Amended And Restated Credit Agreement

$140,000,000 REVOLVING CREDIT FACILITY FIRST AMENDED AND RESTATED CREDIT AGREEMENT by and Among II-VI INCORPORATED, as the Borrower and THE GUARANTORS FROM TIME TO TIME PARTY HERETO and THE LENDERS PARTY HERETO and PNC BANK, NATIONAL ASSOCIATION, as ...

Exhibit 10.1

CUSIP # 45173JAC8

$140,000,000 REVOLVING CREDIT FACILITY

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

by and among

II-VI INCORPORATED, as the Borrower

and

THE GUARANTORS FROM TIME TO TIME PARTY HERETO

and

THE LENDERS PARTY HERETO

and

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent

and

PNC CAPITAL MARKETS LLC, as Sole Lead Arranger and Sole Bookrunner

Dated as of November 16, 2012


TABLE OF CONTENTS

 

     Page  

1.      CERTAIN DEFINITIONS

     1   

1.1    Certain Definitions

     1   

1.2    Construction

     25   

1.3    Accounting Principles; Changes in GAAP

     26   

2.      REVOLVING CREDIT AND SWING LOAN FACILITIES

     26   

2.1    Revolving Credit Commitments

     26   

2.1.1     Revolving Credit Loans

     26   

2.1.2     Swing Loan Commitment

     27   

2.2    Nature of Lenders’ Obligations with Respect to Revolving Credit Loans

     27   

2.3    Commitment Fees

     27   

2.4    Revolving Credit Loan Requests; Swing Loan Requests

     28   

2.4.1     Revolving Credit Loan Requests

     28   

2.4.2     Swing Loan Requests

     28   

2.5     Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans

     29   

2.5.1     Making Revolving Credit Loans

     29   

2.5.2     Presumptions by the Administrative Agent

     29   

2.5.3     Making Swing Loans

     29   

2.5.4     Repayment of Revolving Credit Loans

     30   

2.5.5     Borrowings to Repay Swing Loans

     30   

2.5.6     Swing Loans Under Cash Management Agreements

     30   

2.6    Notes

     30   

2.7    Use of Proceeds

     31   

2.8    Letter of Credit Subfacility

     31   

2.8.1     Issuance of Letters of Credit

     31   

2.8.2     Letter of Credit Fees

     32   

2.8.3     Disbursements, Reimbursement

     32   

2.8.4     Repayment of Participation Advances

     33   

2.8.5     Documentation

     34   

2.8.6     Determinations to Honor Drawing Requests

     34   

2.8.7     Nature of Participation and Reimbursement Obligations

     34   

2.8.8     Indemnity

     36   

2.8.9     Liability for Acts and Omissions

     36   

2.8.10   Issuing Lender Reporting Requirements

     37   

2.9    Reduction of Revolving Credit Commitment

     37   

2.10  Increase in Revolving Credit Commitments

     38   

2.11  Defaulting Lenders

     39   

2.12  Utilization of Commitments in Optional Currencies

     41   

2.12.1    Periodic Computations of Dollar Equivalent Amounts of Revolving Credit Loans that are Optional Currency Loans; Repayment in Same Currency

     41   

 

(i)


2.12.2    Notices From Lenders That Optional Currencies Are Unavailable to Fund New Loans

     41   

2.12.3    Notices From Lenders That Optional Currencies Are Unavailable to Fund Renewals of the Euro-Rate Option

     41   

2.12.4    European Monetary Union

     42   

2.12.5    Requests for Additional Optional Currencies

     43   

3.      [RESERVED]

     43   

4.      INTEREST RATES

     43   

4.1    Interest Rate Options

     43   

4.1.1       Revolving Credit Interest Rate Options; Swing Line Interest Rate

     43   

4.1.2       Rate Quotations

     44   

4.2    Interest Periods

     44   

4.2.1       Amount of Borrowing Tranche

     44   

4.2.2       Renewals

     44   

4.3    Interest After Default

     44   

4.3.1       Letter of Credit Fees, Interest Rate

     44   

4.3.2       Other Obligations

     44   

4.3.3       Acknowledgment

     44   

4.4    Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available

     45   

4.4.1       Unascertainable

     45   

4.4.2       Illegality; Increased Costs; Deposits Not Available

     45   

4.4.3       Administrative Agent’s and Lender’s Rights

     45   

4.5    Selection of Interest Rate Options

     46   

5.      PAYMENTS

     46   

5.1    Payments

     46   

5.2    Pro Rata Treatment of Lenders

     47   

5.3    Sharing of Payments by Lenders

     47   

5.4    Presumptions by Administrative Agent

     48   

5.5    Interest Payment Dates

     48   

5.6    Voluntary Prepayments

     48   

5.6.1       Right to Prepay

     48   

5.6.2       Replacement of a Lender

     49   

5.6.3       Designation of a Different Lending Office

     50   

5.7    Increased Costs

     50   

5.7.1       Increased Costs Generally

     50   

5.7.2       Capital Requirements

     51   

5.7.3       Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans

     51   

5.7.4       Delay in Requests

     51   

5.8    Taxes

     52   

5.8.1       Issuing Lender

     52   

5.8.2       Payments Free of Taxes

     52   

5.8.3       Payment of Other Taxes by the Loan Parties

     52   

5.8.4       Indemnification by the Loan Parties

     52   

 

(ii)


5.8.5       Indemnification by the Lenders

     52   

5.8.6       Evidence of Payments

     53   

5.8.7       Status of Lenders

     53   

5.8.8       Treatment of Certain Refunds

     55   

5.8.9       Survival

     55   

5.9    Indemnity

     55   

5.10  Settlement Date Procedures

     56   

6.      REPRESENTATIONS AND WARRANTIES

     56   

6.1    Representations and Warranties

     56   

6.1.1       Organization and Qualification

     57   

6.1.2       Capitalization and Ownership

     57   

6.1.3       Subsidiaries

     57   

6.1.4       Power and Authority

     57   

6.1.5       Validity and Binding Effect

     57   

6.1.6       No Conflict

     57   

6.1.7       Litigation

     58   

6.1.8       Title to Properties

     58   

6.1.9       Financial Statements

     58   

6.1.10    Margin Stock

     59   

6.1.11    Full Disclosure

     59   

6.1.12    Taxes

     59   

6.1.13    Consents and Approvals

     59   

6.1.14    No Event of Default; Compliance with Instruments

     59   

6.1.15    Patents, Trademarks, Copyrights, Licenses, Etc

     60   

6.1.16    Insurance

     60   

6.1.17    Compliance with Laws

     60   

6.1.18    Material Contracts; Burdensome Restrictions

     60   

6.1.19    Investment Companies; Regulated Entities

     60   

6.1.20    Plans and Benefit Arrangements

     61   

6.1.21    Environmental Matters

     62   

6.1.22    Solvency

     62   

6.1.23    Anti-Money Laundering/International Trade Law Compliance

     62   

6.1.24    Senior Debt Status

     62   

6.2    Updates to Schedules

     62   

7.      CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

     63   

7.1    First Loans and Letters of Credit

     63   

7.1.1       Deliveries

     63   

7.1.2       Payment of Fees

     63   

7.2    Each Loan or Letter of Credit

     63   

8.      COVENANTS

     63   

8.1    Affirmative Covenants

     63   

8.1.1       Preservation of Existence, Etc

     63   

8.1.2       Payment of Liabilities, Including Taxes, Etc

     64   

8.1.3       Maintenance of Insurance

     64   

 

(iii)


8.1.4     Maintenance of Properties and Leases

     64   

8.1.5     Visitation Rights

     64   

8.1.6     Keeping of Records and Books of Account

     64   

8.1.7     Compliance with Laws; Use of Proceeds

     65   

8.1.8     Anti-Terrorism Laws

     65   

8.1.9     Plans and Benefit Arrangements

     65   

8.1.10   Subordination of Intercompany Loans

     65   

8.1.11   Tax Shelter Regulations

     65   

8.1.12   Post-Closing Deliveries

     66   

8.2    Negative Covenants

     66   

8.2.1     Indebtedness

     66   

8.2.2     Liens; Lien Covenants

     67   

8.2.3     Guaranties

     67   

8.2.4     Loans and Investments

     67   

8.2.5     Dividends and Related Distributions

     67   

8.2.6     Liquidations, Mergers, Consolidations, Acquisitions

     68   

8.2.7     Dispositions of Assets or Subsidiaries

     69   

8.2.8     Affiliate Transactions

     69   

8.2.9     Subsidiaries, Partnerships and Joint Ventures

     70   

8.2.10   Continuation of or Change in Business

     70   

8.2.11   Plans and Benefit Arrangements

     70   

8.2.12   Fiscal Year

     71   

8.2.13   Issuance of Stock

     71   

8.2.14   Changes in Organizational Documents

     71   

8.2.15   Inactive Subsidiaries

     71   

8.2.16   Limitation on Negative Pledges

     72   

8.2.17   Maximum Consolidated Leverage Ratio

     72   

8.2.18   Minimum Consolidated Interest Coverage Ratio

     72   

8.3    Reporting Requirements

     72   

8.3.1     Quarterly Financial Statements

     72   

8.3.2     Annual Financial Statements

     72   

8.3.3     Certificate of the Borrower

     73   

8.3.4     Notices

     73   

9.      DEFAULT

     74   

9.1    Events of Default

     74   

9.1.1     Payments Under Loan Documents

     74   

9.1.2     Breach of Warranty

     74   

9.1.3     Breach of Negative Covenants or Visitation Rights

     75   

9.1.4     Breach of Other Covenants

     75   

9.1.5     Defaults in Other Agreements or Indebtedness

     75   

9.1.6     Final Judgments or Orders

     75   

9.1.7     Loan Document Unenforceable

     75   

9.1.8     Uninsured Losses; Proceedings Against Assets

     75   

9.1.9     Events Relating to Plans and Benefit Arrangements

     76   

9.1.10   Change of Control

     76   

9.1.11   Relief Proceedings

     76   

 

(iv)


9.2    Consequences of Event of Default

     76   

9.2.1     Events of Default Other Than Relief Proceedings

     76   

9.2.2     Relief Proceedings

     77   

9.2.3     Set-off

     77   

9.2.4     Application of Proceeds

     78   

10.    THE ADMINISTRATIVE AGENT

     78   

10.1      Appointment and Authority

     78   

10.2      Rights as a Lender

     78   

10.3      Exculpatory Provisions

     79   

10.4      Reliance by Administrative Agent

     80   

10.5      Delegation of Duties

     80   

10.6      Resignation of Administrative Agent

     80   

10.7      Non-Reliance on Administrative Agent and Other Lenders

     81   

10.8      No Other Duties, etc

     81   

10.9      Administrative Agent’s Fee

     81   

10.10    Authorization to Release Guarantors

     82   

10.11    No Reliance on Administrative Agent’s Customer Identification Program

     82   

11. MISCELLANEOUS

     82   

11.1      Modifications, Amendments or Waivers

     82   

11.1.1  Increase of Commitment

     82   

11.1.2  Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment

     82   

11.1.3  Release of Guarantor

     82   

11.1.4  Miscellaneous

     83   

11.2      No Implied Waivers; Cumulative Remedies

     83   

11.3      Expenses; Indemnity; Damage Waiver

     83   

11.3.1  Costs and Expenses

     83   

11.3.2  Indemnification by the Loan Parties

     84   

11.3.3  Reimbursement by Lenders

     85   

11.3.4  Waiver of Consequential Damages, Etc

     85   

11.3.5  Payments

     85   

11.4      Holidays

     85   

11.5      Notices; Effectiveness; Electronic Communication

     85   

11.5.1  Notices Generally

     85   

11.5.2  Electronic Communications

     86   

11.5.3  Change of Address, Etc

     86   

11.6      Severability

     86   

11.7      Duration; Survival

     86   

11.8      Successors and Assigns

     87   

11.8.1  Successors and Assigns Generally

     87   

11.8.2  Assignments by Lenders

     87   

11.8.3  Register

     89   

11.8.4  Participations

     89   

11.8.5  Certain Pledges; Successors and Assigns Generally

     90   

11.9      Confidentiality

     90   

 

(v)


11.9.1   General

     90   

11.9.2   Sharing Information With Affiliates of the Lenders

     91   

11.10    Counterparts; Integration; Effectiveness

     91   

11.10.1 Counterparts; Integration; Effectiveness

     91   

11.11     CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF JURY TRIAL

     91   

11.11.1 Governing Law

     91   

11.11.2 SUBMISSION TO JURISDICTION

     91   

11.11.3 WAIVER OF VENUE

     92   

11.11.4 SERVICE OF PROCESS

     92   

11.11.5 WAIVER OF JURY TRIAL

     92   

11.12    USA Patriot Act Notice

     93   

11.13    Joinder of Guarantors

     93   

11.14    Amendment and Restatement

     93   

 

(vi)


LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES      
SCHEDULE 1.1(A)       PRICING GRID
SCHEDULE 1.1(B)       COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(C)       ADDITIONAL COSTS
SCHEDULE 1.1(P)       PERMITTED LIENS
SCHEDULE 2.8.1       OUTSTANDING LETTERS OF CREDIT
SCHEDULE 6.1.3       SUBSIDIARIES
SCHEDULE 6.1.16       INSURANCE
SCHEDULE 6.1.20       ERISA MATTERS
SCHEDULE 6.1.21       ENVIRONMENTAL DISCLOSURES
SCHEDULE 8.2.1       PERMITTED INDEBTEDNESS
SCHEDULE 8.2.4       EXISTING LOANS AND INVESTMENTS
SCHEDULE 8.2.9       EXISTING INVESTMENTS IN PERMITTED JOINT VENTURES

 

EXHIBITS

     
EXHIBIT 1.1(A)       ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(G)(1)       GUARANTOR JOINDER
EXHIBIT 1.1(G)(2)       GUARANTY AGREEMENT
EXHIBIT 1.1(I)       INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(N)(1)       REVOLVING CREDIT NOTE
EXHIBIT 1.1(N)(2)       SWING LOAN NOTE
EXHIBIT 2.4.1       LOAN REQUEST
EXHIBIT 2.4.2       SWING LOAN REQUEST
EXHIBIT 2.10       LENDER JOINDER
EXHIBIT 5.8.7(A)       U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT 5.8.7 (B)       U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT 5.8.7 (C)       U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT 5.8.7 (D)       U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT 8.2.6       ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 8.3.3       QUARTERLY COMPLIANCE CERTIFICATE

 

(vii)


FIRST AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT (as hereafter amended, modified, supplemented or restated, the “Agreement”) is dated as of November 16, 2012 and is made by and among II-VI INCORPORATED, a Pennsylvania corporation (the “Borrower”), each of the GUARANTORS (as hereinafter defined), the LENDERS (as hereinafter defined), and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders under this Agreement (hereinafter referred to in such capacity as the “Administrative Agent”).

The Borrower has requested the Lenders to provide a revolving credit facility to the Borrower in an aggregate principal amount not to exceed $140,000,000, subject to increase as set forth in Section 2.10 [Increase in Revolving Credit Commitments] hereof. In consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

1. CERTAIN DEFINITIONS

1.1 Certain Definitions. In addition to words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, respectively, unless the context hereof clearly requires otherwise:

Additional Costs shall mean in relation to any Loan that is denominated in Euros or pounds sterling for any Interest Period, the cost as calculated by each Lender in accordance with Schedule 1.1(C) of compliance with the mandatory liquid assets requirements or other reserve, special deposit, assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (or its applicable lending office) of the Bank of England, the European Central Bank or other applicable central bank or similar authority, as applicable, during that Interest Period.

Adjusted Consolidated EBITDA shall mean, for any period, the consolidated net income (or net loss) of any Person for such period as determined in accordance with GAAP plus the sum of (i) consolidated interest expense, (ii) total consolidated income tax expense, (iii) consolidated amortization and depreciation expense, and (iv) any consolidated extraordinary or non-recurring losses, minus any consolidated extraordinary or non-recurring gains which do not represent a cash item in such period or any future period, provided, however that for the purposes of this definition, with respect to (1) a business acquired by such Person or any of its consolidated Subsidiaries pursuant to a Permitted Acquisition, Adjusted Consolidated EBITDA shall be calculated on a pro forma basis, using historical numbers, in accordance with GAAP as if the Permitted Acquisition has been consummated at the beginning of such period and (2) a business or assets disposed of by such Person or any of its consolidated Subsidiaries pursuant to Section 8.2.7 [Disposition of Assets or Subsidiaries] hereof, Adjusted Consolidated EBITDA shall be calculated in accordance with GAAP as if such disposition had been consummated at the beginning of such period.


Administrative Agent shall mean PNC Bank, National Association, and its successors and assigns, in its capacity as administrative agent hereunder.

Administrative Agent’s Fee shall have the meaning specified in Section 10.9 [Administrative Agent’s Fee].

Administrative Agent’s Letter shall have the meaning specified in Section 10.9 [Administrative Agent’s Fee].

Affiliate as to any Person shall mean any other Person (i) which directly or indirectly controls, is controlled by, or is under common control with such Person, (ii) which beneficially owns or holds 5% or more of any class of the voting or other equity interests of such Person, or (iii) 5% or more of any class of voting interests or other equity interests of which is beneficially owned or held, directly or indirectly, by such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

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).

Applicable Commitment Fee Rate shall mean the percentage rate per annum based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Commitment Fee.”

Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Letter of Credit Fee.”

Applicable Margin shall mean, as applicable:

(i) the percentage spread to be added to the Base Rate applicable to Revolving Credit Loans under the Base Rate Option based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Revolving Credit Base Rate Spread”, or

(ii) the percentage spread to be added to the Euro-Rate applicable to Revolving Credit Loans under the Euro-Rate Option based on the Leverage Ratio then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Revolving Credit Euro-Rate Spread”.

Approved Fund shall mean any fund that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

 

2


Assignment and Assumption Agreement shall mean an assignment and assumption agreement entered into by a Lender and an assignee permitted under Section 11.8 [Successors and Assigns], in substantially the form of Exhibit 1.1(A).

