now existing or hereafter arising, now or hereafter received by or belonging or owing to any Borrower, for goods sold by it or for services rendered by it, or however otherwise same may have been established or created, all guarantees and securities therefor, all right, title and interest of all Borrowers in the merchandise or services which gave rise thereto, including the rights of reclamation and stoppage in transit, all rights to replevy goods, and all rights of an unpaid seller of merchandise or services (all hereinafter called the “ Receivables ”);

 

(c)            all machinery, equipment, fixtures and other goods (as defined in Article 9 of the Uniform Commercial Code) whether now owned or hereafter acquired by any Borrower and wherever located, all replacements and substitutions therefor or accessions thereto and all proceeds thereof (all hereinafter called the “ Equipment ”);

 

(d)            certain real property, together with all improvements thereon located at 243 Daniel Webster Highway, Merrimack, New Hampshire and owned by GT Solar (the “ Real Property ); and

 

(e)            all proceeds and products of all of the foregoing in any form, including, without limitation, all proceeds of credit, fire or other insurance, and also including, without limitation, rents and profits resulting from the temporary use of any of the foregoing (which, with Inventory, Receivables, Equipment and Real Property are all hereinafter called “ Collateral ”).

 

Notwithstanding the foregoing, the term “Collateral” does not include:

 

(a)            investment property consisting of capital securities of a foreign Subsidiary of any Borrower other than 65% of the total combined voting power of all capital securities of any direct first-tier foreign Subsidiary;

 

(b)            only any “intent to use” applications for trademark registrations filed pursuant to Section 1(b) of the Lanham Act (15 U.S.C. § 1051 et seq.), unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of the Lanham Act (15 U.S.C. 1051 et seq.) has been filed and accepted by the United States Patent and Trademark Office;

 

(c)            assets subject to capital leases or purchase money security interests but only during such time as such capital leases or purchase money security interest is in place;

 

(d)            licenses, contracts or agreements which, by their nature, are not immediately assignable without additional documentation, such as governmental contracts and licenses containing non-assignment language, but only during such time and for such licenses, contracts or agreements (i) prior to the time Borrowers obtain consents to such collateral assignment; or (ii) for which any such collateral assignment or grant of a security interest in such license, contract or agreement to the Lenders would cause a default under such license, contract or agreement which could result in (x) the termination thereof, (y) an assessment of monetary penalties, or (z) such other penalties which would interfere with the Borrowers use under such

 

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license, contract or agreement, or otherwise causes such licenses, contracts or agreements to be void;

 

(e)            such other assets set forth on Schedule 1(d ) attached hereto, for which the granting of a security interest would be void or illegal under any applicable governmental law, rule or regulation;

 

(f)             Liens in cash collateralizing the Borrowers’ obligations with respect to issued Letters of Credit under the SVB Loan and Security Agreement dated as of April 28, 2006, by and between GT Solar Incorporated (f/k/a GT Equipment Technologies, Inc.) and Silicon Valley Bank which remain outstanding after the Closing Date, but only until such time as such cash collateral is released by SVB as and when the Letters of Credit issued by SVB as and when the Letters of Credit issued by SVB are returned to SVB for cancellation and replaced with Letters of Credit issued by Citizens; and

 

(g)            All securities, investment property, cash, deposits, deposit accounts or other assets held, maintained or managed in GT Solar’s account at SVB Securities which account will initially be entitled Silicon Valley Bank as Secured Party for GT Solar Incorporated’s and numbered 48604416, together with deposit account number 3300538244 held with SVB and together with all GT Solar’s books relating to any of the foregoing and any and all claims, rights and interests ion any of the above and all substitutions for, additions and accessions to and products and proceeds thereof in whatever from including deposit accounts, accounts (including rights of payment), general intangibles, cash, instruments, documents and financial assets all in connection with the foregoing, but only until such time as such collateral is released by SVB or other applicable parties pursuant to the SVB Security Documents.

 

2.              OBLIGATIONS SECURED . The security interest granted hereby is to secure payment and performance of all debts, liabilities and obligations of Borrowers to Agent and/or the Lenders for the Revolving Loans and the Letters of Credit and also any and all other debts, liabilities and obligations of Borrowers to Agent and to Lenders of every kind and description arising under this Agreement and the Other Documents, direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising, by class, or kind, or whether or not contemplated by the parties at the time of the granting of this security interest, and includes obligations to perform acts and refrain from taking action as well as obligations to pay money including, without limitation, all interest, including, without limitation, interest which occurs during any bankruptcy or insolvency proceeding, whether or not such interest is allowed in such proceeding, fees, charges, expenses and overdrafts, and also including, without limitation, all obligations and liabilities which Agent or any Lender may incur or become liable for, on account of, or as a result of, any transactions between Agent, or any Lender and Borrowers under this Agreement or the Other Documents, including any which may arise out of any Letter of Credit issued or caused to be issued for the account of Borrowers and also including Hedging Obligations and other obligations arising out of any foreign exchange contracts, interest rate swap, cap, floor or Hedging Contracts of any Borrower to Agent or any Lender (or any Affiliate of any Lender party to any such Hedging Contracts) (all hereinafter called “ Obligations ”).

 

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3.              BORROWERS’ PLACES OF BUSINESS, INVENTORY LOCATIONS AND RETURNS POLICY . Each Borrower warrants that, as of the date hereof, such Borrower has no places of business other than places of business are listed on Schedule “ A ”, annexed hereto .

 

Each Borrower’s principal executive office and the office where such Borrower keeps its records concerning its accounts, contract rights and other property, as of the date hereof, is set forth on Schedule “A ”. All Inventory owned by any Borrower as of the date hereof, is stored at the locations set forth on Schedule “ A ” (other than Inventory out for repair, in transit or stored at locations where the Borrower has complied with the proceeding paragraph) .

 

Each Borrower will promptly notify Agent in writing of any change in the location of any place of business or the location of any Inventory valued in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) or the establishment of any new place of business or location of Inventory valued in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) or office where its records are kept in each case after the date hereof.

 

4.              BORROWERS’ ADDITIONAL REPRESENTATIONS AND WARRANTIES . Each Borrower represents and warrants that:

 

(a)            Each of GT Solar, GT International and GT Equipment is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and shall hereafter remain in good standing as a corporation in that state, and is duly qualified and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified and in good standing in every other state in which the failure to qualify or become licensed could reasonably be expected to have a Material Adverse Effect.

 

(b)            GT Holdings is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its formation and shall hereafter remain in good standing as a limited liability company in that state, and is duly qualified and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified and in good standing in every other state in which the failure to qualify or become licensed could reasonably be expected to have a Material Adverse Effect.

 

(c)            As of the date hereof, each of the Borrower’s exact legal name is as set forth in this Agreement.

 

(d)            As of the date hereof, the organizational identification number of each Borrower, in its jurisdiction of organization, is as set forth on Schedule “ A ” annexed hereto.

 

(e)            The execution, delivery and performance of this Agreement, and any other document executed by any Borrower in connection herewith, are within each of Borrower’s corporate or company powers, as applicable, have been duly authorized, are not in contravention of law or the terms of such Borrower’s certificate of organization, charter, bylaws, operating agreement or other incorporation or formation papers or of any indenture, agreement or undertaking to which any Borrower is a party or by which it or any of its properties may be bound, except in each case to the extent such contravention could not reasonably be expected to result in a Material Adverse Effect.

 

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(f)             All capital stock or membership interests, as applicable, issued by any Borrower and outstanding was and is properly issued and all books and records of the Borrower, including but not limited to its minute books, by-laws and books of account, are accurate in all material respects.

 

(g)            All of the assets reflected in the most recent financial statements of the Borrowers provided to Agent,  are free and clear of any Lien, except those Liens permitted pursuant to Section 15(h ) of this Agreement.

 

(h)            Each Borrower has timely made or filed (including any extensions) all tax returns, reports and declarations relating to any material tax liability required by any jurisdiction to which it is subject; has paid all taxes shown or determined to be due thereon except (i) those being contested in good faith and which such Borrower has, prior to the date of such contest, identified in writing to Agent as being contested, and has made adequate provision for the payment of all taxes so contested, so that no Lien will encumber any Collateral, and in respect of subsequent periods, or (ii) any obligations where the failure to pay could not reasonably be expected to result in a Material Adverse Effect or otherwise violate the covenants set forth in Section 15(q ).

 

(i)             (i) No Borrower is subject to any charter, corporate or other legal restriction, or any judgment, award, decree, order, governmental rule or regulation or contractual restriction which could reasonably be expected to have a Material Adverse Effect, or otherwise violates the covenants set forth in Article 15 herein, and (ii) each Borrower is in compliance with its charter documents and by-laws, all contractual requirements by which it or any of its properties may be bound and all applicable laws, rules and regulations (including without limitation those relating to environmental protection) other than laws, rules or regulations the validity or applicability of which it is contesting in good faith or provisions of any of the foregoing the failure to comply with which could not reasonably be expected to result in a Material Adverse Effect.

 

(j)             Except as set forth on Schedule 4(i ) hereto, there is no action, suit, proceeding or investigation pending or, to any Borrower’s knowledge, threatened against it or any of its assets before or by any court or other governmental authority which has a reasonable likelihood of adverse determination and, if determined adversely to it, would have a Material Adverse Effect, or otherwise violate the covenants set forth in Section 15(h ).

 

(k)            Except as would not reasonably be expected to result in a Material Adverse Effect: each Borrower is in compliance with the requirements of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) with respect to each Plan; and no “reportable event,” as defined in Section 5053 of ERISA and other than an event with respect to which the notice requirement has been waived by regulation (a “ Reportable Event ”) has occurred and is continuing with respect to any Plan. The word “ Plan ” as used in this Agreement means any employee benefit plan subject to Title IV of ERISA maintained for employees of Borrower, any subsidiary of Borrower or any other trade or business under common control with Borrower within the meaning of Section 4(14)(c) of the Internal Revenue Code of 1986 or any regulations thereunder, each an “ ERISA Affiliate ”).

 

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(l)             Anti-Terrorism Laws.

 

(i)             General .

 

No Borrower, or any Guarantor is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

(ii)            Executive Order No. 13224 .

 

No Borrower, Guarantor, or any of their respective agents acting or benefiting in any capacity in connection with the Loans, Letters of Credit or other transactions hereunder, is any of the following (each a “ Blocked Person ”):

 

(1)            a Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;

 

(2)            a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;

 

(3)            a Person or entity with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(4)            a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224;

 

(5)            a Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website; or

 

(6)            a Person or entity who is known to be affiliated or associated with a person or entity listed above.

