuant to this subclause (C) exceeds the amount of taxes actually required to be paid in cash, the aggregate amount of such excess shall constitute Net Cash Proceeds and (D) any reasonable reserve actually maintained in respect of (x) the sale price of such asset or assets established in accordance with GAAP, and (y) any liabilities associated with such asset or assets and retained by the Borrower or any of its Subsidiaries after such sale or other Disposition thereof, including pension and other post‑employment benefit liabilities and liabilities related against any indemnification obligations associated with such transaction and it being understood that “Net Cash Proceeds” shall include any cash or Cash Equivalents (1) received upon the Disposition of any non‑cash consideration received by such Person in any such Disposition, and (2) received upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (D) above or, if such liabilities have not been satisfied in cash and such reserve not reversed within two years after such Disposition or Casualty Event, the amount of such reserve; and

 

(b)     with respect to the incurrence or issuance of any Indebtedness by the Borrower or any of its Subsidiaries not permitted under Section 7.03, the excess, if any, of (i) the sum of the cash received in connection with such incurrence or issuance over (ii) the investment banking fees, underwriting discounts, commissions, costs and other out‑of‑pocket expenses and other customary expenses (including reasonable attorney’s, accountant’s and other similar professional advisor’s fees), incurred by such Loan Party in connection with such incurrence or issuance to third parties (other than the Loan Parties or any of their Affiliates).

 

Net Working Capital” means, at any time, Current Assets at such time minus Current Liabilities at such time.

 

Note” means a promissory note of the Borrower payable to a Lender or its assigns, substantially in the form of Exhibit B hereto, evidencing the aggregate Indebtedness of the Borrower to such Lender resulting from the Loans made by such Lender.

 

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NPL” means the National Priorities List under CERCLA.

 

Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party or other Subsidiary arising under any Loan Document or otherwise with respect to any Loan Document entered into with a Lender, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any other Subsidiary of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.  Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents (and of any of their Subsidiaries to the extent they have obligations under the Loan Documents) include (1) the obligation (including Guarantee Obligations) to pay principal, interest, reimbursement obligations, charges, expenses, fees (including, without limitation, the Upfront First-Out Fee, the Upfront Initial Fee and any accrued and uncapitalized Upfront First-Out Fee PIK Amounts and Upfront Initial Fee PIK Amounts), premiums (including, without limitation, any Prepayment Premium), the Exit Fee, Attorney Costs, indemnities and other amounts payable by any Loan Party or any other Subsidiary under any Loan Document and (2) the obligation of any Loan Party or any other Subsidiary to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party or such Subsidiary.

 

Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, declaration, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan 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.

 

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Outstanding Amount”  means, on any date, the outstanding principal amount of Loans, after giving effect to any borrowings, accretion of debt, and/or prepayments or repayments of Loans occurring on such date.

 

Participant” has the meaning specified in Section 10.07(d).

 

Participant Register” has the meaning specified in Section 10.07(d).

 

PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107‑56 (signed into law October 26, 2001)), as the same may be amended, supplemented, modified, replaced or otherwise in effect from time to time.

 

PBGC” means the Pension Benefit Guaranty Corporation (or any successor thereof).

 

Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA) other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time in the past five years.

 

Permitted Indebtedness” has the meaning specified in Section 7.03.

 

Permitted Liens” means Liens permitted to be incurred pursuant to Section 7.01.

 

Permitted Servicing Joint Venture” means a joint venture, limited liability company or other business entity between a Loan Party and one or more third parties (each, a “Joint Venture”) that meets each and all of the following criteria: (a) the formation and governing documents for the Joint Venture provide that the liability of the Loan Party that is a party thereto (as among all of the parties to the Joint Venture) is expressly limited to no more than such Loan Party’s pro rata portion of the scope of services and/or other liabilities arising from the Joint Venture, (b) the terms of which formation and governing documents provide for indemnification of such Loan Party against any damages (other than special, indirect or consequential) caused by any other member of the Joint Venture, (c) the scope of the services to be provided by the Joint Venture shall be consistent with the scope of services currently provided by the Loan Parties in the ordinary course of their business (taking into account any services that may be currently subcontracted by the Loan Parties in the ordinary course of their business), (d) the Joint Venture shall be formed solely for the purpose of bidding upon and entering into one or more contracts with one or more customers upon terms that provide that the aggregate contract value as to such Loan Party under each such contract shall be calculated on a “time and materials” basis and (e) such Loan Party, the Joint Venture or the customer or customers of the Joint Venture shall obtain customary liability and commercial insurance, in amounts and from a reputable insurer as may be necessary for prudent execution of the work by the Joint Venture.

 

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

 

PIK Increase Period” has the meaning specified in Section 2.03(b).

 

PIK Interest” has the meaning specified in Section 2.04(a).

 

Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by any Loan Party or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

Prepayment Notice” means a notice of prepayment in respect of any voluntary or mandatory prepayment in substantially the form of Exhibit A.

 

Prepayment Premium” has the meaning specified in Section 2.02(a).

 

Pro Rata Share” means, with respect to each Lender at any time a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitments of such Lender under the Facility at such time and the denominator of which is the amount of the Aggregate Commitments under the Facility at such time; provided that if any Commitment has been terminated, then the Pro Rata Share of each Lender shall be determined based on the outstanding principal amount of the Loans held by such Lender divided by the aggregate principal amount of all outstanding Loans.

 

Projections” has the meaning specified in Section 4.01(e).

 

Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.

 

Recipient” means (a) the Administrative Agent or (b) any Lender, as applicable.

 

Redemption Date” has the meaning specified in Section 2.02(a).

 

Register” has the meaning specified in Section 10.07(c).

 

Registered” means, with respect to Intellectual Property, issued by, registered with, renewed by or the subject of a pending application before any Governmental Authority or Internet domain name registrar.

 

Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, leeching or migration of any Hazardous Material in or into the environment (including the abandonment or disposal of any barrels, tanks, containers or receptacles containing any Hazardous Material), or out of any vessel or facility, including the movement of any Hazardous Material through the air, soil, subsoil, surface, water, ground water, rock formation or otherwise.

 

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Reportable Event” means with respect to any Plan any of the events set forth in Section 4043(c) of ERISA or the regulations issued thereunder, other than events for which the thirty (30) day notice period has been waived.

 

Required Lenders” means, as of any date of determination, one or more Lenders having more than 50% of the Total Facility Exposure.

 

Responsible Officer” means the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, corporate controller or, except for purposes of Sections 6.03 or 6.04, any other similar officer or a Person performing similar functions of a Loan Party (and, as to any document delivered on the Closing Date or the First Amendment Effective Date, as applicable, to the extent acceptable to the Administrative Agent in its sole discretion or required by the terms of this Agreement, any secretary or assistant secretary of a Loan Party).  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

Restricted Payment” means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, (b) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, retraction, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof) and including any thereof acquired through the exercise of warrants or rights of conversion, exchange or purchase and (c) any payment of principal, premium, if any, or interest (whether in cash, securities or other property) of any intercompany note evidencing Indebtedness permitted to be incurred pursuant to Section 7.03(i).

 

S&P” means Standard & Poor’s Ratings Services LLC, a division of The McGraw‑Hill Companies, Inc., and its successors.

 

Sale Leaseback” means any transaction or series of related transactions pursuant to which the Borrower or any of its Subsidiaries (a) sells, transfers or otherwise disposes of any property, real or personal, whether now owned or hereafter acquired, and (b) as part of such transaction, thereafter rents or leases such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold, transferred or disposed.

 

SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

Secured Obligations” has the meaning specified in the Security Agreement.

 

Secured Parties” means, collectively, the Administrative Agent, the Collateral Agent and the Lenders.

 

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Securities Act” means the Securities Act of 1933, as amended from time to time.

 

Securities Pledge Agreement” means, collectively, (a) the Securities Pledge Agreement executed by certain Loan Parties substantially in the form of Exhibit G and (b) each Securities Pledge Agreement Supplement executed and delivered pursuant to the Collateral and Guarantee Requirement or Section 6.11.

 

Securities Pledge Agreement Supplement” has the meaning specified in Section 6.11.

 

Security Agreement” means, collectively, (a) the Security Agreement executed by certain Loan Parties substantially in the form of Exhibit F and (b) each Security Agreement Supplement executed and delivered pursuant to the Collateral and Guarantee Requirement or Section 6.11.

 

Security Agreement Supplement” has the meaning specified in Section 6.11.

 

Servicing Joint Venture Proposal Package” means, with respect to any proposed Permitted Servicing Joint Venture, the following items, each in form reasonably satisfactory to the Administrative Agent:

 

(a)     a copy of the proposed formation and governing documents for the proposed Permitted Servicing Joint Venture, together with a description in reasonable detail of the proposed Permitted Servicing Joint Venture and the nature of the project or projects for which the proposed Permitted Servicing Joint Venture would be formed;

 

(b)     a certificate of a Responsible Officer of the Borrower certifying that:

 

(i)     such proposed Permitted Servicing Joint Venture satisfies the criteria set forth in the definition of “Permitted Servicing Joint Venture” or, if discretionary approval is required with respect to any such criteria, a request for such discretionary approval;

 

(ii)      the entry into such proposed Permitted Servicing Joint Venture would not cause or result in a Default or Event of Default; and

 

(iii)      the Loan Parties are in compliance with the Financial Covenants (both immediately before and after giving effect to the entry into the proposed Permitted Servicing Joint Venture).

 

Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries as of that date determined in accordance with GAAP.

 

Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property (for the avoidance of doubt, calculated to include goodwill and other intangibles) of such Person is greater than the total

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amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

SPC” has the meaning specified in Section 10.07(g).

 

Specified Foreign Subsidiary” means each of GPEG Mexico Distributing, SA de CV, Braden Manufacturing SA de CV and Global Power Equipment Group (Hong Kong) Limited.

 

Specified Subsidiary Transaction” means the transaction set forth on Schedule 7.05.

 

Specified Transaction” means any Investment, Disposition, incurrence or repayment of Indebtedness, Restricted Payment, Capital Expenditure or other transaction that by the terms of this Agreement requires such test to be calculated on a “pro forma basis” or after giving “pro forma effect”.

 

Subsidiary” of a Person means:

 

(a)     a corporation of which another person alone or in conjunction with its other Subsidiaries owns an aggregate number of voting Equity Interests sufficient to enable the election of a majority of the directors regardless of the manner in which other voting Equity Interests are voted;

 

(b)     a corporation of which another person alone or in conjunction with its other Subsidiaries has, through the operation of any agreement or otherwise, the ability to elect or cause the election of a majority of the directors or otherwise exercise control over the management and policies of such corporation;

 

(c)     any partnership of which at least a majority of the outstanding income or capital interests and/or at least a majority of the voting interests of such partnership or, in the case of a limited partnership, any general partner thereof, are owned by a person alone or in conjunction with its other Subsidiaries; and

 

(d)     any trust or other person of which at least a majority of the outstanding beneficial or ownership interests (however designated) are owned by a person alone or in conjunction with its other Subsidiaries.

 

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Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.  In no event shall the term “Subsidiary” include any Permitted Servicing Joint Venture.

 

Subsidiary Transaction” means (i) a Specified Subsidiary Transaction or (ii) any other Disposition constituting the sale of all or substantially all of the assets or Equity Interests of a Subsidiary, the terms and conditions of which have been consented to in advance in writing by the Administrative Agent.

 

Surviving Indebtedness” means the ABN AMRO Facility and any other Indebtedness of the Company or any of its Subsidiaries outstanding immediately before and after giving effect to the Transaction as specified on Schedule 7.03(b).

 

Swap Contract” means (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross‑currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark to market value(s) for such Swap Contracts, as determined by the applicable counterparty in accordance with the terms thereof and in accordance with customary methods for calculating mark‑to‑market values under similar arrangements by such counterparty.