Authorized Officer shall mean, with respect to any Loan Party, the Chief Executive Officer, President, Chief Financial Officer, Treasurer or Assistant Treasurer of such Loan Party, any manager or the members (as applicable) in the case of any Loan Party which is a limited liability company, or such other individuals, designated by written notice to the Administrative Agent from the Borrower, authorized to execute notices, reports and other documents on behalf of such Loan Party required hereunder. The Borrower may amend such list of individuals from time to time by giving written notice of such amendment to the Administrative Agent.

Base Rate shall mean, for any day, a fluctuating per annum rate of interest equal to the highest of (i) the Federal Funds Open Rate, plus 50 basis points (0.5%), (ii) the Prime Rate, and (iii) the Daily Euro-Rate, plus 100 basis points (1.0%). Any change in the Base Rate (or any component thereof) shall take effect at the opening of business on the day such change occurs.

Base Rate Option shall mean the option of the Borrower to have Loans bear interest at the rate and under the terms set forth in either Section 4.1.1(i) [Revolving Credit Base Rate Options].

Benefit Arrangement shall mean at any time an “employee benefit plan,” within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer Plan and which is (currently or hereafter), or within the prior six (6) years was, maintained, sponsored or otherwise contributed to by any member of the ERISA Group.

Borrower shall have the meaning specified in the introductory paragraph.

Borrowing Date shall mean, with respect to any Loan, the date for the making thereof or the renewal or conversion thereof at or to the same or a different Interest Rate Option, which shall be a Business Day.

Borrowing Tranche shall mean specified portions of Loans outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which become subject to the same Interest Rate Option under the same Loan Request by the Borrower and which have the same Interest Period shall constitute one Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall constitute one Borrowing Tranche.

Business Day shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in Pittsburgh, Pennsylvania and if the applicable Business Day relates to any Loan to which the Euro-Rate Option applies, such day must also be a day on which dealings are carried on in the London interbank market.

Capital Expenditures shall mean for any period, with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a consolidated balance sheet of such Person.

 

3


Capital Stock shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

Cash Management Agreements shall have the meaning specified in Section 2.5.6 [Swing Loans Under Cash Management Agreements].

Change in Law shall mean the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any Law, (ii) any change in any Law or in the administration, interpretation, implementation or application thereof by any Official Body or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Official Body; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

Change of Control shall mean (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 20% of the Capital Stock of the Borrower, or (ii) within a period of twelve (12) consecutive calendar months, individuals who were directors of the Borrower on the first day of such period shall cease to constitute a majority of the board of directors of the Borrower.

CIP Regulations shall have the meaning specified in Section 10.11 [No Reliance on Administrative Agent’s Customer Identification Program].

Closing Agenda shall mean that certain Closing Agenda delivered by the Administrative Agent to the Borrower and its counsel.

Closing Date shall mean the Business Day on which the first Loan shall be made, which shall be November 16, 2012.

Code shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

 

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Commitment shall mean as to any Lender the aggregate of its Revolving Credit Commitment and, in the case of PNC, its Swing Loan Commitment, and Commitments shall mean the aggregate of the Revolving Credit Commitments and Swing Loan Commitment of all of the Lenders.

Commitment Fee shall have the meaning specified in Section 2.3 [Commitment Fees].

Compliance Authority means each and all of the (a) U.S. Treasury Department/Office of Foreign Assets Control, (b) U.S. Treasury Department/Financial Crimes Enforcement Network, (c) U.S. State Department/Directorate of Defense Trade Controls, (d) U.S. Commerce Department/Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Justice Department, and (g) U.S. Securities and Exchange Commission.

Compliance Certificate shall have the meaning specified in Section 8.3.3 [Certificate of the Borrower].

Computation Date shall have the meaning specified in Section 2.12.1 [Periodic Computations of Dollar Equivalent amounts of Revolving Credit Loans; Repayment in Same Currency].

Connection Income Taxes shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

Consideration shall mean with respect to any Permitted Acquisition, the aggregate of (i) the cash paid by any of the Loan Parties, directly or indirectly, to the seller in connection therewith, (ii) the Indebtedness incurred or assumed by any of the Loan Parties, whether in favor of the seller or otherwise and whether fixed or contingent, (iii) any Guaranty given or incurred by any Loan Party in connection therewith, and (iv) any other consideration given or obligation incurred by any of the Loan Parties in connection therewith.

Consignment Agreement shall mean the Consignment and/or Purchase of Platinum Agreement dated as of February 26, 2009 between II-VI Incorporated and The Bank of Nova Scotia, as amended from time to time.

Consolidated EBITDA shall mean, for any period, the consolidated net income (or net loss) of any Person for such period as determined in accordance with GAAP plus the sum of (i) consolidated interest expense, (ii) total income tax expense, (iii) consolidated amortization and depreciation expense, and (iv) any extraordinary or non-recurring losses, minus any extraordinary or non-recurring gains. Consolidated EBITDA shall be adjusted to the extent that the computation of Consolidated EBITDA includes a gain or loss with respect to Hedge Agreements as follows: Consolidated EBITDA shall be (1) increased by any non-cash items of loss arising from such Hedge Agreement, in each case, net of any actual cash payments related to the items giving rise to the loss and (2) decreased by any non-cash items of gain arising from such Hedge Agreement, in each case, net of any actual cash payments related to items giving rise to the gain.

 

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Consolidated Interest Coverage Ratio shall mean, for any period, the ratio of Consolidated EBITDA to cash payments for interest expense in such period (including the interest component of capitalized leases).

Consolidated Leverage Ratio shall mean the ratio of Consolidated Total Indebtedness to Adjusted Consolidated EBITDA.

Consolidated Total Indebtedness shall mean the consolidated Indebtedness of a Person for such period; provided, however that Consolidated Total Indebtedness shall exclude net obligations under a Hedge Agreement (exclusive of any mark to market adjustment not requiring any actual cash payment or settlement).

Contamination shall mean the presence or release or threat of release of Regulated Substances in, on, under or emanating to or from the property, which pursuant to Environmental Laws requires notification or reporting to an Official Body, or which pursuant to Environmental Laws requires the investigation, cleanup, removal, remediation, containment, abatement of or other response action or which otherwise constitutes a violation of Environmental Laws.

Covered Entity means the Borrower, its Affiliates and Subsidiaries, all Guarantors, all owners of the foregoing, and all brokers or other agents of the Borrower acting in any capacity in connection with the Loans.

Daily Euro-Rate shall mean, for any day, the rate per annum determined by the Administrative Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the LIBOR Reserve Percentage on such day.

Defaulting Lender shall mean any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swing Loans or (iii) pay over to the Administrative Agent, the Issuing Lender, PNC (as the Swing Loan Lender) or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or the Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within two Business Days after request by the Administrative Agent or the Borrower, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swing Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s or the Borrower’s receipt of such certification in form and substance satisfactory to the Administrative Agent or the Borrower, as the case may be, (d) has become the

 

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subject of a Bankruptcy Event or (e) has failed at any time to comply with the provisions of Section 5.3 [Sharing of Payments by Lenders] with respect to purchasing participations from the other Lenders, whereby such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of its Ratable Share of such payments due and payable to all of the Lenders.

As used in this definition and in Section 2.11 [Defaulting Lenders], the term “Bankruptcy Event” means, with respect to any Person, such Person or such Person’s direct or indirect parent company becoming the subject of a bankruptcy or insolvency proceeding, or having had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by an Official Body or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Official Body or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the United States of America.

Dollar Equivalent shall mean, with respect to any amount of any currency, as of any Computation Date, the Equivalent Amount of such currency expressed in Dollars.

Drawing Date shall have the meaning specified in Section 2.8.3 [Disbursements, Reimbursement].

Eastern Time shall mean standard time in the fifth time zone west of Greenwich, reckoned at the 75th meridian, used in the eastern United States.

Environmental Laws shall mean all federal, state, local, tribal, territorial and foreign Laws (including common law), constitutions, statutes, treaties, regulations, rules, ordinances and codes and any consent decrees, settlement agreements, judgments, orders, directives, policies or programs issued by or entered into with an Official Body applicable to the Loan Parties and their Subsidiaries pertaining or relating to: (i) pollution or pollution control; (ii) protection of human health from exposure to Regulated Substances; (iii) protection of the environment and/or natural resources; (iv) employee safety in the workplace; (v) the presence, use, management, generation, manufacture, processing, extraction, treatment, recycling, refining, reclamation, labeling, packaging, sale, transport, storage, collection, distribution, disposal or release or threat of release of regulated substances; (vi) the presence of Contamination; (vii) the protection of endangered or threatened species; and (viii) the protection of Environmentally Sensitive Areas.

 

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Environmentally Sensitive Area shall mean (i) any wetland as defined by applicable Environmental Laws; (ii) any area designated as a coastal zone pursuant to applicable Laws, including Environmental Laws; (iii) any area of historic or archeological significance or scenic area as defined or designated by applicable Laws, including Environmental Laws; (iv) habitats of endangered species or threatened species as designated by applicable Laws, including Environmental Laws; or (v) a floodplain or other flood hazard area as defined pursuant to any applicable Laws.

Equivalent Amount shall mean, at any time, as determined by the Administrative Agent (which determination shall be conclusive absent manifest error), with respect to an amount of any currency (the “Reference Currency”) which is to be computed as an equivalent amount of another currency (the “Equivalent Currency”), the amount of such Equivalent Currency converted from such Reference Currency at Administrative Agent’s spot-selling rate (based on the market rates then prevailing and available to the Administrative Agent) for the sale of such Equivalent Currency for such Reference Currency at a time determined by the Administrative Agent on the second Business Day immediately preceding the event for which such calculation is made.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

ERISA Event shall mean, (a) any Reportable Event, (b) any Prohibited Transaction, (c) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or any other member of the ERISA Group, (d) any partial or complete withdrawal from a Multiemployer Plan by the Borrower or any other member of the ERISA Group under Title IV of ERISA, any assertion thereof or any notification that a Multiemployer Plan is in reorganization, (e) any cessation of operations (by the Borrower or any other member of the ERISA Group) at a facility in circumstances described in Section 4062 of ERISA, (f) the withdrawal by the Borrower or any other member of the ERISA Group from a Multiple Employer Plan, (g) the filing of a notice of intent to terminate or the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Plan, (h) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, (i) any change in the actuarial assumptions or funding methods used for any Plan, where the effect of such change is to materially increase or materially reduce the unfunded benefit liability or obligation to make periodic contributions, (j) any application for an approval of Borrower or any other member of the ERISA Group for a waiver of the minimum funding standards of Section 412, 430, 432 and 436 of the Code or Section 302, 303, 304 or 305 of ERISA, or (k) any receipt of certification by the responsible actuary that any Plan is considered an at-risk plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 or 305 of ERISA or that any Plan’s adjusted funding target attainment percentage (as defined in Section 436 of the Code) is less than 80%.

ERISA Group shall mean, at any time, the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with the Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code.

 

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Euro-Rate shall mean the following:

(a) with respect to Dollar Loans comprising any Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which Dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by the Administrative Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which US Dollar deposits are offered by leading banks in the London interbank deposit market (for purposes hereof, an “Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for Dollars for an amount comparable to the principal amount of such Borrowing Tranche and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate with respect to Dollar Loans may also be expressed by the following formula:

 

  London interbank offered rate quoted by Bloomberg or
Euro-Rate =  

appropriate successor as shown on Bloomberg Page  BBAM1

  1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate Option applies that is outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

(b) with respect to Optional Currency Loans in currency other than Euro comprising any Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period, the interest rate per annum determined by Administrative Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which deposits in the relevant Optional Currency are offered by leading banks in the Relevant Interbank Market), or the rate which is quoted by an Alternate Source, at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the Relevant Interbank Market offered rate for deposits in the relevant Optional Currency for an amount comparable to the principal amount of such Borrowing Tranche and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by the following formula:

 

9


  Relevant Interbank Market offered rate quoted by Bloomberg or
Euro-Rate =  

appropriate successor as shown on Bloomberg Page BBAM1

  1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate Option applies that is outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error. The Euro-Rate for any Loans shall be based upon the Euro-Rate for the currency in which such Loans are requested.

(c) with respect to Optional Currency Loans denominated in Euro comprising any Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period, the interest rate per annum determined by Administrative Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which deposits in Euro are offered by leading banks in the Relevant Interbank Market) or the rate which is quoted by an Alternate Source, at approximately 11:00 a.m., Brussels time, two (2) Business Days prior to the commencement of such Interest Period as the Relevant Interbank Market offered rate for deposits in Euro for an amount comparable to the principal amount of such Borrowing Tranche and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by the following formula:

 

  London interbank offered rate quoted by Bloomberg or
Euro-Rate =  

appropriate successor as shown on Bloomberg Page BBAM1

  1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate Option applies that is outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error. The Euro-Rate for any Loans shall be based upon the Euro-Rate for the currency in which such Loans are requested.

Euro-Rate Option shall mean the option of the Borrower to have Loans bear interest at the rate and under the terms and conditions set forth in Section 4.1.1(ii).

Euro-Rate Reserve Percentage shall mean as of any day the maximum percentage in effect on such day, (i) as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to

 

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as “Eurocurrency Liabilities”); and (ii) to be maintained by a Lender as required for reserve liquidity, special deposit, or similar purpose by any governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (A) any category of liabilities that includes deposits by reference to which a Euro-Rate is to be determined, or (B) any category of extension of credit or other assets that includes Loans or Borrowing Tranches to which a Euro-Rate applies.

Event of Default shall mean any of the events described in Section 9.1 [Events of Default] and referred to therein as an “Event of Default.”

Excluded Taxes shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (a) such Lender acquires such interest in such Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 5.6.2 [Replacement of a Lender]) or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 5.8.7 [Status of Lenders], amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Recipient’s failure to comply with Section 5.8.7 [Status of Lenders], and (iv) any U.S. federal withholding Taxes imposed under FATCA. (except to the extent imposed due to the failure of the Borrower to provide documentation or information to the IRS).

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.

Existing Credit Agreement shall mean that certain Credit Agreement, dated as of June 15, 2011, as amended prior to the date hereof, by and among Borrower, the guarantors party thereto, the banks party thereto and PNC Bank, National Association as the administrative agent for the banks party thereto.

Expiration Date shall mean, with respect to the Revolving Credit Commitments, November 16, 2017.

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

 

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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 1/100 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.

Federal Funds Open Rate for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by the Administrative Agent (for purposes of this definition, an “Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day. If and when the Federal Funds Open Rate changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate applies will change automatically without notice to the Borrower, effective on the date of any such change.

Foreign Lender shall mean (i) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (ii) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the Laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

GAAP shall mean generally accepted accounting principles as are in effect from time to time, subject to the provisions of Section 1.3 [Accounting Principles; Changes in GAAP], and applied on a consistent basis both as to classification of items and amounts.

Guarantor shall mean each of the parties to this Agreement which is designated as a “Guarantor” on the signature page hereof and each other Person which joins this Agreement as a Guarantor after the date hereof.

Guarantor Joinder shall mean a joinder by a Person as a Guarantor under the Loan Documents in the form of Exhibit 1.1(G)(1).

Guaranty of any Person shall mean any obligation of such Person guaranteeing or in effect guaranteeing any liability or obligation of any other Person in any manner, whether directly or indirectly, including any agreement to indemnify or hold harmless any other Person,

 

12


any performance bond or other suretyship arrangement and any other form of assurance against loss, except (i) endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business; and (ii) guaranties and indemnification obligations directly related to the sale of goods or services by such Person in the ordinary course of business.

Guaranty Agreement shall mean the First Amended and Restated Continuing Agreement of Guaranty and Suretyship in substantially the form of Exhibit 1.1(G)(2) executed and delivered by each of the Guarantors to the Administrative Agent for the benefit of the Lenders.

Hedge Agreements shall mean foreign exchange agreements, currency swap agreements, interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor agreements or similar hedging agreements entered into by the Loan Parties or their Subsidiaries in the ordinary course of business and not for speculative purposes.

ICC shall have the meaning specified in Section 11.11.1 [Governing Law].

IFRS shall mean the International Financial Reporting Standards issued by the International Accounting Standards Board in effect from time to time.

Inactive Subsidiary shall mean any Subsidiary of the Borrower formed under the laws of the United States or any state which is not party to this Agreement, by joinder or otherwise, and which has assets of less than $1,000,000 or gross revenue in any fiscal year of Borrower of less than $1,000,000.

Increasing Lender shall have the meaning assigned to that term in Section 2.10 [Increase In Revolving Credit Commitments].

Indebtedness shall mean, as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit or Hedge Agreement: (A) in the case of a Hedge Agreement that has been closed out, in an amount equal to the termination value thereof and (B) in the case of a Hedge Agreement that has not been closed out, in an amount equal to the mark to market value thereof determined on the basis of readily available quotations provided by any recognized dealer in such Hedge Agreements, (iv) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than thirty (30) days past due), or (v) any Guaranty of Indebtedness for borrowed money.

Indemnified Taxes shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document, and (ii) to the extent not otherwise described in the preceding clause (i), Other Taxes.

 

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Indemnitee shall have the meaning specified in Section 11.3.2 [Indemnification by the Loan Parties].

Information shall mean all information received from the Loan Parties or any of their Subsidiaries relating to the Loan Parties or any of such Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Lender on a non-confidential basis prior to disclosure by the Loan Parties or any of their Subsidiaries, provided that, in the case of information received from the Loan Parties or any of their Subsidiaries after the date of this Agreement, such information is clearly identified at the time of delivery as confidential or is otherwise nonpublic or proprietary in nature.

Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Loan Party or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors; undertaken under any Law.

Intercompany Subordination Agreement shall mean the First Amended and Restated Intercompany Subordination Agreement among the Loan Parties in the form attached hereto as Exhibit 1.1(I).

Interest Period shall mean the period of time selected by the Borrower in connection with (and to apply to) any election permitted hereunder by the Borrower to have Revolving Credit Loans bear interest under the Euro-Rate Option. Subject to the last sentence of this definition, such period shall be (i) one Month if Borrower selects the Euro-Rate Option during the Syndications Period and (ii) one, two, three or six Months if the Borrower selects the Euro-Rate Option after the Syndications Period has ended. Such Interest Period shall commence on the effective date of such Interest Rate Option, which shall be (i) the Borrowing Date if the Borrower is requesting new Loans, or (ii) the date of renewal of or conversion to the Euro-Rate Option if the Borrower is renewing or converting to the Euro-Rate Option applicable to outstanding Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which would otherwise end on a date which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (B) the Borrower shall not select, convert to or renew an Interest Period for any portion of the Loans that would end after the Expiration Date.