 

(iii)           Blocked Person or Transactions .

 

No Borrower, or any Guarantor (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224.

 

(m)           Schedule 4(m) , attached hereto contains a true, accurate and complete listing of all commercial tort claims currently held by the Borrowers as of the Closing Date.

 

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5.              LOANS AND OTHER FINANCIAL ACCOMMODATIONS.

 

I. Revolving Loans .

 

A. Generally .

 

(c)            From time to time upon the Borrower Agent’s request, so long as (and in no event shall) the sum of the aggregate principal amount of all Revolving Loans outstanding (plus the sum of the aggregate amount undrawn on all Letters of Credit) and the requested Revolving Loan does not exceed the Credit Limit (as defined below) or result in a violation of any Financial Covenant, then each Lender, severally and not jointly, shall make such requested Revolving Loan, which shall be advanced according to the applicable Commitment Percentage of each such Lender, provided that Borrowers are in compliance with all covenants herein, including without limitation, the Financial Covenants (based upon information provided to Agent in the most recently delivered Compliance Certificate, pursuant to the terms herein and after giving effect to any cash collateral delivered by Borrowers in connection with such request for borrowing), and there is not continuing any Default or Event of Default. The aggregate amount of each Lender’s Commitment Percentage of the Revolving Loans and the Letters of Credit shall not exceed such Lender’s Commitment Amount, as such Commitment Amount may be amended from time to time in accordance with the provisions hereof.

 

(d)            All Revolving Loans shall bear interest pursuant to the applicable terms of Section 5 hereof and shall be evidenced by and repayable in accordance with each revolving note drawn to the order of each Lender substantially in the form of Exhibit 1 hereto (each a “ Revolving Credit Note ”), as the same may hereafter be amended, supplemented or restated from time to time and any note or notes issued in substitution therefor, but in the absence of a Revolving Note shall be conclusively evidenced by Agent’s records of loans and repayments, except to the extent of manifest error. Each payment by Borrowers on account of the principal of and interest on the Revolving Loans, shall be applied to the Revolving Loans pro rata according to the applicable Commitment Percentage of Lenders at the Payment Office (as defined below) of the Agent or as Agent shall otherwise direct.

 

(c)            Interest on Revolving Loans, net of those Revolving Loans which bear interest calculated by reference to LIBOR (as defined below), will be charged to Borrowers at a fluctuating rate which is the daily equivalent to a rate equal to the Prime Rate plus the Applicable Margin,  upon any balance owing to the Lenders with respect to such Revolving Loans, at the close of each day and shall be payable (i) on the last day of each fiscal quarter in arrears; (ii) on termination of this Agreement pursuant to Section 21 hereof; (iii) on acceleration of the time for payment of the Obligations pursuant to Section 16 hereof; and (iv) on the date the Obligations are paid in full. The rate of interest payable by Borrowers shall be changed effective as of that date in which a change in the Prime Rate becomes effective. Interest shall be computed on the basis of the actual number of days elapsed over a year of three hundred sixty (360) days. The term “ Prime Rate ” as used herein and in any supplement and amendment hereto shall mean the Prime Rate as published from time to time in the “Money Rates” section of The Wall Street Journal or any successor publication, or in the event that such rate is no longer published in The Wall Street Journal , a comparable index or reference selected by Agent and provided to the Borrower Agent. The Prime Rate need not and may not necessarily be the lowest or most

 

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favorable rate. Interest shall be payable in lawful money of the United States of America to Lenders at the Payment Office of the Agent, or as Agent shall direct, without set-off, deduction or counterclaim quarterly, in arrears, on the first day of each quarter, commencing on July 1, 2007.

 

Interest on Revolving Loans, net of Revolving Loans which bear interest calculated by reference to the Prime Rate, will be charged to Borrowers at a rate which is the equivalent to the LIBOR Lending Rate (as defined below) plus the Applicable Margin (as defined below), and shall be payable (i) on the last day of each Interest Period in arrears; (ii) on termination of this Agreement pursuant to Section 21 hereof; (iii) on acceleration of the time for payment of the Obligations pursuant to Section 16 hereof; and (iv) on the date the Obligations are paid in full. All such Interest shall be payable at the end of the applicable Interest Period. Interest on LIBOR Revolving Loans shall be computed on the basis of the actual number of days elapsed over a year of three hundred sixty (360) days.

 

(d)            Changes in the Applicable Margin shall become effective on the first day of the month next following delivery of a Compliance Certificate (either scheduled or supplemental).

 

(e)            The term “ Credit Limit ” as used herein shall mean an amount equal to Sixty Million ($60,000,000.00) Dollars, provided however , that at no time shall amounts outstanding under the Revolving Loan advanced for purposes of working capital and/or general corporate purposes exceed the following limitations (which such limitations shall be referred to collectively, as the “ WC Sub-Limits ”, and each, a “ WC Sub-Limit ”):

 

 

 

Notwithstanding anything to the contrary contained herein, the WC Sub-Limits shall be pro–rated hereunder with the amount of the outstanding Commitment Amounts in order to account for any event where the total Commitment Amount is less than the total Credit Limit (or likewise to account for the event of an increase in the Credit Limit pursuant to Section 5(I)(B ) herein). For example, in the event the total Commitment Amount is Forty Million and 00/100 Dollars ($40,000,000.00), then such initial WC Sub-Limit would be Twenty Million and 00/100 Dollars ($20,000,000.00).

 

(f)             Each Borrower hereby authorizes and directs Agent, for the benefit of the Lenders, in Agent’s sole discretion (provided, however, Agent shall have no obligation to do so)

 

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to pay accrued interest as the same becomes due and payable pursuant to this Agreement or pursuant to any note or other agreement between Borrowers and Agent for the benefit of the Lenders or any Lender as applicable, in connection with the Obligations (except with respect to any Hedging Contracts), and to treat the same as a Revolving Loan to Borrowers, which shall be added to the outstanding Revolving Loan balance pursuant to this Agreement; and during the continuance of an Event of Default , (i) to charge any of Borrower’s accounts under the control of Agent or any of its Affiliates and apply such amounts in each case with respect to repayment of the Obligations in the order set forth in Section 11(a) , herein; or (ii) apply the proceeds of Collateral, including, without limitation, payments on Accounts and other payments from sales or leases of Inventory and any other funds to the payment of such items, in each case with respect to repayment of the Obligations in the order set forth in Section 11(a) , herein. Agent shall promptly notify Borrower Agent of any such charges or applications.

 

(g)            The making of Revolving Loans by the Agent and/or the Lenders to the Borrowers at any time when Borrowers are not in compliance with any covenants or other conditions hereunder is for the benefit of the Borrowers and does not affect the obligations of Borrowers hereunder; all such Revolving Loans constitute Obligations and must be repaid by Borrowers in accordance with the terms of this Agreement.

 

(h)            Intentionally Omitted.

 

(i)            As used in this Agreement, the following terms shall have the following meanings:

 

“ Accounts ” shall have the meaning set forth in Section 1(b ), herein.

 

“ Acts ” shall have the meaning set forth in Section 14(p ), herein.

 

 “ Affiliate ” shall mean any person or entity (i) which directly or indirectly Controls, or is Controlled by or is under common control with any other Person, (ii) which directly or indirectly beneficially holds or owns ten (10%) percent or more of any class of voting stock or membership interest of any such Person, or (iii) ten (10%) percent or more of the voting stock or membership interest of which is directly or indirectly beneficially owned or held by any such Person.

 

“ Agent ” shall have the meaning set forth in the preamble to this Agreement, including any permitted successor or assign.

 

“ Agreement ” shall have the meaning set forth in the preamble to this Agreement.

 

“ Anti-Terrorism Laws ” shall mean any laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).

 

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“ Applicable Margin ” shall be tied to ratio of the trailing four quarter Total Funded Debt to Proforma EBITDA (as determined pursuant to Section 15(b ) of the Agreement), and as set forth below:

 

Ratio of Total Funded Debt to Proforma EBITDA		LIBOR Margin		Prime Rate Margin		LC Commission
> 2.25x		+2.25% per annum		-0.50% per annum		1.250	%
<2.25x and > 1.25x		+2.00% per annum		-0.75% per annum		1.125	%
<1.25x		+1.50 per annum		-1.25% per annum		1.000	%

 

“ Bankruptcy Code ” shall have the meaning set forth in Section 16(xi), herein.

 

“Benefited Lender ” shall have the meaning set forth in Section 5(V)(d ), herein.

 

“ Blocked Person ” shall mean a person that is named as a “specially designated national and blocked person” on the most current list published by the OFAC at its official website or any replacement website or other replacement official publication of such list.

 

“ Borrower ” or “ Borrowers ” shall have the meaning set forth in the preamble.

 

“ Borrower Agent ” shall have the meaning set forth in Section 6(a ), herein.

 

“ Business Day ” shall mean:

 

(i)             any day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in Manchester, New Hampshire;

 

(ii)            when such term is used to describe a day on which a borrowing, payment, prepayment, or repayment is to be made in respect of any LIBOR Rate Loan, any day which is: (A) neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in New York City; and (B) a London Banking Day; and

 

(iii)           when such term is used to describe a day on which an interest rate determination is to be made in respect of any LIBOR Rate Loan, any day which is a London Banking Day.

 

“ Capital Assets ” shall mean assets that, in accordance with GAAP, are required or permitted to be depreciated or amortized on the Borrowers’ balance sheet.

 

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  “Capital Expenditures ” shall mean, but not be limited to, amounts paid during such fiscal year for Capital Assets or Capital Leases (as determined pursuant to financial statements prepared in accordance with GAAP)  but in any event excluding amounts paid or financed here for with casualty, condemnation or asset sale proceeds.

 

“Capital Leases” shall mean as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

 

“Cash Equivalents ” shall mean, at any time, (i) any evidence of Indebtedness with a maturity date of one hundred eighty (180) days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof or any agency or instrumentality thereof; provided, that, the full faith and credit of the United States of America is pledged in support thereof; (ii) certificates of deposit or bankers’ acceptances with a maturity of three hundred and sixty-five (365) days or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500,000,000; (iii) commercial paper (including variable rate demand notes) with a maturity of three hundred and sixty-five (365) days or less issued by an entity (except an Affiliate of any Borrower or Guarantor) organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. or at least P-1 by Moody’s Investors Service, Inc.; (iv) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (i) above entered into with any financial institution having combined capital and surplus and undivided profits of not less than $500,000,000; (v) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America, or, in each case, issued by any governmental agency thereof and backed by the full faith and credit of the United States of America, in each case, maturing within three hundred and sixty-five (365) days or less from the date of acquisition; and (vi) investments in money market funds and mutual funds which invest substantially all of their assets in securities of the types described in clauses (i) through (v) above.

