AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT

Exhibit 10.1

Execution

Counterpart

 

 

AMENDED AND RESTATED

REVOLVING CREDIT LOAN AGREEMENT

dated as of August 7, 2009 by and among

HARVARD BIOSCIENCE, INC.

(the “ Borrower ”),

THE LENDERS THAT ARE SIGNATORIES HERETO

(the “ Lenders ”),

and

BANK OF AMERICA, N.A.

(the “ Agent ”)

 

 

TABLE OF CONTENTS

 

 

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Exhibit A-1 - Committed Loan Notice

Exhibit A-2 - Compliance Certificate

Exhibit B - Revolving Credit Note

Exhibit C - Reserved

Exhibit D - Solvency Certificate

Exhibit E-1 - Assignment and Assumption

Exhibit E-2 – Administrative Questionnaire

 

 

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AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT

This AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT IS dated as of August 7, 2009 by and among HARVARD BIOSCIENCE, INC., a Delaware corporation (the “ Borrower ”) and the Lenders from time to time party hereto, including BANK OF AMERICA, N.A., (both in its capacity as a “ Lender ” and in its capacity as “ Agent ” for itself and the other Lenders), and BROWN BROTHERS HARRIMAN & CO. (as a “Lender” and, together with BANK OF AMERICA, N.A. the “Lenders”).

The Borrower and the Lenders entered into a Revolving Credit Loan Agreement dated as of November 21, 2003 wherein Brown Brothers Harriman & Co. was named the Agent, which was amended by a First Amendment dated March 14, 2006 and by a Second Amendment dated December 1, 2006 (as may have been further amended to the date hereof, the “Original Credit Agreement”). The Borrower, the Guarantors and the Lenders have agreed to amend the Original Credit Agreement and are entering into this Agreement to, among other things, extend the maturity date and to change the Agent from Brown Brothers Harriman & Co. to Bank of America, N.A.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Lenders hereby agree as follows:

ARTICLE I

REVOLVING CREDIT LOANS

1.1. Recitals; Maximum Line Commitment . The Borrower wishes to establish a revolving credit facility (the “ Revolving Credit Facility ”) with the Lenders in an aggregate principal amount at any one time outstanding not in excess of Twenty Million Dollars ($20,000,000) (the “ Maximum Line Commitment ”), to expire on the Maturity Date unless sooner terminated as provided herein.

The Lenders, severally in accordance with their respective Commitments set forth on Schedule 1.1 , are willing to establish such Revolving Credit Facility, subject to the terms and conditions hereafter set forth.

1.2. Revolving Credit Loans; Reborrowings; Compliance Certificates .

(a) Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “ Revolving Credit Loan ”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed, at any time outstanding, the amount of such Lender’s Commitment; provided , however , that after giving effect to any Revolving Credit Borrowing, the Total Revolving Credit Outstandings shall not exceed the Maximum Line Commitment and further provided that all of the Revolving Credit Loans, at any time outstanding, the proceeds of which were used directly, or indirectly through the repayment of a BBA LIBOR Daily Floating Rate Loan and the reborrowing thereof with a Eurodollar Rate Loan, for Permitted Stock Repurchases will not exceed the Permitted Stock Repurchase Sublimit. Within the limits of each Revolving Credit Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 1.2(a) , prepay under Section 1.2(j) , and reborrow under this Section 1.2(a) .

(b) Each Revolving Credit Borrowing, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Agent, which may be given by telephone. Each such notice must be received by the Agent not later than 11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, or continuation of Eurodollar Rate Loans and on the requested date of any BBA LIBOR Daily Floating Rate Loan. Each telephonic notice by the Borrower pursuant to this ÔASection 1.2(b) must be confirmed promptly by delivery to the Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of a Eurodollar Rate Loan and each continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. Each Borrowing of a BBA LIBOR Daily Floating Rate Loan shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing of a Eurodollar Rate Loan, a BBA LIBOR Daily Floating Rate Loan, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, or continuation, (which shall be a Business Day), (iii) the principal amount of Revolving Credit Loans to be borrowed, or continued, (iv) if a Eurodollar Rate Loan, the duration of the Interest Period with respect thereto and (v) the intended use of the proceeds of such Borrowing. If the Borrower requests a Borrowing of, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have selected a BBA LIBOR Daily Floating Rate Loan.

(c) Following receipt of a Committed Loan Notice, the Agent shall promptly notify each Lender of the amount of its Applicable Percentage under the Revolving Credit Facility of the Borrowing. Each Lender shall make the amount of its Loan available to the Agent in immediately available funds at the Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.3 (and, if such Borrowing is the initial credit extension on the Restatement Closing Date, Section 4.1 ), the Agent shall make all funds so received available to the Borrower in like funds as received by the Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Agent by the Borrower.

(d) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default and, unless the Required Lenders otherwise agree in writing, no Loans may be requested and all Eurodollar Rate Loans shall immediately be converted to BBA LIBOR Daily Floating Rate Loans.

(e) The Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate.

(f) After giving effect to all Borrowings, and all continuations of Revolving Credit Loans, there shall not be more than five (5) Interest Periods in effect.

 

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(g) The Borrower may, on the last day of any fiscal quarter, upon written notice to the Agent, terminate the Revolving Credit Facility, or from time to time permanently reduce the Revolving Credit Facility, provided that (i) any such notice shall be received by the Agent not later than 11:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $250,000 in excess thereof and (iii) the Borrower shall not terminate or reduce (A) the Revolving Credit Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Maximum Line Commitment. The Agent will promptly notify the Lenders of any termination or reduction of the Revolving Credit Facility under this Section 1.2(g) . Upon any reduction of the Revolving Credit Facility, the Commitment of each Lender shall be reduced by such Lender’s Applicable Percentage of such reduction amount. All fees in respect of the Revolving Credit Facility accrued until the effective date of any termination of the Revolving Credit Facility shall be paid on the effective date of such termination.

(h) The Borrower shall repay to the Lenders on the Maturity Date for the Revolving Credit Facility the aggregate principal amount of all Revolving Credit Loans outstanding on such date.

(i) Subject to the last sentence of this subsection (i) , the Borrower may, upon written notice to the Agent, at any time or from time to time voluntarily prepay Revolving Credit Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of any BBA LIBOR Daily Floating Rate Loan; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof and (c) any prepayment of BBA LIBOR Daily Floating Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof; or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment whether such Loan is a BBA LIBOR Daily Floating Rate Loan or a Eurodollar Rate Loan and, if a Eurodollar Rate Loan is to be prepaid, the Interest Period(s) of such Loans. The Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage). 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. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 2.4 and Section 2.5 .

1.3. Revolving Credit Notes . The Revolving Credit Loans shall be evidenced by revolving credit promissory notes of the Borrower payable to the order of each Lender, in a principal amount equal to each Lender’s Commitment and in the form attached hereto as Exhibit B (the “ Revolving Credit Notes ” or the “ Notes ”).

 

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1.4. Interest .

(a) Subject to the provisions of Section 1.8 , each Eurodollar Rate Loan shall bear interest (computed on the basis of the actual number of days elapsed over a 360-day year) on the unpaid principal amount thereof until paid in full at the Eurodollar Rate for such Interest Period plus the Applicable Margin and each BBA LIBOR Daily Floating Rate Loan shall bear interest (computed on the basis of the actual number of days elapsed over a 360-day year), at the BBA LIBOR Daily Floating Rate plus the Applicable Margin, from the date of such Borrowing until such Borrowing is repaid in full.