Interest Rate Option shall mean any Euro-Rate Option or Base Rate Option.

 

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IRS shall mean the United States Internal Revenue Service.

ISP98 shall have the meaning specified in Section 11.11.1 [Governing Law].

Issuing Lender shall mean PNC, in its individual capacity as issuer of Letters of Credit hereunder, and any other Lender that Borrower, Administrative Agent and such other Lender may agree may from time to time issue Letters of Credit hereunder.

Joint Venture shall mean a corporation, partnership, limited liability company or other entity in which any Person other than the Loan Parties and their Subsidiaries holds, directly or indirectly, an equity interest.

Labor Contracts shall mean all employment agreements, employment contracts, collective bargaining agreements and other agreements among any Loan Party and its employees.

Law shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award by or settlement agreement with any Official Body.

Lender Provided Hedge shall mean a Hedge Agreement which is provided by any Lender or its Affiliate and with respect to which the Administrative Agent confirms: (i) is documented in a standard International Swaps and Derivatives Association Agreement, and (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner.

Lenders shall mean the financial institutions named on Schedule 1.1(B) and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a Lender. For the purpose of any Loan Document which provides for the granting of a security interest or other Lien to the Lenders or to the Administrative Agent for the benefit of the Lenders as security for the Obligations, “Lenders” shall include any Affiliate of a Lender to which such Obligation is owed.

Letter of Credit shall have the meaning specified in Section 2.8.1 [Issuance of Letters of Credit].

Letter of Credit Borrowing shall have the meaning specified in Section 2.8.3 [Disbursements, Reimbursement].

Letter of Credit Fee shall have the meaning specified in Section 2.8.2 [Letter of Credit Fees].

Letter of Credit Obligation shall mean, as of any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit on such date (if any Letter of Credit shall increase in amount automatically in the future, such aggregate amount available to be drawn shall currently give effect to any such future increase) plus the aggregate Reimbursement Obligations and Letter of Credit Borrowings on such date.

 

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Letter of Credit Sublimit shall have the meaning specified in Section 2.8.1 [Issuance of Letters of Credit].

Lien shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).

Loan Documents shall mean this Agreement, the Administrative Agent’s Letter, the Guaranty Agreement, the Intercompany Subordination Agreement, the Notes, and any other instruments, certificates or documents delivered in connection herewith or therewith.

Loan Parties shall mean the Borrower and the Guarantors.

Loan Request shall have the meaning specified in Section 2.4 [Revolving Credit Loan Requests; Swing Loan Requests].

Loans shall mean collectively and Loan shall mean separately all Revolving Credit Loans and Swing Loans or any Revolving Credit Loan or Swing Loan.

Material Adverse Change or Material Adverse Effect shall mean any set of circumstances or events which (i) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any other Loan Document, (ii) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition, results of operations or prospects of the Loan Parties taken as a whole, (iii) impairs materially or could reasonably be expected to impair materially the ability of the Loan Parties taken as a whole to duly and punctually pay or perform its Obligations, or (iv) impairs materially or could reasonably be expected to impair materially the ability of the Administrative Agent or any of the Lenders, to the extent permitted, to enforce their legal remedies pursuant to this Agreement or any other Loan Document.

Month, with respect to an Interest Period under the Euro-Rate Option, shall mean the interval between the days in consecutive calendar months numerically corresponding to the first day of such Interest Period. If any Euro-Rate Interest Period begins on a day of a calendar month for which there is no numerically corresponding day in the month in which such Interest Period is to end, the final month of such Interest Period shall be deemed to end on the last Business Day of such final month.

Multiemployer Plan shall mean any employee benefit plan which is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower or any member of the ERISA Group is then making or accruing an obligation to make contributions or, within the preceding five Plan years, has made or had an obligation to make such contributions.

 

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Multiple Employer Plan shall mean a Plan which has two or more contributing sponsors (including the Borrower or any member of the ERISA Group) at least two of whom are not under common control, as such a Plan is described in Sections 4063 and 4064 of ERISA.

New Lender shall have the meaning assigned to that term in Section 2.10 [Increase In Revolving Credit Commitments].

Non-Consenting Lender shall have the meaning specified in Section 11.1 [Modifications, Amendments or Waivers].

Notes shall mean collectively, and Note shall mean separately, the promissory notes in the form of Exhibit 1.1(N)(1) evidencing the Revolving Credit Loans, in the form of Exhibit 1.1(N)(2) evidencing the Swing Loan.

Obligation shall mean any obligation or liability of any of the Loan Parties or II-VI Japan Incorporated to the Administrative Agent or any of the Lenders, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under or in connection with (i) this Agreement, the Notes, the Letters of Credit, the Administrative Agent’s Letter, the YEN Revolving Credit Agreement (Japan) or any other Loan Document whether to the Administrative Agent, any of the Lenders or their Affiliates or other persons provided for under such Loan Documents, (ii) any Lender Provided Hedge and (iii) any Other Lender Provided Financial Service Product.

Official Body shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, but not limited to, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

Optional Currency shall mean any currency approved by the Administrative Agent and all of the Lenders pursuant to Section 2.12.5 [Requests for Additional Optional Currencies]. Subject to Section 2.12.4 [European Monetary Union], each Optional Currency must be freely traded in the offshore interbank foreign exchange markets, freely transferable, freely convertible into Dollars and available to the Lenders in the Relevant Interbank Market.

Optional Currency Loans shall have the meaning assigned to such term in Section 2.1.1 [Revolving Credit Loans].

Optional Currency Loan Sublimit shall mean $15,000,000.

Order shall have the meaning specified in Section 2.8.9 [Liability for Acts and Omissions].

 

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

Other Lender Provided Financial Service Product shall mean agreements or other arrangements under which any Lender or Affiliate of a Lender provides any of the following products or services to any of the Loan Parties: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) foreign currency exchange.

Other Taxes shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.6.2 [Replacement of a Lender]).

Participant has the meaning specified in Section 11.8.4 [Participations].

Participant Register shall have the meaning specified in Section 11.8.4 [Participations].

Participation Advance shall have the meaning specified in Section 2.8.3 [Disbursements, Reimbursement].

Payment Date shall mean the first Business Day of each January, April, July and October after the date hereof and on the Expiration Date or upon acceleration of the Notes.

Payment In Full and Paid in Full shall mean the indefeasible payment in full in cash of the Loans and other Obligations hereunder, termination of the Commitments and expiration or termination of all Letters of Credit.

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

Permitted Acquisitions shall have the meaning assigned to such term in Section 8.2.6 [Liquidations, Mergers, Etc.].

Permitted Investments shall mean:

(i) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition;

 

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(ii) commercial paper maturing in 180 days or less rated not lower than A-1, by Standard & Poor’s or P-1 by Moody’s Investors Service, Inc. on the date of acquisition;

(iii) demand deposits, time deposits or certificates of deposit maturing within one year in commercial banks whose obligations are rated A-1, A or the equivalent or better by Standard & Poor’s on the date of acquisition;

(iv) loans to any Person (based on outstanding principal balance measured from time to time) made on or after the Closing Date or investments in any Person (measured at the time of each such investment) made on or after the Closing Date, together with investments in Permitted Joint Ventures (measured at the time of each such investment) made on or after the Closing Date, not to exceed $40,000,000 in the aggregate at any time outstanding;

(v) Investments in Permitted Joint Ventures;

(vi) Investments and acquisitions permitted under Section 8.2.6 [Liquidations, Mergers, Etc.;

(vii) mutual funds that invest substantially all their assets in investments described in (i), (ii) or (iii) above;

(viii) investments made under the Cash Management Agreements or under cash management agreements with any other Lenders; and

(ix) Investments existing on the Closing Date and set forth on Schedule 8.2.4.

Permitted Joint Venture shall have the meaning assigned to that term in Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures].

Permitted Liens shall mean:

(i) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business and which are not yet due and payable;

(ii) Pledges or deposits made in the ordinary course of business to secure payment of workmen’s compensation, or to participate in any fund in connection with workmen’s compensation, unemployment insurance, old-age pensions or other social security programs;

(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable and Liens of landlords securing obligations to pay lease payments that are not yet due and payable or in default;

(iv) Good-faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business;

 

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(v) Encumbrances consisting of zoning restrictions, easements or other restrictions on the use of real property, none of which materially impairs the use of such property or the value thereof, and none of which is violated in any material respect by existing or proposed structures or land use;

(vi) Liens in favor of the Administrative Agent for the benefit of the Lenders, in the form of rights of set-off and recoupment, securing the Obligations, including liabilities under any Lender Provided Hedge and Other Lender Provided Financial Services Products;

(vii) Liens on property leased by any Loan Party or Subsidiary of a Loan Party under capital leases permitted in this Agreement securing obligations of such Loan Party or Subsidiary to the lessor under such leases;

(viii) Any Lien existing on the date of this Agreement and described on Schedule 1.1(P), provided that the principal amount secured thereby is not hereafter increased, and no additional assets become subject to such Lien;

(ix) Purchase Money Security Interests, provided that the aggregate amount of loans and deferred payments secured by such Purchase Money Security Interests plus amounts treated as indebtedness under GAAP with respect to leases treated as capital leases under GAAP shall not exceed $20,000,000 (excluding for the purpose of this computation any loans or deferred payments secured by Liens described on Schedule 1.1(P) and liens permitted under subpart (x) of this definition of Permitted Liens);

(x) Liens in favor of The Bank of Nova Scotia arising under the Consignment Agreement (and Liens under similar replacement facilities as to which the Administrative Agent has been provided notice by Borrower), provided that the amount secured by such Liens shall not exceed $10,000,000 at any time, and

(xi) The following, (A) if the validity or amount thereof is being contested in good faith by appropriate and lawful proceedings diligently conducted so long as levy and execution thereon have been stayed and continue to be stayed or (B) if a final judgment is entered and such judgment is discharged within thirty (30) days of entry, and in either case they do not, in the aggregate, materially impair the ability of any Loan Party to perform its Obligations hereunder or under the other Loan Documents:

(1) Claims or Liens for taxes, assessments or charges due and payable and subject to interest or penalty, provided that the applicable Loan Party maintains such reserves or other appropriate provisions as shall be required by GAAP and pays all such taxes, assessments or charges forthwith upon the commencement of proceedings to foreclose any such Lien;

(2) Claims, Liens or encumbrances upon, and defects of title to, real or personal property, including any attachment of personal or real property or other legal process prior to adjudication of a dispute on the merits;

(3) Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory nonconsensual Liens; or

 

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(4) Liens resulting from final judgments or orders described in Section 9.1.6 [Final Judgments or Orders].

Person shall mean any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, joint venture, government or political subdivision or agency thereof, or any other entity.

Plan shall mean at any time an employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Sections 412 and 430 of the Code, or Section 302 of ERISA and either (i) is maintained by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the ERISA Group for employees of any entity which was at such time a member of the ERISA Group.

PNC shall mean PNC Bank, National Association, its successors and assigns.

Potential Default shall mean any event or condition which with notice or passage of time, or a determination by the Administrative Agent and the Required Lenders, or any combination of the foregoing, would constitute an Event of Default.

Prime Rate shall mean the interest rate per annum announced from time to time by the Administrative Agent at its Principal Office as its then prime rate, which rate may not be the lowest or most favorable rate then being charged commercial borrowers or others by the Administrative Agent. Any change in the Prime Rate shall take effect at the opening of business on the day such change is announced.

Principal Office shall mean the main banking office of the Administrative Agent in Pittsburgh, Pennsylvania.

Prohibited Transaction shall mean any prohibited transaction as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which neither a statutory, an individual nor a class exemption has been issued by the United States Department of Labor.

Published Rate shall mean the rate of interest published each Business Day in The Wall Street JournalMoney Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the rate at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market for a one month period as published in another publication selected by the Administrative Agent).

Purchase Money Security Interest shall mean Liens upon tangible personal property securing loans to any Loan Party or Subsidiary of a Loan Party or deferred payments by such Loan Party or Subsidiary for the purchase of such tangible personal property.

 

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Ratable Share shall mean:

(i) with respect to a Lender’s obligation to make Revolving Credit Loans, participate in Letters of Credit and other Letter of Credit Obligations, and receive payments, interest, and fees related thereto, the proportion that such Lender’s Revolving Credit Commitment bears to the Revolving Credit Commitments of all of the Lenders, provided however that if the Revolving Credit Commitments have terminated or expired, the Ratable Shares for purposes of this clause shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments.

(ii) with respect to all other matters as to a particular Lender, the percentage obtained by dividing (i) such Lender’s Revolving Credit Commitment, by (ii) the sum of the aggregate amount of the Revolving Credit Commitments of all Lenders; provided however that if the Revolving Credit Commitments have terminated or expired, the computation in this clause shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments, and not on the current amount of the Revolving Credit Commitments and provided further in the case of Section 2.11 [Defaulting Lenders] when a Defaulting Lender shall exist, “Ratable Share” shall mean the percentage of the aggregate Commitments (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment.

Recipient shall mean (i) the Administrative Agent, (ii) any Lender and (iii) the Issuing Lender, as applicable.

Regulated Substances shall mean, without limitation, any substance, material or waste, regardless of its form or nature, defined under Environmental Laws as a “hazardous substance,” “pollutant,” “pollution,” “contaminant,” “hazardous or toxic substance,” “extremely hazardous substance,” “toxic chemical,” “toxic substance,” “toxic waste,” “hazardous waste,” “special handling waste,” “industrial waste,” “residual waste,” “solid waste,” “municipal waste,” “mixed waste,” “infectious waste,” “chemotherapeutic waste,” “medical waste,” or “regulated substance” or any other material, substance or waste, regardless of its form or nature, which otherwise is regulated by Environmental Laws.

Reimbursement Obligation shall have the meaning specified in Section 2.8.3 [Disbursements, Reimbursement].

Related Parties shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

Relevant Interbank Market shall mean in relation to Euro, the European Interbank Market, and, in relation to any other currency, the London interbank market.

Relief Proceeding shall mean any proceeding seeking a decree or order for relief in respect of any Loan Party or Subsidiary of a Loan Party in a voluntary or involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Loan Party or Subsidiary of a Loan Party for any substantial part of its property, or for the winding-up or liquidation of its affairs, or an assignment for the benefit of its creditors.

 

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Reportable Compliance Event means that any Covered Entity becomes a Sanctioned Person, or is indicted, arraigned, investigated or custodially detained, or receives an inquiry from regulatory or law enforcement officials, in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or self-discovers facts or circumstances implicating any aspect of its operations with the actual or possible violation of any Anti-Terrorism Law.

Reportable Event shall mean a reportable event described in Section 4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan.

Required Lenders shall mean

(A) If there exists fewer than three (3) Lenders, all Lenders (other than any Defaulting Lender), and

(B) If there exist three (3) or more Lenders, Lenders (other than any Defaulting Lender) having more than 67% of the sum of the aggregate amount of the Revolving Credit Commitments of the Lenders (excluding any Defaulting Lender) or, after the termination of the Revolving Credit Commitments, the outstanding Revolving Credit Loans and Ratable Share of Letter of Credit Obligations of the Lenders (excluding any Defaulting Lender).

Required Share shall have the meaning assigned to such term in Section 5.10 [Settlement Date Procedures].

Revolving Credit Commitment shall mean, as to any Lender at any time, the amount initially set forth opposite its name on Schedule 1.1(B) in the column labeled “Amount of Commitment for Revolving Credit Loans,” as such Commitment is thereafter assigned or modified and Revolving Credit Commitments shall mean the aggregate Revolving Credit Commitments of all of the Lenders.

Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall mean separately all Revolving Credit Loans or any Revolving Credit Loan made by the Lenders or one of the Lenders to the Borrower pursuant to Section 2.1 [Revolving Credit Commitments] or Section 2.8.3 [Disbursements, Reimbursement].

Revolving Facility Usage shall mean at any time the sum of the Dollar Equivalent amount of the outstanding Revolving Credit Loans (including Optional Currency Loans), the outstanding Swing Loans, and the Letter of Credit Obligations.

Sanctioned Country means a country subject to a sanctions program maintained by any Compliance Authority.

Sanctioned Person means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority.

 

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Settlement Date shall mean the Business Day on which the Administrative Agent elects to effect settlement pursuant Section 5.10 [Settlement Date Procedures].

Shares shall have the meaning assigned to that term in Section 6.1.2 [Capitalization and Ownership].

Solvent shall mean, with respect to any Person on any date of determination, taking into account any right of reimbursement, contribution or similar right available to such Person from other Persons, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Standard & Poor’s shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

Statements shall have the meaning specified in Section 6.1.9(i) [Historical Statements].

Subsidiary of any Person at any time shall mean any corporation, trust, partnership, limited liability company or other business entity (i) of which more than 50% of the outstanding voting securities or other interests normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, or (ii) which is controlled or capable of being controlled by such Person or one or more of such Person’s Subsidiaries.

Swing Loan Commitment shall mean PNC’s commitment to make Swing Loans to the Borrower pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an aggregate principal amount up to $10,000,000

Swing Loan Lender shall mean PNC, in its capacity as a lender of Swing Loans.

 

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Swing Loan Note shall mean the Swing Loan Note of the Borrower in the form of Exhibit 1.1(N)(2) evidencing the Swing Loans, together with all amendments, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.

Swing Loan Request shall mean a request for Swing Loans made in accordance with Section 2.4.2 [Swing Loan Requests] hereof.

Swing Loans shall mean collectively and Swing Loan shall mean separately all Swing Loans or any Swing Loan made by PNC to the Borrower pursuant to Section 2.1.2 [Swing Loan Commitment] hereof.

Syndications Period shall mean the period between the Closing Date and the earlier of the following dates: (a) the date on which the Commitment of PNC has been reduced below $80,000,000, or (b) January 31, 2013.

Taxes shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Official Body, including any interest, additions to tax or penalties applicable thereto.

UCP shall have the meaning specified in Section 11.11.1 [Governing Law].

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.