 

“ Cash Flow ” shall mean the aggregate of (i) Net Income (determined in accordance with GAAP), plus (ii) Interest, depreciation and amortization, plus (iii) an accounting for extraordinary expenses, including non-recurring charges such as purchase accounting charges, changes in revenue recognition and non-

 

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cash charges for stock options minus (iv) distributions, and minus (v) unfinanced Capital Expenditures.

 

“CIP Regulations ” shall have the meaning set forth in Section 23(m) , herein.

 

“Citizens ” shall have the meaning set forth in the preamble.

 

“ Closing Date ” shall mean April 20, 2007.

 

“ CMLTD ”  shall mean the current maturity of long-term Indebtedness paid ( or required to be paid) during the applicable period, including but not limited to, amounts required to be paid during such period under Capital Leases, or with respect to amounts paid (or required to be paid) under any other Subordinated Indebtedness whether now existing or hereafter incurred.

 

“ Collateral ” shall have the meaning set forth in Section 1(e), herein.

 

“ Commitment Amount ” shall mean the aggregate principal amount of each Lender’s Commitment Percentage of the Revolving Loans and the Letters of Credit, as the same may be amended from time to time in accordance with the provisions of this Agreement. The initial Commitment Amount of Lenders as of the Closing Date is as follows, and shall be set forth on Schedule “C ”, as the same may be amended from time to time, as permitted herein:

 

Lender		Commitment Amount
Citizens Bank New Hampshire		$	40,000,000.00
		$	20,000,000.00

 

“Commitment Percentage(s) ” of any Lender shall mean the percentage set forth below such Lender’s name on the signature pages hereof as same may be adjusted upon any assignment by a Lender pursuant to the terms hereof. The current Commitment Percentages of the initial Lenders for the Revolving Loan as of the Closing Date are as follows, and shall be set forth on Schedule “C ”, as the same may be amended from time to time, as permitted herein:

 

 

“Committed Loan ” shall mean a loan made by a Lender pursuant to Section 5(I) , herein, provided that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Loan Request, the term “Committed Loan” shall refer

 

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to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.

 

“ Continuation/Conversion Notice ” shall have the meaning set forth in Section 5(II)(b) , herein.

 

“ Control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any person or entity, whether through the ownership of voting securities or by contract.

 

“ Control Agreements ” shall have the meaning set forth in Section 11(c ), herein.

 

“ Credit Limit ” shall have the meaning set forth in Section 5(I)(A)(e) , herein.

 

“ Debt Service Coverage Ratio ” shall mean, during the applicable period, that quotient equal to (a) Cash Flow, divided by (b) Fixed Charges.

 

“ Default” shall mean the occurrence of any of the events specified in Section 16 , whether or not any requirement for the giving of notice, the lapse of any cure period, or both, has been satisfied.

 

“ Default Rate ” shall have the meaning set forth in Section 16(a), herein.

 

“ Defaulting Lender ” shall have the meaning set forth in Section 5(V)(f ), herein.

 

“ Designated Lender ” shall have the meaning set forth in Section 5(V)(k ), herein.

 

 “ Distributions ” shall mean all payment or distributions to shareholders in cash or in property other than reasonable salaries, bonuses and expense reimbursements.

 

“ Eligible Assignees ” shall have the meaning set forth in Section 24(a ), herein.

 

“ Equipment” shall have the meaning set forth in Section 1(c) , herein.

 

“ ERISA ” shall have the meaning set forth in Section 4(j ), herein.

 

“ ERISA Affiliate ” shall have the meaning set forth in Section 4(j ), herein.

 

“ Event of Default ” shall have the meaning set forth in Section 16 , herein.

 

“ Excess LC ” shall have the meaning set forth in Section 5(III)(a)(2 ), herein.

 

“ Excess LC Amount ” shall have the meaning set forth in Section 5(III)(a)(2 ), herein.

 

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“ Executive Order No. 13224 ” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

 

“ Facility ” means the credit facility described herein with respect to the Revolving Loans (including issuances of Letters of Credit) up to the Credit Limit.

 

“ Federal Funds Effective Rate ” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100th of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided , if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

 

“ Financial Covenants ” shall mean those certain Borrowers’ Negative Covenants set forth in Sections 15 (a) – (f), herein.

 

“ Fixed Charges ” shall mean Interest Expense plus CMLTD.

 

“ GAAP ” shall mean the generally accepted accounting principles in the United States as in effect from time to time, except that for purposes of Section 15 GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 15 and in the event that any “ Accounting Change ” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrowers and the Agent and Lenders agree to enter into negotiations in order to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating the Borrowers’ financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrowers, the Agent and the Required Lenders, (1) all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred and (2) the Borrowers will furnish to the Agent (for distribution to the Lenders), in addition to the financial statements required to be furnished pursuant to Section 15 (the “ Current GAAP Financials ”), (a) the financial statements described in such Section based upon GAAP as in effect at the time the relevant financial covenant, standard or term

 

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was agreed to (the “ Prior GAAP Financials ”) and (b) a reconciliation between the Prior GAAP Financials and the Current GAAP Financials. “ Accounting Changes ” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board (the “ FASB ”), the Emerging Issues Task Force (“ EITF ”) of the FASB or, if applicable, the SEC. In addition, the definitions set forth in this Agreement or any Other Document and any financial calculations required by this Agreement or any Other Document shall be computed to exclude (a) the effect of purchase accounting adjustments, including the effect of non-cash items resulting from any amortization, write-up, write-down or write-off of any assets or deferred charges and (b) the application of FAS 133 (and limited to the exclusion of any unrealized losses or gains resulting from mark-to-market of Hedging Agreements), FAS 150 (but solely in connection with additions to or deductions from net income) or FAS 123r (to the extent that the pronouncements in FAS 123r result in recording an equity award as a liability on the consolidated balance sheet of the Borrowers in the circumstance where, but for the application of the pronouncements, such award would have been classified as equity).

 

“ Governmental Body ” shall mean any nation or government, any state or other political subdivision thereof or any entity exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.

 

“ GT Equipment ” shall have the meaning set forth in the preamble.

 

“ GT Holdings ” shall have the meaning set forth in the preamble.

 

“ GT International ” shall have the meaning set forth in the preamble.

 

“ GT Solar ” shall have the meaning set forth in the preamble.

 

“ Guarantor ” shall mean, individually, any present or future guarantor of the whole or any part of the Obligations and collectively, the “ Guarantors, ” provided however, that such term does not mean or include any foreign Subsidiary.

 

“ Hedging Contracts ” shall mean interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, or any other agreements or arrangements entered into between any Borrower and any other Person designed to protect the Borrowers against fluctuations in interest rates or currency exchange rates.

 

“ Hedging Obligations ” means, with respect to any Borrower, all liabilities of Borrowers to Agent or any Lender (or any Affiliate of any Lender) or any other Person under Hedging Contracts.

 

“ Increase Effective Date ” shall have the meaning set forth in Section 5(I)(B)(d) , herein.

 

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“ Increase Option ” shall mean during the term of the Facility, the Borrowers shall have the option to increase the Facility Amount by a maximum aggregate amount of up to $20,000,000.00

 

“Indebtedness” shall mean (i) all liabilities for borrowed money, for the deferred purchase price of property or services (other than trade payables and accrued expenses in the ordinary course of business), and under Capital Leases, in respect of which a person or entity is directly or indirectly, absolutely or contingently liable as obligor, guarantor, endorser or otherwise, or in respect of which such person or entity otherwise assures a creditor against loss, and (ii) all liabilities of the type described in (i) above which are secured by (or for which the holder has an existing right, contingent or otherwise, to be secured by) any Lien upon property owned by such person or entity, whether or not such person or entity has assumed or become liable for the payment thereof.

 

“ Indemnitee ”  shall have the meaning set forth in Section 25(g) , herein.

 

“ Interest ” or “ Interest Expense ” shall mean, for the applicable period, all interest paid in cash (or accrued but not paid), including but not limited to, interest paid in cash (or accrued but not paid) on Indebtedness (including all Subordinated Indebtedness) and on Capital Leases, determined in accordance with GAAP.

 

“ Interest Payment Date ” shall mean, relative to any LIBOR Rate Loan, the last Business Day of such Interest Period for LIBOR Rate Loans having an Interest Period of three months or less and as to LIBOR Rate Loans having an Interest Period longer than three months, each Business Day which is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period.

 

“ Interest Period ” shall mean, relative to any LIBOR Rate Loans:

 

(i)             initially, the period beginning on (and including) the date on which such LIBOR Rate Loan is made or continued as, or converted into, a LIBOR Rate Loan pursuant to this Agreement and ending on (but excluding) the day which numerically corresponds to such date one, two or three months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month), in each case as the Borrower Agent may select in its notice pursuant to this Agreement; and

 

(ii)            thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two or three months thereafter, as selected by the Borrower Agent by irrevocable notice to the Agent not less than two Business Days prior to the last day of the then current Interest Period with respect thereto;

 

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provided, however, that

 

(i)             subject to clause (ii) below, the Borrowers shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates of more than five (5) different dates;

 

(ii)            Interest Periods for LIBOR Rate Loans in connection with which any Borrower has or may incur Hedging Obligations with the Agent or any Lender shall be of the same duration as the relevant periods set under the applicable Hedging Contracts;

 

(iii)           if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day unless such day falls in the next calendar month, in which case such Interest Period shall end on the first preceding Business Day;

 

(iv)           Interest Periods commencing on the same date for LIBOR Rate Loans comprising part of the same advance hereunder shall be of the same duration; and

 

(v)            no Interest Period may end later than the Termination Date.

 

“ Inventory ” shall have the meaning set forth in Section 1(a ).

 

“ Inventory Sale Financing ” shall have the meaning set forth in Section 15(i ).

 

“ IPO ” shall have the meaning set forth in Section 16(a) (xiii ), herein.

 

“ Issuing Lender ” shall mean Citizens Bank New Hampshire in its capacity as the Lender issuing the Letters of Credit, and any permitted successor or assign.