(b) Interest on the Revolving Credit Notes shall be payable on the earlier to occur of the last day of the Interest Period applicable to such Eurodollar Rate Loan or in the case of a BBA LIBOR Daily Floating Rate Loan the earlier to occur of (x) the last Business Day of each calendar month (y) when such Loan is repaid, and at maturity (whether by acceleration or otherwise).

1.5. Fees .

(a) Unused Line Fee . The Borrower shall pay the Agent for the ratable benefit of the Lenders an unused line fee (the “ Unused Line Fee ”) for the period commencing on the Restatement Closing Date to and including the Maturity Date, or the earlier date of termination of the Revolving Credit Facility hereunder, in an amount equal to one half of one percent (0.5%) per annum (computed on the basis of the actual number of days elapsed over a 360-day year) of the daily unused portion of the Maximum Line Commitment. The Unused Line Fee shall be paid quarterly in arrears on the last day of each March, June, September and December of each year, commencing on the first such date next succeeding the Restatement Closing Date, and on the date of termination of the Revolving Credit Facility.

(b) Origination Fee . The Borrower shall pay to the Agent, for the accounts of the Lenders on a pro rata basis, an origination fee (the “ Origination Fee ”) in an aggregate amount of One Hundred Fifty Thousand Dollars ($150,000) on the Restatement Closing Date. No portion of the Origination Fee paid to the Agent, for the accounts of the Lenders, shall under any circumstances be refunded to the Borrower.

(c) Agent Fee . The Borrower shall pay to the Agent (for its own account) on the Restatement Closing Date and on each anniversary thereafter during the term of the Agreement an annual fee of Ten Thousand Dollars ($10,000), which shall be fully earned and payable on the Restatement Closing Date and on each anniversary of the Restatement Closing Date.

1.6. Subsidiary Guaranties and Pledge Agreement .

(a) The Notes and all other Obligations of the Borrower hereunder and/or under the other Loan Documents shall be secured by and entitled to the benefits of an unconditional payment and performance guaranties from all Subsidiaries of the Borrower organized under the laws of any state in the United States (collectively, the “ US Subsidiaries ” and each a “ US Subsidiary ”). The Subsidiary Guaranties (collectively, the “ Subsidiary Guaranties ”) will be satisfactory in form and substance to the Agent.

 

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(b) Subsidiary Pledge Agreements(s) . The Notes and all other Obligations of the Borrower hereunder and/or under the other Loan Documents shall be further secured by and entitled to the benefits of one or more pledge agreements of the Borrower in favor of the Agent (collectively, the “ Pledge Agreement of Borrower ”) pursuant to which the Borrower will pledge to the Agent sixty-five percent (65%) of the outstanding capital stock or other equity interests held by the Borrower in each of its directly owned Subsidiaries which is a Foreign Subsidiary and the Pledge Agreement of U.S. Subsidiary pursuant to which FKA GSI US Inc., a Subsidiary Guarantor, will pledge to the Agent sixty-five percent (65%) of the outstanding capital stock or other equity interests held by such Subsidiary Guarantor in each of its directly owned Subsidiaries which is a Foreign Subsidiary. Within ten (10) Business Days after demand by Agent following the occurrence and during the continuance of an Event of Default, Borrower and such Subsidiary Guarantor, respectively, will deliver to the Agent all Pledged Stock (as defined in the Pledge Agreement of Borrower and in the Pledge Agreement of U.S. Subsidiary) and other instruments (including stock powers) referenced in the respective pledge agreements, and will certify as to the accuracy (as of the date of such delivery) of all information set forth on the Schedules to such pledge agreements.

1.7. Payments Generally; Agent’s Clawback .

(a) General . 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 Agent, for the account of the respective Lenders to which such payment is owed, at the Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Agent will promptly distribute to each Lender its Applicable Percentage in respect of the Revolving Credit Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. 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 on computing interest or fees, as the case may be.

(b) Funding by Lenders; Presumption by Agent . (i) Unless the Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Agent such Lender’s share of such Borrowing, the Agent may assume that such Lender has made such share available on such date in accordance with Section 1.2(b) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Agent, then the applicable Lender and the Borrower severally agree to pay to the Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the

 

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BBA LIBOR Daily Floating Rate. If the Borrower and such Lender shall pay such interest to the Agent for the same or an overlapping period, the Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Agent.

(c) Payments by Borrower; Presumptions by Agent . Unless the Agent shall have received notice from the Borrower prior to the time at which any payment is due to the Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, severally agrees to repay to the Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Agent, at the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation.

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

(d) Failure to Satisfy Conditions Precedent . If any Lender makes available to the 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 Agent because the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Agent shall promptly return such funds (in like funds as received from such Lender) to such Lender, without interest.

(e) Obligations of Lenders Several . The obligations of the Lenders hereunder to make Revolving Credit Loans, and to make payments pursuant to Section 13.1(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 13.1(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 13.1(c) .

(f) Funding Source . 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) Insufficient Funds . If at any time insufficient funds are received by and available to the Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i)  first , toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees

 

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then due to such parties, and (ii)  second , toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(h) Sharing of Payments by Lenders . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of any the Revolving Credit Loans due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Revolving Credit Loans due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Revolving Credit Loans due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations in respect of any of the Revolving Credit Loans owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Revolving Credit Loans owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Obligations in respect of the Revolving Credit Loans owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the Revolving Credit Loans then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (A) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

1.8. Default Rate of Interest . In the event of any Event of Default, including but not limited to the Borrower’s failure to make any payment of principal of or interest on the Notes when due, whether at maturity or at a date fixed for the payment of any installment or

 

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prepayment thereof or by declaration, acceleration or otherwise, interest on the full outstanding balance of principal and (to the extent permitted by law) interest on the Notes shall, during the continuance of such Event of Default, be payable on demand at a rate per annum equal to two percent (2%) above the rate otherwise applicable to each Note hereunder. Interest shall accrue at such default rate until the Event of Default is cured by the Borrower or waived in writing and notice thereof is provided to the Borrower by the Agent.

1.9. Form and Terms of Payment . All payments by the Borrower of principal of or interest on the Notes due to the Lenders pursuant to the Loan Documents shall be made as described Section 1.7 . All other payments shall be made to the Agent for the account of each Lender in accordance with and proportionate to such Lender’s Commitment at the address set forth in this Agreement (or at such other address as the Agent shall have furnished to the Borrower in writing) and shall be made in immediately available funds free of any counterclaim, set-off or charge. The Borrower hereby authorizes the Agent to charge when due, the Borrower’s deposit accounts from time to time maintained by the Borrower with the Agent for the purpose of effecting payments of principal and interest on the Loans and the Unused Line Fee. Any other amounts due to the Lenders from the Borrower under the Loan Documents or otherwise shall be billed to the Borrower. If such amounts are not paid by the date specified in any such bill, the Agent is authorized to effect such payment by charging or any deposit accounts from time to time maintained by the Borrower with the Agent and giving prompt notice thereof to Borrower.