 

Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

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Synthetic Lease Obligation” means the monetary obligation of a Person under (i) a so‑called synthetic, off‑balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property (including any Sale Leaseback), in each case, creating obligations that do not appear on the balance sheet of such Person but which could be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, stamp taxes, withholdings or other charges imposed by any Governmental Authority (including additions to tax, penalties and interest with respect thereto).

 

Termination Date” has the meaning specified in Section 9.11(a).

 

Test Period” means, at any date of determination, the most recently completed four consecutive fiscal quarters of the Borrower ending on or prior to such date for which the consolidated financial statements of the Borrower and its Subsidiaries have been (or were required to have been) delivered pursuant to Section 6.01(a) or (b).

 

Threshold Amount” means $500,000.

 

Total Debt” means, as of any date, consolidated Indebtedness of the Borrower and its Subsidiaries outstanding as of such date of the type described in clauses (a), (b), (d), (e), (g), (h) (excluding undrawn amounts under outstanding letters of credit or letters of guaranty) and (i) (but only if drawn or called) of the definition thereof.

 

Total Facility Exposure” means, as of any date of determination, the sum of (a) Total Outstandings as of such date and (b) the then unfunded Commitments (if any).

 

Total Leverage Ratio” means, with respect to any Test Period, the ratio of (a) Total Debt as of the last day of such Test Period to (b) Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for such Test Period.

 

Total Outstandings” means, as of any date of determination, the then aggregate Outstanding Amount of all Loans.

 

Transaction” means, collectively, (a) extension of Commitments under this Agreement and the funding of the Loans on the Closing Date, (b) the consummation of any other transactions in connection with the foregoing and (c) the payment of the fees and expenses, including prepayment premiums, incurred in connection with any of the foregoing.

 

Unaudited Financial Statements” means the unaudited financial statements described in Section 4.01(e).

 

Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any security interest in any item or items of Collateral.

 

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United States” and “U.S.” mean the United States of America.

 

Upfront First-Out Fee” has the meaning specified in Section 2.05(b)(ii).

 

Upfront First-Out Fee Payment Date” has the meaning specified in Section 2.05(b)(ii).

 

Upfront First-Out Fee PIK Amount” has the meaning specified in Section 2.05(b)(ii).

 

Upfront Initial Fee” has the meaning specified in Section 2.05(b)(i).

 

Upfront Initial Fee Payment Date” has the meaning specified in Section 2.05(b)(i).

 

Upfront Initial Fee PIK Amount” has the meaning specified in Section 2.05(b)(i).

 

U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(g)(ii)(B)(3).

 

Wholly‑owned” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly‑owned Subsidiaries of such Person.

 

Withdrawal Liability” means the liability of a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

Withholding Agent” means any Loan Party and the Administrative Agent.

 

Section 1.02     Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)     The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)     (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(ii)     Article, Section, paragraph, clause, subclause, Exhibit and Schedule references are to the Loan Document in which such reference appears.

 

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(iii)     The term “including” is by way of example and not limitation.

 

(iv)     The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(c)     In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including.”

 

(d)     Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

(e)     Whenever the context may require, any pronoun shall include the corresponding masculine, feminine or neuter forms.

 

Section 1.03     Accounting Terms.  (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein; provided,  however, that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision, regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then the Administrative Agent and the Borrower agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and the Borrower after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, (i) the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred and (ii) the Borrower shall provide to the Administrative Agent and the Lenders a written reconciliation in form and substance reasonably satisfactory to the Administrative Agent, between calculations of any applicable ratios, baskets and other requirements hereunder before and after giving effect to such Accounting Change.

 

(b)     Notwithstanding anything to the contrary herein, for purposes of determining compliance with any test contained in this Agreement with respect to any period during which any Specified Transaction occurs, the Financial Covenants shall be calculated with respect to such period and such Specified Transaction on a pro forma basis.  In addition, the parties hereto agree that following the occurrence of a Specified Transaction, the Administrative Agent and the Borrower shall use commercially reasonable efforts to amend and revise the Financial Covenants in order to reflect the impact of any Subsidiary Transaction on the operations of the Borrower and its Subsidiaries.

 

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(c)     Where reference is made to a Person “and its Subsidiaries on a consolidated basis” or similar language, such consolidation shall not include any subsidiaries other than Subsidiaries.

 

Section 1.04     Rounding.  Any financial ratios required to be satisfied in order for a specific action to be permitted under this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding‑up if there is no nearest number).

 

Section 1.05     References to Agreements, Laws, Etc.  Unless otherwise expressly provided herein, (a) references to documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, amendments and restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, amendments and restatements, extensions, supplements and other modifications are permitted by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

Section 1.06     Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

Section 1.07     Timing of Payment or Performance.  When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day.

 

Section 1.08     Currency Equivalents Generally.  (a) Any amount specified in this Agreement (other than in Article II,  Article IX and Article X or as set forth in paragraph (b) of this Section) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount to be determined in a manner consistent with the definition of Exchange Rate.

 

(b)     For purposes of determining compliance under Sections 7.02,  7.05 and 7.06, any amount in a currency other than Dollars will be converted to Dollars in a manner consistent with that used in calculating net income in the Borrower’s annual financial statements delivered pursuant to Section 6.01(a);  provided,  however, that the foregoing shall not be deemed to apply to the determination of any amount of Indebtedness.

 

ARTICLE II

 

THE COMMITMENTS AND CREDIT EXTENSIONS

Section 2.01     The Loans. 

 

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(a)     Subject to the terms and conditions set forth herein, on the Closing Date, each Lender agrees to make initial term loans (collectively, the “Initial Loans”) in an aggregate principal amount not to exceed at any time outstanding the amount set forth opposite such Lender’s name in Schedule 2.01(a) (such amount being referred to herein as such Lender’s “Initial Loan Commitment”).  The Initial Loan Commitment of each Lender shall be automatically and permanently reduced by the principal amount of each Initial Loan made by such Lender on the Closing Date.

 

(b)     Subject to the terms and conditions set forth herein, on the First Amendment Effective Date, each Lender agrees to make first-out term loans (collectively, the “First-Out Loans”) in an aggregate principal amount not to exceed at any time outstanding the amount set forth opposite such Lender’s name in Schedule 2.01(b) (such amount being referred to herein as such Lender’s “First-Out Loan Commitment”).  The First-Out Loan Commitment of each Lender shall be automatically and permanently reduced by the principal amount of each First-Out Loan made by such Lender on the First Amendment Effective Date.

 

(c)     Amounts borrowed under this Section 2.01 and repaid or prepaid may not be re-borrowed.

 

(d)     All the outstanding principal amount of the Initial Loans, together with all accrued and unpaid interest thereon, and any fees and other amounts payable hereunder, shall be due and payable on the earlier of (i) the Maturity Date and (ii) the date of the acceleration of the Loans pursuant to Section 9.02.  All the outstanding principal amount of the First-Out Loans, together with all accrued and unpaid interest thereon, and any fees and other amounts payable hereunder, shall be due and payable on the earlier of (x) the First-Out Loan Repayment Date and (y) the date of the acceleration of the Loans pursuant to Section 9.02.

 

Section 2.02     Prepayments.  (a) Optional Prepayments.  (i) The Borrower may, upon delivery of a Prepayment Notice to the Administrative Agent, at any time or from time to time voluntarily prepay, in whole or in part (in a minimum amount of $1,000,000 and integral multiples of $100,000 in excess of that amount for each partial prepayment) the outstanding principal amount of the Loans on any Business Day (the “Redemption Date”) for an amount equal to the Loans being prepaid on such Redemption Date, plus any accrued but unpaid interest on the aggregate principal amount of the Loans being prepaid, plus, solely in the case of the Initial Loans, the Prepayment Premium.  The applicable “Prepayment Premium” in respect of any prepayment of the Initial Loans shall be an amount calculated as follows:

 

(ii)     If the Redemption Date occurs:

 

(A)     on or prior to the first anniversary of the Closing Date, the Prepayment Premium shall be an amount equal to three percent (3%) of the aggregate outstanding principal amount of the Initial Loans being prepaid on such Redemption Date;

 

(B)     after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, the Prepayment Premium shall be an amount

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equal to two percent (2%) of the aggregate outstanding principal amount of the Initial Loans being prepaid on such Redemption Date;

 

(C)     after the second anniversary of the Closing Date and on or prior to the third anniversary of the Closing Date, the Prepayment Premium shall be an amount equal to one percent (1%) of the aggregate outstanding principal amount of the Initial Loans being prepaid on such Redemption Date; and

 

(D)     after the third anniversary of the Closing Date and at any time thereafter, the Prepayment Premium shall be zero.

 

Notwithstanding any of the foregoing to the contrary, with respect to any prepayment made in connection with a Disposition permitted pursuant to Section 7.05(j), if the Redemption Date occurs on or prior to the third anniversary of the Closing Date, the Prepayment Premium shall be an amount equal to one percent (1%) of the aggregate outstanding principal amount of the Initial Loans being prepaid on such Redemption Date.

 

(iii)     Any Prepayment Notice must be received by the Administrative Agent not later than 12:00 noon (New York, New York time) three (3) Business Days prior to any Redemption Date and shall specify the date and amount of such prepayment.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Each prepayment of Loans pursuant to this Section 2.02(a) shall be paid to the Lenders in accordance with their respective Pro Rata Shares as set forth in Section 2.02(b)(vii) below. 

 

(iv)     No partial prepayment shall be made under this Section 2.02(a) in connection with any event described in Section 2.02(b).

 

(b)     Mandatory Prepayments.  (i) As promptly as reasonably practicable, but in any event within five (5) Business Days after the date that is ninety (90) days following the end of each Fiscal Year, the Borrower shall cause to be prepaid an aggregate principal amount of Loans equal to (A) 100% (such percentage as it may be reduced as described below, the “ECF Percentage”) of Excess Cash Flow, if any, for the Fiscal Year covered by the financial statements required to be delivered pursuant to Section 6.02(a) minus (B) the sum of all voluntary prepayments of Loans (except to the extent that such prepayments are financed, directly or indirectly, with long‑term Indebtedness or non‑ordinary course Dispositions of property); provided that the ECF Percentage (before giving effect to the foregoing reductions, if any) shall be reduced to 75% if the Total Leverage Ratio is less than 2.50:1.00 as of the end of the Fiscal Year covered by such financial statements and provided further that so long as no Default or Event of Default has occurred and is continuing, no such prepayments shall be required unless Excess Cash Flow for such Fiscal Year equals or exceeds $1,000,000, at which point the Borrower shall cause to be prepaid an aggregate principal amount of Loans equal to the applicable percentage of Excess Cash Flow as set forth herein.

 

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(ii)     If the Borrower or any of its Subsidiaries Disposes of any property (excluding Dispositions permitted pursuant to Section 7.05 (other than pursuant to Section 7.05(h),  (j) and (k) (other than with respect to an Initial Subsidiary Transaction)), the Borrower shall cause to be prepaid, in accordance with Section 2.02(b)(vii), an aggregate amount of the Obligations equal to 100% of all such Net Cash Proceeds realized or received in connection with such Disposition, plus the Prepayment Premium on the principal amount of the Initial Loans (if any) being prepaid (calculated in accordance with Section 2.02(a)(ii), it being agreed that the relevant payment date shall be deemed to be the “Redemption Date” for purposes of such calculation), as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds; provided (i) so long as no Default or Event of Default shall have occurred and be continuing and (ii) to the extent that aggregate Net Cash Proceeds from the Closing Date through the applicable date of determination do not exceed $1,500,000, the Borrower shall have the option, directly or through one or more of its Subsidiaries, to invest such Net Cash Proceeds within one hundred eighty (180) days of receipt thereof in productive assets of the general type used in the business of the Borrower and its Domestic Subsidiaries.  If the Borrower or any of its Subsidiaries Disposes of any property in connection with an Initial Subsidiary Transaction pursuant to Section 7.05(k), the Borrower shall cause to be prepaid, an aggregate amount of the Obligations equal to 100% of all such Net Cash Proceeds realized or received in connection with such Initial Subsidiary Transaction, plus the Upfront First-Out Fee and the Upfront Initial Fee, together with the accrued and uncapitalized Upfront First-Out Fee PIK Amount and Upfront Initial Fee PIK Amount, as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds.  For the avoidance of doubt, any prepayment made pursuant to this Section 2.02(b)(ii) as a result of a Disposition shall not be deemed to be a consent to any such Disposition or a cure or waiver of any Event of Default which occurs in connection with such Disposition, it being understood that such Event of Default may only be waived with the express consent of Required Lenders.