 

“ Key Person(s)” shall mean any of a Borrowers’ Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, or any other member of any Borrower’s senior management reasonably agreed upon by such Borrower and Agent.

 

“ LC Commission”   shall have the meaning set forth in Section 5(III)(e ), herein.

 

“ Lender ” and “ Lenders ” shall have the meaning ascribed to such term in the preamble in this Agreement and shall include each Person which becomes a permitted transferee, successor or assign of any Lender.

 

“ Lender Default ”  shall have the meaning set forth in Section 5(V)(f), herein.

 

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“Letter of Credit ” shall mean any standby letter or commercial of credit issued at the request of the Borrower Agent and for the account of any Borrower in accordance with Section 5(III ), herein.

 

“ Letter of Credit Request ”  shall have the meaning set forth in Section 5 (III)(a)(1) .

 

“ LIBOR Lending Rate ” shall mean, relative to any LIBOR Rate Loan to be made, continued or maintained as, or converted into, a LIBOR Rate Loan for any Interest Period, a rate per annum determined pursuant to the following formula:

 

LIBOR Lending Rate		=		LIBOR Rate
				(1.00 - LIBOR Reserve Percentage)

 

“ LIBOR Notice of Borrowing ” shall have the meaning set forth in Section 5(II)(a ), herein.

 

“ LIBOR Rate ” shall mean, relative to any Interest Period for LIBOR Rate Loans, the offered rate for deposits of U.S. Dollars in an amount approximately equal to the amount of the requested LIBOR Rate Loan for a term coextensive with the designated Interest Period which the British Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day which is two London Banking Days (as defined below) prior to the beginning of such Interest Period.

 

“ LIBOR Rate Loan ” shall mean, any Revolving Loan the rate of interest applicable to which is based upon the LIBOR Lending Rate.

 

“ LIBOR Rate Loan Prepayment Fee ” shall have the meaning set forth in Section 5(IV)(b ), herein.

 

“LIBOR-Reference Banks Loan” means any Loan the rate of interest applicable to which is based upon the LIBOR-Reference Banks Rate.

 

“LIBOR-Reference Banks Lending Rate” means, relative to a LIBOR-Reference Banks Rate Loan for any Interest Period, a rate per annum determined pursuant to the following formula:

 

LIBOR-Reference Banks Lending		=		LIBOR-Reference Banks Rate
Rate				(1.00 – LIBOR Reserve Percentage)

 

“LIBOR-Reference Banks Rate ” means relative to any Interest Period for LIBOR-Reference Banks Loans, the rate for which deposits in U.S. Dollars are offered by the Reference Banks to prime banks in the London interbank market in an amount approximately equal to the amount requested LIBOR-Reference Banks Loan at approximately 11:00 a.m., London time on the day that is two London Banking Days prior to the beginning of such Interest Period. The Bank will

 

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request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for such date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for such date will be the arithmetic mean of the rates quoted by major banks in New York City selected by the Bank, at approximately 11:00 a.m. New York City time for loans in U.S. Dollars to leading European banks for such Interest Period and in an amount approximately equal to the amount requested LIBOR-Reference Banks Loan.

 

“ LIBOR Reserve Percentage ” shall mean, relative to any day of any Interest Period for LIBOR Rate Loans, the maximum aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) under any regulations of the Board of Governors of the Federal Reserve System (the “ Board ”) or other governmental authority having jurisdiction with respect thereto as issued after the Closing Date from time to time and then applicable to assets or liabilities consisting of “Eurocurrency Liabilities”, as currently defined in Regulation D of the Board, having a term approximately equal or comparable to such Interest Period.

 

“ Lien ” shall have the meaning set forth in Section 15(h) , herein.

 

“ London Banking Day ” shall mean a day on which dealings in US dollar deposits are transacted in the London interbank market.

 

“ Material Adverse Effect ” shall mean a material adverse effect on and/or material adverse developments with respect to (a) the business, assets, liabilities, operations, financial condition or operating results of the Borrowers and their wholly-owned Subsidiaries (taken as a whole), (b) the ability of a Borrower or the Borrowers to perform their Obligations under this Agreement or the Other Documents, to which they are a party, or (c) the legality, validity, binding effect or enforceability of this Agreement and/or the Other Documents, or the rights, remedies and benefits taken as a whole (including the value of the Collateral and perfection and priority of the Liens in favor of the Agent (for its benefit and for the benefit of the Lenders) available to the Agent and Lenders under this Agreement and the Other Documents.

 

“ Minimum Deposit ” shall have the meaning set forth in Section 11(c ), herein.

 

“ Mortgage ” shall mean that certain Mortgage and Security Agreement from GT Solar to Agent, as Mortgagee, dated as of the date herewith and encumbering that certain real property and improvements as noted therein.

 

“ Multiemployer Plan ” shall have the meaning set forth in Section 16(a)(xviii ), herein.

 

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“Net Cash Proceeds” shall mean (a) in connection with any disposition or any condemnation event, the proceeds thereof in the form of cash and Cash Equivalents including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received, provided however , that for purposes of calculating threshold levels herein (including without limitation, those levels set forth in Section 15(g )), the entire amount of any such cash or Cash Equivalent shall be recognized when incurred (whether or not actually received at such time), net of (i) attorneys’ fees, accountants’ fees, investment banking fees, and other customary fees and expenses actually incurred in connection therewith, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such disposition or condemnation event (other than any Lien pursuant to the Loan Agreement or Other Documents), (iii) taxes paid and the Borrowers’ reasonable and good faith estimate of income, franchise, sales, and other applicable taxes required to be paid by the Borrowers or any Guarantor in connection with such disposition or condemnation event, the computation of which shall, in each such case, take into account the reduction in tax liability resulting from any available operating losses and net operating loss carryovers, tax credits, and tax credit carry forwards, and similar tax attributes, (iv) amounts provided as a cash reserve, in accordance with GAAP, or amounts placed in a funded escrow, against any liabilities under any indemnification obligations or purchase price adjustments associated with any disposition, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds), and (v) the Borrowers’ good faith estimate of payments required to be made with respect to unassumed liabilities relating to the assets sold (provided that, to the extent such cash proceeds are not so used within the then current fiscal year, such cash proceeds shall constitute Net Cash Proceeds).

 

 “ Net Income ” shall as determined in accordance mean the net income of the Borrowers and their Subsidiaries, determined in accordance with GAAP.

 

“ Non-Defaulting Lenders ” shall have the meaning set forth in Section 5(V)(g) , herein.

 

“ Note ” shall mean each Revolving Credit Note and “ Notes ” shall mean all such Revolving Credit Notes.

 

“ Notice of Borrowing ” shall have the meaning set forth in Section 5(II)(c ), herein.

 

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“Reference Banks” means four major banks in the London interbank market.

 

“ Register ” shall have the meaning set forth in Section 24(b ), herein.

 

“ Registration Fee ” shall have the meaning set forth in Section 24(b ), herein.

 

“ Reportable Event ” shall have the meaning set forth in Section 4(j) , herein.

 

“ Required Lenders ” shall mean (a) when there are three (3) or more Lenders which are parties to this Agreement, those Lenders holding at least sixty-six and two thirds percent (66 2/3%) of the outstanding Revolving Loans and/or commitments and (b) when there are one (1) or two (2) Lenders which are parties to this Agreement, Lenders holding at least one hundred percent (100%) of the Revolving Loans.

 

“ Responsible Officer ” shall mean, with respect to any Person, the chief executive officer, president, chief financial officer, treasurer, controller or comptroller, but in any event, with respect to financial matters, the chief financial officer, treasurer, controller or comptroller of such Person.

 

“ Revolving Credit Note ” shall mean, collectively, the promissory notes made by Borrowers in favor of each Lender referred to in Section 5I(b ) hereof.

 

“ Revolving Loan(s) ” or “ Revolving Credit Loan ” shall mean advances made in the form of revolving loans to Borrowers under Section 5(I ) hereof and shall also include all advances extended under all Letters of Credit pursuant to Section 5(III ) hereof. “Senior Indebtedness ” shall mean any Indebtedness that is not Subordinated Indebtedness

 

“ Settlement Date ” shall mean the Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.

 

“ Sponsor Affiliated Lenders ” shall mean GFI Energy Ventures, and funds and managed accounts which are controlled by any such Person, or an Affiliate of such Person.

 

“ Subordinated Indebtedness” shall mean Indebtedness which is expressly stated to be subordinated or junior in right of payment to the Borrowers’ Obligations to the Agent in a manner and form which is reasonably satisfactory to the Agent.

 

“ Subsidiary ” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other equity interests having ordinary voting power (other than stock or such other equity interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,

 

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partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrowers.

 

“ SVB ” shall have the meaning ascribed to it in Section 12 , herein.

 

“ SVB Payoff ” shall have the meaning ascribed to it in Section 12 , herein.

 

“ SVB Security Documents ” shall mean, collectively, the Amended and Restated Security Agreement by and between SVB and GT Solar dated as of April 19, 2007, and those certain Securities Account Control Agreement by and among SVG Securires, ADP Clearing & Outsourcing Services, Inc. GT Solar and the Creditor named therein, which such documents relate to, among other things securities, investment property, cash, deposits, deposit accounts or other assets held, maintained or managed in GT Solar Incorporated’s account at SVB Securities which account will initially be entitled Silicon Valley Bank as Secured Party for GT Solar Incorporated’s and numbered 48604416, together with deposit account number 3300538244 held with SVB.

 

“Term ” shall mean the term of this Agreement commencing from the date of execution until the Termination Date.

 

“ Termination Date ” shall have the meaning set forth in Section 21(a ), herein.

 

“ Total Funded Debt ” shall mean all Subordinated Indebtedness plus the Senior Indebtedness, plus Letters of Credit issued, minus pledged cash collateral accounts;

 

“ Unfinanced Capital Expenditures ” shall mean Capital Expenditures, minus long term Indebtedness issued during the applicable period for the acquisition of Capital Assets.

 

“ Uniform Commercial Code ” shall have the meaning set forth in Section 25(e) , herein.

 

“ Unused Line Fee ” shall have the meaning set forth in Section 5(VI)(h ), herein.

 

“ USA Patriot Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

 

“WC Sub-Limits ” shall have the meaning set forth in Section 5(I)(A)(e ), herein.

 

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“ Week ” shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.