1.10. Reserved .

1.11. Reserved .

1.12. Use of Proceeds . The Borrower will use the proceeds of the Loans to fund Permitted Acquisitions, Permitted Stock Repurchases, ongoing working capital needs and other general corporate purposes of the Borrower and its Subsidiaries, including closing costs relating to this Agreement. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, use any part of such proceeds ( i ) for the purpose of making any Restricted Payment except with the prior written consent of the Agent, ( ii ) for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve System, or ( iii ) for any other purpose which would violate any provision of this Agreement or of any applicable statute, regulation, order or restriction.

ARTICLE II

TAXES, YIELD PROTECTION AND ILLEGALITY

2.1. Taxes. (a)  Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes .

(i) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Laws require the Borrower or the Agent to withhold or deduct any

 

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Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by the Borrower or the Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii) If the Borrower or the Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Agent shall withhold or make such deductions as are determined by the Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Borrower . Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Tax Indemnifications .

(i) Without limiting the provisions of subsection (a) or (b) above, the Borrower shall, and does hereby indemnify the Agent and each Lender, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) withheld or deducted by the Borrower or the Agent or paid by the Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of any such payment or liability delivered to the Borrower by a Lender (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest error.

(ii) Without limiting the provisions of subsection (a) or (b) above, each Lender shall, and does hereby, indemnify the Borrower and the Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrower or the Agent) incurred by or asserted against the Borrower or the Agent by any Governmental Authority as a result of the failure by such Lender to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender to the Borrower or the Agent pursuant to subsection (e). Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due

 

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to the Agent under this clause (ii). The agreements in this clause (ii) shall survive the resignation and/or replacement of the Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Credit Facility and the repayment, satisfaction or discharge of all other Obligations.

(d) Evidence of Payments . Upon request by the Borrower or the Agent, as the case may be, after any payment of Taxes by the Borrower or the Agent to a Governmental Authority as provided in this Section 2.1, the Borrower shall deliver to the Agent or the Agent shall deliver to the Borrower, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Agent, as the case may be.

(e) Status of Lenders; Tax Documentation .

(i) Each Lender shall deliver to the Borrower and to the Agent, at the time or times prescribed by applicable Laws or when reasonably requested by the Borrower or the Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower or the Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.

(ii) Without limiting the generality of the foregoing, if the Borrower is resident for tax purposes in the United States,

(A) any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Agent executed originals of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable Laws or reasonably requested by the Borrower or the Agent as will enable the Borrower or the Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; and

(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower and the 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 request of the Borrower or the Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(I) executed originals of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

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(II) executed originals of Internal Revenue Service Form W-8ECI,

(III) executed originals of Internal Revenue Service Form W-8IMY and all required supporting documentation,

(IV) 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) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) executed originals of Internal Revenue Service Form W-8BEN, or

(V) executed originals of any other form prescribed by applicable Laws as a basis for claiming exemption from or a reduction in United States Federal withholding tax together with such supplementary documentation as may be prescribed by applicable Laws to permit the Borrower or the Agent to determine the withholding or deduction required to be made.

(iii) Each Lender shall promptly (A) notify the Borrower and the Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that the Borrower or the Agent make any withholding or deduction for taxes from amounts payable to such Lender.

(f) Treatment of Certain Refunds . Unless required by applicable Laws, at no time shall the Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If the Agent, or any Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses incurred by the Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Agent, such Lender agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by

 

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the relevant Governmental Authority) to the Agent or such Lender in the event the Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

2.2. Illegality . If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Agent, any obligation of such Lender to make Eurodollar Rate Loans shall be suspended until such Lender notifies the Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Agent), prepay or, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

2.3. Inability to Determine Rates . If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans may be suspended at the election of the Agent until the Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, or continuation of Eurodollar Rate Loans.

2.4. Increased Costs; Reserves on Eurodollar Rate Loans .

(a) Increased Costs . If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 2.4 ) or;

(ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.1 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender); or

 

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(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender;

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

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

(c) Certificates for Reimbursement . A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests . Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans . The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as

 

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determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.

2.5. Compensation for Losses . Upon demand of any Lender (with a copy to the Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a) any continuation, payment or prepayment of any Eurodollar Rate Loan on a day other than the last day of the Interest Period for such Eurodollar Rate Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow or continue any Eurodollar Rate Loan on the date or in the amount notified by the Borrower.

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Eurodollar Rate Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 2.5 , each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

2.6. Mitigation Obligations; Replacement of Lenders .

(a) If any Lender requests compensation under Section 2.4 , or the Borrower is required to pay any additional amount to any Lender, or any Governmental Authority for the account of any Lender pursuant to Section 2.1 , or if any Lender gives a notice pursuant to Section 2.2 , then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.1 or 2.4 , as the case may be, in the future, or eliminate the need for the notice pursuant to Section 2.2 , as applicable, and (ii) in each case, would not subject such Lender, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.4 , or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.1 , the Borrower may replace such Lender in accordance with Section 16.7 .

 

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2.7. Survival . All of the Borrower’s obligations under this Article II shall survive the termination of the Revolving Credit Facility, repayment of all of the other Obligations hereunder, and resignation of the Agent.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Agreement and to make the Loans provided for hereunder, the Borrower makes the following representations and warranties, which shall survive the execution and delivery hereof and of the Notes, and which shall be re-made by the Borrower each time the Borrower submits a quarterly Compliance Certificate pursuant to Section 5.1 .

3.1. Organization, Standing, etc. of the Borrower . The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to own and operate its properties, to carry on its business as now conducted, to enter into this Agreement, the Loan Documents to which it is a party and all other documents to be executed by it in connection with the transactions contemplated hereby, to execute the Pledge Agreement of Borrower and deliver the Collateral as defined in the Pledge Agreement of Borrower, to issue the Notes, and to carry out the terms hereof and thereof.

3.2. Subsidiaries . Schedule 3.2 attached hereto correctly sets forth as to each Subsidiary, its name, the jurisdiction of its incorporation or other formation, the number of shares of its capital stock or other beneficial interest of each class outstanding and the number of such outstanding shares or other beneficial interests owned by the Borrower and/or its Subsidiaries. Each such Subsidiary is a corporation or other entity duly organized, validly existing and, in good standing under the laws of the jurisdiction of its incorporation or other formation, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and to enter into such of the Loan Documents, if any, to be executed by it in connection with the transactions contemplated hereby. All of the outstanding capital stock or other beneficial interests of each Subsidiary is validly issued, fully-paid and nonassessable, and is owned by the Borrower or its Subsidiaries as specified in Schedule 3.2 , in each case free of any mortgage, pledge, lien, security interest, charge, option or other encumbrance other than Permitted Liens. The Borrower or a Subsidiary of Borrower own all of the outstanding capital stock or other beneficial interest of each of its Subsidiaries which is not a US Subsidiary free and clear of any mortgage, pledge, lien, security interest, charge, option or other encumbrance.

3.3. Qualification . The Borrower and its Subsidiaries are duly qualified or licensed and in good standing as foreign corporations or other entities duly authorized to do business in each jurisdiction in which the character of the properties owned or the nature of the activities conducted makes such qualification or licensing necessary, except where the failure to be so qualified or licensed is not reasonably likely to have a Material Adverse Effect.

 

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3.4. Financial Information; Disclosure; Solvency Certificate; Opening Balance Sheet; Projections, etc .