U.S. Person shall mean any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

U.S. Tax Compliance Certificate shall have the meaning specified in Section 5.8.7 [Status of Lenders].

Withholding Agent shall mean any Loan Party and the Administrative Agent.

YEN Revolving Credit Agreement (Japan) shall mean the Credit Agreement, dated as of January 31, 2012, by and among II-VI Japan Incorporated, the Guarantors and Banks party thereto and PNC, as administrative agent on behalf of the Banks party thereto (as amended and as may in the future be amended, restated or replaced), pursuant to which PNC extended a revolving credit facility (the “YEN Revolving Credit Loan”) to II-VI Japan Incorporated in a maximum principal amount of Yen 500,000,000. The YEN Revolving Credit Loan is guaranteed by the Borrower and may be amended from time to time all as may be agreed by PNC and II-VI Japan Incorporated.

YEN Revolving Credit Loan shall have the meaning assigned to such term in the definition of YEN Revolving Credit Agreement (Japan).

1.2 Construction. Unless the context of this Agreement otherwise clearly requires, the following rules of construction shall apply to this Agreement and each of the other Loan Documents: (i) references to the plural include the singular, the plural, the part and the whole and

 

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the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (ii) the words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole; (iii) article, section, subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified; (iv) reference to any Person includes such Person’s successors and assigns; (v) reference to any agreement, including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto, document or instrument means such agreement, document or instrument as amended, modified, replaced, substituted for, superseded or restated; (vi) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; (vii) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (viii) section headings herein and in each other Loan Document are included for convenience and shall not affect the interpretation of this Agreement or such Loan Document, and (ix) unless otherwise specified, all references herein to times of day shall constitute references to Eastern Time.

1.3 Accounting Principles; Changes in GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, (i) if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP (including as a result of the adoption of IFRS) or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP (including as a result of the adoption of IFRS) or in the application thereof, then the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such provision to preserve the original intent thereof (subject to the approval of the Required Lenders), provided, however, that such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (ii) notwithstanding anything in GAAP to the contrary, for purposes of all financial calculations hereunder, the amount of any Indebtedness outstanding at any time shall be the stated principal amount thereof.

2. REVOLVING CREDIT AND SWING LOAN FACILITIES

2.1 Revolving Credit Commitments.

2.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Revolving Credit Loans in either Dollars or one or more Optional Currencies (such Revolving Credit Loans denominated in Optional Currencies referred to herein as “Optional Currency Loans”) to the Borrower at any time or from time to time on or after the date hereof to the Expiration Date; provided that after giving effect to each such Loan (i) the aggregate Dollar Equivalent amount of Revolving Credit Loans from such Lender shall not exceed such Lender’s

 

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Revolving Credit Commitment minus such Lender’s Ratable Share of the outstanding Swing Loans and Letter of Credit Obligations, (ii) the Revolving Facility Usage shall not exceed the Revolving Credit Commitments of the Lenders, (iii) no Revolving Credit Loan to which the Base Rate Option applies shall be made in an Optional Currency, and (iv) the aggregate Dollar Equivalent amount of Optional Currency Loans shall not exceed the Optional Currency Loan Sublimit. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.

2.1.2 Swing Loan Commitment. Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, and in order to facilitate loans and repayments between Settlement Dates, PNC may, at its option, cancellable at any time for any reason whatsoever, make swing loans in Dollars (the “Swing Loans”) to the Borrower at any time or from time to time after the date hereof to, but not including, the Expiration Date, in an aggregate principal amount up to but not in excess of $10,000,000, provided that after giving effect to each such Loan, the Revolving Facility Usage shall not exceed the aggregate Revolving Credit Commitments of the Lenders; and provided further that a Swing Loan shall not be made if the proceeds thereof would be used to repay, in whole or in part, any outstanding Swing Loan. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.2.

2.2 Nature of Lenders’ Obligations with Respect to Revolving Credit Loans. Each Lender shall be obligated to participate in each request for Revolving Credit Loans pursuant to Section 2.4 [Revolving Credit Loan Requests; Swing Loan Requests] in accordance with its Ratable Share. The aggregate Dollar Equivalent of each Lender’s Revolving Credit Loans outstanding hereunder to the Borrower at any time shall never exceed its Revolving Credit Commitment minus its Ratable Share of the outstanding Swing Loans and Letter of Credit Obligations. The obligations of each Lender hereunder are several. The failure of any Lender to perform its obligations hereunder shall not affect the Obligations of the Borrower to any other party nor shall any other party be liable for the failure of such Lender to perform its obligations hereunder. The Lenders shall have no obligation to make Revolving Credit Loans hereunder on or after the Expiration Date.

2.3 Commitment Fees. Accruing from the date hereof until the Expiration Date, the Borrower agrees to pay to the Administrative Agent for the account of each Lender according to its Ratable Share, a nonrefundable commitment fee (the “Commitment Fee”) equal to the Applicable Commitment Fee Rate (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) multiplied by the average daily difference between the amount of (i) the Revolving Credit Commitments and (ii) the Revolving Facility Usage (provided however, that solely in connection with determining the share of each Lender in the Commitment Fee, the Revolving Facility Usage with respect to the portion of the Commitment Fee allocated to PNC shall include the full amount of the outstanding Swing Loans, and with respect to the portion of the Commitment Fee allocated by the Administrative Agent to all of the Lenders other than PNC, such portion of the Commitment Fee shall be calculated (according to each such Lender’s Ratable Share) as if the Revolving Facility Usage excludes the outstanding Swing Loans); provided, further, that any Commitment Fee accrued with respect to the Revolving Credit Commitment of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the

 

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Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by the Borrower prior to such time; and provided further that no Commitment Fee shall accrue with respect to the Revolving Credit Commitment of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. Subject to the proviso in the directly preceding sentence, all Commitment Fees shall be payable in arrears on each Payment Date.

2.4 Revolving Credit Loan Requests; Swing Loan Requests.

2.4.1 Revolving Credit Loan Requests. Except as otherwise provided herein, the Borrower may from time to time prior to the Expiration Date request the Lenders to make Revolving Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit Loans pursuant to Section 4.2 [Interest Periods], by delivering to the Administrative Agent, not later than 10:00 a.m., (i) three (3) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans in Dollars to which the Euro-Rate Option applies or the conversion to or the renewal of the Euro-Rate Option for any Loans; and (ii) four (4) Business Days prior to the proposed Borrowing Date with respect to the making of an Optional Currency Loan or the date of conversation to or renewal of the Euro-Rate Option for Optional Currency Loans; and (iii) the same Business Day of the proposed Borrowing Date with respect to the making of a Revolving Credit Loan to which the Base Rate Option applies or the last day of the preceding Interest Period with respect to the conversion to the Base Rate Option for any Loan, of a duly completed request therefor substantially in the form of Exhibit 2.4.1or a request by telephone immediately confirmed in writing by letter, facsimile or telex in such form (each, a “Loan Request”), it being understood that the Administrative Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Loan Request shall be irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the proposed Loans (expressed in the currency in which such Loans shall be funded) comprising each Borrowing Tranche, which amount shall be in (x) integral multiples of $500,000 and not less than $500,000 for each Borrowing Tranche under the Euro-Rate Option, and (y) not less than the lesser of $500,000 or the maximum amount available for Borrowing Tranches to which the Base Rate Option applies; (iii) whether the Euro-Rate Option or Base Rate Option shall apply to the proposed Loans comprising the applicable Borrowing Tranche; (iv) in the case of a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate Interest Period for the Loans comprising such Borrowing Tranche. No Optional Currency Loans may be converted into a Base Rate Loan, a Euro-Rate Loan or a Loan denominated in a different Optional Currency.

2.4.2 Swing Loan Requests. Except as otherwise provided herein, and provided that no Event of Default has occurred, the Borrower may from time to time prior to the Expiration Date request the Swing Loan Lender to make Swing Loans by delivery to the Swing Loan Lender not later than 2:00 p.m. on the proposed Borrowing Date of a duly completed request therefor substantially in the form of Exhibit 2.4.2 hereto or a request by telephone immediately confirmed in writing by letter, facsimile or telex (each, a “Swing Loan Request”), it being understood that the Administrative Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Swing Loan Request shall be irrevocable and shall specify the proposed Borrowing Date and the principal amount of such Swing Loan, which shall be not less than $100,000.

 

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2.5 Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans.

2.5.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly after receipt by it of a Loan Request pursuant to Section 2.4 [Revolving Credit Loan Requests; Swing Loan Requests], notify the Lenders of its receipt of such Loan Request specifying the information provided by the Borrower, including the currency in which the Revolving Credit Loan is requested, and the apportionment among the Lenders of the requested Revolving Credit Loans as determined by the Administrative Agent in accordance with Section 2.2 [Nature of Lenders’ Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit the principal amount of each Revolving Credit Loan in the requested Optional Currency (or in Dollars if so requested by the Administrative Agent) to the Administrative Agent such that the Administrative Agent is able to, and the Administrative Agent shall, to the extent the Lenders have made funds available to it for such purpose and subject to Section 7.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans to the Borrower in immediately available funds in Dollars or the requested Optional Currency, as applicable, at the Principal Office prior to 2:00 p.m., on the applicable Borrowing Date; provided that if any Lender fails to remit such funds to the Administrative Agent (or fails to remit such funds in the applicable Optional Currency) in a timely manner, the Administrative Agent may elect in its sole discretion to fund with its own funds, including funds in the requested Optional Currency, the Revolving Credit Loans of such Lender on such Borrowing Date, and such Lender shall be subject to the repayment obligation in Section 2.5.2 [Presumptions by the Administrative Agent].

2.5.2 Presumptions by the Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Loan that such Lender will not make available to the Administrative Agent such Lender’s share of such Loan, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.5.1 [Making Revolving Credit Loans] and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Loan available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Loans under the Base Rate Option. If such Lender pays its share of the applicable Loan to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

2.5.3 Making Swing Loans. So long as PNC elects to make Swing Loans, PNC shall, after receipt by it of a Swing Loan Request pursuant to Section 2.4.2, [Swing Loan Requests] fund such Swing Loan to the Borrower in U.S. Dollars and immediately available funds at the Principal Office prior to 4:00 p.m. on the Borrowing Date.

 

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2.5.4 Repayment of Revolving Credit Loans. The Borrower shall repay the Revolving Credit Loans (including Optional Currency Loans) together with all outstanding interest thereon on the Expiration Date.

2.5.5 Borrowings to Repay Swing Loans. PNC may, at its option, exercisable at any time for any reason whatsoever, demand repayment of the Swing Loans, and each Lender shall make a Revolving Credit Loan in an amount equal to such Lender’s Ratable Share of the aggregate principal amount of the outstanding Swing Loans, plus, if PNC so requests, accrued interest thereon, provided that no Lender shall be obligated in any event to make Revolving Credit Loans in excess of its Revolving Credit Commitment minus its Ratable Share of Letter of Credit Obligations. Revolving Credit Loans made pursuant to the preceding sentence shall bear interest at the Base Rate Option and shall be deemed to have been properly requested in accordance with Section 2.4.1 [Revolving Credit Loan Requests] without regard to any of the requirements of that provision. PNC shall provide notice to the Lenders (which may be telephonic or written notice by letter, facsimile or telex) that such Revolving Credit Loans are to be made under this Section 2.5.5 and of the apportionment among the Lenders, and the Lenders shall be unconditionally obligated to fund such Revolving Credit Loans (whether or not the conditions specified in Section 2.4.1 [Revolving Credit Loan Requests] are then satisfied) by the time PNC so requests, which shall not be earlier than 3:00 p.m. on the Business Day next after the date the Lenders receive such notice from PNC.

2.5.6 Swing Loans Under Cash Management Agreements. In addition to making Swing Loans pursuant to the foregoing provisions of Section 2.5.3 [Making Swing Loans], without the requirement for a specific request from the Borrower pursuant to Section 2.4.2 [Swing Loan Requests], PNC as the Swing Loan Lender may make Swing Loans to the Borrower in accordance with the provisions of the agreements between the Borrower and such Swing Loan Lender relating to the Borrower’s deposit, sweep and other accounts at such Swing Loan Lender and related arrangements and agreements regarding the management and investment of the Borrower’s cash assets as in effect from time to time (the “Cash Management Agreements”) to the extent of the daily aggregate net negative balance in the Borrower’s accounts which are subject to the provisions of the Cash Management Agreements. Swing Loans made pursuant to this Section 2.5.6 in accordance with the provisions of the Cash Management Agreements shall (i) be subject to the limitations as to aggregate amount set forth in Section 2.1.2 [Swing Loan Commitment], (ii) not be subject to the limitations as to individual amount set forth in Section 2.4.2 [Swing Loan Requests], (iii) be payable by the Borrower, both as to principal and interest, at the rates and times set forth in the Cash Management Agreements (but in no event later than the Expiration Date), (iv) not be made at any time after such Swing Loan Lender has received written notice of the occurrence of an Event of Default and so long as such shall continue to exist, or, unless consented to by the Required Lenders, a Potential Default and so long as such shall continue to exist, (v) if not repaid by the Borrower in accordance with the provisions of the Cash Management Agreements, be subject to each Lender’s obligation pursuant to Section 2.5.5 [Borrowings to Repay Swing Loans], and (vi) except as provided in the foregoing subsections (i) through (v), be subject to all of the terms and conditions of this Article 2.

 

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2.6 Notes. The Obligation of the Borrower to repay the aggregate unpaid principal amount of the Revolving Credit Loans and Swing Loans made to it by each Lender, together with interest thereon, shall be evidenced by a revolving credit Note and a swing Note, dated the Closing Date payable to the order of such Lender in a face amount equal to the Revolving Credit Commitment or Swing Loan Commitment, as applicable, of such Lender.

2.7 Use of Proceeds. The proceeds of the Loans shall be used (i) to refinance existing indebtedness for borrowed money; (ii) to make Permitted Acquisitions; (iii) to fund ongoing working capital and capital expenditures, and for general corporate purposes including the issuance of Letters of Credit and to fund repurchases by the Borrower of its Shares; and (iv) to pay fees and expenses in connection with this Agreement and Permitted Acquisitions.

2.8 Letter of Credit Subfacility.

2.8.1 Issuance of Letters of Credit. The Borrower or any Loan Party may at any time prior to the Expiration Date request the issuance of a letter of credit in Dollars (each a “Letter of Credit”) on behalf of itself or another Loan Party, or the amendment or extension of an existing Letter of Credit, by delivering or having such other Loan Party deliver to the Issuing Lender (with a copy to the Administrative Agent) a completed application and agreement for letters of credit, or request for such amendment or extension, as applicable, in such form as the Issuing Lender may specify from time to time by no later than 10:00 a.m. at least three (3) Business Days, or such shorter period as may be agreed to by the Issuing Lender, in advance of the proposed date of issuance. Promptly after receipt of any letter of credit application, the Issuing Lender shall confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit application and if not, such Issuing Lender will provide the Administrative Agent with a copy thereof. Unless the Issuing Lender has received notice from any Lender, the Administrative Agent or any Loan Party, at least one day prior to the requested date of issuance, amendment or extension of the applicable Letter of Credit, that one or more applicable conditions in Article 7 [Conditions of Lending and Issuance of Letters of Credit] is not satisfied, then, subject to the terms and conditions hereof and in reliance on the agreements of the other Lenders set forth in this Section 2.8, the Issuing Lender or any of the Issuing Lender’s Affiliates will issue the proposed Letter of Credit or agree to such amendment or extension, provided that each Letter of Credit shall (A) have a maximum maturity of twelve (12) months from the date of issuance, and (B) in no event expire later than ten (10) Business Days prior to the Expiration Date (unless such letter of credit is secured by cash collateral delivered to the Administrative Agent in an amount equal to 105% of the maximum amount available to be drawn under such letter of credit and under terms and conditions and with documentation acceptable to the Administrative Agent and providing that in no event shall (i) the Letter of Credit Obligations exceed, at any one time, $5,000,000 (the “Letter of Credit Sublimit”) or (ii) the Revolving Facility Usage exceed, at any one time, the Revolving Credit Commitments. Each request by the Borrower for the issuance, amendment or extension of a Letter of Credit shall be deemed to be a representation by the Borrower that it shall be in compliance with the preceding sentence and with Article 7 [Conditions of Lending and Issuance of Letters of Credit] after giving effect to the requested issuance, amendment or extension of such Letter of Credit. Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to the beneficiary thereof, the applicable Issuing Lender will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. The Letters of Credit identified on Schedule 2.8.1 that were issued under the Existing Credit Agreement remain outstanding and, on the Closing Date, will constitute all outstanding Letters of Credit under this Agreement as of such date.

 

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2.8.2 Letter of Credit Fees. The Borrower shall pay (i) to the Administrative Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”) equal to the Applicable Letter of Credit Fee Rate on the daily amount available to be drawn under each Letter of Credit, and (ii) to the Issuing Lender for its own account a fronting fee equal to 0.125% per annum on the daily amount available to be drawn under each Letter of Credit. All Letter of Credit Fees and fronting fees shall be computed on the basis of a year of 360 days and actual days elapsed and shall be payable quarterly in arrears on each Payment Date following issuance of each Letter of Credit. The Borrower shall also pay to the Issuing Lender for the Issuing Lender’s sole account the Issuing Lender’s then in effect customary fees and administrative expenses payable with respect to the Letters of Credit as the Issuing Lender may generally charge or incur from time to time in connection with the issuance, maintenance, amendment (if any), assignment or transfer (if any), negotiation, and administration of Letters of Credit.

2.8.3 Disbursements, Reimbursement. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Ratable Share of the maximum amount available to be drawn under such Letter of Credit and the amount of such drawing, respectively.