 

(iii)     If any Casualty Event occurs, the Borrower shall cause to be prepaid an aggregate principal amount of Loans equal to 100% of all such Net Cash Proceeds realized or received in connection with such Casualty Event, as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds; provided, (i) so long as no Default or Event of Default shall have occurred and be continuing, and (ii) to the extent that aggregate Net Cash Proceeds from the Closing Date through the applicable date of determination do not exceed $500,000, the Borrower shall have the option, directly or through one or more of its Subsidiaries, to invest such Net Cash Proceeds within one hundred eighty (180) days of receipt thereof in productive assets of the general type used in the business of the Borrower and its Domestic Subsidiaries, which investment may include the repair, restoration or replacement of the applicable assets thereof.

 

(iv)     If the Borrower or any of its Subsidiaries incurs or issues any Indebtedness (including Debt Equivalents) not expressly permitted to be incurred or issued pursuant to Section 7.03,  the Borrower shall cause to be prepaid, in accordance with Section 2.02(b)(vii), an aggregate amount of the Obligations equal to 100% of all such Net Cash Proceeds received therefrom, plus the Prepayment Premium on the principal amount of the Initial Loans (if any) being prepaid (calculated in accordance with Section 2.02(a)(ii), it being agreed that the relevant

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payment date shall be deemed to be the “Redemption Date” for purposes of such calculation) as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds.

 

(v)     If the Borrower or any of its Subsidiaries receives any tax refunds and/or any extraordinary receipts in excess of $500,000 in the aggregate in any Fiscal Year, the Borrower shall cause to be prepaid an aggregate principal amount of Loans in the amount of such tax refunds and/or extraordinary receipts as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt thereof.

 

(vi)     If the Borrower or any of its Subsidiaries receives Net Cash Proceeds from a capital contribution or issuance of any Equity Interests of the Borrower or any of its Subsidiaries (other than Equity Interests issued (i) pursuant to any employee stock or stock option compensation plan, (ii) by any Subsidiary to the Borrower or any other Subsidiary to the extent permitted by Section 7.02, or (iii) for purposes approved in writing by the Administrative Agent), the Borrower shall cause to be prepaid, in accordance with Section 2.02(b)(vii), an aggregate amount of the Obligations equal to 100% of all such Net Cash Proceeds received therefrom, plus the Prepayment Premium on the principal amount of the Initial Loans (if any) being prepaid (calculated in accordance with Section 2.02(a)(ii), it being agreed that the relevant payment date shall be deemed to be the “Redemption Date” for purposes of such calculation) as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds. 

 

(vii)     So long as no Default or Event of Default has occurred and is continuing, (x) each voluntary and mandatory prepayment of Loans pursuant to Section 2.02(a) and this Section 2.02(b) (excluding any Disposition made pursuant to Section 7.05(k) in connection with an Initial Subsidiary Transaction) shall be applied as follows:

 

First, to the payment of all outstanding fees and all expenses specified in Section 8.03;

 

Second, to the payment of that portion of the Obligations constituting accrued, unpaid interest (including, but not limited to, accrued but uncapitalized PIK Interest) and the Exit Fee, in each case in respect of the First-Out Loans;

 

Third, to the payment of that portion of the Obligations constituting accrued, unpaid interest (including, but not limited to, accrued but uncapitalized PIK Interest) and the Prepayment Premium (if any), in each case in respect of the Initial Loans;

 

Fourth, shall be further applied in inverse order of maturity to reduce the remaining scheduled installments of principal of the First-Out Loans; and

 

Fifth, shall be further applied in inverse order of maturity to reduce the remaining scheduled installments of principal of the Initial Loans;

 

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(y)  the Net Cash Proceeds from a mandatory prepayment of Loans pursuant to this Section 2.02(b) received in connection with an Initial Subsidiary Transaction shall be applied as follows:

 

First, to the payment of all outstanding fees and all expenses specified in Section 8.03;

 

Second, to the payment of that portion of the Obligations constituting (A) the Upfront First-Out Fee, together with all accrued and uncapitalized Upfront First-Out Fee PIK Amounts and (B) accrued, unpaid interest (including, but not limited to, accrued but uncapitalized PIK Interest) in respect of the First-Out Loans and (C) the Exit Fee;

 

Third, to the payment of that portion of the Obligations constituting (A) the Upfront Initial Fee, together with all accrued and uncapitalized Upfront Initial Fee PIK Amounts and (B) accrued, unpaid interest (including, but not limited to, accrued but uncapitalized PIK Interest) in respect of the Initial Loans;

 

Fourth, shall be further applied in inverse order of maturity to reduce the remaining scheduled installments of principal of the First-Out Loans; and

 

Fifth, shall be further applied in inverse order of maturity to reduce the remaining scheduled installments of principal of the Initial Loans.

 

(viii)     The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of Loans required to be made pursuant to clauses (i),  (ii),  (iii),  (iv),  (v) and (vi) of this Section 2.02(b) at least three (3) Business Days prior to the date of such prepayment pursuant to a Prepayment Notice.  Each such notice shall specify the date of such prepayment and provide a reasonably detailed calculation of the amount of such prepayment.  The Administrative Agent will promptly notify each Lender of the contents of the Borrower’s Prepayment Notice and of such Lender’s Pro Rata Share of the prepayment.

 

(c)     Interest.  All prepayments under this Section 2.02 shall be accompanied by all accrued interest thereon.

 

Section 2.03     Repayment of Loans.  (a) The Borrower shall repay to the Administrative Agent, for the ratable account of the Lenders (i) commencing on June 30, 2018 through March 31, 2019, in consecutive quarterly installments to be paid on the last day of each fiscal quarter of the Borrower, an amount equal to 1.25% of the original aggregate principal amount of the Loans, (ii) commencing on June 30, 2019 and thereafter in consecutive quarterly installments to be paid on the last day of each fiscal quarter of the Borrower, equal to 1.875% of the original aggregate principal amount of the Loans and (iii) on the Maturity Date, the remaining Obligations (including, without limitation, all accrued and unpaid principal and interest on the principal amounts of the Loans (including any accrued but uncapitalized PIK Interest)).  For the avoidance of doubt, scheduled repayments pursuant to this Section 2.03 shall be reduced as a result of the application of prepayments in accordance with Section 2.02 solely to the extent of any such amounts applied to the prepayment of the Loans.

 

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(b)     The Borrower shall repay to the Administrative Agent, for the ratable account of the Lenders, (i) a principal amount equal to $25,000,000 on January 1, 2018 plus (ii) the Upfront Initial Fee, together with all accrued and uncapitalized Upfront Initial Fee PIK Amounts (the “2018 Amortization Payment”); provided,  however, that the Borrower may elect to defer the 2018 Amortization Payment to a later date, including the Maturity Date; provided further however, that the Borrower shall not be required to pay the 2018 Amortization Payment in the event that (i) an Initial Subsidiary Transaction occurs on or prior to January 1, 2018 and (ii) such Initial Subsidiary Transaction is in an aggregate amount greater than $25,000,000.  In the event that the Borrower elects to defer the 2018 Amortization Payment, the PIK Interest payable pursuant to Section 2.04 shall increase by an additional 5% per annum during the period commencing on January 1, 2018 through the Interest Payment Date occurring immediately prior to the date the 2018 Amortization Payment is paid (such period, the “PIK Increase Period”).

 

(c)     The Borrower shall repay to the Administrative Agent, for the ratable account of the Lenders, on the First-Out Loan Repayment Date, an amount equal to (i) the aggregate principal amount of the First-Out Loans, plus (ii) all accrued and unpaid principal and interest on the principal amounts of the First-Out Loans (including any accrued but uncapitalized PIK Interest), plus (iii) the Upfront First-Out Fee, together with all accrued and uncapitalized Upfront First-Out Fee PIK Amounts.  For the avoidance of doubt, scheduled repayments pursuant to this Section 2.03 shall be reduced as a result of the application of prepayments in accordance with Section 2.02 solely to the extent of any such amounts applied to the prepayment of the First-Out Loans.

 

Section 2.04     Interest.  (a) Subject to the provisions of Section 2.04(b), each Loan shall bear interest on the outstanding principal amount thereof for each Interest Period in an amount equal to the LIBO Rate plus the sum of: (i) 9.00% per annum payable in cash (“Cash Interest”) and (ii) (x) 10.00% per annum and (y) during the PIK Increase Period, 15% per annum, in each case of clauses (ii)(x) and (ii)(y) in an amount payable-in-kind (“PIK Interest”).

 

(b)     Commencing upon the occurrence and during the continuance of any Event of Default, the Borrower shall pay interest on (i) the principal amount of the Loans and (ii) to the extent then due and payable all other outstanding Obligations hereunder, in each case under clauses (i) and (ii) at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.  Accrued and unpaid interest on past due amounts (including interest on past due interest to the fullest extent permitted by applicable Laws) shall be due and payable upon demand.

 

(c)     Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  All Cash Interest shall be payable in cash to the Administrative Agent to be allocated pursuant to Section 2.08.  All PIK Interest shall accrue and be added and capitalized to the outstanding principal balance of the Loans on each Interest Payment Date, and the principal amount of the Loans shall be increased by such PIK Interest amount for all purposes under the Loan Documents.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after any judgment.

 

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Section 2.05     Fees.  (a) The Borrower shall pay to the Agents a non-refundable annual administration fee equal to $25,000, in the aggregate, for agency services provided under this Agreement.  This fee shall be in all respects fully earned, due and payable on the Closing Date directly from the proceeds of the Loan and thereafter, shall be payable by the Borrower in advance on each anniversary of the Closing Date during the term of this Agreement.

 

(b)     (i)     The Borrower agrees to pay to the Administrative Agent for distribution to the Lenders in accordance with each Lenders’ Pro Rata Share, an upfront fee equal to 7% of the Initial Loan Commitments (the “Upfront Initial Fee”).  The Upfront Initial Fee is earned on the Closing Date.  Until such time as the Upfront Initial Fee Payment Date has occurred, the Upfront Initial Fee shall bear interest in an amount equal to the LIBO Rate plus 19% per annum (the “Upfront Initial Fee PIK Amount”).  The Upfront Initial Fee PIK Amount shall accrue and be added and capitalized to the outstanding amount of the Upfront Initial Fee on each Interest Payment Date, and the balance of the Upfront Initial Fee shall be increased by the Upfront Initial Fee PIK Amount for all purposes under the Loan Documents.  The Upfront Initial Fee, together with all accrued and uncapitalized Upfront Initial Fee PIK Amounts shall be payable upon the earliest of (i) the date that the Borrower is required to repay the Obligations with the Net Cash Proceeds of an Initial Subsidiary Transaction pursuant to Section 2.02(b)(ii), (ii) the date that the 2018 Amortization Payment is paid, (iii) the Maturity Date and (iv) the date of acceleration of the Loans pursuant to Section 9.02 (the “Upfront Initial Fee Payment Date”).