(a) The Borrower has furnished the Lenders with the financial statements and other reports requested by the Agent, and has furnished the Pro-forma Compliance Certificate referred to in Section 4.3 , and the Solvency Certificate referred to below in Section 4.3 . Such financial statements have been prepared in accordance with GAAP applied on a consistent basis and such financial statements fairly present in all material respects the financial position and results of operations of the Borrower and its Subsidiaries on a consolidated basis as of the dates and for the periods indicated. Since March 31, 2009, there has not occurred any event, circumstance or condition which has had or is reasonably likely to have a Material Adverse Effect.

(b) Neither this Agreement, the Solvency Certificate, nor any financial statements, reports or other documents or certificates furnished to the Lenders by the Borrower in connection with the transactions contemplated hereby or thereby contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein or therein contained not misleading, in light of the circumstances under which they are made, except to the extent that such financial statements, reports or other documents or certificates expressly relate to an earlier date or are affected by the consummation of the transactions contemplated by this Agreement.

(c) Without limiting the scope of the Solvency Certificate in the form attached hereto as Exhibit D (the “ Solvency Certificate ”) delivered by the Borrower to the Lenders on the Restatement Closing Date, none of the Loans will render the Borrower unable to pay its debts as they become due; the Borrower is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its property; and the Borrower does not have any knowledge of any person contemplating the filing of any such petition against it. The Borrower is solvent (within the meanings of all applicable fraudulent transfer or fraudulent conveyance statutes and acts, the federal bankruptcy code and all other applicable laws) and has assets having a fair value in excess of the amount required to pay its probable liabilities on its existing debts (including the Loans and contingent debts) as they become absolute and matured, and has access to adequate capital for the conduct of its business and the ability to pay its debts from time to time incurred therewith as such debts mature.

3.5. Licenses; Franchises, etc . The Borrower and its Subsidiaries have all material authorizations, licenses, permits, approvals and franchises of any public or governmental regulatory body necessary for the conduct of the business of the Borrower and its Subsidiaries as now conducted except where the failure to have the same is not reasonably likely to have a Material Adverse Effect (such authorizations, licenses, permits and franchises, together with any extensions or renewals thereof, being herein sometimes referred to collectively as the “ Licenses ”). All of such Licenses are validly issued and in full force and effect and the Borrower and its Subsidiaries have fulfilled and performed all of their obligations with respect thereto and have full power and authority to operate thereunder.

 

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3.6. Material Agreements . The Borrower’s most recent form 10-K filed with the SEC, as supplemented by the Borrower’s forms 10-Q and 8-K filed with the SEC thereafter, accurately and completely lists each material agreement and instrument required to be disclosed therein, including but not limited to any material leases, employment agreements or other agreements with management of the Borrower or any Subsidiary, stockholder agreements and all other material agreements required to be disclosed therein. Each of the Borrower and its Subsidiaries (as applicable) and, to the best of the Borrower’s knowledge, all third parties to such material agreements, are in material compliance with the terms thereof, and no default or event of default by the Borrower or, to the Borrower’s knowledge, any other party thereto, exists thereunder.

3.7. Tax Returns and Payments . The Borrower and its Subsidiaries have filed all tax returns required by law to be filed and have paid all taxes, assessments and other governmental charges levied upon any of their respective properties, assets, income or franchises, other than those (i) not yet delinquent, (ii) not material in aggregate amount, (iii) being or about to be contested as provided in subsection 5.4 and/or (iv) not reasonably likely to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of their respective taxes are adequate in the opinion of the Borrower, and the Borrower knows of no unpaid assessment for additional taxes or of any basis therefor other than those which in the aggregate, are not reasonably likely to have a Material Adverse Effect.

3.8. Indebtedness, Liens and Investments, etc . Other than intercompany Indebtedness, Schedule 3.8 attached hereto correctly describes, as of the date or dates indicated therein, (a) all outstanding Indebtedness of the Borrower and its Subsidiaries in respect of borrowed money, Capital Leases and the deferred purchase price of property; (b) all existing mortgages, liens and security interests in respect of any property or assets of the Borrower or its Subsidiaries; (c) all outstanding investments, loans and advances of the Borrower and its Subsidiaries; and (d) all existing guarantees by the Borrower and its Subsidiaries.

3.9. Real Estate Owned and Leased; Title to Properties; Liens . The Borrower and its Subsidiaries have good and marketable title to or leasehold interests in all of their respective properties and assets, and none of such properties or assets is subject to any mortgage, pledge, lien, security interest, charge or encumbrance except the existing mortgages and security interests, if any, referred to in Schedule 3.8 attached hereto and Permitted Liens. The real property owned by the Borrower and/or its Subsidiaries and the real property leased by the Borrower and/or its Subsidiaries (the “ Real Estate Leases ”) are listed on Schedule 3.9 hereto. The Borrower and its Subsidiaries enjoy quiet possession under all Real Estate Leases to which they are parties as lessees, and all of such Real Estate Leases are valid, subsisting and in full force and effect.

3.10. Litigation, etc . Except as may be set forth on Schedule 3.10 , there is no action, proceeding or investigation pending or threatened (or any basis therefor known to the Borrower) (i) which questions the validity of this Agreement, the Notes, the Loan Documents, or the other documents executed in connection herewith or therewith, or any action taken or to be taken pursuant hereto or thereto, or (ii) which if adversely determined against the Borrower, would result in liability of the Borrower in an amount which exceeds $250,000.

 

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3.11. Authorization; Compliance with Other Instruments . The execution, delivery and performance of this Agreement, the Notes and the other Loan Documents, have been duly authorized by all necessary action on the part of the Borrower and its Subsidiaries party thereto, will not result in any violation of or be in conflict with or constitute a default under any term of the charter or by-laws of the Borrower or any Subsidiary party to any of the Loan Documents, or of any material agreement, or any material instrument, judgment, decree, order, statute, rule or governmental regulation applicable to the Borrower or any Subsidiary party to any of the Loan Documents or to which the Borrower or any such Subsidiary is a party, as the case may be, or result in the creation of any mortgage, lien, charge or encumbrance upon any of the properties or assets of the Borrower or any such Subsidiary pursuant to any such term, other than the liens created under the Loan Documents. No consent of stockholders of the Borrower is necessary in order to authorize the execution, delivery or performance of this Agreement or the Loan Documents, or the issuance of the Notes other than those consents which have been obtained as of the Closing Date. Neither the Borrower nor any Subsidiary is in violation of any term of its charter or by-laws, or of any material term of any material agreement or instrument to which it is a party, or, of any judgment, decree, order, statute, rule or governmental regulation applicable to it which is reasonably likely to have a Material Adverse Effect.

3.12. Eligible Accounts . The Eligible Accounts included the calculation of minimum Working Capital are bona fide existing payment obligations of Account Debtors created by the sale or lease and delivery of Inventory or the rendition of services to such Account Debtors in the ordinary course of Borrower’s and/or its Subsidiaries’ business, owed to Borrower and/or such Subsidiaries without defenses, disputes, offsets, counterclaims, or rights of return or cancellation (other than normal return policies) known to the Borrower or such Subsidiary. As to each Account that is identified by Borrower as an Eligible Account in a Compliance Certificate submitted to Agent, such Account is not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Accounts.

3.13. Eligible Inventory . All Eligible Inventory included in the calculation of minimum Working Capital is of good and merchantable quality. As to each item of Inventory that is identified by Borrower as Eligible Inventory in a Compliance Certificate submitted to Agent, such Inventory is located at one of the locations set forth on Schedule 3.13 or at such other location identified in writing by Borrower to Agent, or is in transit from one such location to another such location and is not otherwise excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Inventory.