 

B.             The Increased Loan Amount .

 

(a)            Request for Increase . During the term of the Facility, the Borrowers shall have the option to increase the Facility Amount by a maximum aggregate amount of up to $20,000,000.00 (the “ Increase Option ”). Borrowers may exercise said Increase Option at any time by providing notice to the Agent (which shall promptly notify the Lenders), provided however, (a) that at the time of the exercise of such option, there is no Default or Event of Default which shall have occurred and be continuing; (b) in no event shall the existence of this Increase Option be deemed a commitment on the part of any Lender until such time as such Lender in writing agrees to increase its commitment or a new Lender issues a written commitment for any such amounts in excess of the Commitment Amount in effect as of the date such Increase Option is exercised, and then in such event, such increase to the Facility Amount shall only be to the extent of the increased commitment or new Commitment Amounts; (c) at the time of sending such notice, the Borrowers (in consultation with the Agent) shall specify the time period within which each existing Lender is requested to respond as to whether such Lender agrees to increase the amount of its Commitment in accordance with Section 5(1)(B)(b) , below;  (d) any such increase shall be in a minimum amount of $5,000,000.00 with minimum increments of $1,000,000.00 above that amount, and a maximum aggregate increase of $20,000,000.00; and (e) any such increase shall be integrated into this Agreement and shall be subject to the same terms and conditions as this Agreement.

 

(b)            Lender Elections to Increase . Each Lender shall notify the Agent within such time period specified in said notice, whether or not it agrees, in its sole discretion, to increase its Commitment and, if so, by what amount (which need not be its pro rata share thereof). Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

 

(c)            Notification by Agent; Additional Lenders . The Agent shall notify the Borrowers and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase in the Facility Amount and subject to the approval of the Agent and the Issuing Bank (which approvals shall not be unreasonably withheld), the Borrowers may also invite additional Eligible Assignees (as defined in Section 24 herein) to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Agent, its counsel, and provided there is no Event of Default continuing hereunder, the Borrower Agent.

 

(d)            Effective Date and Allocations . If the aggregate Commitments (including due to new Commitments by additional Lenders) are increased in accordance with this Section 5(I)(B ), the Agent and the Borrowers shall determine the effective date (the “ Increase Effective Date ”) and the final allocation of such increase. The Agent

 

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shall promptly notify the Borrowers and the Lenders (including any additional Lenders) of the final allocation of such increase and the Increase Effective Date.

 

(e)            Conditions to Effectiveness of Increase . Any increase in the Facility amount pursuant to this Section 5(I)(B ) shall be subject to satisfaction of the following conditions:

 

(i)             The Borrowers shall have paid to (A) the Agent, such fees as shall be due to Agent at such time and in connection with such Increase, and (B) to each Lender, such fees, if any, as shall have been mutually agreed upon by the Borrower Agent and the Agent at or prior to the exercise of the Increase Option.

 

(ii)            As of the Increase Effective Date, no Default or Event of Default then exists and is continuing or would result from such increase in the Facility Amount (including on a pro forma basis relative to financial covenant compliance).

 

(iii)           The Borrowers shall have delivered to the Agent a certificate dated as of the Increase Effective Date (in sufficient copies for each Lender) (A) certifying and attaching the resolutions adopted by the Borrowers approving or consenting to such increase, and (B) certifying that, before and after giving effect to such increase, (1) the representations and warranties of the Borrowers in this Agreement and in each other Loan Document are true and correct in all material respects on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case, to the knowledge of the Borrowers, they are true and correct in all material respects as of such earlier date, and except to the extent of changes resulting from transactions contemplated and permitted by this Agreement and changes occurring in the ordinary course of business (in each case to the extent not constituting a Default or Event of Default), and (2) no Default or Event of Default exists and is continuing or would result from such increase in the Facility amount (including on a pro forma basis relative to Financial Covenant compliance).

 

(iv)           The Borrowers shall prepay any Committed Loans outstanding on the Increase Effective Date (and pay any additional amounts required with respect to any LIBOR Rate Loan associated with such prepayment) to the extent necessary to keep the outstanding Committed Loans ratable with any revised Commitment allocations arising from any nonratable increase in the Commitments under this Section 5(I)(B) . Notwithstanding any provisions of this Agreement to the contrary, the Borrowers may borrow from the Lenders providing such increase in the Commitments (on a non pro rata basis with Lenders not providing such increase) in order to fund such prepayment.

 

(v)            The Borrowers will execute and deliver to each applicable Lender a new Note in the appropriate stated amount, and will execute and deliver or otherwise provide to the Agent and the Lenders such other documents and instruments consistent with the terms of this Agreement, as the Agent or Lenders reasonably may require.

 

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(f)             The provisions of this Section 5(I)(B ) shall not constitute a “commitment” to lend, and the Commitments of the Lenders shall not be increased until satisfaction or waiver of the provisions of this Section 5(I)(B ) and actual increase of the Commitments as provided herein.

 

II.             Borrowing Procedures .

 

(a)            LIBOR Loan Request . Lenders shall not be required to make a LIBOR Rate Loan, or convert a Prime Rate Loan into a LIBOR Rate Loan, unless Agent shall have received from the Borrower Agent a request for such LIBOR Rate Loan, in substantially the form of Exhibit 3 annexed hereto (herein a “ LIBOR Notice of Borrowing ”). By delivering a borrowing request (i.e., Notice of Borrowing) to the Agent on or before 1:00 pm., New York time, on a Business Day, the Borrower Agent may from time to time irrevocably request, on not less than two Business Days’ notice, a Revolving Loan in a minimum amount of One Hundred Thousand Dollars ($100,000.00) with integral multiples of Fifty Thousand Dollars ($50,000.00) with an Interest Period of one, two or three months. On the terms and subject to the conditions of this Agreement, each LIBOR Rate Loan shall be made available to the Borrowers no later than 11:00 a.m. New York time on the first day of the applicable Interest Period by deposit to the account of the Borrowers as shall have been specified in its borrowing request.

 

(b)            Continuation and Conversion Elections . By delivering a continuation/conversion notice (“ Continuation/Conversion Notice ”) to the Agent on or before 1:00 p.m., New York time, on a Business Day, the Borrower Agent may from time to time irrevocably elect, on not less than two (2)   Business Days’ notice, that all, or any portion in an aggregate minimum amount of One Hundred Thousand Dollars ($100,000.00) with integral multiples of Fifty Thousand Dollars ($50,000.00) of any LIBOR Rate Loan be converted on the last day of an Interest Period into a LIBOR Rate Loan with a different Interest Period, or continued on the last day of an Interest Period as a LIBOR Rate Loan with a similar Interest Period, provided, however , that no portion of the outstanding principal amount of any LIBOR Rate Loans may be converted to, or continued as, LIBOR Rate Loans when any Default or Event of Default has occurred and is continuing, and no portion of the outstanding principal amount of any LIBOR Rate Loans may be converted to LIBOR Rate Loans of a different duration if such LIBOR Rate Loans relate to any Hedging Obligations related to any Hedging Contracts with respect to interest rates. In the absence of delivery of a continuation/conversion notice with respect to any LIBOR Rate Loan at least two Business Days before the last day of the then current Interest Period with respect thereto, such LIBOR Rate Loan shall, on such last day, automatically convert to a Revolving Loan that accrues interest by reference to the Prime Rate.

 

(c)            Prime Rate Loan . Lenders shall not be required to make a Prime Rate Loan unless Agent shall have received from the Borrower Agent a request for such Prime Rate Loan (the “ Prime Loan Notice of Borrowing ”). By delivering a written borrowing request to the Agent on or before 12:00 p.m., New York time, on a Business Day of the requested borrowing, the Borrower Agent may from time to time irrevocably

 

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request,  a Revolving Loan Advance in a minimum amount of Ten Thousand ($10,000.00) Dollars with integral multiples of Ten Thousand ($10,000.00) Dollars. On the terms and subject to the conditions of this Agreement, each Prime Rate Loan shall be made available to the Borrowers no later than 3:00 p.m. New York time on the effective date specified therefore by deposit to the account of the Borrowers as shall have been specified in its borrowing request. For purposes herein, each of the LIBOR Notice of Borrowing, the Continuation/Conversion Notice and a Prime Loan Notice of Borrowing may be referred to as “ Notice of Borrowing ”)

 

(d)            Certification . Upon delivery of a Notice of Borrowing, Borrowers shall be deemed to have certified that no Default or Event of Default shall have occurred and be continuing or created as a result of the borrowing being requested and all representations and warranties contained herein and in all of the Other Loan Documents are true and complete in all material respects, except to the extent such representation and warranty relates to an earlier date, and in such case, the representation and warranties are true and correct in all material respects as of such date of said Notice of Borrowing; additionally, upon request by the Agent, the Borrower Agent shall deliver to Agent a completed Borrower’s Certificate in substantially the form of Exhibit 2 attached hereto and made a part hereof.

 

III.            Letters of Credit .

 

(a)            (1)            Subject to the terms and conditions set forth in this Agreement, at any time and from time to time from the Closing Date through the Termination Date, the Issuing Lender shall issue such Letters of Credit as the Borrowers may request upon the delivery of a written request in the form of Exhibit 6 hereto (a “ Letter of Credit Request ”) to the Issuing Lender, provided that (i) no Default or Event of Default shall have occurred and be continuing, (ii) except as set forth in Section 5(III)(a)(2 ), below, in no event shall the sum of (A) the Revolving Loans Outstanding and (B) the amount of Letters of Credit Outstanding (after giving effect to all Letters of Credit requested and drawings made under any Letters of Credit but not reimbursed) exceed the total maximum Commitment Amount, (iii) all representations and warranties contained herein and in all of the Other Documents are true and complete in all material respects, except to the extent any such representation or warranty relates to an earlier date, and in such case such applicable representations and warranties are true and correct in all material respects of such date, and (iv) in no event shall any amount drawn under a Letter of Credit be available for reinstatement or a subsequent drawing under such Letter of Credit. Each Letter of Credit Request shall be for a Letter of Credit in a minimum aggregate amount of $5,000. Each Letter of Credit Request shall be executed by a Responsible Officer of Borrower Agent. The Issuing Lender shall be entitled to conclusively rely on such Person’s authority to request a Letter of Credit on behalf of Borrowers. The Issuing Lender shall have no duty to verify the authenticity of any signature appearing on a Letter of Credit Request. The Borrowers assume all risks with respect to the use of the Letters of Credit. The amount available to be drawn under any Letter of Credit shall reduce on a dollar-for-dollar basis the amount available to be drawn under the Credit Limit as a Revolving Loan.