2.8.3.1 In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Issuing Lender will promptly notify the Borrower and the Administrative Agent thereof. Provided that it shall have received such notice, the Borrower shall reimburse (such obligation to reimburse the Issuing Lender shall sometimes be referred to as a “Reimbursement Obligation”) the Issuing Lender prior to 12:00 noon on each date that an amount is paid by the Issuing Lender under any Letter of Credit (each such date, a “Drawing Date”) by paying to the Administrative Agent for the account of the Issuing Lender an amount equal to the amount so paid by the Issuing Lender. In the event the Borrower fails to reimburse the Issuing Lender (through the Administrative Agent) for the full amount of any drawing under any Letter of Credit by 12:00 noon on the Drawing Date, the Administrative Agent will promptly notify each Lender thereof, and the Borrower shall be deemed to have requested that Revolving Credit Loans be made by the Lenders under the Base Rate Option to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the Revolving Credit Commitment and subject to the conditions set forth in Section 7.2 [Each Loan or Letter of Credit] other than any notice requirements. Any notice given by the Administrative Agent or Issuing Lender pursuant to this Section 2.8.3.1 may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

2.8.3.2 Each Lender shall upon any notice pursuant to Section 2.8.3.1 make available to the Administrative Agent for the account of the Issuing Lender an amount in immediately available funds equal to its Ratable Share of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.8.3 [Disbursements; Reimbursement]) each be deemed to have made a Revolving Credit Loan under the Base Rate

 

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Option to the Borrower in that amount. If any Lender so notified fails to make available to the Administrative Agent for the account of the Issuing Lender the amount of such Lender’s Ratable Share of such amount by no later than 2:00 p.m. on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during the first three (3) days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Revolving Credit Loans under the Base Rate Option on and after the fourth day following the Drawing Date. The Administrative Agent and the Issuing Lender will promptly give notice (as described in Section 2.8.3.1 above) of the occurrence of the Drawing Date, but failure of the Administrative Agent or the Issuing Lender to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.8.3.2.

2.8.3.3 With respect to any unreimbursed drawing that is not converted into Revolving Credit Loans under the Base Rate Option to the Borrower in whole or in part as contemplated by Section 2.8.3.1, because of the Borrower’s failure to satisfy the conditions set forth in Section 7.2 [Each Loan or Letter of Credit] other than any notice requirements, or for any other reason, the Borrower shall be deemed to have incurred from the Issuing Lender a borrowing (each a “Letter of Credit Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to the Revolving Credit Loans under the Base Rate Option. Each Lender’s payment to the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.8.3 [Disbursements, Reimbursement] shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing (each a “Participation Advance”) from such Lender in satisfaction of its participation obligation under this Section 2.8.3.

2.8.4 Repayment of Participation Advances.

2.8.4.1 Upon (and only upon) receipt by the Administrative Agent for the account of the Issuing Lender of immediately available funds from the Borrower (i) in reimbursement of any payment made by the Issuing Lender under the Letter of Credit with respect to which any Lender has made a Participation Advance to the Administrative Agent, or (ii) in payment of interest on such a payment made by the Issuing Lender under such a Letter of Credit, the Administrative Agent on behalf of the Issuing Lender will pay to each Lender, in the same funds as those received by the Administrative Agent, the amount of such Lender’s Ratable Share of such funds, except the Administrative Agent shall retain for the account of the Issuing Lender the amount of the Ratable Share of such funds of any Lender that did not make a Participation Advance in respect of such payment by the Issuing Lender.

2.8.4.2 If the Administrative Agent is required at any time to return to any Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in any Insolvency Proceeding, any portion of any payment made by any Loan Party to the Administrative Agent for the account of the Issuing Lender pursuant to this Section in reimbursement of a payment made under any Letter of Credit or interest or fees thereon, each Lender shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent for the account of the Issuing Lender the amount of its Ratable Share of any amounts so returned by the Administrative Agent plus interest thereon from the date such demand is made to the date such amounts are returned by such Lender to the Administrative Agent, at a rate per annum equal to the Federal Funds Effective Rate in effect from time to time.

 

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2.8.5 Documentation. Each Loan Party agrees to be bound by the terms of the Issuing Lender’s application and agreement for letters of credit and the Issuing Lender’s written regulations and customary practices relating to letters of credit, though such interpretation may be different from such Loan Party’s own. In the event of a conflict between such application or agreement and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct, the Issuing Lender shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following any Loan Party’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.

2.8.6 Determinations to Honor Drawing Requests. In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit.

2.8.7 Nature of Participation and Reimbursement Obligations. Each Lender’s obligation in accordance with this Agreement to make the Revolving Credit Loans or Participation Advances, as contemplated by Section 2.8.3 [Disbursements, Reimbursement], as a result of a drawing under a Letter of Credit, and the Obligations of the Borrower to reimburse the Issuing Lender upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.8 under all circumstances, including the following circumstances:

(i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Lender or any of its Affiliates, the Borrower or any other Person for any reason whatsoever, or which any Loan Party may have against the Issuing Lender or any of its Affiliates, any Lender or any other Person for any reason whatsoever;

(ii) the failure of any Loan Party or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in Sections 2.1 [Revolving Credit Commitments], 2.4 [Revolving Credit Loan Requests; Swing Loan Requests], 2.5 [Making Revolving Credit Loans and Swing Loans; Etc.] or 7.2 [Each Loan or Letter of Credit] or as otherwise set forth in this Agreement for the making of a Revolving Credit Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section 2.8.3 [Disbursements, Reimbursement];

(iii) any lack of validity or enforceability of any Letter of Credit;

 

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(iv) any claim of breach of warranty that might be made by any Loan Party or any Lender against any beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right which any Loan Party or any Lender may have at any time against a beneficiary, successor beneficiary any transferee or assignee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), the Issuing Lender or its Affiliates or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Loan Party or Subsidiaries of a Loan Party and the beneficiary for which any Letter of Credit was procured);

(v) the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provision of services relating to a Letter of Credit, in each case even if the Issuing Lender or any of its Affiliates has been notified thereof;

(vi) payment by the Issuing Lender or any of its Affiliates under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

(viii) any failure by the Issuing Lender or any of its Affiliates to issue any Letter of Credit in the form requested by any Loan Party, unless the Issuing Lender has received written notice from such Loan Party of such failure within three Business Days after the Issuing Lender shall have furnished such Loan Party and the Administrative Agent a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

(ix) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Loan Party or Subsidiaries of a Loan Party;

(x) any breach of this Agreement or any other Loan Document by any party thereto;

(xi) the occurrence or continuance of an Insolvency Proceeding with respect to any Loan Party;

(xii) the fact that an Event of Default or a Potential Default shall have occurred and be continuing;

(xiii) the fact that the Expiration Date shall have passed or this Agreement or the Commitments hereunder shall have been terminated; and

 

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(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

2.8.8 Indemnity. The Borrower hereby agrees to protect, indemnify, pay and save harmless the Issuing Lender and any of its Affiliates that has issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which the Issuing Lender or any of its Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (A) the gross negligence or willful misconduct of the Issuing Lender as determined by a final non-appealable judgment of a court of competent jurisdiction or (B) the wrongful dishonor by the Issuing Lender or any of Issuing Lender’s Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Official Body.

2.8.9 Liability for Acts and Omissions. As between any Loan Party and the Issuing Lender, or the Issuing Lender’s Affiliates, such Loan Party assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender shall not be responsible for any of the following, including any losses or damages to any Loan Party or other Person or property relating therefrom: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or its Affiliates shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such 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; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Loan Party against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Loan Party and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Lender or its Affiliates, as applicable, including any act or omission of any Official Body, and none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Lender’s or its Affiliates rights or powers hereunder. Nothing in the preceding sentence shall relieve the Issuing Lender from liability for the Issuing Lender’s gross negligence or willful misconduct in connection with actions or omissions described in such clauses (i) through (viii) of such sentence. In no event shall the Issuing Lender or its Affiliates be liable to any Loan Party for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

 

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Without limiting the generality of the foregoing, the Issuing Lender and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by the Issuing Lender or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the Issuing Lender or its Affiliate; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on the Issuing Lender or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the Issuing Lender or its Affiliates under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put the Issuing Lender or its Affiliates under any resulting liability to the Borrower or any Lender.

2.8.10 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on the first Business Day of each month, provide to Administrative Agent and Borrower a schedule of the Letters of Credit issued by it, in form and substance satisfactory to Administrative Agent, showing the date of issuance of each Letter of Credit, the account party, the original face amount (if any), and the expiration date of any Letter of Credit outstanding at any time during the preceding month, and any other information relating to such Letter of Credit that the Administrative Agent may request.

2.9 Reduction of Revolving Credit Commitment. The Borrower shall have the right at any time and from time to time upon five (5) Business Days’ prior written notice to the Administrative Agent to permanently reduce, in whole multiples of $1,000,000 of principal, or terminate the Revolving Credit Commitment without penalty or premium, except as hereinafter set forth, provided that any such reduction or termination shall be accompanied by prepayment of the Revolving Credit Notes, together with the full amount of interest accrued on the principal sum to be prepaid (and all amounts referred to in Section 5.7 [Increased Costs] hereof), to the extent that the aggregate Dollar Equivalent amount thereof then outstanding exceeds the Revolving Credit Commitment as so reduced or terminated.

 

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2.10 Increase in Revolving Credit Commitments.

(i) Increasing Lenders and New Lenders. The Borrower may make up to three (3) requests that (A) the current Lenders increase their Revolving Credit Commitments (any current Lender which elects to increase its Revolving Credit Commitment shall be referred to as an “Increasing Lender”) or (B) one or more new lenders (each a “New Lender”) join this Agreement and provide a Revolving Credit Commitment hereunder, subject to the following terms and conditions;

(a) No Obligation to Increase. No current Lender shall be obligated to increase its Revolving Credit Commitment and any increase in the Revolving Credit Commitment by any current Lender shall be in the sole discretion of such current Lender.

(b) Defaults. There shall exist no Events of Default or Potential Default on the effective date of such increase after giving effect to such increase.

(c) Aggregate Revolving Credit Commitments. After giving effect to such increase, the total Revolving Credit Commitments shall not exceed $175,000,000 (the total aggregate amount of such increases shall not exceed $35,000,000).

(d) Minimum Revolving Credit Commitments. After giving effect to such increase, the amount of the Revolving Credit Commitments provided by each of the New Lenders and each of the Increasing Lenders shall be at least $10,000,000 or such lesser amount as necessary to increase the Revolving Credit Commitments to $175,000,000; and

(e) Resolutions; Opinion. The Loan Parties shall deliver to the Administrative Agent on or before the effective date of such increase the following documents in a form reasonably acceptable to the Administrative Agent: (1) certifications of their corporate secretaries with attached resolutions certifying that the increase in the Revolving Credit Commitment has been approved by such Loan Parties, and (2) an opinion of counsel addressed to the Administrative Agent and the Lenders addressing the authorization and execution of the Loan Documents by, and enforceability of the Loan Documents against, the Loan Parties.

(f) Notes. The Borrower shall execute and deliver (1) to each Increasing Lender a replacement revolving credit Note reflecting the new amount of such Increasing Lender’s Revolving Credit Commitment after giving effect to the increase (and the prior Note issued to such Increasing Lender shall be deemed to be terminated) and (2) to each New Lender a revolving credit Note reflecting the amount of such New Lender’s Revolving Credit Commitment.

(g) Approval of New Lenders. Any New Lender shall be subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld) and the Borrower (which approval shall not be unreasonably withheld) and shall not be (1) a Borrower or any of the Borrower’s Subsidiaries or Affiliates, (2) a natural Person or (3) a Person that is not a financial institution.

(h) Increasing Lenders. Each Increasing Lender shall confirm its agreement to increase its Revolving Credit Commitment pursuant to an acknowledgement in a form acceptable to the Administrative Agent, signed by it and the Borrower and delivered to the Administrative Agent at least five (5) days before the effective date of such increase.

 

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(i) New Lenders—Joinder. Each New Lender shall execute a lender joinder in substantially the form of Exhibit 2.10 pursuant to which such New Lender shall join and become a party to this Agreement and the other Loan Documents with a Revolving Credit Commitment in the amount set forth in such lender joinder

(ii) Treatment of Outstanding Loans and Letters of Credit.

(a) Repayment of Outstanding Loans; Borrowing of New Loans. On the effective date of such increase, the Borrower shall repay all Loans then outstanding, subject to the Borrower’s indemnity obligations under Section 5.9 [Indemnity]; provided that it may borrow new Loans with a Borrowing Date on such date. Each of the Lenders shall participate in any new Loans made on or after such date in accordance with their respective Ratable Shares after giving effect to the increase in Revolving Credit Commitments contemplated by this Section.

(b) Outstanding Letters of Credit. Repayment of Outstanding Loans; Borrowing of New Loans. On the effective date of such increase, each Increasing Lender and each New Lender (i) will be deemed to have purchased a participation in each then outstanding Letter of Credit equal to its Ratable Share of such Letter of Credit and the participation of each other Lender in such Letter of Credit shall be adjusted accordingly and (ii) will acquire, (and will pay to the Administrative Agent, for the account of each Lender, in immediately available funds, an amount equal to) its Ratable Share of all outstanding Participation Advances.

2.11 Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(i) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.3 [Commitment Fees];

(ii) the Commitment and outstanding Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 11.1 [Modifications, Amendments or Waivers]); provided, that this clause (ii) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

(iii) if any Swing Loans are outstanding or any Letter of Credit Obligations exist at the time such Lender becomes a Defaulting Lender, then:

(a) all or any part of the outstanding Swing Loans and Letter of Credit Obligations of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Ratable Shares but only to the extent that (x) the Revolving Facility Usage does not exceed the total of all non-Defaulting Lenders’ Revolving Credit Commitments, and (y) no Potential Default or Event of Default has occurred and is continuing at such time;

 

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(b) if the reallocation described in clause (a) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such outstanding Swing Loans, and (y) second, cash collateralize for the benefit of the Issuing Lender the Borrower’s obligations corresponding to such Defaulting Lender’s Letter of Credit Obligations (after giving effect to any partial reallocation pursuant to clause (a) above) in a deposit account held at the Administrative Agent for so long as such Letter of Credit Obligations are outstanding;

(c) if the Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of Credit Obligations pursuant to clause (b) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.8.2 [Letter of Credit Fees] with respect to such Defaulting Lender’s Letter of Credit Obligations during the period such Defaulting Lender’s Letter of Credit Obligations are cash collateralized;

(d) if the Letter of Credit Obligations of the non-Defaulting Lenders are reallocated pursuant to clause (a) above, then the fees payable to the Lenders pursuant to Section 2.8.2 [Letter of Credit Fees] shall be adjusted in accordance with such non-Defaulting Lenders’ Ratable Share; and

(e) if all or any portion of such Defaulting Lender’s Letter of Credit Obligations are neither reallocated nor cash collateralized pursuant to clause (a) or (b) above, then, without prejudice to any rights or remedies of the Issuing Lender or any other Lender hereunder, all Letter of Credit Fees payable under Section 2.8.2 [Letter of Credit Fees] with respect to such Defaulting Lender’s Letter of Credit Obligations shall be payable to the Issuing Lender (and not to such Defaulting Lender) until and to the extent that such Letter of Credit Obligations are reallocated and/or cash collateralized; and

(iv) so long as such Lender is a Defaulting Lender, PNC shall not be required to fund any Swing Loans and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless the Issuing Lender is satisfied that the related exposure and the Defaulting Lender’s then outstanding Letter of Credit Obligations will be 100% covered by the Revolving Credit Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.11(iii), and participating interests in any newly made Swing Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.11(iii)(a) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a parent company of any Lender shall occur following the date hereof and for so long as such event shall continue, or (ii) PNC or the Issuing Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, PNC shall not be required to fund any Swing Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless PNC or the Issuing Lender, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to PNC or the Issuing Lender, as the case may be, to defease any risk to it in respect of such Lender hereunder.

 

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In the event that the Administrative Agent, the Borrower, PNC and the Issuing Lender agree in writing that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Administrative Agent will so notify the parties hereto, and the Ratable Share of the Swing Loans and Letter of Credit Obligations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment, and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swing Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Ratable Share.

2.12 Utilization of Commitments in Optional Currencies.

2.12.1 Periodic Computations of Dollar Equivalent Amounts of Revolving Credit Loans that are Optional Currency Loans; Repayment in Same Currency. For purposes of determining utilization of the Revolving Credit Commitments, the Administrative Agent will determine the Dollar Equivalent amount of (i) the proposed Revolving Credit Loans that are Optional Currency Loans as of the requested Borrowing Date or date of issuance, as the case may be, and (ii) the outstanding Revolving Credit Loans denominated in an Optional Currency as of the end of each Interest Period (each such date under clauses (i) and (ii), and any other date on which the Administrative Agent determines it is necessary or advisable to make such computation, in its sole discretion, is referred to as a “Computation Date”). Unless otherwise provided in this Agreement or agreed to by the Administrative Agent and the Required Lenders, each Loan shall be repaid or prepaid in the same currency in which the Loan was made. A certificate of the Administrative Agent setting forth the Administrative Agent’s determination of such Dollar Equivalent amounts shall be delivered to the Borrower and shall be conclusive absent manifest error so long as such determination is made on a reasonable basis.

2.12.2 Notices From Lenders That Optional Currencies Are Unavailable to Fund New Loans. The Lenders shall be under no obligation to make an Optional Currency Loan requested by the Borrower if any Lender notifies the Administrative Agent by 5:00 p.m. four (4) Business Days prior to the Borrowing Date for such Optional Currency Loan that such Lender cannot provide its Revolving Credit Ratable Share of such Optional Currency Loan. In the event the Administrative Agent timely receives a notice from a Lender pursuant to the preceding sentence, the Administrative Agent will notify the Borrower no later than 12:00 noon three (3) Business Days prior to the Borrowing Date for such Optional Currency Loan that the Optional Currency is not then available for such Optional Currency Loan, and the Administrative Agent shall promptly thereafter notify the Lenders of the same and the Lenders shall not make such Optional Currency Loan requested by the Borrower under their Loan Request.