3.14. Governmental and Other Third Party Consents . Except for such filings or notices which have already been made or are being made on or prior to the Closing Date, none of the Borrower or any Subsidiary which is a party to any of the Loan Documents is required to obtain any order, consent, approval or authorization of (collectively, the “ Consents ”), or required to make any declaration or filing with, any governmental unit or other regulatory agency or authority (other than the SEC) in connection with (a) the execution and delivery of this Agreement and the issuance and delivery of the Notes pursuant hereto, (b) the execution and delivery of the Loan Documents, (c) the exercise by the Agent of any rights and remedies following an Event of Default (other than the filing of UCC financing statements) or (d) for the purpose of maintaining in full force and effect each of the Licenses and enabling the Borrower to operate thereunder. To the Borrower’s knowledge, no appeal, reconsideration, or rehearing or other review of any Consent has been taken or instituted.

 

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3.15. Regulation U, etc . Neither the Borrower nor any Subsidiary owns or has any present intention of acquiring any margin stock within the meaning of Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve System (herein called “ margin stock ”). None of the proceeds of the Loans will be used, directly or indirectly, by the Borrower or any Subsidiary for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry, any margin stock or for any other purpose which might constitute the transactions contemplated hereby a “ purpose credit ” within the meaning of said Regulation U, or cause this Agreement to violate Regulation U, Regulation T, Regulation X, or any other regulation of the Board of Governors of the Federal Reserve System or the Securities Exchange Act of 1934, as amended. If requested by the Agent, the Borrower will promptly furnish the Agent with a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in said Regulation U.

3.16. Employee Retirement Income Security Act of 1974 . Schedule 3.16 attached hereto sets forth a true, correct and complete list of all material employee benefit plans and arrangements of the Borrower, including, without limitation, all pension, profit sharing or similar plans providing for a program of deferred compensation to any employee or any plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”). The terms used in this Section 3.16 and in subsection 5.1 and subsection 6.10 of this Agreement shall have the meanings assigned thereto in the applicable provisions of ERISA and the Internal Revenue Code of 1986, as amended (the “ IRC ”), and the term “ Affiliated Company ” shall mean the Borrower and all corporations, partnerships, trades or businesses (whether or not incorporated) which constitute a controlled group of corporations with the Borrower, a group of affiliated service group or other affiliated group, within the meaning of Section 414(b), Section 414(c), Section 414(m) or Section 414(o), respectively, of the IRC, or Section 4001 of ERISA. Each employee benefit plan sponsored by the Borrower or an Affiliated Company and, to the best of the Borrower’s knowledge, each multi-employer plan (as defined in Section 4001(a)(3) of ERISA) to which any Affiliated Company makes contributions, are in material compliance with applicable provisions of ERISA and the IRC. No Affiliated Company has incurred any material liability to the Pension Benefit Guaranty Corporation (“ PBGC ”) or any employee benefit plan on account of any failure to meet the contribution requirements of any such plan, minimum funding requirements or prohibited transactions under ERISA or the IRC, termination of a single employer plan, partial or complete withdrawal from a multi-employer plan, or the insolvency, reorganization or termination of any multi-employer plan, and no event has occurred or conditions exist which present a material risk that any Affiliated Company will incur any material liability on account of any of the foregoing circumstances. The consummation of the transactions contemplated by this Agreement will not result in any prohibited transaction under ERISA or the IRC for which an exemption is not available.

3.17. Reserved .

3.18. Environmental Matters . Neither the Borrower nor any US Subsidiary has ever caused or permitted any Hazardous Material to be disposed of on or under any real property owned, leased or operated by the Borrower and/or any US Subsidiary in material violation of

 

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applicable law and no such real property has ever been used (by the Borrower and/or any US Subsidiary or, to the Borrower’s knowledge, by any other Person) as (a) a disposal site or permanent storage site for any Hazardous Material or (b) a temporary storage site for any Hazardous Material, in each instance in material violation of applicable law. Except as may be set forth on Schedule 3.18 , the Borrower has been issued and is in compliance with all material permits, licenses, approvals and other authorizations relating to environmental matters and necessary or desirable for its business, and has filed all notifications and reports relating to chemical substances, air emissions, underground storage tanks, effluent discharges and Hazardous Material waste storage, treatment and disposal required in connection with the operation of its businesses. All Hazardous Materials used or generated by the Borrower or any US Subsidiary or any business merged into or otherwise acquired by the Borrower or any US Subsidiary have been generated, accumulated, stored, transported, treated, recycled and disposed of in compliance with all applicable laws and regulations. Neither the Borrower nor any of its US Subsidiaries has any liabilities with respect to Hazardous Materials, and to the knowledge of the Borrower, no facts or circumstances exist which could give rise to liabilities with respect to the violation (whether by the Borrower or any other Person) of any Environmental Law and/or Hazardous Materials, which is reasonably likely to have a Material Adverse Effect.

3.19. Patents, Trademarks, Intellectual Property . The Borrower owns or otherwise has rights to use all of its material Proprietary Rights and such Proprietary Rights are adequate for the conduct of its business as now conducted, without any known conflict with the rights or claimed rights of others.

3.20. Chief Executive Offices Principal Place of Business . The chief executive office and principal place of business of the Borrower is, and at all times since April, 1997, has been, located at 84 October Hill Road, Holliston, Massachusetts 01746. The Borrower shall not make any change in the location of its chief executive office without giving the Agent at least thirty (30) days’ prior written notice thereof.

3.21. Trade and Other Names . The exact legal name of the Borrower is Harvard Bioscience, Inc. Except as set forth on Schedule 3.21 attached hereto, during the last five years ending on the date hereof, the Borrower has not conducted any business under any other name (including any d/b/a, trade or assumed name).

3.22. Securities Laws . The Borrower is not an “ investment company ” or a company “ controlled ” by an “ investment company ” within the meaning of the Investment Company Act of 1940.

3.23. Loan Documents . The representations and warranties of the Borrower and its Subsidiaries contained herein and in the other Loan Documents, are true and correct in all material respects, and the Borrower and its Subsidiaries thereto are in compliance in all material respects with the terms of the Loan Documents to which each is a party.

3.24. Depository and Other Accounts . Schedule 3.24 attached hereto lists all banks and other financial institutions and depositories at which the Borrower and/or any US Subsidiary maintains (or has caused to be maintained) or will maintain deposit accounts, operating accounts, trust accounts, tax or trust receivable accounts or other accounts of any kind or nature into which

 

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funds of the Borrower and/or each US Subsidiary (including funds in which the Borrower or any US Subsidiary maintains a contingent or residual interest) are from time to time deposited, and such Schedule 3.24 correctly identifies the name and address of each depository, the name in which each account is held, the purpose of the account and the complete account number. The Borrower will notify the Agent simultaneously with the submission of the quarterly Compliance Certificate, and thereby supplement such Schedule 3.24 as new accounts are established by the Borrower and/or any US Subsidiary. The Borrower hereby authorizes the Agent to attach such supplements to Schedule 3.24 from time to time delivered by the Borrower to Schedule 3.24 attached hereto.