 

(ii)     The Borrower agrees to pay to the Administrative Agent for distribution to the Lenders in accordance with each Lenders’ Pro Rata Share, an upfront fee equal to 7% of the First-Out Loan Commitments (the “Upfront First-Out Fee”).  The Upfront First-Out Fee is earned on the First Amendment Effective Date.  Until such time as the Upfront First-Out Fee Payment Date has occurred, the Upfront First-Out Fee shall bear interest in an amount equal to the LIBO Rate plus 19% per annum (the “Upfront First-Out Fee PIK Amount”).  The Upfront First-Out Fee PIK Amount shall accrue and be added and capitalized to the outstanding amount of the Upfront First-Out Fee on each Interest Payment Date, and the balance of the Upfront First-Out Fee shall be increased by the Upfront First-Out Fee PIK Amount for all purposes under the Loan Documents.  The Upfront First-Out Fee, together with all accrued and uncapitalized Upfront First-Out Fee PIK Amounts shall be payable upon the earlier to occur of (i) First-Out Repayment Date and (ii) the date of acceleration of the Loans pursuant to Section 9.02 (the “Upfront First-Out Fee Payment Date”).

 

(c)     On the First-Out Loan Repayment Date or on the earlier repayment of the Loans in full (whether voluntarily, upon the First-Out Repayment Date or upon acceleration pursuant to Section 9.02), the Borrower agrees to pay to the Administrative Agent for distribution to the Lenders in accordance with each Lender’s Pro Rata Share of the First-Out Loans a fee equal to 7% of the aggregate outstanding principal amount of the First-Out Loans (the “Exit Fee”). 

 

Section 2.06     Computation of Interest and Fees.  All computations of fees and interest shall be made on the basis of a three hundred and sixty (360) day year and actual days elapsed.  Interest shall accrue on each Loan for the day on which such Loan is made, and shall not accrue on such Loan, or any portion thereof, for the day on which such Loan or such portion

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is paid; provided that any such Loan that is repaid on the same day on which it is made shall bear interest for one (1) day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

Section 2.07     Evidence of Indebtedness.  (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender.  The accounts or records maintained by each Lender shall be prima facie evidence absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note payable to such Lender, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

(b)     Entries made in good faith by each Lender in its account or accounts pursuant to Section 2.07(a), shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to such Lender, under this Agreement and the other Loan Documents, absent manifest error; provided that the failure of such Lender to make an entry, or any finding that an entry is incorrect, in such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement and the other Loan Documents.

 

Section 2.08     Payments Generally.  (a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office and in immediately available funds not later than 3:00 p.m. (New York City time) on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Applicable Lending Office.  All payments received by the Administrative Agent after 3:00 p.m. (New York City time) shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

 

(b)     If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that if such extension would cause payment of interest on or principal of Loans to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

 

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(c)     Unless the Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:

 

(i)     if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate; and

 

(ii)     if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal Funds Rate.  When such Lender makes payment to the Administrative Agent (together with all accrued interest thereon), then such payment amount (excluding the amount of any interest which may have accrued and been paid in respect of such late payment) shall constitute such Lender’s Loan included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, then in the event the Administrative Agent has funded a Loan in advance of receipt of funds from a defaulting Lender or otherwise made a payment to the Borrower on behalf of such defaulting Lender, the Administrative Agent may make a demand therefor upon the Borrower and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by a Lender hereunder.

 

A notice by the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this Section 2.08(c) shall be conclusive, absent manifest error.

 

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

 

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(e)     The obligations of the Lenders hereunder to make Loans are several and not joint.  The failure of any Lender to make any Loan shall not relieve any other Lender of its corresponding obligation to do so on such date, and neither the Administrative Agent nor any Lender shall be responsible for the failure of any other Lender to make its Loan.

 

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

 

(g)     Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.03.  If the Administrative Agent receives funds for application to the Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lender’s Pro Rata Share of the Outstanding Amount of all Loans outstanding at such time, in repayment or prepayment of such of the outstanding Loans or other Obligations then owing to such Lender.

 

Section 2.09     Sharing of Payments.  If, other than as expressly provided elsewhere herein (including, without limitation, in Section 10.07), any Lender shall obtain on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon.  The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by applicable Law, exercise all its rights of payment (including the right of setoff, but subject to Section 10.09) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  Each Lender that purchases a participation pursuant to this Section 2.09 shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations

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purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

 

ARTICLE III

 

TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

 

Section 3.01     Taxes

 

(a)      Defined Terms.  For purposes of this Section 3.01, 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 applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(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 Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(d)     Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(e)     Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.07(d) relating to the maintenance of a Participant

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Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

 

(f)     Evidence of Payments.  As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 3.01, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(g)     Status of Lenders.  (i)      Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(g)(ii)(A),  (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)     Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Borrower:

 

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

 

(B)     any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such

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Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(1)     in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN (or W-8BEN-E, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN (or W-8BEN-E, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)     executed copies of IRS Form W-8ECI;

 

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

 

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

 

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

 

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

 

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

 

(h)     Treatment of Certain Refunds.  If any party determines, in its reasonable discretion, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.01 (including by the payment of additional amounts pursuant to this Section 3.01), 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 paragraph (h) (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 paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) 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 and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph 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.

 

(i)     Survival.  Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

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Section 3.02     Illegality.  (a) If any Lender determines that any Law has made it unlawful, or that any Governmental Authority that is a court, statutory board or commission has asserted that it is unlawful, for any Lender or its Applicable Lending Office to make, maintain or fund the Loans (and, in the opinion of such Lender, the designation of a different lending office would either not avoid such unlawfulness or would be disadvantageous to such Lender), then such Lender shall promptly notify Borrower thereof following which (a) the Lender’s Commitment shall be suspended until such time as such Lender may again make and maintain the Loans hereunder and (b) if such Law shall so mandate, the Loans held by such Lender shall be prepaid by Borrower on or before such date as shall be mandated by such Law in an amount equal to 100% of the aggregate principal amount of Loans held by such Lender, plus any accrued but unpaid interest on the aggregate principal amount of the Loans being prepaid, plus the Prepayment Premium (if any) on the principal amount of such Loans being prepaid (calculated in accordance with Section 2.02(a)(ii), it being agreed that the relevant payment date shall be deemed to be the “Redemption Date” for purposes of such calculation).

 

(b)     Maximum Legal Rate.  No agreements, conditions, provisions or stipulations contained in this Agreement or any other instrument, document or agreement between the Loan Party and any Agent or any Lender or default of the Loan Parties, or the exercise by any Agent or any Lender of the right to accelerate the payment of the maturity of principal and interest, or to exercise any option whatsoever contained in this Agreement or any other Loan Document, or the arising of any contingency whatsoever, shall entitle any Lender to contract for, charge, or receive, in any event, consideration for the use, forbearance or detention of money (“interest”) at a rate exceeding the maximum rate of interest permitted by applicable state or federal law in effect from time to time (hereinafter “Maximum Legal Rate”).  In no event shall the Loan Parties be obligated to pay interest at any rate exceeding such Maximum Legal Rate and all agreements, conditions or stipulations, if any, which may in any event or contingency whatsoever operate to bind, obligate or compel the Loan Parties to pay a rate of interest exceeding the Maximum Legal Rate, shall be without binding force or effect, at law or in equity, to the extent only of the excess of interest determined at a rate over such Maximum Legal Rate.  In the event any interest is contracted for, charged or received at any rate in excess of the Maximum Legal Rate (“Excess”), each Loan Party acknowledges and stipulates that any such contract, charge, or receipt shall be the result of an accident and bona fide error, and that any Excess received by any Lender shall be applied, first, to reduce the principal then unpaid hereunder in respect of the First-Out Loans; second, to reduce the principal then unpaid hereunder in respect of the Initial Loans; third, to reduce the other Obligations in respect of the First-Out Loans; fourth, to reduce the other Obligations in respect of the Initial Loans; and fifth, returned to the Loan Parties, it being the intention of the parties hereto not to enter at any time into a usurious or otherwise illegal relationship.  Each Loan Party recognizes that, with fluctuations in the LIBO Rate and the Maximum Legal Rate, such a result could inadvertently occur.  By the execution of this Agreement, the Borrower covenants that (i) the credit or return of any Excess shall constitute the acceptance by such Loan Party of such Excess, and (ii) such Loan Party shall not seek or pursue any other remedy, legal or equitable, against any Agent or any Lender, based in whole or in part upon the contracting for, charging or receiving of any interest in excess of the maximum authorized or the receiving of any interest in excess of the maximum authorized by applicable law.  To the extent applicable, for the purpose of determining whether or not any Excess has been contracted for, charged or received by any Agent or any

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Lender, all interest at any time contracted for, charged or received by the Administrative Agent and any Lender in connection with this Agreement shall be amortized, prorated, allocated and spread in equal parts during the full stated term of this Agreement and otherwise as provided by applicable Law.  If, as a result of any circumstances whatsoever, fulfillment of any provision hereof or of any related agreement, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by applicable usury law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity.

 

Section 3.03     Increased Cost and Reduced Return; Capital Adequacy.  (a) If any Lender reasonably determines that as a result of the introduction of or any Change in Law or a change in the interpretation of any Law with which such Lender or any lending office of such Lender, if any, is required to comply, in each case, after the date hereof, there shall be any increase in the cost to such Lender agreeing to make, making or maintaining any Loan, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 3.03(a) any such increased costs or reduction in amount resulting from (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes or (iii) Other Connection Taxes), then from time to time within fifteen (15) days after demand by such Lender setting forth in reasonable detail such increased costs (with a copy of such demand to the Administrative Agent given in accordance with Section 3.04), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction. 

 

(b)     If any Lender reasonably determines that the introduction of any Law regarding (i) capital adequacy or any change therein or in the interpretation thereof or (ii) liquidity requirement, or in each case any change therein or in the interpretation thereof with which such Lender (or its Applicable Lending Office) is required to comply, in each case after the date hereof, would have the effect of reducing the rate of return on the capital of such Lender, or any corporation controlling such Lender, to a level below that which such Lender, or the corporation controlling such Lender, could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of any corporation controlling such Lender with respect to capital adequacy) as a consequence of such Lender’s obligations hereunder, then from time to time upon demand of such Lender setting forth in reasonable detail the charge and the calculation of such reduced rate of return (with a copy of such demand to the Administrative Agent given in accordance with Section 3.04), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction within fifteen (15) days after receipt of such demand.

 

(c)     Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.03 shall not constitute a waiver of such Lender’s right to demand such compensation.

 

(d)     If any Lender requests compensation under this Section 3.03, then such Lender will, if requested by the Borrower, use commercially reasonable efforts to designate another Applicable Lending Office for any Loan affected by such event; provided that such efforts are made on terms that, in the reasonable judgment of such Lender, cause such Lender and its Applicable Lending Office(s) to suffer no material economic, legal or regulatory

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disadvantage; and provided further that nothing in this Section 3.03(d) shall affect or postpone any of the Obligations of the Borrower or the rights of such Lender pursuant to Section 3.03(a),  (b) or (c).

 

Section 3.04     Matters Applicable to All Requests for Compensation.  The Administrative Agent or any Lender claiming compensation under this Article III shall deliver a certificate to the Borrower setting forth the additional amount or amounts to be paid to it hereunder, which shall be conclusive absent manifest error.  In determining such amount, the Administrative Agent or such Lender, as the case may be, may use any reasonable averaging and attribution methods.  With respect to any Lender’s claim for compensation under Section 3.01,  Section 3.02 or Section 3.03, the Borrower shall not be required to compensate such Lender for any amount incurred more than two hundred and seventy (270) days prior to the date that such Lender notifies the Borrower of the event that gives rise to such claim; provided that if the circumstance giving rise to such claim is retroactive, then such 270‑day period referred to above shall be extended to include the period of retroactive effect thereof.