 

(2)            Notwithstanding the aforesaid, the Agent, in its sole discretion, may allow the issuance of Letters of Credit to exceed that amount which would result in a

 

 

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violation of one or more Financial Covenants (based upon information provided to Agent in the most recently delivered Compliance Certificate, pursuant to the terms herein), but in any event not to exceed the maximum Credit Limit (the “ Excess LC Amount ”; the Letters of Credit issued in connection with any Excess LC Amount shall be referred to collectively, as the “ Excess LCs ” and individually, as an “ Excess LC ”), provided however , that (i) there shall not then exist a Default or Event of Default hereunder, (ii) the issuance of the Excess LCs does not otherwise create a Default hereunder; and (iii) the Borrowers shall post cash collateral with the Agent for the full amount of the Excess LCs (including any portion of a Letter of Credit that exceeds the Credit Limit). For all other purposes hereunder, any Excess LC shall be treated as Letter of Credit hereunder.

 

(b)            Each Letter of Credit Request shall be submitted to the Issuing Lender at least three (3) Business Days (or such shorter period as the Issuing Lender may approve) prior to the date upon which the requested Letter of Credit is to be issued. Each such Letter of Credit Request shall contain (i) a statement as to the purpose for which such Letter of Credit shall be used (which purpose shall be in accordance with the terms of this Agreement), and (ii) a certification by a Responsible Officer of Borrower Agent that the Borrowers are and will be in compliance with all covenants under the Loan Documents after giving effect to the issuance of such Letter of Credit, and otherwise that no Default or Event of Default has occurred and is continuing. The Borrowers shall further deliver to the Issuing Lender such additional applications and documents as the Issuing Lender may require, in conformity with the then standard practices of its letter of credit department, in connection with the issuance of such Letter of Credit; provided that in the event of any conflict, the terms of this Agreement shall control.

 

(c)            The Issuing Lender shall, if it approves of the content of the Letter of Credit Request (which approval shall not be unreasonably withheld, conditioned or delayed), and subject to the conditions set forth in this Agreement, issue the Letter of Credit on or before three (3) Business Days following receipt of the documents last due pursuant to Section 5III(b), above. Each Letter of Credit shall be in form and substance reasonably satisfactory to the Issuing Lender in its reasonable discretion, and no Letter of Credit shall have an expiration date later than six (6) months following the Termination Date. Upon issuance of a Letter of Credit, the Issuing Lender shall provide notice of the issuance of such Letter of Credit to the Lenders and shall provide a copy of such Letter of Credit to any Lender that requests a copy.

 

(d)            Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a participation therein from Issuing Lender in an amount equal to its respective Commitment Percentage of the amount of such Letter of Credit. No Lender’s obligation to participate in a Letter of Credit shall be affected by any other Lender’s failure to perform as required herein with respect to such Letter of Credit or any other Letter of Credit.

 

(e)            There shall be no fee based upon the face amount of any Letter of Credit in connection with the issuance thereof. Borrowers shall however, pay to Agent for the accounts of the Lenders in accordance with their respective percentage shares of participation in such Letter of Credit, a Letter of Credit Commission fee (the “ LC Commission ”) calculated at the rate per annum equal to a percentage of the face amount of such Letter of Credit. The LC Commission rate shall be set at the time of issuance of the applicable Letter of Credit and calculated according to the fee schedule set forth in the definition of “Applicable Margin” in Section 5(I)(A)(i ), and which such LC Commission

 

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Fees shall be payable in quarterly installments in arrears with respect to each Letter of Credit on the fifth day following the end of each calendar quarter after the date of issuance and continuing for each quarter or portion thereof thereafter, as applicable, or on any earlier date on which the Commitments shall terminate and on the expiration or return of any Letter of Credit. In the event that Borrowers deliver cash collateral to the Agent in connection with and for the full amount of a requested Letter of Credit at the time of such request, then the LC Commission rate for such Letter of Credit shall be set at the lowest LC Commission rate provided herein. In addition, the Borrowers shall pay to Issuing Lender for its own account within five (5) days of demand of Issuing Lender the standard and reasonable issuance, documentation and service charges for Letters of Credit issued from time to time by Issuing Lender, provided however that so long as Issuing Lender is Citizens, if Borrowers have not made such payment to Citizens within said five (5) day period, then Agent shall make such payment and treat the same as a Revolving Loan for working capital purposes.

 

(f)             In the event that any amount is drawn under a Letter of Credit by the beneficiary thereof, the Borrowers shall cause the Issuing Lender to be reimbursed as follows: (i) Agent shall immediately and without notice to Borrowers, treat such amount drawn as a Revolving Loan under this Agreement for working capital purposes. The Agent shall promptly notify each Lender by telex, telecopy, telegram, telephone (confirmed in writing) or other similar means of transmission, and each Lender shall promptly and unconditionally pay to the Agent, for the Issuing Lender’s own account, an amount equal to such Lender’s Commitment Percentage of such Letter of Credit (to the extent of the amount drawn). If and to the extent any Lender shall not make such amount available on the Business Day on which such draw is funded, such Lender agrees to pay such amount to the Agent forthwith on demand, together with interest thereon, for each day from the date on which such draw was funded until the date on which such amount is paid to the Agent, at the Federal Funds Effective Rate until three (3) days after the date on which the Agent gives notice of such draw and at the Federal Funds Effective Rate plus 1% for each day thereafter. Further, such Lender shall be deemed to have assigned any and all payments made of principal and interest on its Loans, amounts due with respect to its participations in Letters of Credit and any other amounts due to it hereunder to the Agent to fund the amount of any drawn Letter of Credit which such Lender was required to fund pursuant to this Section 5(III)(f) until such amount has been funded (as a result of such assignment or otherwise). In the event of any such failure or refusal, the Lenders not so failing or refusing shall be entitled to a priority position as against the Lender or Lenders so failing or refusing to make such funds available to the Borrowers, for such amounts as provided in Section 5(V ). The failure of any Lender to make funds available to the Agent in such amount shall not relieve any other Lender of its obligation hereunder to make funds available to the Agent pursuant to this Section 5(III)(f) .

 

(g)            If after the issuance of a Letter of Credit pursuant to Section 5(III ) by the Issuing Lender, but prior to the funding of any portion thereof by a Lender, one of the events described in Section 16(a)(i ) or (viii) shall have occurred, each Lender will, on the date such Revolving Credit Loan pursuant to Section 5(III)(f) was to have been made, purchase an undivided participation interest in the Letter of Credit in an amount equal to its Revolving Credit Commitment Percentage of the amount of such Letter of Credit. Each Lender will immediately transfer to the Issuing Lender in immediately available funds the amount of its participation and upon receipt thereof the Issuing Lender will deliver to such Lender a Letter of Credit participation certificate dated the date of receipt of such funds and in such amount.

 

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(h)            Whenever at any time after the Issuing Lender has received from any Lender any such Lender’s payment of funds under a Letter of Credit and thereafter the Issuing Lender receives any payment on account thereof, then the Issuing Lender will distribute to such Lender its participation interest in such amount (appropriately adjusted in the case of interest payments to reflect the period of time during which such Lender’s participation interest was outstanding and funded); provided, however, that in the event that such payment received by the Issuing Lender is required to be returned, such Lender will return to the Issuing Lender any portion thereof previously distributed by the Issuing Lender to it.

 

(i)             The issuance of any supplement, modification or amendment affecting the amount of any Letter of Credit or any renewal or extension of the term for more than thirty (30) days to any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.

 

(j)             Borrowers assume all risks of the acts, omissions, or misuse of any Letter of Credit by the beneficiary thereof. To the extent permitted by applicable law, none of the Agent, Issuing Lender or any Lender will be responsible for (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the issuance of any Letter of Credit, even if such document should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise; (iii) any loss or delay in the transmission or otherwise of any document or draft required by or from a beneficiary in order to make a disbursement under a Letter of Credit or the proceeds thereof; (iv) for the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (v) for any consequences arising from causes beyond the control of Agent or any Lender. Provided there exists no negligence or willful misconduct on the part of the Agent, Issuing Lender or any Lender, then none of Agent, Issuing Lender or any Lender will be responsible for (i) failure of any beneficiary of any Letter of Credit to comply fully with the conditions required in order to demand payment under a Letter of Credit; (ii) errors in interpretation of technical terms; (iii) the form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter of Credit; and (iv) the form, validity, sufficiency, accuracy, genuineness or legal effect of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason. Notwithstanding the foregoing, in no event shall the Lender be responsible for any acts of fraud or forgery by Borrowers any of its Subsidiaries or any third party in connection with the issuance, transfer, presentment or payment under or in connection with any Letter of Credit. None of the foregoing will affect, impair or prevent the vesting of any of the rights or powers granted to Agent, Issuing Lender or the Lenders hereunder. In furtherance and extension and not in limitation or derogation of any of the foregoing, any act taken or omitted to be taken by Agent, Issuing Lender or the other Lenders in good faith will be binding on Borrowers and will not put Agent, Issuing Lender or the other Lenders under any resulting liability to Borrowers.

 

(k)            An Issuing Lender may resign as Issuing Lender hereunder at any time upon at least sixty (60) days prior notice to the Lenders, the Agent and the Borrower Agent. The Issuing Lender may be replaced at any time by written agreement among the Borrowers, each Agent, the replaced Issuing Lender and the successor Issuing Lender. The

 

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Agent shall notify the Lenders of any such replacement of the Issuing Lender or any such additional Issuing Lender. At the time any such resignation or replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing Lender. From and after the effective date of any such resignation or replacement or addition, as applicable, (a) the successor or additional Issuing Lender shall have all the rights and obligations of the Issuing Lender under this Agreement with respect to Letters of Credit to be issued by it thereafter and (b) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or such addition or to any previous Issuing Lender, or to such successor or such addition and all previous Issuing Lenders, as the context shall require. After the resignation or replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such resignation or replacement, but shall not be required to issue additional Letters of Credit. If at any time there is more than one Issuing Lender hereunder, the Borrower Agent may, in its discretion, select which Issuing Lender is to issue any particular Letter of Credit.

 

IV.            Repayments, Prepayments and Interest .

 

(a)            Repayments, Continuations and Conversions . LIBOR Rate Loans shall mature and become payable in full on the last day of the Interest Period relating to such LIBOR Rate Loan. Prior to the termination of this Agreement, upon maturity of any LIBOR Rate Loan, such Revolving Loan may be continued for an additional Interest Period or may be converted to a Prime Rate Loan, as set forth above (unless there exists any Default or Event of Default and the Agent does not otherwise elect to exercise any right to accelerate the Loans it is granted hereunder).