2.12.3 Notices From Lenders That Optional Currencies Are Unavailable to Fund Renewals of the Euro-Rate Option. If the Borrower delivers a Loan Request requesting that the Lenders renew the Euro-Rate Option with respect to an outstanding Borrowing Tranche of an Optional Currency Loan, the Lenders shall be under no obligation to renew such Euro-Rate Option if any Lender delivers to the Administrative Agent a notice by 5:00 p.m. four (4) Business Days prior to the effective date of such renewal that such Lender cannot continue to

 

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provide such Optional Currency Loan in the applicable Optional Currency. In the event the Administrative Agent timely receives a notice from a Lender pursuant to the preceding sentence, the Administrative Agent will notify the Borrower no later than 12:00 noon three (3) Business Days prior to the renewal date that the renewal of such Optional Currency Loan in the applicable Optional Currency is not then available, and the Administrative Agent shall promptly thereafter notify the Lenders of the same. If the Administrative Agent shall have so notified the Borrower that any such continuation of such Optional Currency Loan in such Optional Currency is not then available, any notice of renewal with respect thereto shall be deemed withdrawn, and such Loans shall be redenominated into Loans in Dollars at the Base Rate Option or Euro-Rate Option, at the Borrower’s option (subject, in the case of the Euro-Rate Option, to compliance with Section 2.5 [Making Revolving Credit Loans, Etc.] and Section 4.1 [Interest Rate Options]), with effect from the last day of the Interest Period with respect to any such Loans. The Administrative Agent will promptly notify the Borrower and the Lenders of any such redenomination, and in such notice, the Administrative Agent will state the aggregate Dollar Equivalent amount of the redenominated Loan as of the applicable Computation Date with respect thereto and such Lender’s Revolving Credit Ratable Share thereof.

2.12.4 European Monetary Union.

2.12.4.1 Payments In Euros Under Certain Circumstances. If (i) any Optional Currency ceases to be lawful currency of the nation issuing the same and is replaced by the Euro or (ii) any Optional Currency and the Euro are at the same time recognized by any governmental authority of the nation issuing such currency as lawful currency of such nation and the Administrative Agent or the Required Lenders shall so request in a notice delivered to the Borrower, then any amount payable hereunder by any party hereto in such Optional Currency shall instead by payable in the Euro and the amount so payable shall be determined by translating the amount payable in such Optional Currency to the Euro at the exchange rate established by that nation for the purpose of implementing the replacement of the relevant Optional Currency by the Euro (and the provisions governing payments in Optional Currencies in this Agreement shall apply to such payment in the Euro as if such payment in the Euro were a payment in an Optional Currency). Prior to the occurrence of the event or events described in clause (i) or (ii) of the preceding sentence, each amount payable hereunder in any Optional Currency will, except as otherwise provided herein, continue to be payable only in that currency. A certificate of the Administrative Agent setting forth the Administrative Agent’s determination of the translation of the amount payable in such Optional Currency to the Euro shall be delivered to the Borrower and shall be conclusive absent manifest error so long as such determination is made on a reasonable basis.

2.12.4.2 Additional Compensation Under Certain Circumstances. The Borrower agrees, at the request of any Lender, to compensate such Lender for any loss, cost, expense or reduction in return that such Lender shall reasonably determine shall be incurred or sustained by such Lender as a result of the replacement of any Optional Currency by the Euro and that would not have been incurred or sustained but for the transactions provided for herein. A certificate of any Lender setting forth such Lender’s determination of the amount or amounts necessary to compensate such Lender shall be delivered to the Borrower and shall be conclusive absent manifest error so long as such determination is made on a reasonable basis. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

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2.12.5 Requests for Additional Optional Currencies. The Borrower may deliver to the Administrative Agent a written request that Revolving Credit Loans hereunder also be permitted to be made in any other lawful currency (other than Dollars), provided that such currency must be freely traded in the offshore interbank foreign exchange markets, freely transferable, freely convertible into Dollars and available to the Lenders in the Relevant Interbank Market. The Administrative Agent will promptly notify the Lenders of any such request promptly after the Administrative Agent receives such request. The Administrative Agent will promptly notify the Borrower of the acceptance or rejection by the Administrative Agent and each of the Lenders of the Borrower’s request. The requested currency shall be approved as an Optional Currency hereunder only if the Administrative Agent and all of the Lenders approve of the Borrower’s request.

3. [RESERVED]

4. INTEREST RATES

4.1 Interest Rate Options. The Borrower shall pay interest in respect of the outstanding unpaid principal amount of the Loans as selected by it from the Base Rate Option or Euro-Rate Option set forth below applicable to the Loans, it being understood that, subject to the provisions of this Agreement, the Borrower may select different Interest Rate Options and different Interest Periods to apply simultaneously to the Loans comprising different Borrowing Tranches and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the Loans comprising any Borrowing Tranche; provided that there shall not be at any one time outstanding more than eight (8) Borrowing Tranches in the aggregate among all of the Loans and provided further that if an Event of Default or Potential Default exists and is continuing, the Borrower may not request, convert to, or renew the Euro-Rate Option for any Loans and the Required Lenders may demand that all existing Borrowing Tranches bearing interest under the Euro-Rate Option shall be converted immediately to the Base Rate Option, subject to the obligation of the Borrower to pay any indemnity under Section 5.9 [Indemnity] in connection with such conversion. If at any time the designated rate applicable to any Loan made by any Lender exceeds such Lender’s highest lawful rate, the rate of interest on such Lender’s Loan shall be limited to such Lender’s highest lawful rate. Interest on the principal amount of each Optional Currency Loan shall be paid by the Borrower in such Optional Currency.

4.1.1 Revolving Credit Interest Rate Options; Swing Line Interest Rate. The Borrower shall have the right to select from the following Interest Rate Options applicable to the Revolving Credit Loans, provided that all Optional Currency Loans shall bear interest at the Revolving Credit Euro-Rate Option:

(i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate to change automatically from time to time effective as of the effective date of each change in the Base Rate; or

 

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(ii) Revolving Credit Euro-Rate Option: A rate per annum (computed on the basis of a year of 360 days and actual days elapsed) equal to the Euro-Rate as determined for each applicable Interest Period plus the Applicable Margin; provided however, that in the case of an Optional Currency Loan denominated in Canadian dollars (if any), such rate per annum shall be calculated on the basis of a 365-day year.

Subject to Section 4.3 [Interest After Default], only the Base Rate Option applicable to Revolving Credit Loans shall apply to the Swing Loans.

4.1.2 Rate Quotations. The Borrower may call the Administrative Agent on or before the date on which a Loan Request is to be delivered to receive an indication of the rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest which thereafter is actually in effect when the election is made.

4.2 Interest Periods. At any time when the Borrower shall select, convert to or renew a Euro-Rate Option, the Borrower shall notify the Administrative Agent thereof (i) at least three (3) Business Days prior to the effective date of such Euro-Rate Option with respect to a Loan denominated in Dollars, and (ii) at least four (4) Business Days prior to the effective date of such Euro-Rate Option with respect to an Optional Currency Loan, by delivering a Loan Request. The notice shall specify an Interest Period during which such Interest Rate Option shall apply. Notwithstanding the preceding sentence, the following provisions shall apply to any selection of, renewal of, or conversion to a Euro-Rate Option:

4.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under the Euro-Rate Option shall be in integral multiples of, and not less than, the respective amounts set forth in Section 2.4.1 [Revolving Credit Loan Requests]; and

4.2.2 Renewals. In the case of the renewal of a Euro-Rate Option at the end of an Interest Period, the first day of the new Interest Period shall be the last day of the preceding Interest Period, without duplication in payment of interest for such day.

4.3 Interest After Default. To the extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived, at the discretion of the Administrative Agent or upon written demand by the Required Lenders to the Administrative Agent:

4.3.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the rate of interest for each Loan otherwise applicable pursuant to Section 2.8.2 [Letter of Credit Fees] or Section 4.1 [Interest Rate Options], respectively, shall be increased by 2.0% per annum;

4.3.2 Other Obligations. Each other Obligation hereunder if not paid when due shall bear interest at a rate per annum equal to the sum of the rate of interest applicable to Revolving Credit Loans under the Base Rate Option plus an additional 2.0% per annum from the time such Obligation becomes due and payable and until it is Paid In Full; and

4.3.3 Acknowledgment. The Borrower acknowledges that the increase in rates referred to in this Section 4.3 reflects, among other things, the fact that such Loans or other amounts have become a substantially greater risk given their default status and that the Lenders are entitled to additional compensation for such risk; and all such interest shall be payable by Borrower upon demand by Administrative Agent.

 

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4.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available.

4.4.1 Unascertainable. If on any date on which a Euro-Rate would otherwise be determined, the Administrative Agent shall have determined that:

(i) adequate and reasonable means do not exist for ascertaining such Euro-Rate, or

(ii) a contingency has occurred which materially and adversely affects the London interbank eurodollar market relating to the Euro-Rate,

then the Administrative Agent shall have the rights specified in Section 4.4.3 [Administrative Agent’s and Lender’s Rights].

4.4.2 Illegality; Increased Costs; Deposits Not Available. If at any time any Lender shall have determined that:

(i) the making, maintenance or funding of any Loan to which a Euro-Rate Option applies has been made impracticable or unlawful by compliance by such Lender in good faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law), or

(ii) such Euro-Rate Option will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any such Loan, or

(iii) after making all reasonable efforts, deposits of the relevant amount in Dollars for the relevant Interest Period for a Loan, or to banks generally, to which a Euro-Rate Option applies, respectively, are not available to such Lender with respect to such Loan, or to banks generally, in the interbank eurodollar market,

then the Administrative Agent shall have the rights specified in Section 4.4.3 [Administrative Agent’s and Lender’s Rights].

4.4.3 Administrative Agent’s and Lender’s Rights. In the case of any event specified in Section 4.4.1 [Unascertainable] above, the Administrative Agent shall promptly so notify the Lenders and the Borrower thereof, and in the case of an event specified in Section 4.4.2 [Illegality; Increased Costs; Deposits Not Available] above, such Lender shall promptly so notify the Administrative Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Administrative Agent shall promptly send copies of such notice and certificate to the other Lenders and the Borrower. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (A) the Lenders, in the case of such notice given by the Administrative Agent, or (B) such Lender, in the case of such notice given by such Lender, to allow the Borrower to

 

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select, convert to or renew a Euro-Rate Option shall be suspended until the Administrative Agent shall have later notified the Borrower, or such Lender shall have later notified the Administrative Agent, of the Administrative Agent’s or such Lender’s, as the case may be, determination that the circumstances giving rise to such previous determination no longer exist. If at any time the Administrative Agent makes a determination under Section 4.4.1 [Unascertainable] and the Borrower has previously notified the Administrative Agent of its selection of, conversion to or renewal of a Euro-Rate Option and such Interest Rate Option has not yet gone into effect, such notification shall be deemed to provide for selection of, conversion to or renewal of the Base Rate Option otherwise available with respect to such Loans. If any Lender notifies the Administrative Agent of a determination under Section 4.4.2 [Illegality; Increased Costs; Deposits Not Available], the Borrower shall, subject to the Borrower’s indemnification Obligations under Section 5.9 [Indemnity], as to any Loan of the Lender to which a Euro-Rate Option applies, on the date specified in such notice either convert such Loan to the Base Rate Option otherwise available with respect to such Loan or prepay such Loan in accordance with Section 5.6 [Voluntary Prepayments]. Absent due notice from the Borrower of conversion or prepayment, such Loan shall automatically be converted to the Base Rate Option otherwise available with respect to such Loan upon such specified date.

4.5 Selection of Interest Rate Options. If the Borrower fails to select a new Interest Period to apply to any Borrowing Tranche of Loans under the Euro-Rate Option at the expiration of an existing Interest Period applicable to such Borrowing Tranche in accordance with the provisions of Section 4.2 [Interest Periods], the Borrower shall be deemed to have converted such Borrowing Tranche to the Base Rate Option, as applicable to Revolving Credit Loans commencing upon the last day of the existing Interest Period.

5. PAYMENTS

5.1 Payments. All payments and prepayments to be made in respect of principal, interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or other fees or amounts due from the Borrower hereunder shall be payable prior to 11:00 a.m. on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without set-off, counterclaim or other deduction of any nature, and an action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent at the Principal Office for the account of PNC with respect to the Swing Loans and for the ratable accounts of the Lenders with respect to the Revolving Credit Loans in U.S. Dollars and in immediately available funds, and the Administrative Agent shall promptly distribute such amounts to the Lenders in immediately available funds; provided that in the event payments are received by 11:00 a.m. by the Administrative Agent with respect to the Loans and such payments are not distributed to the Lenders on the same day received by the Administrative Agent, the Administrative Agent shall pay the Lenders interest at the Federal Funds Effective Rate with respect to the amount of such payments for each day held by the Administrative Agent and not distributed to the Lenders. The Administrative Agent’s and each Lender’s statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the Loans and other amounts owing under this Agreement.

 

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5.2 Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans shall be allocated to each Lender according to its Ratable Share, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrower with respect to principal, interest, Commitment Fees and Letter of Credit Fees (but excluding the Administrative Agent’s Fee and the Issuing Lender’s fronting fee) shall (except as otherwise may be provided with respect to a Defaulting Lender and except as provided in Sections 4.4.3 [Administrative Agent’s and Lender’s Rights] in the case of an event specified in Section 4.4 [Euro-Rate Unascertainable; Etc.], 5.6.2 [Replacement of a Lender] or 5.7 [Increased Costs]) be payable ratably among the Lenders entitled to such payment in accordance with the amount of principal, interest, Commitment Fees and Letter of Credit Fees, as set forth in this Agreement. Notwithstanding any of the foregoing, each borrowing or payment or prepayment by the Borrower of principal, interest, fees or other amounts from the Borrower with respect to Swing Loans shall be made by or to PNC according to Section 2.5.5 [Borrowings to Repay Swing Loans].

5.3 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by realization upon security, or by any other non-pro rata source, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than the pro-rata share of the amount such Lender is entitled thereto, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by Law (including court order) to be paid by the Lender or the holder making such purchase; and

(ii) the provisions of this Section 5.3 shall not be construed to apply to (x) any payment made by the Loan Parties pursuant to and in accordance with the express terms of the Loan Documents or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or Participation Advances to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section 5.3 shall apply).

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

 

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

5.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option applies shall be due and payable in arrears on each Payment Date. Interest on Loans to which the Euro-Rate Option applies shall be due and payable on the last day of each Interest Period for those Loans and, if such Interest Period is longer than three (3) Months, also on the 90th day of such Interest Period. Interest on the principal amount of each Loan or other monetary Obligation shall be due and payable on demand after such principal amount or other monetary Obligation becomes due and payable (whether on the stated Expiration Date, upon acceleration or otherwise).

5.6 Voluntary Prepayments.

5.6.1 Right to Prepay. The Borrower shall have the right at its option from time to time to prepay the Loans in whole or part without premium or penalty (except as provided in Section 5.6.2 [Replacement of a Lender] below, in Section 5.7 [Increased Costs] and Section 5.9 [Indemnity]). Whenever the Borrower desires to prepay any part of the Loans, it shall provide a prepayment notice to the Administrative Agent by 1:00 p.m. at least one (1) Business Day prior to the date of prepayment of the Revolving Credit Loans denominated in Dollars, and at least four (4) Business Days prior to the date of prepayment of any Optional Currency Loans, or no later than 2:00 p.m. on the date of prepayment of Swing Loans, setting forth the following information:

(w) the date, which shall be a Business Day, on which the proposed prepayment is to be made;

(x) a statement indicating the application of the prepayment between the Revolving Credit Loans and Swing Loans;

(y) a statement indicating the application of the prepayment between Loans to which the Base Rate Option applies and Loans to which the Euro-Rate Option applies; and

 

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(z) the total principal amount of such prepayment, which shall not be less than the lesser of (i) the Revolving Facility Usage or (ii) $100,000 for any Swing Loan or $500,000 for any Revolving Credit Loan (including Optional Currency Loans).

All prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount except with respect to Loans to which the Base Rate Option applies, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made. Except as provided in Section 4.4.3 [Administrative Agent’s and Lender’s Rights], if the Borrower prepays a Loan but fails to specify the applicable Borrowing Tranche which the Borrower is prepaying, the prepayment shall be applied first to Loans to which the Base Rate Option applies, then to Loans to which the Euro-Rate Option applies. Any prepayment hereunder shall be subject to the Borrower’s Obligation to indemnify the Lenders under Section 5.9 [Indemnity].

5.6.2 Replacement of a Lender. In the event any Lender (i) gives notice under Section 4.4 [Euro-Rate Unascertainable, Etc.], (ii) requests compensation under Section 5.7 [Increased Costs], or requires the Borrower to pay any Indemnified Taxes or additional amount to any Lender or any Official Body for the account of any Lender pursuant to Section 5.8 [Taxes], (iii) is a Defaulting Lender, (iv) becomes subject to the control of an Official Body (other than normal and customary supervision), or (v) is a Non-Consenting Lender referred to in Section 11.1 [Modifications, Amendments or Waivers], then in any such event the Borrower may, at its sole expense, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.8 [Successors and Assigns]), all of its interests, rights (other than existing rights to payments pursuant to Sections 5.7 [Increased Costs] or 5.8 [Taxes]) and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.8 [Successors and Assigns];

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and Participation Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 5.9 [Indemnity]) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 5.7.1 [Increased Costs Generally] or payments required to be made pursuant to Section 5.8 [Taxes], such assignment will result in a reduction in such compensation or payments thereafter; and

(iv) such assignment does not conflict with applicable Law.

 

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A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

5.6.3 Designation of a Different Lending Office. If any Lender requests compensation under Section 5.7 [Increased Costs], or the Borrower is or will be required to pay any Indemnified Taxes or additional amounts to any Lender or any Official Body for the account of any Lender pursuant to Section 5.8 [Taxes], then such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 5.7 [Increased Costs] or Section 5.8 [Taxes], as the case may be, in the future, and (ii) would not subject such Lender to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

5.7 Increased Costs.

5.7.1 Increased Costs Generally. If any Change in Law shall:

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

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii) impose on any Lender, the Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, the Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, the Issuing Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Issuing Lender or other Recipient, the Borrower will pay to such Lender, the Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered.

 

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

5.7.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans. A certificate of a Lender or the Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or the Issuing Lender or its holding company, as the case may be, as specified in Sections 5.7.1 [Increased Costs Generally] or 5.7.2 [Capital Requirements] and delivered to the Borrower shall be conclusive absent manifest error so long as such determination is made on a reasonable basis. The Borrower shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.

5.7.4 Delay in Requests. Failure or delay on the part of any Lender or the Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).