 

Section 3.05     Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

 

ARTICLE IV

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

Section 4.01     Conditions to the Closing Date.  The obligation of each Lender to make the Loans hereunder is subject to satisfaction or waiver in writing by the Lenders of the following conditions precedent:

 

(a)     The Administrative Agent’s receipt of the following, each properly executed by a Responsible Officer of the signing Loan Party, if applicable, and each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:

 

(i)     executed counterparts of this Agreement and the other Loan Documents by each Loan Party, Agent and Lender, as applicable;

 

(ii)     an original Note executed by the Borrower in favor of each Lender that has requested in writing a Note;

 

(iii)     such certificates (including a certificate substantially in the form of Exhibit I) of resolutions or other corporate action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan

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Documents to which such Loan Party is a party or is to be a party on the Closing Date;

 

(iv)     an opinion of (i) Thompson Hine LLP, counsel to the Loan Parties and (ii) Van Valer Law Firm, LLP, Indiana counsel to the Loan Parties, in each case, in form and substance reasonably satisfactory to the Administrative Agent;

 

(v)     a certificate attesting to the Solvency of the Loan Parties (taken as a whole) on the Closing Date after giving effect to the Transaction and the other transactions contemplated hereby and thereby, from the chief financial officer of the Borrower in substantially the form of Exhibit J hereto;

 

(vi)     copies of a recent Lien and judgment search in each jurisdiction reasonably requested by the Collateral Agent with respect to the Loan Parties together with evidence that, upon satisfaction of the conditions precedent contained in any applicable payoff letters, all existing Liens (other than Liens permitted under Section 7.01) will be terminated and released and all actions required to terminate and release such Liens have been satisfactorily taken or will be capable of being satisfactorily undertaken substantially simultaneously with the closing of the Transaction; and

 

(vii)     (A) Organization Documents of each Loan Party and (B) good standing certificates or certificates of status, as applicable, as of a date reasonably proximate to the Closing Date, from (1) the applicable Governmental Authority of each Loan Party’s jurisdiction of incorporation, organization or formation and (2) the jurisdictions where the failure of a Loan Party to be qualified and in good standing could reasonably be expected to have a Material Adverse Effect, and, where available, bring down certificates, for each Loan Party.

 

(b)     As of the Closing Date, after giving effect to the Transaction, the Borrower and each of its Subsidiaries will have no indebtedness other than the Facility, the Existing Letters of Credit, and any Surviving Indebtedness specified on Schedule 7.03(b).  All amounts due or outstanding in respect of any Indebtedness other than the Facility, the Existing Letters of Credit and any Surviving Indebtedness specified on Schedule 7.03(b) shall have been repaid in full, all commitments (if any) in respect thereof terminated, all guarantees (if any) thereof discharged and released and all security therefor (if any) released, together with all fees and other amounts owing thereon, or documentation in form and substance reasonably satisfactory to the Administrative Agent to effect such release upon such repayment and termination shall have been delivered to the Administrative Agent. 

 

(c)     In order to create in favor of Collateral Agent, for the benefit of the Lenders, a valid, perfected first priority security interest in the personal property Collateral, Collateral Agent shall have received: 

 

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(i)     evidence satisfactory to Collateral Agent of the compliance by each Loan Party of their obligations under the Collateral Documents (including, without limitation, their obligations to authorize or execute, as the case may be, and deliver UCC financing statements, originals of securities, instruments and chattel paper, deposit account control agreements and any agreements governing securities accounts as provided therein);

 

(ii)     a completed Collateral Questionnaire dated the Closing Date and executed by a Responsible Officer of each Loan Party, together with all attachments contemplated thereby, including (A) the results of a recent search, by a Person satisfactory to Collateral Agent, of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of any Loan Party in the jurisdictions specified in the Collateral Questionnaire, together with copies of all such filings disclosed by such search, and (B) UCC termination statements (or similar documents) duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search (other than any such financing statements in respect of Permitted Liens);

 

(iii)     opinions of counsel (which counsel shall be reasonably satisfactory to Collateral Agent) with respect to the creation and perfection of the security interests in favor of Collateral Agent in such Collateral and such other matters governed by the laws of each jurisdiction in which any Loan Party or any personal property Collateral is located as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory to Collateral Agent; and

 

(iv)     evidence that each Loan Party shall have taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument (including without limitation, (i) a landlord personal property collateral access agreement executed by the landlord of any leasehold property and by the applicable Loan Party, and (ii) any intercompany notes evidencing Indebtedness permitted to be incurred pursuant to Section 7.03(i)) and made or caused to be made any other filing and recording (other than as set forth herein) reasonably required by Collateral Agent.

 

(d)     [Reserved].

 

(e)     The Administrative Agent shall have received (i) the audited consolidated balance sheets and related statements of income, Shareholders’ Equity and cash flows of the Company and unaudited consolidating balance sheets and related statements of income  

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for the Fiscal Year of the Company ended December 31, 2016, each in draft form, (ii) unaudited consolidated and consolidating balance sheets and related statements of income and cash flows of the Company for each subsequent fiscal quarter after December 31, 2014 ended at least forty-five (45) days before the Closing Date, (iii) unaudited consolidated and consolidating balance sheets and related statements of income of the Company for each fiscal month after December 31, 2014 ended at least thirty-one (31) days before the Closing Date and (iv) forecasts prepared by management of the Borrower of balance sheets, income statements and cash flow statements on a monthly basis for Fiscal Year 2017, on a quarterly basis for Fiscal Year 2018 and on an annual basis for Fiscal Year 2019 (“Projections”), in each case, in form and substance satisfactory to the Administrative Agent and prepared in accordance with GAAP as in effect at the time of such preparation.

 

(f)     The Administrative Agent and the Lenders shall have completed, to their satisfaction, all legal, tax, environmental, management background checks, business and other due diligence with respect to the business, assets, liabilities, operations and condition (financial or otherwise) of the Borrower and its Subsidiaries in scope and determination satisfactory to the Administrative Agent and the Lenders in their sole discretion.

 

(g)     Payment by the Borrower of all accrued costs, fees and expenses (including applicable Attorney Costs and the reasonable and documented out-of-pocket fees and expenses of any other advisors to the Administrative Agent and the Lenders) and any other compensation due and payable to the Administrative Agent and Lenders on the Closing Date shall have been received.

 

(h)     The Administrative Agent shall have received reasonably satisfactory evidence of insurance required to be maintained pursuant to Section 6.07 and the Collateral Agent shall be named as an additional loss payee and additional insured, as applicable, thereunder.

 

(i)     The Lenders shall have received on or prior to the Closing Date all documentation and other information required by regulatory authorities under applicable “know your customer” and anti‑money laundering rules and regulations, including without limitation the PATRIOT Act and customary management background checks, in order to allow the Lenders to comply therewith, in each case, to the extent requested at least five (5) Business Days prior to the Closing Date.

 

(j)      [Reserved].

 

(k)     The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document shall be true and correct in all material respects on and as of the date of such Credit Extension (before and after giving effect to such Credit Extension); provided that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

 

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(l)     No Default or Event of Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds therefrom.

 

Section 4.02     Conditions to All Credit Extensions.  The obligation of each Lender to make a Credit Extension (other than with respect to the Initial Loans) hereunder is subject to satisfaction or waiver in writing by the Lenders of the following conditions precedent:

 

(a)     The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document shall be true and correct in all material respects on and as of the First Amendment Effective Date (before and after giving effect to the proposed Credit Extension); provided that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

 

(b)     No Default or Event of Default shall exist, or would result from the proposed Credit Extension or from the application of the proceeds therefrom.

 

(c)     Payment by the Borrower of all accrued costs, fees and expenses (including applicable Attorney Costs and the reasonable and documented out-of-pocket fees and expenses of any other advisors to the Administrative Agent and the Lenders) and any other compensation due and payable to the Administrative Agent and Lenders on the Closing Date shall have been received.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Agents and the Lenders that:

 

Section 5.01     Existence, Qualification and Power; Compliance with Laws.  Each Loan Party and each of its Subsidiaries (a) is duly incorporated, organized or formed, and validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization (to the extent such concept exists in such jurisdiction), (b) has all requisite power and authority to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing (to the extent such concept exists) under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, (d) is in compliance with all Laws (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), orders, writs, injunctions and orders and (e) has all requisite governmental licenses, authorizations, consents and approvals to operate its business as currently conducted, except, with respect to the foregoing clauses (c), (d) and (e), as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

 

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Section 5.02     Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party, and the consummation of the Transaction, (a) are within such Loan Party’s corporate or other powers, (b) have been duly authorized by all necessary corporate or other organizational action, and (c) do not and will not (i) contravene the terms of any of such Person’s Organization Documents, (ii) except as set forth on Schedule 5.02, result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 7.01), or require any payment to be made under (w) any material Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries, (x) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject or (y) any Material Agreement, or (iii) violate any material applicable Law.

 

Section 5.03     Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document to which such Loan Party is a party, or for the consummation of the Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the priority thereof) or (d) the exercise by the Collateral Agent, the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for (i) filings necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of the Secured Parties, (ii) the approvals, consents, exemptions, authorizations, actions, notices and filings which are set forth on Schedule 5.03 or have been duly obtained, taken, given or made and are in full force and effect and (iii) such approvals, consents, exemptions, authorizations, actions, notices and filings the failure to obtain or make would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.  All applicable waiting periods in connection with the Transaction have expired without any action having been taken by any competent authority restraining, preventing or imposing materially adverse conditions upon the Transaction or the rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any properties now owned or hereafter acquired by any of them.

 

Section 5.04     Binding Effect.  This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto.  This Agreement and each other Loan Document constitutes a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.

 

Section 5.05     Financial Statements; No Material Adverse Effect.  (a) The Unaudited Financial Statements (A) fairly present in all material respects the financial condition of the Company as of the dates thereof and the Company’s results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered

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thereby, except, in the case of the Unaudited Financial Statements, changes resulting from customary year-end adjustments consistent with past practice and the absence of footnotes and (B) show all material Indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date hereof that are required to be reflected on a balance sheet prepared in accordance with GAAP, except for such Indebtedness and other liabilities incurred since the date of the Unaudited Financial Statements in the ordinary course of business.

 

(b)     Since December 31, 2016, there has been no event or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.

 

(c)     The Projections furnished to the Administrative Agent prior to the Closing Date are based on good faith estimates and assumptions made by the management of the Borrower; provided, the Projections are not to be viewed as facts and that actual results during the period or periods covered by the Projections may differ from such Projections and that the differences may be material;  provided further, as of the Closing Date, management of the Borrower believed that the Projections were reasonable and attainable.

 

(d)     (i) The audited consolidated financial statements of the Borrower and its Subsidiaries most recently delivered pursuant to Section 6.01(a) and Section 6.01(g) and (ii) the unaudited consolidated financial statements of the Borrower and its Subsidiaries most recently delivered pursuant to Section 6.01(b), and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such periods (A) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (B) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of unaudited financial statements, to the absence of footnotes and to customary year‑end adjustments consistent with past practice.

 

(e)     The consolidated forecasted balance sheets, statements of income and statements of cash flows of the Borrower and its Subsidiaries delivered to the Lenders pursuant to Section 6.01(c) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were reasonable in light of the conditions existing at the time of delivery of such forecasts; it being understood that actual results may vary from such forecasts and that such variations may be material.

 

Section 5.06     Litigation.  Except as set forth on Schedule 5.06, there is no action, suit, investigation, litigation or proceeding affecting any Loan Party or its Subsidiaries, including any Environmental Action, pending or, to any Loan Party’s knowledge, threatened before any Governmental Authority or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the Transaction.

 

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Section 5.07     Ownership of Property; Liens

 

(a)     Each Loan Party and its Subsidiaries is the legal and beneficial owner of the Collateral pledged by it free and clear of any Lien, except for the Liens and security interests created or permitted under the Loan Documents including, any Liens permitted under Section 7.01.

 

(b)     Each Loan Party and each of its Subsidiaries has good and marketable title in fee simple to, or valid leasehold interests in, or easements or other limited property interests in, all real property used in the ordinary conduct of its business, free and clear of all Liens except for defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes and Liens permitted by Section 7.01 and except where the failure to have such title or other interest would not reasonably be expected to have a Material Adverse Effect.  Set forth on Schedule 5.07(b) hereto is a complete and accurate list of all real property owned by any Loan Party or any of its Subsidiaries, showing, as of the date hereof, the street address, state and any other relevant jurisdiction, record owner and fair market value.  Set forth on Schedule 5.07(b) hereto is a complete and accurate list of all Leasehold Property under which any Loan Party or any Subsidiary is the tenant, showing as of the date hereof the street address, state and any other relevant jurisdiction, parties thereto, sublessee (if any), expiration date and annual base rental cost thereof.