3.25. Burdensome Obligations; Future Expenditures . To the Borrower’s knowledge, neither the Borrower nor any of its Subsidiaries is party to or bound by any agreement (including but not limited to the Material Agreements listed on the Borrower’s most recent form 10-K filed with the SEC, as supplemented by the Borrower’s forms 10-Q and 8-K filed with the SEC thereafter), instrument, deed or lease or is subject to any charter, by-law or other restriction, commitment or requirement which, in the opinion of the management of such Person, is so unusual or burdensome as in the foreseeable future to have or cause or create a material risk of having or causing a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries anticipate that the future expenditures, if any, by the Borrower and its Subsidiaries needed to meet the provisions of any federal, state or foreign governmental statutes, orders, rules or regulations will be so burdensome as to have or cause, or create a material risk of having or causing, a Material Adverse Effect.

3.26. Insurance Policies . Schedule 3.26 lists all material insurance policies of any kind or nature maintained by or on behalf of the Borrower, as well as a summary of the principal terms of such insurance. All such insurance policies, together with any insurance policies obtained by the Borrower after the Restatement Closing Date, are or will be in full force and effect and provide coverage of such risks and in such amounts as is customarily maintained for businesses of the scope and size of the Borrower.

3.27. Employment and Labor Agreements . Schedule 3.27 accurately and completely describes each employment agreement, agreement for the payment of deferred compensation, severance or so-called change in control agreement covering executive officers of the Borrower, as well as all collective bargaining agreements or other labor agreements covering any employees of the Borrower.

ARTICLE IV

CONDITIONS OF CLOSING/LENDING

4.1. Conditions Precedent on the Restatement Closing Date . The obligation of the Agent and Lenders to execute this Agreement and the obligations of the Lenders to make the initial Loan after the Restatement Closing Date hereunder is subject to the conditions set forth below:

(a) This Agreement, all related Schedules, the Pledge Agreement of Borrower, the Subsidiary Guaranties, the Pledge Agreement of U.S. Subsidiary and such other

 

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Loan Documents, instruments, schedules, exhibits or certificates as shall be designated by the Agent shall have been executed by the Borrower and the other parties thereto and delivered to the Agent;

(b) reserved;

(c) The Agent shall have received all other information and documents which the Agent or its counsel reasonably required in connection with the transactions contemplated by this Agreement, such information and documents where appropriate to be certified by the proper officers of the Borrower, its Subsidiaries or governmental authorities.

(d) The Agent shall have received from the Borrower a Solvency Certificate, which shall be satisfactory in all respects in the sole discretion of the Agent;

(e) No Default or Event of Default shall have occurred and be continuing;

(f) The Agent shall have received the favorable opinion of Goodwin Procter LLP in form and substance reasonably satisfactory to the Agent and dated as of the Restatement Closing Date;

(g) The Borrower shall have paid in full all invoiced costs and expenses (including reasonable attorneys’ fees) incurred on behalf of the Agent in connection with this Agreement, which amounts may be paid with the proceeds of the Revolving Credit Loans;

(h) The Borrower shall have paid to the Agent the full amount of the Origination Fee set forth in Section 1.5(c) and the Agent Fee set forth in Section 1.5(d) of this Agreement, which amounts may be paid with the proceeds of the Revolving Credit Loans;

(i) The Agent shall have received a certificate dated as of the Restatement Closing Date, signed by the Chief Executive Officer, Chief Financial Officer or such other executive officer of Borrower as may be reasonably acceptable to Agent, certifying that (i) the conditions precedent specified in this Section 4.1 have been fulfilled; (ii) the representations and warranties of the Borrower and its Subsidiaries contained in this Agreement and in each of the other Loan Documents and the schedules to this Agreement delivered as of the Restatement Closing Date, are true, complete and correct as of the Restatement Closing Date; (iii) no event or condition has occurred which is reasonably likely to have a Material Adverse Effect; and (iv) as of the Restatement Closing Date there is no Default or Event of Default under this Agreement;

(j) The Agent shall have received evidence of insurance coverage for the Borrower and each US Subsidiary in compliance with Section 5.3 ;

(k) The Agent shall have received corporate resolutions, good standing certificates and lien search results as it may reasonably require;

(l) The accrued but unpaid unused line fee under the Original Credit Agreement has been paid through the Restatement Closing Date and BBH will have resigned as Agent.

 

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Without limiting any other provision of this Agreement, each of the opinions, agreements, certificates, and other conditions precedent listed above must be reasonably satisfactory in all respects to the Agent and its counsel in order for such condition precedent to be deemed satisfied.

4.2. Reserved .

4.3. Conditions Precedent to Loans on the Restatement Closing Date .

(a) No Default; Representations and Warranties, etc . On the Restatement Closing Date and on the effective date of each Compliance Certificate submitted by the Borrower hereunder: (i) the representations and warranties of the Borrower and its Subsidiaries contained in this Agreement and in each of the other Loan Documents shall be true and correct in all material respects on and as of such dates as if they had been made on such dates (except to the extent that such representations and warranties expressly relate to an earlier date or are affected by the consummation of transactions permitted under this Agreement and except that references to financial statements shall be deemed to refer to the most recent audited financial statements delivered to the Agent pursuant to Section 5.1(a) hereof); (ii) the Borrower shall be in compliance in all material respects with all of the terms and provisions set forth herein on its part to be observed or performed on or prior to such dates; (iii) after giving effect to any Loans to be made on such dates, no Default or Event of Default shall have occurred and be continuing; and (iv) since the date of the most recently delivered audited financial statements of the Borrower and its Subsidiaries, no event or condition shall have occurred or exist which is reasonably likely to have a Material Adverse Effect. Each request for a Loan hereunder shall constitute a representation and warranty by the Borrower to the Agent and Lenders that all of the conditions specified in this Section 4.3(a) , have been and continue to be satisfied in all material respects as of the date of each such Loan (except the Borrower and its Subsidiaries shall only be required to confirm their representations and warranties on a quarterly basis in connection with the delivery of a Compliance Certificate). As of the date of each request for a Loan hereunder, the Borrower shall not have knowledge that it is in violation of Section 7.3 hereof. The Lenders hereby agree that the Borrower shall be permitted, from time to time, to supplement each of the Schedules provided to the Agent in connection with the execution and delivery of this Agreement and the other Loan Documents with respect to any matter arising after the Restatement Closing Date which is not otherwise prohibited by the terms of this Agreement (or with respect to which the Agent has otherwise consented) and which is necessary in order to render the representations and warranties of the Borrower and its Subsidiaries given in the Loan Documents true and correct, provided that any such supplements shall not be required more than once every year and such Schedules shall be deemed automatically updated by information contained in each Compliance Certificate and all SEC filings without the need for any further action on the part of the Borrower or any Subsidiary.

(b) The Borrower shall have paid the fees specified in Section 1.5 and all other amounts (including reimbursement for legal fees) owing from the Borrower to the Agent and Lenders from and after the Restatement Closing Date in accordance with the terms hereof.

(c) Except in connection with Permitted Acquisitions in accordance with Section 6.17.B , if any portion of the requested Loan is to be used to fund an acquisition, at least

 

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five (5) Business Days prior to the consummation of any such acquisition, the Borrower shall have delivered to the Agent a certificate, signed by the Chief Executive Officer or Chief Financial Officer of the Borrower, certifying that such acquisition is a Permitted Acquisition under Section 6.17.A .