Notwithstanding anything to the contrary in this Section 5.7, in the event that any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that it shall have incurred Additional Costs in connection with any Loans made by such Lender, the Borrower agrees, within ten (10) Business Days of request by such Lender, to pay to such Lender the amount of such Additional Costs; provided that payments for Additional Costs under this paragraph shall be without duplication of any other payment under this Section 5.7. A certificate of such Lender setting forth the Lender’s determination of such Additional Costs shall be delivered to the Borrower.

 

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5.8 Taxes.

5.8.1 Issuing Lender. For purposes of this Section 5.8, the term “Lender” includes the Issuing Lender and the term “applicable Law” includes FATCA.

5.8.2 Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Official Body in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 5.8 [Taxes]) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

5.8.3 Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely pay to the relevant Official Body in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

5.8.4 Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 5.8 [Taxes]) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Official Body. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

5.8.5 Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of any of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.8.4 [Participations] relating to the maintenance of a Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Official Body. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 5.8.5 [Indemnification by the Lenders].

 

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5.8.6 Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to an Official Body pursuant to this Section 5.8 [Taxes], such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Official Body evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

5.8.7 Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.8.7(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. In such case, the Borrower shall have the right to replace any such Lender with one or more replacement Lenders pursuant to Section 5.6.2 [Replacement of a Lender]

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

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

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

 

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

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

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit 5.8.7 (A) to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(iv) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.8.7 (B) or Exhibit 5.8.7(C), IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.8.7(D) on behalf of each such direct and indirect partner;

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

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative

 

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Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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

5.8.8 Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.8 [Taxes] (including by the payment of additional amounts pursuant to this Section 5.8 [Taxes]), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 5.8 [Taxes] with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Official Body with respect to such refund). Such indemnifying party, upon the request of such indemnified party incurred in connection with obtaining such refund, shall repay to such indemnified party the amount paid over pursuant to this Section 5.8.8 [Treatment of Certain Refunds] (plus any penalties, interest or other charges imposed by the relevant Official Body) in the event that such indemnified party is required to repay such refund to such Official Body. Notwithstanding anything to the contrary in this Section 5.8.8 [Treatment of Certain Refunds]), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 5.8.8 [Treatment of Certain Refunds] the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

5.8.9 Survival. Each party’s obligations under this Section 5.8 [Taxes] shall survive the resignation of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all Obligations.

5.9 Indemnity. In addition to the compensation or payments required by Section 5.7 [Increased Costs] or Section 5.8 [Taxes], the Borrower shall indemnify each Lender against all liabilities, losses or expenses (including loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan, from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract) which such Lender sustains or incurs as a consequence of any:

 

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(i) payment, prepayment, conversion or renewal of any Loan to which a Euro-Rate Option applies on a day other than the last day of the corresponding Interest Period (whether or not such payment or prepayment is mandatory, voluntary or automatic and whether or not such payment or prepayment is then due),

(ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices or otherwise) in whole or part any Loan Requests under Section 2.4 [Revolving Credit Loan Requests; Swing Loan Requests] or Section 4.2 [Interest Periods] or notice relating to prepayments under Section 5.6 [Voluntary Prepayments], or

If any Lender sustains or incurs any such loss or expense, it shall from time to time notify the Borrower of the amount determined in good faith by such Lender (which determination may include such assumptions, allocations of costs and expenses and averaging or attribution methods as such Lender shall deem reasonable) to be necessary to indemnify such Lender for such loss or expense. Such notice shall set forth in reasonable detail the basis for such determination. Such amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such notice is given.

5.10 Settlement Date Procedures. In order to minimize the transfer of funds between the Lenders and the Administrative Agent, the Borrower may borrow, repay and reborrow Swing Loans and PNC may make Swing Loans as provided in Section 2.1.2 [Swing Loan Commitments] hereof during the period between Settlement Dates. The Administrative Agent shall notify each Lender of its Ratable Share of the total of the Revolving Credit Loans and the Swing Loans (each a “Required Share”). On such Settlement Date, each Lender shall pay to the Administrative Agent the amount equal to the difference between its Required Share and its Revolving Credit Loans, and the Administrative Agent shall pay to each Lender its Ratable Share of all payments made by the Borrower to the Administrative Agent with respect to the Revolving Credit Loans. The Administrative Agent shall also effect settlement in accordance with the foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans and on any mandatory prepayment date as provided for herein and may at its option effect settlement on any other Business Day. These settlement procedures are established solely as a matter of administrative convenience, and nothing contained in this Section 5.10 shall relieve the Lenders of their obligations to fund Revolving Credit Loans on dates other than a Settlement Date pursuant to Section 2.1.2 [Swing Loan Commitment]. The Administrative Agent may at any time at its option for any reason whatsoever require each Lender to pay immediately to the Administrative Agent such Lender’s Ratable Share of the outstanding Revolving Credit Loans and each Lender may at any time require the Administrative Agent to pay immediately to such Lender its Ratable Share of all payments made by the Borrower to the Administrative Agent with respect to the Revolving Credit Loans.

6. REPRESENTATIONS AND WARRANTIES

6.1 Representations and Warranties. The Loan Parties, jointly and severally, represent and warrant to the Administrative Agent and each of the Lenders as follows:

 

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6.1.1 Organization and Qualification. Each Loan Party and each Subsidiary of each Loan Party is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each Loan Party and each Subsidiary of each Loan Party has the lawful power to own or lease its properties and to engage in the business it presently conducts or proposes to conduct. Each Loan Party and each Subsidiary of each Loan Party is duly licensed or qualified and in good standing in each jurisdiction where failure to be so licensed or qualified and in good standing would result in a Material Adverse Effect.

6.1.2 Capitalization and Ownership. All of the authorized capital stock of the Borrower, and the shares (referred to herein as “Shares”) of the Borrower that are issued and outstanding have been validly issued and are fully paid and nonassessable.

6.1.3 Subsidiaries. Schedule 6.1.3 states the name of each of the Borrower’s Subsidiaries, its jurisdiction of incorporation, its authorized capital stock, the issued and outstanding shares (referred to herein as the “Subsidiary Shares”) and the owners thereof if it is a corporation, its outstanding partnership interests (the “Partnership Interests”) if it is a partnership and its outstanding limited liability company interests, interests assigned to managers thereof and the voting rights associated therewith (the “LLC Interests”) if it is a limited liability company. The Borrower and each Subsidiary of the Borrower has good and marketable title to all of the Subsidiary Shares, Partnership Interests and LLC Interests it purports to own, free and clear in each case of any Lien. All Subsidiary Shares, Partnership Interests and LLC Interests have been validly issued, and all Subsidiary Shares are fully paid and nonassessable. All capital contributions and other consideration required to be made or paid in connection with the issuance of the Partnership Interests and LLC Interests have been made or paid, as the case may be. There are no options, warrants or other rights outstanding to purchase any such Subsidiary Shares, Partnership Interests or LLC Interests except as indicated on Schedule 6.1.3.

6.1.4 Power and Authority. Each Loan Party has full power to enter into, execute, deliver and carry out this Agreement and the other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan Documents and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary proceedings on its part.

6.1.5 Validity and Binding Effect. This Agreement has been duly and validly executed and delivered by each Loan Party, and each other Loan Document which any Loan Party is required to execute and deliver on or after the date hereof will have been duly executed and delivered by such Loan Party on the required date of delivery of such Loan Document. This Agreement and each other Loan Document constitutes, or will constitute, legal, valid and binding obligations of each Loan Party which is or will be a party thereto on and after its date of delivery thereof, enforceable against such Loan Party in accordance with its terms, except to the extent that enforceability of any of such Loan Document may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the right of specific performance.

6.1.6 No Conflict. Neither the execution and delivery of this Agreement or the other Loan Documents by any Loan Party nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by any of them will conflict with, constitute a default under or result in any breach of (i) the terms and

 

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conditions of the certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents of any Loan Party or (ii) any Law having a Material Adverse Effect or any agreement or instrument or order, writ, judgment, injunction or decree to which any Loan Party or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan Party or any of its Subsidiaries (other than Liens granted under the Loan Documents), except those which will not result in a Material Adverse Effect.

6.1.7 Litigation. There are no actions, suits, proceedings or investigations pending or, to the knowledge of any Loan Party, threatened against such Loan Party or any Subsidiary of such Loan Party at law or equity before any Official Body which individually or in the aggregate may result in any Material Adverse Change. None of the Loan Parties or any Subsidiaries of any Loan Party is in violation of any order, writ, injunction or any decree of any Official Body which may result in any Material Adverse Change.

6.1.8 Title to Properties. Each Loan Party and each Subsidiary of each Loan Party has good and marketable title to or valid leasehold interest in all properties, assets and other rights which it purports to own or lease or which are reflected as owned or leased on its books and records, free and clear of all Liens and encumbrances except Permitted Liens, and subject to the terms and conditions of the applicable leases. All leases of property are in full force and effect without the necessity for any consent which has not previously been obtained upon consummation of the transactions contemplated hereby.

6.1.9 Financial Statements.

(i) Historical Statements. The Borrower has delivered to the Administrative Agent copies of its audited consolidated year-end financial statements for and as of the end of the two (2) fiscal years ended June 30, 2011 and June 30, 2012. In addition, the Borrower has delivered to the Administrative Agent copies of its unaudited consolidated interim financial statements for the fiscal quarter ended September 30, 2012 (all such annual and interim statements being collectively referred to as the “Statements”). The Statements were compiled from the books and records maintained by the Borrower’s management, are correct and complete and fairly represent the consolidated financial condition of the Borrower and its Subsidiaries as of the respective dates thereof and the results of operations for the fiscal periods then ended and have been prepared in accordance with GAAP consistently applied, subject (in the case of the interim statements) to normal year-end audit adjustments.

(ii) Accuracy of Financial Statements. Neither the Borrower nor any Subsidiary of the Borrower has any liabilities, contingent or otherwise, or forward or long-term commitments that are not disclosed in the Statements or in the notes thereto, and except as disclosed therein there are no unrealized or anticipated losses from any commitments of the Borrower or any Subsidiary of the Borrower which may cause a Material Adverse Change. Since June 30, 2012, no Material Adverse Change has occurred.

 

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6.1.10 Margin Stock. None of the Loan Parties or any Subsidiaries of any Loan Party engages or intends to engage principally, or as one of its important activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U, T or X as promulgated by the Board of Governors of the Federal Reserve System). No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or which is inconsistent with the provisions of the regulations of the Board of Governors of the Federal Reserve System. None of the Loan Parties or any Subsidiary of any Loan Party holds or intends to hold margin stock in such amounts that more than 25% of the reasonable value of the assets of any Loan Party or Subsidiary of any Loan Party are or will be represented by margin stock.

6.1.11 Full Disclosure. Neither this Agreement nor any other Loan Document, nor any certificate, statement, agreement or other documents furnished to the Administrative Agent or any Lender in connection herewith or therewith, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading. There is no fact known to any Loan Party which has a Material Adverse Effect on the business, property, assets, financial condition, results of operations or prospects of any Loan Party or Subsidiary of any Loan Party which has not been set forth in this Agreement or in the certificates, statements, agreements or other documents furnished in writing to the Administrative Agent and the Lenders prior to or at the date hereof in connection with the transactions contemplated hereby.

6.1.12 Taxes. All federal, state, local and other tax returns required to have been filed with respect to each Loan Party and each Subsidiary of each Loan Party have been filed, and payment or adequate provision has been made for the payment of all taxes, fees, assessments and other governmental charges which have or may become due pursuant to said returns or to assessments received, except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made or do not result in a Material Adverse Change. There are no agreements or waivers extending the statutory period of limitations applicable to any federal income tax return of any Loan Party or Subsidiary of any Loan Party for any period.

6.1.13 Consents and Approvals. No consent, approval, exemption, order or authorization of, or a registration or filing with, any Official Body or any other Person is required by any Law or any agreement in connection with the execution, delivery and carrying out of this Agreement and the other Loan Documents by any Loan Party.

6.1.14 No Event of Default; Compliance with Instruments. No event has occurred and is continuing and no condition exists or will exist after giving effect to the borrowings or other extensions of credit to be made on the Closing Date under or pursuant to the Loan Documents which constitutes an Event of Default or Potential Default. None of the Loan Parties, or to the Loan Parties’ knowledge, any Subsidiary of any Loan Party which is not itself a Loan Party is in violation of (i) any term of its certificate of incorporation, bylaws, certificate of

 

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limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents or (ii) any material agreement or instrument to which it is a party or by which it or any of its properties may be subject or bound where such violation would constitute a Material Adverse Change.

6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc. Each Loan Party and each Subsidiary of each Loan Party owns or possesses all the patents, trademarks, service marks, trade names, copyrights, licenses, registrations, franchises, permits and rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to be conducted by such Loan Party or Subsidiary, without known possible, alleged or actual conflict with the rights of others, except where the failure to own or possess such patents, trademarks, service marks, trade names, copyrights, licenses, registrations, franchises, permits and rights would not constitute a Material Adverse Change.

6.1.16 Insurance. Schedule 6.1.16 lists all insurance policies and other bonds to which any Loan Party or Subsidiary of any Loan Party is a party (other than de minimis policies for auto coverage or other individual policies carried by Subsidiaries), all of which are valid and in full force and effect. No notice has been given or claim made and no grounds exist to cancel or avoid any of such policies or bonds or to reduce the coverage provided thereby. Such policies and bonds provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of each Loan Party and each Subsidiary of each Loan Party in accordance with prudent business practice in the industry of the Loan Parties and their Subsidiaries.

6.1.17 Compliance with Laws. The Loan Parties and their Subsidiaries are in compliance with all applicable Laws (other than Environmental Laws which are specifically addressed in Section 6.1.21 [Environmental Matters]) in all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is presently or will be doing business except where the failure to do so would not constitute a Material Adverse Change.

6.1.18 Material Contracts; Burdensome Restrictions. The material contracts relating to the business operations of each Loan Party and, to the Loan Parties’ knowledge, each Subsidiary of any Loan Party which is not itself a Loan Party, including all employee benefit plans, Multiemployer Plans and Labor Contracts are valid, binding and enforceable upon such Loan Party or Subsidiary and each of the other parties thereto in accordance with their respective terms, and there is no default thereunder, to the Loan Parties’ knowledge, with respect to parties other than such Loan Party or Subsidiary. None of the Loan Parties or their Subsidiaries is bound by any contractual obligation, or subject to any restriction in any organization document, or any requirement of Law which could result in a Material Adverse Change.

6.1.19 Investment Companies; Regulated Entities. None of the Loan Parties or any Subsidiaries of any Loan Party is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.” None of the Loan Parties or any Subsidiaries of any Loan Party is subject to any other Federal or state statute or regulation limiting its ability to incur Indebtedness for borrowed money.

 

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6.1.20 Plans and Benefit Arrangements.

(i) Except as set forth on Schedule 6.1.20, each Benefit Arrangement, Plan and Multiemployer Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the IRS (or an IRS opinion letter issued to the prototype plan’s sponsor) to the effect that the form of such Benefit Arrangement, Plan or Multiemployer Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the IRS to be exempt from Federal income tax under Section 501(a) of the Code, or an application for such letter is currently being processed by the IRS, and to the knowledge of Borrower or any member of the ERISA Group, nothing has occurred that would prevent, or cause the loss of, such tax-qualified status. The Borrower and each other member of the ERISA Group are in compliance in all material respects with any applicable provisions of ERISA, the Code and other Federal or state laws with respect to all Benefit Arrangements, Plans and Multiemployer Plans. All Plans and Benefit Arrangements have been administered substantially in accordance with their terms and applicable Law. To the extent that any Benefit Arrangement is insured, the Borrower and all other members of the ERISA Group have paid when due all premiums required to be paid for all periods through the Closing Date. To the extent that any Benefit Arrangement is funded other than with insurance, Borrower and all other members of the ERISA Group have made when due all contributions required to be paid for all periods through the Closing Date. With respect to each Plan and Multiemployer Plan, Borrower and each other member of the ERISA Group has fulfilled their obligations under the minimum funding standards of Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA, except to the extent the failure to fulfill such obligations could not reasonably be expected to result in a Material Adverse Change. Borrower and all other members of the ERISA Group have made when due any and all payments required to be made under any agreement relating to a Plan, Benefit Arrangement, Multiemployer Plan or Multiple Employer Plan or any Law pertaining thereto. To the best of the Borrower’s knowledge, each Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder when due.

(ii) No ERISA Event has occurred or is reasonably expected to occur. No Plan has any unfunded pension liability (i.e. excess of benefit liabilities over the current value of that Plan’s assets, determined in accordance with the assumptions used for funding the Plan for the applicable plan year). Neither Borrower nor any other member of the ERISA Group: (A) has instituted or intends to institute proceedings to terminate any Plan under Sections 4041 or 4041A of ERISA, (B) has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA), (C) has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan, (D) has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA, or (E) has applied for or obtained a waiver of the minimum funding standards under, or has had asserted against them any penalty for failure to fulfill the minimum funding requirements of, Sections 412, 430, 431, 432 and 436 of the Code or Sections 302, 303, 304 and 305 of ERISA.

 

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6.1.21 Environmental Matters. Each Loan Party is, and to the knowledge of each respective Loan Party, each of its Subsidiaries is and has been, in compliance with applicable Environmental Laws except as disclosed on Schedule 6.1.21; provided that such matters so disclosed could not in the aggregate result in a Material Adverse Change.

6.1.22 Solvency. On the Closing Date and after giving effect to the initial Loans hereunder, each of the Loan Parties is Solvent.

6.1.23 Anti-Money Laundering/International Trade Law Compliance. No Covered Entity (i) is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country in violation of any law, regulation, order or directive enforced by any Compliance Authority or has any assets in the possession, custody or control of a Sanctioned Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority. In addition to the foregoing, each of the Loan Parties represents and warrants that (i) the proceeds of the Loans will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority; (ii) the funds used to repay the Loans are not derived from any unlawful activity; and (iii) each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any laws of the United States, including but not limited to any Anti-Terrorism Laws.

6.1.24 Senior Debt Status. The Obligations of each Loan Party under this Agreement, the Notes, the Guaranty Agreement and each of the other Loan Documents to which it is a party do rank and will rank at least pari passu in priority of payment with all other Indebtedness of such Loan Party except Indebtedness of such Loan Party to the extent secured by Permitted Liens. There is no Lien upon or with respect to any of the properties or income of any Loan Party or Subsidiary of any Loan Party which secures indebtedness or other obligations of any Person except for Permitted Liens.