 

(c)     Except for the properties set forth on Schedule 5.07(b), as of the Closing Date, no Loan Party or any of its Subsidiaries owns any Material Owned Property or leases any Leasehold Property.

 

Section 5.08     Perfection of Security Interests. Upon the making of the filings and taking of the other actions set forth on Schedule 5.08, all filings and other actions necessary to perfect and protect the security interest in the Collateral created under the Collateral Documents have been duly made or taken and are in full force and effect, and the Collateral Documents create in favor of the Collateral Agent for the benefit of the Secured Parties a valid and, together with such filings and other actions, perfected first priority security interest in the Collateral, securing the payment of the Secured Obligations, and having priority over all other Liens on the Collateral except in the case of (a) non‑consensual Liens permitted under Section 7.01, to the extent any such Liens would have priority over the Liens in favor of the Collateral Agent pursuant to any applicable Law, and (b) Liens not required to be perfected by control or possession pursuant to the Collateral and Guarantee Requirement to the extent that all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken.

 

Section 5.09     Environmental Compliance.  Except as specifically set forth on Schedule 5.09:

 

(a)     The operations and properties of each Loan Party and each of its Subsidiaries comply in all material respects with all Environmental Laws and Environmental Permits, all past non‑compliance with such Environmental Laws and Environmental Permits has been fully resolved without ongoing obligations, costs or liabilities in the aggregate, in excess of the Threshold Amount, and no circumstances exist that would be reasonably likely to (A) to the knowledge of the Loan Parties, form

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the basis of an Environmental Action against any Loan Party or any Subsidiary or any of their properties or (B) cause any such property to be subject to any remedial action requirement or any restrictions on ownership, occupancy, use or transferability under any Environmental Law, which, in each case, individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect.

 

(b)     None of the properties currently or, to the knowledge of the Loan Parties, formerly, owned or operated by any Loan Party or any of its Subsidiaries is listed or, to such Loan Party’s or each of its Subsidiaries’ knowledge, proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list; there are no, and, to the knowledge of the Loan Parties, never have been, any underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the best of its knowledge, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries, in each case for which any Loan Party or any of its Subsidiaries is liable and that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect; and other than in compliance with applicable Environmental Laws, there is no friable asbestos or asbestos‑containing material on any property currently owned or operated by any Loan Party or any of its Subsidiaries; and Hazardous Materials have not been released, discharged or disposed of by any Loan Party or any of its Subsidiaries on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries other than in material compliance with applicable Environmental Laws and that, individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect.

 

(c)     Neither any Loan Party nor any of its Subsidiaries is undertaking, or is required either contractually or by any Environmental Law to undertake, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened Release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law and that individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; and all Hazardous Materials generated, used, treated, handled or stored at, or transported by or on behalf of any Loan Party or any of its Subsidiaries at, to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries have, to the knowledge of the Loan Parties, been disposed of in a manner not reasonably expected to result in material liability to any Loan Party or any of its Subsidiaries.

 

(d)     The Borrower and each of its Subsidiaries has obtained, maintained and timely renewed all material Environmental Permits required for ownership and operation of its property and business as presently conducted and there are no proceedings pending, or to the Borrower’s knowledge, threatened, to revoke, review or materially modify any such Environmental Permits.  Neither the Borrower nor any of its Subsidiaries has received any written notification pursuant to any Environmental Law or otherwise has  

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knowledge that any work, repairs, construction or Capital Expenditures are required to be made to be in or continue to be in compliance with any Environmental Law or any material Environmental Permit that individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

(e)     Except as would not reasonably be expected to result in a material liability, no Loan Party nor any of its Subsidiaries has contractually assumed any liability or obligation to investigate or remediate any property under or relating to any applicable Environmental Law.

 

(f)     Borrower has provided Lenders with true and complete copies of all environmental reports, audits and sampling results in its possession or control.

 

(g)     Nothing contained in this Section 5.09 is intended to apply to any action, suit, investigation, litigation or proceeding (including any Environmental Action) relating to exposure to asbestos, in any form, or any asbestos containing materials.

 

Section 5.10     Taxes.  (a) Each of the Borrower and each of its Subsidiaries has timely filed all income and all other material tax returns and reports required to be filed, and has timely paid all Taxes (whether or not shown on such tax returns or reports) and all other amounts of federal, provincial, state, municipal, foreign and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are set forth on Schedule 5.10(a) or are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP.

 

(b)     Except as set forth on Schedule 5.10(b) or as would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Effect, (i) there are no claims being asserted in writing with respect to any amounts of taxes, (ii) there are no presently effective waivers or extensions of statutes in writing with respect to any amounts of taxes, and (iii) no tax returns are being examined by, and no written notification of intention to examine has been received from, the Internal Revenue Service or any other taxing authority, in each case, with respect to the Borrower or any of its Subsidiaries.

 

(c)     Neither the Borrower nor any of its Subsidiaries is party to any tax sharing agreement other than with an affiliate included in a consolidated or combined tax return, provided that any such tax sharing agreement shall be subject to the restrictions in Section 7.08.

 

Section 5.11     Compliance with ERISA.  (a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other federal or state Laws, except as is not, either individually or in the aggregate, reasonably likely to have a Material Adverse Effect.

 

(b)     (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) none of the Loan Parties or any of their Subsidiaries has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 et seq. or 4243 of

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ERISA with respect to a Multiemployer Plan, except for a liability that could not reasonably be expected to result in a Material Adverse Effect; and (iii) none of the Loan Parties or any of their Subsidiaries or any ERISA Affiliate has engaged in a transaction that would be subject to Section 4069 or 4212(c) of ERISA.

 

Section 5.12     Labor Matters.  There are no strikes pending or, or to the Borrower’s knowledge, threatened against the Borrower or any of its Subsidiaries that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.  The (i) hours worked and payments made to employees of the Borrower or any of its Subsidiaries have not been in violation in any material respect of the Fair Labor Standards Act or any other applicable Law dealing with such matters and (ii) all material payments due from the Borrower or any of its Subsidiaries or for which any claim may be made against the Borrower or any of its Subsidiaries, on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of the Borrower or such Subsidiary to the extent required by GAAP.  The consummation of the Transaction will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any of its Subsidiaries (or any predecessor) is bound, other than collective bargaining agreements that, individually or in the aggregate, are not material to the Borrower or any of its Subsidiaries.

 

Section 5.13     Insurance.  The properties of the Loan Parties and their Subsidiaries are insured in the manner contemplated by Section 6.07Schedule 5.13 sets forth a true, complete and correct description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Closing Date. As of the Closing Date, all such insurance is in full force and effect and all premiums in respect of such insurance have been duly paid.  The insurance maintained by or on behalf of the Loan Parties and their Subsidiaries is adequate and is in accordance with normal industry practice.

 

Section 5.14     Subsidiaries; Equity Interests.  As of the date hereof and the date of delivery of any supplemental Schedules pursuant to Section 6.02(d) and Section 6.11, none of the Loan Parties have any Subsidiaries other than those specifically disclosed in Schedule 5.14, and all of the outstanding Equity Interests in each such Person and each such Subsidiary have been validly issued, are fully paid and non‑assessable.  As of the date hereof and the date of delivery of any supplemental Schedules pursuant to Section 6.02(d) and Section 6.11,  Schedule 5.14 (a) sets forth the name and jurisdiction of organization of each Subsidiary of each of the Loan Parties, (b) sets forth the ownership interest of each Loan Party and each of its Subsidiaries in each of their respective Subsidiaries, including the percentage of such ownership and (c) identifies each Person the Equity Interests of which are required to be pledged pursuant to the Collateral and Guarantee Requirement and Section 6.11.

 

Section 5.15     Margin Regulations; Investment Company Act; PATRIOT Act

 

(a)      None of the Loan Parties or any of their Subsidiaries is engaged nor will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for

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the purpose of purchasing or carrying margin stock, and no proceeds of any Borrowings will be used for any purpose that violates Regulation U issued by the FRB.

 

(b)     None of the Loan Parties or any of their Subsidiaries or any Person controlling such Loan Party or any of its Subsidiaries is required to be registered as an “investment company” under the Investment Company Act of 1940, as amended.

 

(c)     None of the Loan Parties or any of their Subsidiaries is in material violation of any applicable laws relating to money laundering, including the PATRIOT Act, or terrorism, including Executive Order No. 13224 on Terrorist Financing, effective September 23, 2001, and the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended), or any enabling legislation or executive order relating thereto.  None of the Loan Parties or any of their Subsidiaries will knowingly use the proceeds of the Loans in violation of any of the foregoing statutes.

 

(d)     No Loan Party (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner that violates Section 2 of such executive order, or (iii) is a person on the list of “Specially Designated Nationals and Blocked Persons” or subject to blocking or specific trade restrictions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or implementing executive order.

 

Section 5.16     Disclosure.  No report, financial statement, certificate or other written information furnished by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains when furnished any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that with respect to projections and other forward‑looking information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time of preparation; it being understood that such projections may vary from actual results and that such variances may be material.  There are no facts known (or which should upon the reasonable exercise of diligence be known) to Company (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in such other documents, certificates and statements furnished to Lenders for use in connection with the transactions contemplated hereby.

 

Section 5.17     Intellectual Property.  As of the date hereof and the date of delivery of any supplemental Schedules pursuant to Section 6.02(d) and Section 6.11, set forth on Schedule 5.17 is a complete and accurate list of all Registered patents, trademarks, service

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marks, domain names and copyrights, owned by the Borrower or any of its Subsidiaries as of such date, showing as of such date the jurisdiction in which each such item of Registered Intellectual Property is registered or in which an application is pending and the registration or application number.  The Borrower and each Subsidiary owns or has the right to use, all of the trademarks, service marks, trade names, domain names, copyrights, patents, know‑how, technology and other intellectual property recognized under applicable Law (collectively, “Intellectual Property”) that are material to the operation of their respective businesses as currently conducted and, to the knowledge of the Loan Parties, the use of such Intellectual Property by such Person or the operation of their respective businesses is not infringing upon any Intellectual Property rights held by any other Person except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect.

 

Section 5.18     Solvency.  After giving effect to the Transaction and the other transactions contemplated hereby and thereby, the Borrower and its Subsidiaries are, on a consolidated basis, Solvent.

 

Section 5.19     Material AgreementsSchedule 5.19 contains a true, correct and complete list of all the Material Agreements in effect on the Closing Date, which, together with any updates provided pursuant to Section 6.03(l), are in full force and effect and no defaults currently exist thereunder (other than as described in Schedule 5.19 or in such updates).