ARTICLE V

AFFIRMATIVE COVENANTS

So long as any of the Loans shall remain available to the Borrower, and until the principal of and interest on the Notes and all fees due hereunder and all of the Borrower’s obligations to the Agent and Lenders hereunder (other than inchoate indemnification obligations) shall have been paid in full, the Borrower agrees that:

5.1. Financial Statements, Field Audits etc . The Borrower will furnish or cause to be furnished to the Agent:

(a) Within one hundred twenty (120) days after the end of each fiscal year of the Borrower, (i) the audited consolidated balance sheets of the Borrower and its Subsidiaries as at the end of such year, and (ii) the related audited consolidated statements of income and surplus and cash flows for such year, setting forth in comparative form with respect to such consolidated financial statements figures for the previous fiscal year, all in reasonable detail, together with the opinion thereon of independent public accountants selected by the Borrower with an established national or regional reputation, which opinion shall be in a form generally recognized as unqualified and shall state that such financial statements have been prepared in accordance with GAAP and that the audit by such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards related to reporting;

(b) within forty-five (45) days after the end of each of the first three quarterly accounting periods and within sixty (60) days after the end of the fourth quarterly accounting period in each fiscal year of the Borrower, (i) (A) the unaudited consolidated and consolidating balance sheets and related statements of income and surplus for such period and for the period from the beginning of the current fiscal year to the end of such period and (B) consolidated cash flows for the period from the beginning of the current fiscal year to the end of such period, all in reasonable detail and signed by the Chief Financial Officer of the Borrower and (ii) a compliance certificate substantially in the form of Exhibit A attached hereto (the “ Compliance Certificate ”) signed by the Chief Executive Officer, or the Chief Financial Officer, or such other officer of the Borrower as may be acceptable in the sole discretion of the Agent, certifying that the representations and warranties of the Borrower and its Subsidiaries contained herein and in each of the other Loan Documents (as supplemented and updated as provided in Section 4.3(a) hereof) are true, complete and correct in all material respects as of such date, that no event or condition which constitutes a Default or Event of Default exists, and demonstrating the calculations used to determine compliance with the financial covenants listed in such Compliance Certificate;

(c) As soon as available, but in any event within 45 days after the end of each quarterly accounting period in each fiscal year of the Borrower, (i) a quarterly summary accounts receivable aging report, in such form as Agent may from time to time reasonably require and (ii)

 

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reports detailing such other information as Agent may from time to time reasonably require. All of the reports listed in the foregoing clauses (i) and (ii) shall be in reasonable detail and current through at least the close of business for the immediately preceding quarter and certified by the Chief Executive Officer, or the Chief Financial Officer or such other officer of the Borrower as may be acceptable in the sole discretion of the Agent;

(d) On or before January 30 of each fiscal year, an annual budget prepared on a quarterly basis for the Borrower and its Subsidiaries for the then current fiscal year, (displaying anticipated balance sheets and statements of income and surplus and cash flows); and promptly upon preparation thereof, any amendments or revisions thereto or any other significant budgets which the Borrower prepares;

(e) Promptly upon their becoming available, copies of all 10-Ks and 10-Qs and other periodic or special reports filed by the Borrower or any Subsidiary with the SEC, or any such periodic or special reports filed with any other federal, state or local governmental agency or authority, and copies of any material notices and other material communications from the SEC or from any other federal, state or local governmental agency or authority which specifically relate to the Borrower or any Subsidiary, except in each case for those reports, notices and other communications required by such governmental agencies to be kept confidential;

(f) Forthwith upon any officer of the Borrower obtaining knowledge of any condition or event which constitutes a Default or Event of Default, a certificate signed by such officer specifying in reasonable detail the nature and period of existence thereof and what action the Borrower has taken or proposes to take with respect thereto;

(g) Promptly upon receipt thereof, copies of all audit reports and management letters, if any, submitted to the Borrower by independent public accountants in connection with each interim or special audit of the books of the Borrower made by such accountants and, upon request by the Agent, copies of all financial statements, reports, notices and proxy statements, if any, sent by the Borrower to its shareholders;

(h) Immediately, after the Borrower obtains knowledge thereof, notice of: (i) the institution or commencement of any action, suit, proceeding or investigation by or against or affecting the Borrower or any of its Subsidiaries or any of its or their assets which, if determined adversely to the Borrower, is reasonably likely to have a Material Adverse Effect; (ii) any litigation or proceeding instituted by or against the Borrower, or any judgment, award, decree, order or determination relating to any litigation or proceeding involving the Borrower which is reasonably likely to have a Material Adverse Effect; (iii) the imposition or creation of any lien against any asset of the Borrower except those permitted by this Agreement; (iv) any reportable event under Section 4043 of ERISA for which the notice requirement is not waived by the regulations thereunder, together with a statement of the Borrower’s chief executive officer, chief financial officer and/or controller as to the details thereof and a copy of its notice thereof to the PBGC; and (v) any known release or threat of release of Hazardous Materials on, onto or under any site owned or operated by the Borrower or any Subsidiary in material violation of applicable law or the incurrence of any expense or loss in connection therewith or upon the Borrower’s obtaining knowledge of any investigation, action or the incurrence of any expense or loss by any

 

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governmental authority in connection with the containment or removal of any Hazardous Materials for which expense or loss the Borrower or any Subsidiary may be liable or potentially responsible;

(i) Promptly notify Agent in writing of any material adverse change in the Borrower’s financial condition or of any condition or event which constitutes a Default or an Event of Default under this Agreement or any other Loan Document or any other event or condition which has had or is reasonably likely to have a Material Adverse Effect;

(j) The Borrower will permit the Agent to inspect and audit the books and records and any of the properties or assets of the Borrower and its Subsidiaries during normal business hours and, prior to the occurrence and the continuance of an Event of Default, upon reasonable prior notice to the Borrower and any such Subsidiary, each such inspection to be at the Borrower’s expense, provided , that the Borrower shall not be responsible for the expenses of such inspections and audits more than two times per fiscal year prior to the occurrence of a Default or Event of Default; and

(k) Promptly upon request therefor, all such other information regarding the business, affairs and condition of the Borrower as the Agent may from time to time reasonably request.

5.2. Legal Existence; Licenses; Compliance with Laws . The Borrower will, and will cause each Subsidiary to: maintain its corporate or other organizational existence and business, except as otherwise permitted pursuant to Section 6.7 hereof; maintain all properties which are reasonably necessary for the conduct of such business, now or hereafter owned, in good repair, working order and condition; take all actions necessary to maintain and keep in full force and effect its rights and franchises, including the Licenses, unless the failure to do so is not reasonably likely to have a Material Adverse Effect; maintain at all times proper books of record and account in which full, true and correct entries shall be made of its transactions in accordance with GAAP and set aside on its books from its earnings for each fiscal year all such proper reserves as shall be required in accordance with GAAP in connection with its business; and comply with all applicable statutes, rules, regulations and orders of, and all applicable restrictions imposed by, all governmental authorities in respect of the conduct of its business and the ownership of its properties in states in which the Borrower desires to continue business operations, except where the failure to comply is not reasonably likely to have a Material Adverse Effect; provided that neither the Borrower nor any Subsidiary shall be required by reason of this subsection to comply therewith at any time while the Borrower or such Subsidiary shall be contesting its obligations to do so in good faith by appropriate proceedings promptly initiated and diligently conducted, and if it shall have set aside on its books such reserves, if any, with respect thereto as are required by GAAP and deemed adequate by the Borrower and its independent public accountants.