 

(b)            Voluntary Prepayment of LIBOR Rate Loans . LIBOR Rate Loans may be prepaid upon the terms and conditions set forth herein. For LIBOR Rate Loans in connection with which the Borrowers have or may incur Hedging Obligations, additional obligations may be associated with prepayment in accordance with the terms and conditions of the applicable Hedging Contracts. The Borrower Agent shall give the Agent, no later than 1:00 p.m., New York City time, at least two (2) Business Days notice of any proposed prepayment of any LIBOR Rate Loans, specifying the proposed date of payment of such LIBOR Rate Loans, and the principal amount to be paid. Each partial prepayment of the principal amount of LIBOR Rate Loans shall be in an integral multiple of One Hundred Thousand Dollars ($100,000.00)  and accompanied by the payment of all charges outstanding on such LIBOR Rate Loans and of all accrued interest on the principal repaid to the date of payment. Borrowers acknowledge that prepayment or acceleration of a LIBOR Rate Loan during an Interest Period shall result in the Agent incurring additional costs, expenses and/or liabilities and that it is extremely difficult and impractical to ascertain the extent of such costs, expenses and/or liabilities. Therefore, all full or partial prepayments of LIBOR Rate Loans shall be accompanied by, and the Borrowers hereby promise to pay, on each date a LIBOR Rate Loan is prepaid or the date all sums payable hereunder become due and payable, by acceleration or otherwise, in addition to all other sums then owing, an amount (“ LIBOR Rate Loan Prepayment Fee ”) determined by the Agent pursuant to the following formula:

 

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(i)             the then current rate for United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent) with a maturity date closest to the end of the Interest Period as to which prepayment is made, subtracted from

 

(ii)            the LIBOR Lending Rate plus the Applicable Margin applicable to the LIBOR Rate Loan being prepaid.

 

If the result of this calculation is zero or a negative number, then there shall be no LIBOR Rate Loan Prepayment Fee. If the result of this calculation is a positive number, then the resulting percentage shall be multiplied by:

 

(iii)           the amount of the LIBOR Rate Loan being prepaid.

 

The resulting amount shall be divided by:

 

(iv)           360

 

and multiplied by:

 

(v)            the number of days remaining in the Interest Period as to which the prepayment is being made.

 

Said amount shall be reduced to present value calculated by using the referenced United States Treasury securities rate and the number of days remaining in the Interest Period for the LIBOR Rate Loan being prepaid.

 

The resulting amount of these calculations shall be the then applicable LIBOR Rate Loan Prepayment Fee.

 

(c)            Interest Provisions Interest on the outstanding principal amount of any Loan when classified as a: (i) LIBOR Rate Loan shall accrue during each Interest Period at a rate equal to the sum of the LIBOR Lending Rate for such Interest Period plus the Applicable Margin thereto and be payable on each Interest Payment Date, (ii) LIBOR-Reference Banks Rate Loan shall accrue during each Interest Period at a rate equal to the sum of the LIBOR-Reference Banks Lending Rate for such Interest Period plus the Applicable Margin thereto and be payable on each Interest Payment Date, and (iii) Prime Rate Loan shall accrue during each Interest Period at a rate equal to the Prime Rate and be payable on each Interest Payment Date.

 

(d)            On termination of this Agreement, pursuant to Section 21 or acceleration of the obligations pursuant to Section 16 , Borrowers shall pay to Agent the entire outstanding principal balance of all Revolving Loans and all other Obligations of Borrowers to Agent and shall deliver to Agent cash collateral in an amount equal to one hundred three (103%) percent of the aggregate of amounts then undrawn on all outstanding Letters of Credit issued pursuant to this Agreement for the account of the Borrowers.

 

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V.             Manner of Borrowing and Payment .

 

(a)            Each borrowing of Revolving Loans shall be advanced by the Lenders, severally and not jointly, according to the applicable Commitment Percentage of each such Lender.

 

(b)            Each payment (including each prepayment) by Borrowers on account of the principal of and interest on the Revolving Loans, shall be applied to the Revolving Loans pro rata according to the applicable Commitment Percentage of each Lender. Except as expressly provided herein, all payments (including prepayments) to be made by Borrowers on account of principal, interest and fees shall be made when due without set off or counterclaim and shall be made to Agent on behalf of the Lenders to the Payment Office, in each case on or prior to 1:00 P.M., New York time, in Dollars and in immediately available funds.

 

(c)            (i)             Commencing with the first Business Day following the Closing Date, each borrowing of Revolving Loans shall be advanced by Agent and each payment by Borrowers on account of Revolving Loans shall be applied to those Revolving Loans advanced by Agent. On or before 1:00 p.m., New York time, on each Settlement Date commencing with the first Settlement Date following the Closing Date, Agent and Lenders shall make certain payments as follows: (I) if the aggregate amount of new Revolving Loans made by Agent during the preceding Week (if any) exceeds the aggregate amount of repayments applied to outstanding Revolving Loans during such preceding Week, then each Lender shall provide Agent with funds in an amount equal to its applicable Commitment Percentage of the difference between (w) such Revolving Loans and (x) such repayments and (II) if the aggregate amount of repayments applied to outstanding Revolving Loans during such Week exceeds the aggregate amount of new Revolving Loans made during such Week, then Agent shall provide each Lender with funds in an amount equal to its applicable Commitment Percentage of the difference between (y) such repayments and (z) such Revolving Loans.

 

(ii)            Each Lender shall be entitled to earn interest at the applicable interest rate(s) hereunder on outstanding advances which it has funded.

 

(iii)           Promptly, but not later than the end of each week, following each Settlement Date, Agent shall submit to each Lender a certificate with respect to payments received and advances made during the Week immediately preceding such Settlement Date. Such certificate of Agent shall be conclusive in the absence of manifest error.

 

(d)            If any Lender (a “ Benefited Lender ”) shall at any time receive any payment of all or part of its advances, or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other Lender’s advances, or interest thereon, and such greater proportionate payment

 

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or receipt of Collateral is not expressly permitted hereunder, such benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each such other Lender’s advances, or shall provide such other Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Each Lender so purchasing a portion of another Lender’s advances may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.

 

(e)            Unless Agent shall have been notified by telephone, confirmed in writing, by any Lender that such Lender will not make the amount which would constitute its applicable Commitment Percentage of the advances available to Agent, Agent may (but shall not be obligated to) assume that such Lender shall make such amount available to Agent on the next Settlement Date and, in reliance upon such assumption, make available to Borrowers a corresponding amount. Agent will promptly notify Borrower Agent of its receipt of any such notice from a Lender. If such amount is made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent on demand an amount equal to the product of (i) the daily average Federal Funds Effective Rate (computed on the basis of a year of 360 days) during such period as quoted by Agent, times (ii) such amount, times (iii) the number of days from and including such Settlement Date to the date on which such amount becomes immediately available to Agent. A certificate of Agent submitted to any Lender with respect to any amounts owing under this Section 5(V)(e ) shall be conclusive, in the absence of manifest error. If such amount is not in fact made available to Agent by such Lender within three (3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount, with interest thereon at the rate per annum then applicable to such Revolving Loans hereunder, within five (5) days from demand of Borrower Agent; provided, however, that Agent’s right to such recovery shall not prejudice or otherwise adversely affect Borrowers’ rights (if any) against such Lender.

 

(f)             Notwithstanding anything to the contrary contained herein, in the event any Lender (x) has refused (which refusal constitutes a breach by such Lender of its obligations under this Agreement) to make available its portion of any Revolving Loan or (y) notifies either Agent or Borrower Agent that it does not intend to make available its portion of any Revolving Loan (if the actual refusal would constitute a breach by such Lender of its obligations under this Agreement) (each, a “ Lender Default ”), all rights and obligations hereunder of such Lender (a “ Defaulting Lender ”) as to which a Lender Default is in effect and of the other parties hereto shall be modified to the extent of the express provisions of this Section while such Lender Default remains in effect.

 

(g)            Advances shall be made pro rata from Lenders (the “ Non-Defaulting Lenders ”) which are not Defaulting Lenders based on their respective Commitment Percentages, and no Commitment Percentage of any Lender or any pro rata

 

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share of any advance required to be advanced by any Lender shall be increased as a result of such Lender Default. Amounts received in respect of principal of any type of Advances shall be applied to reduce the applicable advances of each Lender pro rata based on the aggregate of the outstanding Revolving Loans of that type of all Lenders at the time of such application; provided, that, such amount shall not be applied to any advances of a Defaulting Lender at any time when, and to the extent that, the aggregate amount of advances of any Non-Defaulting Lender exceeds such Non-Defaulting Lender’s Commitment Percentage of all Revolving Loans then outstanding.

 

(h)            A Defaulting Lender shall not be entitled to give instructions to Agent or to approve, disapprove, consent to or vote on any matters relating to this Agreement and the Other Documents. All amendments, waivers and other modifications of this Agreement and the Other Documents may be made without regard to a Defaulting Lender and, for purposes of the definition of “Required Lenders”, a Defaulting Lender shall be deemed not to be a Lender and not to have Advances outstanding.

 

(i)             Other than as expressly set forth in this Section, the rights and obligations of a Defaulting Lender (including the obligation to indemnify Agent) and the other parties hereto shall remain unchanged. Nothing in this Section shall be deemed to release any Defaulting Lender from its obligations under this Agreement and the Other Documents, shall alter such obligations, shall operate as a waiver of any default by such Defaulting Lender hereunder, or shall prejudice any rights which Borrowers, Agent or any Lender may have against any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.

 

(j)             In the event a Defaulting Lender retroactively cures to the satisfaction of Agent the breach which caused a Lender to become a Defaulting Lender within five (5) Business Days from the date of the breach, such Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as a Lender under this Agreement. If, however, a breach is not cured as provided herein, or in the event that a former Defaulting Lender (which such Lender previously cured such default as provided herein), fails on another occasion to make available its pro rata share of any Revolving Loan (whether or not cured), then, provided Borrowers are not then in Default hereunder, Borrowers shall have the right to require the Agent to exercise the repurchase rights contained in Section 5(V)(k ), below with respect to any Defaulting Lender.