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder which is accrued and payable shall remain unpaid or unsatisfied, the Borrower shall, and shall (except in the case of the covenants set forth in Section 6.01,  Section 6.02,  Section 6.03 and Section 6.04(b)) cause each Subsidiary to:

 

Section 6.01     Financial Statements.  Deliver to the Administrative Agent for prompt further distribution to each Lender:

 

(a)     as soon as available, but in any event within ninety (90) days after the end of each Fiscal Year of the Borrower, a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Year, and the related consolidated and consolidating statements of income or operations, Shareholders’ Equity and cash flows for such Fiscal Year, setting forth in each case (i) in comparative form the figures for the previous Fiscal Year and (ii) a comparison of actual figures against the forecasts for such Fiscal Year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a (A) report and opinion of an independent registered public accounting firm reasonably acceptable to the Administrative Agent (Hein & Associates shall be acceptable), which report and opinion shall (1) be prepared in accordance with generally accepted auditing standards and (2) not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit other than pertaining solely to impending debt maturities of any

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Indebtedness occurring within twelve (12) months of such audit, and (B) certificate of such accounting firm to the Lenders stating that in the course of the regular audit of the business of the Borrower and its Subsidiaries, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof; and

 

(b)     as soon as available, but in any event, within forty‑five (45) days after the end of each fiscal quarter of the Borrower (commencing with the first full fiscal quarter ended after the Closing Date), a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated and consolidating statements of income or operations, and consolidated and consolidating statements of cash flows for such fiscal quarter and for the portion of the Fiscal Year then ended, setting forth in each case (A) in comparative form the figures for the corresponding fiscal quarter of the previous Fiscal Year and the corresponding portion of the previous Fiscal Year and (B) a comparison of actual figures for such fiscal quarter against the forecasts for such fiscal quarter, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations, Shareholders’ Equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to customary year‑end adjustments consistent with past practice and the absence of footnotes ;  provided,  however, that until the annual financial statements of the Borrower for the Fiscal Year ended December 31, 2017 are filed with the SEC or any other successor Governmental Authority (the “2017 Filed Financial Statements”), a Responsible Officer of the Borrower shall only be required to certify that such financial statements fairly present in all material respects the financial condition, results of operations, and Shareholders’ Equity of the Borrower and its Subsidiaries in accordance with GAAP, subject to customary period end adjustments, the absence of footnotes, adjustments required by subsequent events and other customary audit and accounting adjustments that impact open accounting periods, provided further that if any such financial statements are adjusted in the 2017 Filed Financial Statements, the Borrower shall within three (3) Business Days following the filing of the 2017 Filed Financial Statements deliver to the Administrative Agent for further distribution to each Lender a detailed statement of such adjustments, which shall be reasonably satisfactory to the Administrative Agent.

 

(c)     as soon as available, but in any event, within thirty (30) days after the end of each of fiscal month of the Borrower (commencing with the first full fiscal month ended after the Closing Date),

 

(i)     a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal month, and the related consolidated and consolidating statements of income or operations, (which shall set forth the cost of sales and in selling, general and administrative (SG&A) expenses, gross margin, restructuring charges and unusual or nonrecurring expenses) for such fiscal month and for the portion of the Fiscal Year then ended, together with a calculation of the trailing twelve-month Consolidated Adjusted EBITDA as of the end of such month and setting forth in each

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case (A) in comparative form the figures for the corresponding fiscal month of the previous Fiscal Year and the corresponding portion of the previous Fiscal Year and (B) a comparison of actual figures for such fiscal month against the forecasts for such fiscal month, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations, Shareholders’ Equity of the Borrower and its Subsidiaries in accordance with GAAP, subject only to customary year‑end adjustments consistent with past practice and the absence of footnotes; provided,  however, that until the 2017 Filed Financial Statements are filed with the SEC or any other successor Governmental Authority, a Responsible Officer of the Borrower shall only be required to certify that such financial statements fairly present in all material respects the financial condition, results of operations, and Shareholders’ Equity of the Borrower and its Subsidiaries in accordance with GAAP, subject to customary period end adjustments, the absence of footnotes, adjustments required by subsequent events and other customary audit and accounting adjustments that impact open accounting periods, provided further that if any such financial statements are adjusted in the 2017 Filed Financial Statements, the Borrower shall within three (3) Business Days following the filing of the 2017 Filed Financial Statements deliver to the Administrative Agent for further distribution to each Lender a detailed statement of such adjustments, which shall be reasonably satisfactory to the Administrative Agent.

 

(ii)     until the consummation and final closing of the Specified Subsidiary Transaction, a pro forma rolling thirteen-week cash flow budget of the Borrower and its Domestic Subsidiaries, which budget shall detail all cash inflows and outflows during such period and shall otherwise be reasonably satisfactory in all respects to the Administrative Agent (each such budget, a Cash Flow Budget).  Each Cash Flow Budget shall include a reconciliation of the actual results for the immediately preceding thirteen-week period to the Cash Flow Budget for such immediately preceding thirteen-week period and a detailed explanation of all material variances from the immediately preceding thirteen-week Cash Flow Budget and shall demonstrate that accounts payables have been made in the ordinary course of business and consistent with past practices; and

 

(iii)     a schedule of outstanding letters of credit, outstanding Indebtedness balances and Liquidity reflected on the balance sheet of the Loan Parties on a consolidated basis.

 

(d)     Annual Forecasts and Budget.  As soon as available and in any event no later than February 1 of each Fiscal Year, forecasts prepared by management of the Borrower, in form reasonably satisfactory to the Administrative Agent, of balance sheets, income statements and cash flow statements on a monthly basis for the period until the Maturity Date, and an explanation of the assumptions on which such forecasts are based and demonstrating projected compliance with the Financial Covenants, in each case in form reasonably satisfactory to the Administrative Agent.

 

(e)     Management Discussion and Analysis Reports.  Simultaneously with the delivery of each set of financial statements referred to in Section 6.01(a),  (b) and (c), (i) a

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report setting forth management’s analysis and discussion of the condition (financial and otherwise) operations, which may be in the form of the Business Segment Review delivered to the Administrative Agent prior to the Closing Date, (ii) a summary of all backlog, walk forwards and opportunity listings, (iii) [reserved], (iv) a schedule of outstanding letters of credit (including the Existing Letters of Credit), and (v) a schedule of outstanding performance and surety bonds and a schedule of costs in excess of billings.  The Borrower shall schedule one (1) telephonic or in-person conference per fiscal quarter among the Administrative Agent, the Lenders and the chief financial officer and chief executive officer of the Borrower to discuss the contents of the relevant reports.

 

(f)     Annual Reconciliation.  Simultaneously with the delivery of each set of financial statements referred to in Section 6.01(a), an annual reconciliation to the forecast delivered to the Administrative Agent for the Fiscal Year recently ended in footnote form and in substance satisfactory to the Administrative Agent.

 

(g)     December 31, 2016 Audited Financial Statements.  As soon as available and in any event no later than September 15, 2017, the final audited consolidated balance sheets and related statements of income, Shareholders’ Equity and cash flows of the Company for the Fiscal Year of the Company ended December 31, 2016.  

 

Section 6.02     Certificates; Reports; Other Information.  Promptly deliver to the Administrative Agent for further distribution to each Lender:

 

(a)     upon delivery of the financial statements referred to in Section 6.01(a),  (b), and (c)(i) (solely as it relates to the Financial Covenants set forth in Section 7.12(e)), a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower;

 

(b)     promptly after the same are publicly available, copies of all annual, regular, periodic and special reports and registration statements which the Borrower files with the SEC or with any successor Governmental Authority (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered), exhibits to any registration statement and, if applicable, any registration statement on Form S‑8), all press releases and other statements made available generally by the Borrower or any of its Subsidiaries to the public concerning material developments in the business of the Borrower or any of its Subsidiaries, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

(c)     promptly after the receipt or furnishing thereof, copies of any material requests or material notices received by any Loan Party or any of its Subsidiaries (other      than in the ordinary course of business) in respect of any instrument, indenture, loan or credit or similar agreement relating to Indebtedness in excess of the Threshold Amount or relating to the ABN AMRO Facility;

 

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(d)     together with the delivery of each Compliance Certificate pursuant to Section 6.02(a), (i) a description of each event, condition or circumstance during the last fiscal quarter covered by such Compliance Certificate requiring a prepayment under Section 2.02(b), (ii) a list of Subsidiaries as of the date of delivery of such Compliance Certificate or a confirmation that there is no change in such information since the later of the Closing Date or the date of the last such list, (iii) a report supplementing Schedules 5.07(b) and 5.17 and Schedules I and IV of the Security Agreement and (iv) such other information required by the Compliance Certificate;

 

(e)     within fifteen (15) days of filing or receipt of any material written notification, copies of all Tax returns, waivers, amendments, requests for extension and other material written notifications which the Borrower and its Subsidiaries files with, or receives from, the Internal Revenue Service or any other taxing authority;

 

(f)     any notices of default given or received with respect to any Permitted Servicing Joint Venture and, upon written request of the Administrative Agent, such additional material or documentation provided by or to the Loan Parties with respect to each such Permitted Servicing Joint Venture as may be reasonably requested; and

 

(g)     promptly, such additional information regarding the business, legal, financial or corporate affairs of any Loan Party or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a),  (b) or (c) or Section 6.02(b)(c) or (e) may be delivered electronically to the Administrative Agent for further distribution to each Lender and if so delivered, shall be deemed to have been delivered on the date the Borrower delivers such documents to the Administrative Agent by electronic mail; provided that upon written request by the Administrative Agent, the Borrower shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent.  Notwithstanding the foregoing, the Borrower shall deliver originally executed Compliance Certificates to the Administrative Agent (in addition to the electronic copies pursuant to the foregoing).  Each Lender shall be solely responsible for timely accessing electronically provided documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.

 

Section 6.03     Notice Requirements; Other Information.  (i) Promptly after a Responsible Officer obtains knowledge thereof, notify the Administrative Agent of each of the following events or circumstances, and, (ii) as soon as available, provide to the Administrative Agent, for prompt further distribution to each Lender, the following information and documents:

 

(a)     the occurrence of any Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower has taken or proposes to take with respect thereto;

 

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(b)     the occurrence of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect;

 

(c)     the commencement of, or any material development in, any litigation or governmental proceeding (including without limitation pursuant to any applicable Environmental Law) pending against the Borrower or any of the Subsidiaries that is listed on Schedule 5.06 or that could reasonably be expected to be determined adversely and, if so determined, to result in a Material Adverse Effect;

 

(d)     the occurrence of any ERISA Event that could reasonably be expected to result in a liability above the Threshold Amount or the breach of any representation in Section 5.11 or 5.12;

 

(e)     the occurrence of any event triggering a Collateral and Guarantee Requirement under Section 6.11;

 

(f)     any information with respect to environmental matters as required by Section 6.04(b);

 

(g)     copies of all notices, requests and other documents received by any Loan Party or any of its Subsidiaries pursuant to any instrument, indenture, loan or credit or similar agreement relating to Indebtedness in excess of the Threshold Amount regarding or related to any breach or default by any party thereto or any other event that could reasonably be expected to materially impair the value of the interests or the rights of any Loan Party or otherwise have a Material Adverse Effect and copies of any amendment, modification or waiver of any provision of any such instrument, indenture, loan or credit or similar agreement relating to any Indebtedness in excess of the Threshold Amount and, from time to time upon request by the Administrative Agent, such information and reports regarding such instruments, indentures and loan and credit and similar agreements relating to any Indebtedness in excess of the Threshold Amount as the Administrative Agent may reasonably request;

 

(h)     a tax event or liability not previously disclosed in writing by the Borrower to the Administrative Agent which would reasonably be expected to result in a material liability, together with any other information as may be reasonably requested by the Administrative Agent to enable the Administrative Agent to evaluate such matters;

 

(i)     any occurrence of a Change of Control;

 

(j)     any change (i) in any Loan Party’s corporate name, (ii) any Loan Party’s identity and corporate structure, (iii) any Loan Party’s taxpayer identification number or (iv) any Loan Party’s location.  The Borrower agrees that it will not, and will not permit any of its Subsidiaries to, permit or make any change referred to in this Section 6.03(j) unless all filings have been made under the Uniform Commercial Code within the time periods provided therein or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first

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priority security interest in the Collateral and for the Collateral Agent at all times following such change to have a valid, legal and perfected first priority security interest as contemplated by the Collateral Documents in each case, subject to Permitted Liens;

 

(k)     immediately upon the discovery of any inaccuracy, miscalculation or misstatement contained in any Compliance Certificate or other certificate provided for any period that affects any financial or other calculations, representations or warranties or other statements impacting any provision of this Agreement and any other Loan Document in any material respect, notice of such inaccuracy, miscalculation or misstatement together with an updated certificate including the corrected information, calculation or statement, as applicable;

 

(l)     promptly, and in any event within ten (10) Business Days (i) after any Material Agreement of the Borrower or any of its Subsidiaries is terminated or amended in a manner that is materially adverse to Borrower or such Subsidiary, as the case may be, or (ii) after any new Material Agreement is entered into, a written statement describing such event, with copies of such material amendments or new contracts, delivered to Administrative Agent (to the extent such delivery is permitted by the terms of any such Material Agreement, provided, no such prohibition on delivery shall be effective if it were bargained for by Borrower or its applicable Subsidiary with the intent of avoiding compliance with this Section 6.03(l)), and an explanation of any actions being taken with respect thereto;

 

(m)     each year, at the time of delivery of annual financial statements with respect to the preceding Fiscal Year pursuant to Section 6.01(a), the Company shall deliver to Collateral Agent an Officer’s Certificate either (i)  confirming that there has been no change in such information since the date of the Collateral Questionnaire delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes, or (ii) certifying that all UCC financing statements (including fixtures filings, as applicable) or other appropriate filings, recordings or registrations, have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified in the Collateral Questionnaire or pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Collateral Documents for a period of not less than eighteen (18) months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);

 

(n)     [reserved]; and

 

(o)     any management letter delivered to management of the Borrower by an independent registered public accounting firm.