5.3. Insurance .

(a) Business Interruption Insurance . Each of the Borrower and its Subsidiaries shall be covered by or maintain with financially sound and reputable insurers insurance related to interruption of business, either for loss of revenues or for extra expense, in the manner customary for businesses of similar size engaged in similar activities.

 

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(b) Property Insurance . Each of the Borrower and its Subsidiaries shall keep its assets which are of an insurable character insured by financially sound and reputable insurers against theft and fraud and against loss or damage by fire, explosion and hazards insured against by extended coverage to the extent, in amounts and with deductibles which are customary for businesses of similar size engaged in similar activities.

(c) Liability Insurance . Each of the Borrower and its Subsidiaries shall be covered by or maintain with financially sound and reputable insurers insurance against liability for hazards, risks and liability to persons and property to the extent, in amounts and with deductibles which are customary for businesses of similar size engaged in similar activities.

(d) Reserved .

(e) Requirements; Proceeds . Each insurance policy maintained pursuant to this Section 5.3 shall provide that the Agent shall be notified of any proposed cancellation of such policy at least thirty (30) days in advance of such proposed cancellation for all events other than nonpayment and for nonpayment at least ten (10) days in advance of such proposed cancellation. Upon the request of the Agent, copies of all such policies shall be delivered to the Agent. All insured losses under any policy of insurance will be adjusted by the insurer with, and paid to, the Borrower.

5.4. Payment of Taxes . The Borrower will, and will cause each Subsidiary to, pay and discharge promptly as they become due and payable all taxes, assessments and other governmental charges or levies imposed upon it or its income or upon any of its properties or assets, or upon any part thereof, as well as all lawful claims of any kind (including claims for labor, materials and supplies) which, if unpaid, might by law become a lien or a charge upon its property; provided that neither the Borrower nor any Subsidiary shall be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings promptly initiated and diligently conducted and if the Borrower or such Subsidiary, as the case may be, shall have set aside on its books such reserves, if any, with respect thereto as are required by GAAP and deemed appropriate by the Borrower and its independent public accountants.

5.5. Payment of Other Indebtedness, etc . Except as to matters being contested in good faith and by appropriate proceedings, and subject to the provisions of Section 6.5 (Restricted Payments) hereof, the Borrower will, and will cause each Subsidiary to, pay promptly when due, or in conformance with customary trade terms, all other Indebtedness and obligations incident to the conduct of its business where any failure to pay is reasonably likely to result in a Material Adverse Effect.

5.6. Further Assurances . From time to time hereafter, the Borrower will execute and deliver, or will cause to be executed and delivered, such additional instruments, certificates or documents, and will take all such actions, as the Agent may reasonably request, for the purposes of implementing or effectuating the provisions of this Agreement, the Loan Documents or the

 

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Notes, provided that, the Borrower shall not be required to effect a public registration of all or any part of the Collateral (as defined in the Pledge Agreement of Borrower) pursuant to the Securities Act of 1933, as amended, or other similar foreign or state securities law. Subject to the proviso in the preceding sentence, upon the exercise by the Agent of any power, right, privilege or remedy pursuant to this Agreement or the Loan Documents which requires any consent, approval, registration, qualification or authorization of any governmental authority or instrumentality, the Borrower will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Agent may be required to obtain for such governmental consent, approval, registration, qualification or authorization.

5.7. Depository Accounts . The Borrower will maintain (x) its primary depository account with the Agent provided , that , the Borrower will have opened an account with the Agent on or before the Restatement Closing Date and will have until November 5, 2009 to transfer all funds as necessary to make such account the Borrower’s primary depository account and (y) its domestic Cash Management Services with the Lenders.

5.8. Communication with Accountants . The Borrower authorizes the Agent to communicate directly with the Borrower’s independent certified public accountants and, on or before the Restatement Closing Date, will instruct those accountants to disclose to and discuss with the Agent any and all prepared financial statements and all other supporting financial documents and schedules delivered to the Borrower by such accountants.

5.9. Environmental Indemnification; Compliance .

(a) The Borrower shall at all times, both before and after repayment of the Loans, at its sole cost and expense indemnify, exonerate and save harmless the Agent and Lenders and all those claiming by, through or under the Agent and Lenders (collectively, the “ Indemnified Parties ”) against and from all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind whatsoever, including, without limitation, reasonable attorneys’ fees and experts’ fees and disbursements, which may at any time (including, without limitation, before or after discharge or foreclosure of the Agent’s security interests, mortgages or leasehold mortgages or deeds of trust or any other instrument now or hereafter constituting a Loan Document) be imposed upon, incurred by or asserted or awarded against the Indemnified Parties and arising from or out of: (a) any Hazardous Materials liability or other liability for damage to person or property arising out of any Hazardous Materials released on, upon, under, into or about any property at any time owned, leased or operated by the Borrower or any of its Subsidiaries (including without limitation with respect to any condition or circumstance which existed on any such property prior to or as of the time the Borrower or any of its Subsidiaries first acquired, leased or occupied the same) or any violation of any Environmental Laws by the Borrower or any of its Subsidiaries, or any contractor, sub-contractor, tenant, occupant or invitee thereof; or (b) any act, omission, negligence or conduct of the Borrower or any Subsidiary of the Borrower or any contractor, sub-contractor, tenant, occupant or invitee thereof resulting in any Hazardous Material liability. Notwithstanding any limitation which otherwise might be imposed by any applicable statute of limitations, any cause of action which the Indemnified Parties may have against the Borrower under this Section 5.9 , may be brought against the Borrower and/or any

 

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Subsidiary at any time within two (2) years following assertion of the claim against the Indemnified Parties for which indemnification or exoneration is sought (it being understood that the foregoing shall not require the Indemnified Parties to bring any claim or action within such two (2) year period if a longer statute applies).

(b) The Borrower shall take all appropriate response actions, including any removal and remedial action, in the event of a release, emission, discharge or disposal of any Hazardous Materials in violation of applicable law on, upon, under, into or about any property at any time, owned, leased or operated by the Borrower so as to (a) remain in compliance with Section 3.18 and (b) keep all property at any time owned, leased or operated by the Borrower free from and uncontaminated by Hazardous Materials and in compliance with applicable Environmental Laws, the failure to comply with which is reasonably likely to have a Material Adverse Effect.

5.10. Mandatory Repayment of Outstanding Revolving Credit Loans in Excess of Working Capital; Prepayment From Proceeds of Asset Sales .

(a) If as of the last day of any fiscal quarter the aggregate outstanding principal amount of the Revolving Credit Loans exceeds the Borrower’s Working Capital, the Borrower will within five (5) Business Days repay the Revolving Credit Notes, without penalty or premium (other than the amounts due under Section 2.4 or Section 2.5 , if applicable, in an amount necessary to cause the outstanding principal amount of the Revolving Credit Loans not to exceed the Borrower’s Working Capital as of the last day of such fiscal quarter. To the extent any such payment is made within five (5) Business Days, any Default as a result of a breach of Section 7.3 hereof shall be deemed to have been cured.

(b) Following the occurrence of an Event of Default which is continuing, without limiting the provisions of Section 6.8 , the Borrower will prepay all of the Revolving Credit Loans (with proceeds to be applied as set forth below) in an amount equal to one hundred percent (100%) of all the Net Cash Proceeds of asset sales (other than sales of Inventory) in excess of