 

(k)            The Agent shall, upon request of Borrower Agent pursuant to subsection (j) above, and provided there exists no Default hereunder, require any Defaulting Lender other than Citizens Bank New Hampshire to assign its interest in the Revolving Loan to Citizens Bank New Hampshire or to any other Lender or to any other Person designated by the Agent (“ Designated Lender ”), for a price equal to the then outstanding principal amount plus accrued interest and unpaid interest and fees due such Lender. Upon payment to such Lender in the amount of the then outstanding principal amount of Lender’s Commitment Percentage of the outstanding Revolving Loans, plus accrued and unpaid interest due such Lender, such Lender will assign its interest to Citizens Bank New Hampshire or the Designated Lender, as applicable, pursuant to a

 

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Commitment Transfer Supplement executed by such Lender, Citizens Bank New Hampshire or the Designated Lender, as appropriate and Agent substantially in the form of Exhibit 5 attached hereto.

 

(l)             No Defaulting Lender shall be entitled to receive any fees with respect to their Commitment Amount, Revolving Loans or participation in Letters of Credit while such Lender is a Defaulting Lender hereunder, provided however, that the Non-Defaulting Lenders shall be entitled to such fees and Borrowers shall pay to the Agent, for the benefit of the Non-Defaulting Lenders, such amounts as shall be due and owing hereunder.

 

VI.            Miscellaneous LIBOR Rate Loan Terms .

 

(a)            LIBOR Rate Lending Unlawful . If after the Closing Date, the Agent (or any Lender) shall determine (which determination shall, upon notice thereof to the Borrower Agent be conclusive and binding on the Borrowers) that the introduction of or any change in or in the interpretation of any law, rule or regulation, makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for the Agent (or any Lender) to make, continue or maintain any LIBOR Rate Loan as, or to convert any Revolving Loan into, a LIBOR Rate Loan of a certain duration, all existing LIBOR Rate Loans of such type shall automatically convert into LIBOR-Reference Banks Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion. For purposes of this agreement, in the event of such a conversion, all LIBOR-Reference Banks Rate Loans shall be treated (except as to interest rate) as equivalent to a LIBOR Rate Loan of similar amount and Interest Period. For greater certainty, all provisions of this agreement relating to LIBOR Rate Loans shall apply equally to LIBOR-Reference Banks Loans, including, but not limited to the manner in which LIBOR-Reference Banks Rate Loans are requested, continued, converted, the manner in which interest accrues, is payable, principal payments are made, whether voluntary or involuntary, as well as any penalties, increased costs or taxes associated with any of the foregoing.

 

(b)            Substitute Rate . If the Agent (or any Lender) shall have determined after the Closing Date that:

 

(i)             US dollar deposits in the relevant amount and for the relevant Interest Period are not available to the Agent (or any Lender) in the London interbank market;

 

(ii)            by reason of circumstances affecting the Agent (or any Lender) in the London interbank market, adequate means do not exist for ascertaining the LIBOR Rate applicable hereunder to LIBOR Rate Loans of any duration, or

 

(iii)           the LIBOR Rate no longer adequately reflects the Agent’s (or any Lender’s) cost of funding loans,

 

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then, upon notice from the Agent (or any Lender) to the Borrower Agent, the obligations of the Agent (or any Lender) under this section to make or continue any LIBOR Rate Loans, or to convert any Revolving Loans,  as applicable, into, LIBOR Rate Loans of such duration shall forthwith be suspended until the Agent (or any Lender) shall notify the Borrower Agent that the circumstances causing such suspension no longer exist. Agent shall use reasonable efforts to provide Borrower Agent with written notice of any such suspension of LIBOR Rate Loans.

 

(c)            Indemnities . In addition to the LIBOR Rate Loan Prepayment Fee, the Borrowers agree to reimburse the Agent (or any Lender) (without duplication to such amounts already included in the calculation of LIBOR Rate Loan Prepayment Fee) within ten (10) Business Days for any increase in the cost to the Agent (or any Lender), or reduction in the amount of any sum receivable by the Agent (or any Lender), in respect, or as a result of:

 

(i)             any conversion or repayment or prepayment of the principal amount of any LIBOR Rate Loans on a date other than the scheduled last day of the Interest Period applicable thereto;

 

(ii)            any Revolving Loans not being made as LIBOR Rate Loans in accordance with the borrowing request thereof;

 

(iii)           any LIBOR Rate Loans not being continued as, or converted into, LIBOR Rate Loans in accordance with the continuation/conversion notice thereof, or

 

(iv)           any costs associated with marking to market any Hedging Obligations that (in the reasonable determination of the Agent (or any Lender or any Affiliates of any Lender party to a Hedging Contract)) are required to be terminated as a result of any conversion, repayment or prepayment of the principal amount of any LIBOR Rate Loan on a date other than the scheduled last day of the Interest Period applicable thereto.

 

The Agent (or any Lender) shall promptly notify the Borrower Agent in writing of the occurrence of any such event, such notice to state, in reasonable detail, the reasons therefor and the additional amount required fully to compensate the Agent (or any Lender) for such increased cost or reduced amount. Such additional amounts shall be payable by the Borrowers to the Agent (or any Lender) within ten (10) Business Days of its receipt of such notice, and such notice shall, in the absence of manifest error, be conclusive and binding on the Borrowers. The Borrowers understand, agree and acknowledge the following: (a) the Agent (or any Lender) does not have any obligation to purchase, sell and/or match funds in connection with the use of LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate Loan, (b) the LIBOR Rate may be used merely as a reference in determining such rate, and (c) the Borrowers having accepted the LIBOR Rate as a reasonable and fair basis for calculating such rate, the LIBOR Rate Loan Prepayment Fee, and other funding losses incurred by the Agent (or

 

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any Lender) (without any duplication of the LIBOR Rate Loan Prepayment Fee). As provided herein, Borrowers agree to pay the LIBOR Rate Loan Prepayment Fee as well as other funding losses, if any (and without duplication), whether or not the Agent (or any Lender) elects to purchase, sell and/or match funds.

 

(d)            Increased Costs . If on or after the date hereof the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Agent (or any Lender) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency after the Closing Date:

 

(i)             shall subject the Agent (or any Lender) to any tax, duty or other charge with respect to its LIBOR Rate Loans or its obligation to make LIBOR Rate Loans, or shall change the basis of taxation of payments to the Agent of the principal of or interest on its LIBOR Rate Loans or any other amounts due under this Agreement in respect of its LIBOR Rate Loans or its obligation to make LIBOR Rate Loans (except for the introduction of, or change in the rate of, tax on the overall net income of the Agent (or any Lenders) or franchise taxes, imposed by the jurisdiction (or any political subdivision or taxing authority thereof) under the laws of which the Agent is organized or in which the Agent’s principal executive office is located); or

 

(ii)            shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System of the United States) against assets of, deposits with or for the account of, or credit extended by, the Agent or shall impose on the Agent or on the London interbank market any other condition affecting its LIBOR Rate Loans or its obligation to make LIBOR Rate Loans;

 

and the result of any of the foregoing is to increase the cost to the Agent (or any Lender) of making or maintaining any LIBOR Rate Loan, or to reduce the amount of any sum received or receivable by the Agent (or any Lender) under this Agreement with respect thereto, by an amount deemed by the Agent to be material, then, within fifteen (15) days after written demand by the Agent (with supporting documentation, as applicable), the Borrowers shall pay to the Agent such additional amount or amounts as will compensate the Agent for such increased cost or reduction.

 

(e)            [Reserved.]

 

(f)             Taxes . All payments by the Borrowers of principal of, and interest on, the LIBOR Rate Loans and all other amounts payable hereunder shall be made free and clear

 

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of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by the Agent’s (or any Lender’s) net income or receipts (such non-excluded items being called “ Taxes ”). In the event that any withholding or deduction from any payment to be made by the Borrowers hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Borrowers will

 

(i)             pay directly to the relevant authority the full amount required to be so withheld or deducted;

 

(ii)            promptly forward to the Agent an official receipt or other documentation satisfactory to the Agent evidencing such payment to such authority; and

 

(iii)           pay to the Agent such additional amount or amounts as is necessary to ensure that the net amount actually received by the Agent will equal the full amount the Agent would have received had no such withholding or deduction been required.

 

Moreover, if any Taxes are directly asserted against the Agent (or any Lender) with respect to any payment received by the Agent hereunder, the Agent may pay such Taxes and the Borrowers will promptly pay such additional amount (including any penalties, interest or expenses) as is necessary in order that the net amount received by the Agent after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount the Agent would have received had not such Taxes been asserted.

 

If any Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent (and all Lenders) the required receipts or other required documentary evidence, the Borrowers shall indemnify the Agent (and all Lenders) for any incremental Taxes, interest or penalties that may become payable by the Agent as a result of any such failure.

 

(g)            Notwithstanding anything to the contrary contained herein, Agent and Borrowers agree that after the occurrence of an Event of Default which is continuing, Borrowers shall not request and Agent will not make LIBOR Rate Loans.

 

(h)            In addition to all other sums payable hereunder, Borrowers shall pay Agent for the ratable benefit of the Lenders, a fee (the “Unused Line Fee” ) in an amount equal to one-fifth of one percent (.20%) per annum of the difference between: (i) the Credit Limit and (ii) the average amount of the principal balance of Revolving Loans outstanding for each quarterly period this Agreement is in effect, plus the average amount of Outstanding Letters of Credit. Such Unused Line Fee shall be payable quarterly in arrears and shall be treated as a Revolving Loan to Borrowers for working capital purposes. The Unused Line Fee shall be divided pro rata amount the Lenders in accordance with their respective Commitment Percentages.

 

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(i)             In addition to all other sums payable hereunder, Borrowers shall pay to Agent (i) an Administrative Agent fee equal to Ten Thousand and 00/100 Dollars ($10,000.00) per annum, payable quarterly in advance, provided that there is more than one Lender a party to this Agreement; in the event that more than two Lenders are party to this Agreement, an additional fee of Five Thousand and 00/100 Dollars ($5,000.00) per annum per additional Lender shall be due and payable quarterly by the Borrowers; (ii) an origination fee equal to one fifth of one percent (.20%) of the maximum Credit Limit, or One Hundred Twenty Thousand and 00/100 Dollars ($120,000.00), of which the Agent has received $30,000.00, which such amount shall not be shared with any other Lenders, and the balance of Ninety Thousand Dollars ($90,000.00) shall be payable in full on the Closing Date. Said Ninety T