 

Section 6.04     Environmental Matters.  (a) Comply and cause each of its Subsidiaries and take all commercially reasonable efforts to cause all lessees and other Persons operating or occupying any real property owned or leased by the Loan Parties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain

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and renew, and cause each of its Subsidiaries to obtain, maintain and timely renew, all Environmental Permits required under Environmental Laws for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action required to remove, clean up and/or otherwise address all violations of Environmental Laws and all Releases or threatened Releases of Hazardous Materials from any of its properties, as required under, and in accordance with the requirements of all Environmental Laws; provided,  however, that neither the Borrower nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and, to the extent required by GAAP, appropriate reserves are being maintained with respect to such circumstances.

 

(b)     Environmental Reporting Requirements.  Promptly, and in any event within ten (10) Business Days, after a Responsible Officer obtains knowledge thereof, notify the Administrative Agent of or, deliver to the Administrative Agent, for further distribution to each Lender copies of any and all material written correspondence and material documents concerning:

 

(i)     any Environmental Action against or of any non‑compliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that would (1) reasonably be expected to result in a liability to any Loan Party in excess of $500,000 or (2) cause any Mortgaged Properties to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law;

 

(ii)     to the extent any of the following is reasonably expected to result in a liability to any Loan Party in excess of $500,000: (1) any occurrence of any Release or threatened Release of Hazardous Materials required to be reported to any Governmental Authority under applicable Environmental Law, (2) any Release or threatened Release that could reasonably be expected to result in an Environmental Action or (3) the Loan Parties’ discovery of any occurrence of or condition on any real property adjoining or in the vicinity of any site or facility that would be reasonably expected to cause such site or facility or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws;

 

(iii)     to the extent reasonably expected to result in a liability to any Loan Party in excess of $500,000, any action proposed to be taken by the Borrower or any of its Subsidiaries to modify current operations in a manner that would reasonably be expected to subject the Borrower and its Subsidiaries to any material additional obligations or requirements under Environmental Laws;

 

(iv)     copies of all material environmental reports or audits (whether produced by the Borrower or its Subsidiaries or any third party or Governmental Authority) and any Phase I or Phase II reports in respect of any sites or real property owned, leased or operated by the Borrower and its Subsidiaries that are in possession or control of any Loan Party or any of its Subsidiaries;

 

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(v)     to the extent any of the following is reasonably expected to result in a liability to any Loan Party in excess of $500,000: copies of any and all material written communications with respect to (A) any Environmental Action, (B) any release or threatened release or non‑compliance with any Environmental Law required to be reported to any Governmental Authority and (C) any request for information from a Governmental Authority that suggests such Governmental Authority is investigating the potential responsibility of the Borrower or any of its Subsidiaries as a potentially responsible party;

 

(vi)     the good faith belief that a Release of Hazardous Materials, or a violation of Environmental Law reasonably likely to result in a fine or penalty in excess of $500,000, has occurred on or after the Closing Date, and within sixty (60) days after request by the Administrative Agent and at the expense of the Borrower, any additional environmental site assessment reports for any of its or its Subsidiaries’ properties described in such request prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent, indicating the presence or absence of such Hazardous Materials and the estimated cost of any compliance, removal or remedial action in connection with any such Hazardous Materials on such properties; without limiting the generality of the foregoing, if the Administrative Agent reasonably determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Administrative Agent may retain an environmental consulting firm to prepare such report at the expense of the Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary that owns any property described in such request to grant at the time of such request to the Administrative Agent, the Lenders, such firm and any agents or representatives thereof, the right, subject to the rights of tenants, to enter onto their respective properties to undertake such an assessment; and

 

(vii)     any such other documents and information as the Administrative Agent may reasonably request from time to time.

 

Section 6.05     Maintenance of Existence.  (a) Preserve, renew and maintain in full force and effect its legal existence, structure and name under the Laws of the jurisdiction of its organization and (b) take all commercially reasonable action to maintain all rights, privileges (including its good standing), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except pursuant to a transaction permitted by Section 7.04 or Section 7.05;  provided, that nothing in this Section 6.05 shall prevent any Loan Party (other than the Borrower) from discontinuing operations or maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of such Loan Party, desirable in the conduct of its or their business and is not materially adverse to the Lenders.

 

Section 6.06     Maintenance of Properties.  Maintain, preserve and protect all of its material properties and equipment that are used or useful in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted, and make all commercially reasonable and appropriate repairs, renewals, replacements, modifications, improvements, upgrades, extensions and additions thereof except where failure to do so would not reasonably be expected to materially adversely

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affect the use of the related property; provided, that nothing in this Section 6.06 shall prevent any Loan Party (other than the Borrower) from discontinuing operations or maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of such Loan Party, desirable in the conduct of its or their business and is not materially adverse to the Lenders.

 

Section 6.07     Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies (in the good faith judgment of management), insurance with respect to its properties and business (including D&O insurance) against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self‑insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Borrower and its Subsidiaries) as are customarily carried by a Person engaged in similar businesses and owning or leasing similar properties in the same general areas in which the Borrower or such Subsidiary operates.

 

Section 6.08     Compliance with Laws. Comply with the requirements of all Laws and all orders, writs, injunctions, decrees and judgments applicable to it or to its business or property, except where such non‑compliance is not, either individually or in the aggregate, reasonably likely to have a Material Adverse Effect.

 

Section 6.09     Books and Records.  Maintain proper books of record and account, in which entries that are full, true and correct in all material respects and as are sufficient to permit the preparation of financial statements in conformity with GAAP consistently applied shall be made of all material financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be.

 

Section 6.10     Inspection Rights/Lender Meetings.  (a) Permit representatives and independent contractors of the Administrative Agent to visit and inspect any properties of the Borrower and its Subsidiaries (subject, in the case of third party customer sites, to customary access agreements) and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the reasonable expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided,  however, that (i) such visits and inspections shall be coordinated through the Administrative Agent and (ii) the Administrative Agent shall not exercise such rights more than four (4) times during any Fiscal Year absent the occurrence of an Event of Default.  The Administrative Agent shall give the Borrower the opportunity to participate in any discussions with the Borrower’s independent public accountants to the extent reasonably feasible.  Neither the Borrower nor any Subsidiary shall be required to disclose to the Administrative Agent or any Lender any information that, in the opinion of counsel to the Borrower or such Subsidiary, is prohibited by Law to be disclosed, is subject to attorney client privilege or constitutes attorney work product or the disclosure of which would cause a material breach of a binding non‑disclosure agreement with a third party to the extent such agreement is not made in contemplation of the avoidance of this Section 6.10.

 

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(b)     The Borrower will, upon the request of Administrative Agent or Required Lenders, participate in a meeting of Administrative Agent and Lenders once during each Fiscal Year to be held at the Borrower’s corporate offices (or at such other location as may be agreed to by the Borrower and Administrative Agent) at such time as may be agreed to by the Borrower and Administrative Agent.

 

Section 6.11     Covenant to Guarantee Obligations and Give Security.  Upon (x) the formation or acquisition of any new direct or indirect Subsidiaries by any Loan Party or (y) the acquisition of any property by any Loan Party (it being understood that, in the case of real property under the foregoing clauses (x) and (y), only the requirements of Section 6.11(g), which requirements shall apply only to Material Owned Property, Section 6.11(b) and Section 6.11(f) shall apply), and such property, in the sole judgment of the Collateral Agent, shall not already be subject to a perfected first priority security interest in favor of the Collateral Agent for the benefit of the Secured Parties, then each Loan Party shall, in each case at such Loan Party’s expense:

 

(a)     in connection with the formation or acquisition of a Subsidiary, within thirty (30) days after such formation or acquisition (or such longer period as the Collateral Agent may agree in its sole discretion), cause each such Subsidiary that is required to be a Guarantor pursuant to the Collateral and Guarantee Requirement, to duly execute and deliver to the Collateral Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Collateral Agent, guaranteeing the other Loan Parties’ Obligations under the Loan Documents,

 

(b)     within thirty (30) days after (or such longer period as the Collateral Agent may agree in its sole discretion) such formation or acquisition, furnish to the Collateral Agent a description of the Material Owned Properties and material personal properties of such Subsidiary that is required to become a Guarantor under the Collateral and Guarantee Requirement or the Material Owned Property and personal properties so acquired, in each case in detail reasonably satisfactory to the Collateral Agent,

 

(c)     within thirty (30) days after (or such longer period as the Collateral Agent may agree in its sole discretion) (i) acquisition of property by any Loan Party, duly execute and deliver, and cause each Loan Party to duly execute and deliver, to the Collateral Agent such additional pledges, assignments, Securities Pledge Agreement Supplements, Security Agreement Supplements, Intellectual Property Security Agreement Supplements and other security agreements (which, to the extent applicable and if relating to the type of Collateral the granting of a security interest in which can be effected through the execution of a joinder agreement or supplement to the Securities Pledge Agreement (a “Securities Pledge Agreement Supplement”), a joinder agreement or supplement to the Security Agreement (a “Security Agreement Supplement”) or a joinder agreement or supplement to the Intellectual Property Security Agreement (an “Intellectual Property Security Agreement Supplement”) shall be effected in such manner), as specified by, and in form and substance reasonably satisfactory to the Collateral Agent, in each case securing payment of all the Obligations of such Loan Party under the Loan Documents and granting Liens on all such properties and (ii) such

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formation or acquisition of any new Subsidiary that is required to become a Guarantor under the Collateral and Guarantee Requirement, duly execute and deliver and cause such Subsidiary that is required to become a Guarantor under the Collateral and Guarantee Requirement and each Loan Party acquiring Equity Interests in such Subsidiary to duly execute and deliver to the Collateral Agent pledges, assignments, Security Agreement Supplements, Intellectual Property Security Agreement Supplements and other security agreements (which, to the extent applicable and if relating to the type of Collateral the granting of a security interest in which can be effected through the execution of a Security Agreement Supplement or Intellectual Security Agreement Supplement shall be effected in such manner) as specified by, and in form and substance reasonably satisfactory to, the Collateral Agent, in each case securing payment of all of the Obligations of such Subsidiary or Loan Party, respectively, under the Loan Documents and granting Liens on all properties of such new Subsidiary,

 

(d)     within thirty (30) days (or such longer period as the Collateral Agent may agree in its sole discretion) after such formation or acquisition, take, and cause each Loan Party and each newly acquired or newly formed Subsidiary that is required to become a Guarantor under the Collateral and Guarantee Requirement to take or cause to be taken, whatever action (including, without limitation, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the reasonable opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid, perfected (subject to the Collateral and Guarantee Requirement) Liens on the properties purported to be subject to the pledges, assignments, Security Agreement Supplements, Intellectual Property Security Agreement Supplements and security agreements delivered pursuant to this Section 6.11, enforceable against all third parties in accordance with their terms, subject to Permitted Liens,