6.2 Updates to Schedules. Should any of the information or disclosures provided on any of the Schedules attached hereto become outdated or incorrect in any material respect, the Borrower shall promptly provide the Administrative Agent in writing with such revisions or updates to such Schedule as may be necessary or appropriate to update or correct same. No Schedule shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule be deemed to have been cured thereby, unless and until the Required Lenders, in their sole and absolute discretion, shall have accepted in writing such revisions or updates to such Schedule; provided however, that the Borrower may update certain of the Schedules without any Lender approval in connection with any transaction permitted under Sections 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions], 8.2.7 [Dispositions of Assets or Subsidiaries] and 8.2.9 [Subsidiaries, Partnerships and Joint Ventures].

 

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7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

The obligation of each Lender to make Loans and of the Issuing Lender to issue Letters of Credit hereunder is subject to the performance by each of the Loan Parties of its Obligations to be performed hereunder at or prior to the making of any such Loans or issuance of such Letters of Credit and to the satisfaction of the following further conditions:

7.1 First Loans and Letters of Credit.

7.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have received all of the items set forth on the Closing Agenda in form and substance satisfactory to the Administrative Agent along with all such other documents in connection with such transactions as the Administrative Agent or said counsel may reasonably request, including all information required under applicable “Know-Your-Customer” and anti-money laundering rules and regulations, including the U.S. PATRIOT Act.

7.1.2 Payment of Fees. The Borrower shall have paid all fees and expenses payable on or before the Closing Date as required by this Agreement, the Administrative Agent’s Letter or any other Loan Document.

7.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing, extending or increasing any Letters of Credit and after giving effect to the proposed extensions of credit: (i) the representations, warranties of the Loan Parties shall then be true and correct before and after giving effect to the making of such Loan or the issuance of such Letters of Credit and to the application of the proceeds therefrom, as though made on and as of such date, (ii) no Event of Default or Potential Default shall have occurred and be continuing, (iii) the making of the Loans or issuance, extension or increase of such Letter of Credit shall not contravene any Law applicable to any Loan Party or Subsidiary of any Loan Party or any of the Lenders, and (iv) the Borrower shall have delivered to the Administrative Agent a duly executed and completed Loan Request or to the Issuing Lender an application for a Letter of Credit, as the case may be.

8. COVENANTS

The Loan Parties, jointly and severally, covenant and agree that until Payment In Full, the Loan Parties shall comply at all times with the following covenants:

8.1 Affirmative Covenants.

8.1.1 Preservation of Existence, Etc. Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain its legal existence as a corporation, limited partnership or limited liability company and its license or qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary, except as otherwise expressly permitted in Section 8.2.6 [Liquidations, Mergers, Etc.] or where the failure to be so licensed or qualified and in good standing would not constitute a Material Adverse Change.

 

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8.1.2 Payment of Liabilities, Including Taxes, Etc. Each Loan Party shall, and shall cause each of its Subsidiaries to, duly pay and discharge all liabilities to which it is subject or which are asserted against it, promptly as and when the same shall become due and payable, including all taxes, assessments and governmental charges upon it or any of its properties, assets, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or charges, are being contested in good faith and by appropriate and lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made but only to the extent that failure to discharge any such liabilities would not result in any additional liability which would result in a Material Adverse Change to the financial condition of any Loan Party or Subsidiary of any Loan Party or which would result in a Material Adverse Effect on any assets of a Loan Party, provided that the Loan Parties and their Subsidiaries will pay all such liabilities forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor.

8.1.3 Maintenance of Insurance. Each Loan Party shall, and shall cause each of its Subsidiaries to, insure its properties and assets against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, workers’ compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary, all as reasonably determined by the Administrative Agent.

8.1.4 Maintenance of Properties and Leases. Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the general practice of other businesses of similar character and size, all of those properties useful or necessary to its business, and from time to time, such Loan Party will make or cause to be made all appropriate repairs, renewals or replacements thereof.

8.1.5 Visitation Rights. Each Loan Party shall, and shall cause each of its Subsidiaries to, permit any of the officers or authorized employees or representatives of the Administrative Agent or any of the Lenders to visit and inspect any of its properties and to examine and make excerpts from its books and records and discuss its business affairs, finances and accounts with its officers, all in such detail and at such times and as often as any of the Lenders may reasonably request, provided that each Lender shall provide the Borrower and the Administrative Agent with reasonable notice prior to any visit or inspection. In the event any Lender desires to conduct an audit of any Loan Party, such Lender shall make a reasonable effort to conduct such audit contemporaneously with any audit to be performed by the Administrative Agent, provided that such Lender makes reasonable efforts not to interfere with the ordinary business operations of such Loan Party and that such audit does not interfere with any audit being performed by such Loan Party’s internal or external auditors.

8.1.6 Keeping of Records and Books of Account. The Borrower shall, and shall cause each Subsidiary of the Borrower to, maintain and keep proper books of record and account which enable the Borrower and its Subsidiaries to issue financial statements in

 

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accordance with GAAP and as otherwise required by applicable Laws of any Official Body having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in which full, true and correct entries shall be made in all material respects of all its dealings and business and financial affairs.

8.1.7 Compliance with Laws; Use of Proceeds. Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with all applicable Laws, including all Environmental Laws, in all respects; provided that it shall not be deemed to be a violation of this Section 8.1.7 if any failure to comply with any Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief which in the aggregate would constitute a Material Adverse Change. The Loan Parties will use the Letters of Credit and the proceeds of the Loans only in accordance with Section 2.7 [Use of Proceeds] and as permitted by applicable Law. The Loan Parties shall not use the Letters of Credit or the proceeds of the Loans for any purposes which contravenes any applicable Law or any provision hereof.

8.1.8 Anti-Terrorism Laws. None of the Loan Parties is or shall be (i) a Person with whom any Lender is restricted from doing business under Executive Order No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved in making or receiving any contribution of funds, goods or services to or for the benefit of such a Person or in any transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set forth in any Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law. The Loan Parties shall provide to the Lenders any certifications or information that a Lender requests to confirm compliance by the Loan Parties with Anti-Terrorism Laws.

8.1.9 Plans and Benefit Arrangements. The Borrower shall, and shall cause each other member of the ERISA Group to, comply with ERISA, the Code and other Laws applicable to Plans, Benefit Arrangements and Multiemployer Plans except where such failure, alone or in conjunction with any other failure, would not result in a Material Adverse Change. Without limiting the generality of the foregoing, the Borrower shall cause all of its Plans and all Plans maintained by any member of the ERISA Group to be funded in accordance with the minimum funding requirements of Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA and shall make, and cause each member of the ERISA Group to make, in a timely manner, all contributions due to Plans, Benefit Arrangements and Multiemployer Plans.

8.1.10 Subordination of Intercompany Loans. Each Loan Party shall cause any intercompany Indebtedness, loans or advances owed by any Loan Party to any other Loan Party to be subordinated pursuant to the terms of the Intercompany Subordination Agreement.

8.1.11 Tax Shelter Regulations. None of the Loan Parties intends to treat the Loans and/or Letters of Credit and related transactions as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4). In the event any of the Loan Parties determines to take any action inconsistent with such intention, the Borrower will promptly (1) notify the Administrative Agent thereof, and (2) deliver to the Administrative Agent a duly completed copy of IRS Form 8886 or any successor form. If the Borrower so notifies the Administrative Agent, the Borrower acknowledges that one or more of the Lenders may treat its Loans and/or Letters of Credit as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the lists and other records required by such Treasury Regulation.

 

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8.1.12 Post-Closing Deliveries. On or prior to December 31, 2012, the Loan Parties shall furnish to the Agent, in form and substance satisfactory to the Agent (i) an executed amendment to the Consignment Agreement that address the conflicts between the Consignment Agreement and this Agreement and the scope of the liens granted under the Consignment Agreement and filed UCC-3 financing statement amendments with respect to the financing statements filed with respect to the Consignment Agreement that address the scope of the liens granted under the Consignment Agreement; (ii) the following lien searches with respect to the following Loan Parties (a) federal tax lien and local defendant searches in the New Jersey Superior Court with respect to the Borrower, (b) UCC, state tax lien and local defendant searches in the Florida Secretary of State and Pasco County Circuit Court with respect to Photop Technologies, Inc., (c) state tax lien, local defendant and local judgment searches in the Mississippi Secretary of State with respect to II-VI Wide Band Gap, Inc.; and (iii) UCC-3 terminations or other releases or satisfactions necessary to satisfy any Liens disclosed by the foregoing lien searches that are not permitted hereunder.

8.2 Negative Covenants.

8.2.1 Indebtedness. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Indebtedness, except:

(i) Indebtedness under the Loan Documents;

(ii) Existing Indebtedness as set forth on Schedule 8.2.1 (including any extensions or renewals thereof; provided there is no increase in the amount thereof or other significant change in the terms thereof unless otherwise specified on Schedule 8.2.1);

(iii) Indebtedness secured by Purchase Money Security Interests plus amounts treated as indebtedness under GAAP with respect to leases treated as capital leases under GAAP not exceeding $20,000,000;

(iv) Indebtedness of a Loan Party to another Loan Party which is subordinated pursuant to the Intercompany Subordination Agreement and in accordance with Section 8.1.10 [Subordination of Intercompany Loans];

(v) Any (i) Lender Provided Hedge , (ii) other Hedge Agreement approved by the Administrative Agent or (iii) Indebtedness under any Other Lender Provided Financial Services Product; provided however, the Loan Parties and their Subsidiaries shall enter into a Lender Provided Hedge or another Hedge Agreement only for hedging (rather than speculative) purposes;

(vi) the YEN Revolving Credit Loan in a maximum principal amount to exceed YEN 500,000,000; and

 

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(vii) Other unsecured Indebtedness not exceeding in the aggregate of any time $20,000,000.

8.2.2 Liens; Lien Covenants. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens.

8.2.3 Guaranties. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, at any time, directly or indirectly, become or be liable in respect of any Guaranty, or assume, guarantee, become surety for, endorse or otherwise agree, become or remain directly or contingently liable upon or with respect to any obligation or liability of any other Person, except for Guaranties of Indebtedness of the Loan Parties permitted hereunder and the guaranty by the Borrower of the obligations of II-VI Japan Incorporated to PNC Bank, National Association, including amounts owed under the YEN Revolving Credit Agreement (Japan).

8.2.4 Loans and Investments. Each of the Loan Parties shall not at any time make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) or limited liability company interest in, or any other investment or interest in, or make any capital contribution to, any other Person, or agree, become or remain liable to do any of the foregoing, except:

(i) trade credit extended on usual and customary terms in the ordinary course of business;

(ii) advances to employees to meet expenses incurred by such employees in the ordinary course of business;

(iii) Permitted Investments;

(iv) Permitted Joint Ventures; and

(v) loans, advances and investments in other Loan Parties.

8.2.5 Dividends and Related Distributions. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, make or pay, or agree to become or remain liable to make or pay, any dividend or other distribution of any nature (whether in cash, property, securities or otherwise) on account of or in respect of its shares of capital stock, partnership interests or limited liability company interests on account of the purchase, redemption, retirement or acquisition of its shares of capital stock (or warrants, options or rights therefor), partnership interests or limited liability company interests, except (i) dividends or other distributions payable to another Loan Party, (ii) dividends paid by the Borrower in stock of the Borrower, and (iii) so long as no Event of Default shall exist immediately prior to or after giving effect to such repurchase or cash dividend, repurchases for cash by the Borrower of shares of its outstanding common stock during the term of this Agreement and payment of cash dividends by the Borrower to its stockholders. In addition, the Borrower shall not permit any Subsidiary of the Borrower to enter into or otherwise be bound by any agreement prohibiting or restricting the payment of dividends by such Subsidiary to a Loan Party.

 

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8.2.6 Liquidations, Mergers, Consolidations, Acquisitions. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or substantially all of the assets or Capital Stock of any other Person; provided that

(1) any Loan Party other than the Borrower may consolidate or merge into another Loan Party and any Subsidiary which is not a Loan Party may merge with and into any other Subsidiary which is not a Loan Party so long as the surviving entity is wholly-owned, directly or indirectly, by one or more of the Loan Parties,

(2) any Loan Party or any of its Subsidiaries may acquire, whether by purchase or by merger, (A) all of the ownership interests of another Person or (B) substantially all of assets of another Person or of a business or division of another Person (each a “Permitted Acquisition”), provided that each of the following requirements is met:

(i) if a Loan Party is acquiring the ownership interests in such Person, such Person shall execute a Guarantor Joinder and join this Agreement as a Guarantor pursuant to Section 11.13[Joinder of Guarantors] on or before the date of such Permitted Acquisition;

(ii) the board of directors or other equivalent governing body of such Person shall have approved such Permitted Acquisition and, if the Loan Parties shall use any portion of the Loans to fund such Permitted Acquisition, the Loan Parties also shall have delivered to the Lenders written evidence of the approval of the board of directors (or equivalent body) of such Person for such Permitted Acquisition;

(iii) the business acquired, or the business conducted by the Person whose ownership interests are being acquired, as applicable, shall be similar or complimentary to one or more line or lines of business or operations conducted by the Loan Parties or any of their respective Subsidiaries and shall comply with Section 8.2.10[Continuation of or Change in Business];

(iv) no Potential Default or Event of Default shall exist immediately prior to and after giving effect to such Permitted Acquisition;

(v) if the Consideration in connection with any such Permitted Acquisition exceeds $20,000,000, the Borrower shall demonstrate that the representations and warranties contained in Article 6 shall be true and correct and that it shall be in compliance with the covenants contained in Article 8 after giving effect to such Permitted Acquisition (including in such computation Indebtedness or other liabilities assumed or incurred in connection with such Permitted Acquisition but excluding income earned or expenses incurred by the Person, business or assets to be acquired prior to the date of such Permitted Acquisition) by delivering at least five (5) Business Days prior to such Permitted Acquisition a certificate in the form of Exhibit 8.2.6 evidencing such compliance;

 

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(vi) the Loan Parties shall deliver to the Administrative Agent at least five (5) Business Days before such Permitted Acquisition copies of any agreements entered into or proposed to be entered into by such Loan Parties or any of its Subsidiaries in connection with such Permitted Acquisition, and shall deliver to the Administrative Agent such other information about such Person or its assets as any Lender may reasonably require; and

(3) Transactions permitted under Section 8.2.7 [Disposition of Assets and Subsidiaries] shall be permitted.

8.2.7 Dispositions of Assets or Subsidiaries. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of voluntarily or involuntarily, any of its properties or assets, tangible or intangible (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or of capital stock, shares of beneficial interest, partnership interests or limited liability company interests of a Subsidiary of such Loan Party), except:

(i) transactions involving the sale of inventory in the ordinary course of business;

(ii) any sale, transfer or lease of assets in the ordinary course of business which are no longer necessary or required in the conduct of such Loan Party’s or such Subsidiary’s business;

(iii) any sale, transfer or lease of assets by any wholly owned Subsidiary of such Loan Party to another Loan Party (including any newly created Loan Party which becomes a Loan Party pursuant to the provisions of Section 11.13 [Joinder of Guarantors]);

(iv) any sale, transfer or lease of assets in the ordinary course of business which are replaced by substitute assets acquired or leased in transactions not prohibited by this Agreement; or

(v) any other disposition of assets with fair market values aggregating not more than $20,000,000 in any fiscal year of the Borrower.

8.2.8 Affiliate Transactions. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, enter into or carry out any transaction with any Affiliate of any Loan Party (including purchasing property or services from or selling property or services to any Affiliate of any Loan Party or other Person) unless such transaction is not otherwise prohibited by this Agreement, is entered into in the ordinary course of business upon fair and reasonable arm’s-length terms and conditions which are disclosed to the Administrative Agent and is in accordance with all applicable Law.

 

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8.2.9 Subsidiaries, Partnerships and Joint Ventures.

(a) Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, own or create directly or indirectly any Subsidiaries other than (i) any Subsidiary which has joined this Agreement as Guarantor on the Closing Date; (ii) Inactive Subsidiaries in existence on the Closing Date; (iii) existing investments in Permitted Joint Ventures described on Schedule 8.2.9 or future investments as permitted under Section 8.2.9(b) hereof; and (iv) any Subsidiary formed after the Closing Date which joins this Agreement as a Guarantor pursuant to Section 11.13 [Joinder of Guarantors], and provided further that no Subsidiary formed after the date of this Agreement which is formed under the laws of a foreign county shall be required to join as a Guarantor if such joinder would result in material adverse tax consequences. Each of the Loan Parties shall not become or agree to (1) become a general or limited partner in any general or limited partnership, except that the Loan Parties may be general or limited partners in other Loan Parties, (2) become a member or manager of, or hold a limited liability company interest in, a limited liability company, except that the Loan Parties may be members or managers of, or hold limited liability company interests in, other Loan Parties, or (3) become a joint venturer or hold a joint venture interest in any joint venture.

(b) Borrower and its Subsidiaries shall be permitted to create, invest in or acquire interests in corporations or other entities formed under the laws of nations other than the United States and its political subdivisions (each a “Permitted Joint Venture”) provided that in each such case the following conditions are met:

(i) Borrower shall provide the Administrative Agent notice of any such investment or acquisition not later than 15 days prior to such investment or acquisition; and

(ii) The total amount of investments and acquisitions (measured at the time of each such investment or acquisition) made under this Section 8.2.9(b) (including any indebtedness of such Permitted Joint Venture guaranteed by Borrower or any Subsidiary of Borrower) on or after the Closing Date together with investments and loans made under Section 8.2.4 in investments and loans described in clause (iv) of the Definition of “Permitted Investments” (using the computation methodology set forth in such clause (iv)) made on or after the Closing Date, shall not exceed $40,000,000 in the aggregate at any time.

8.2.10 Continuation of or Change in Business. Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, engage in any business or operations other than substantially as conducted and operated by such Loan Party or Subsidiary during the present fiscal year, and business or operations complimentary thereto, and such Loan Party or Subsidiary shall not permit any material change in such business.

8.2.11 Plans and Benefit Arrangements. Each of the Borrower and other member of the ERISA Group shall not, and shall not permit any of its Subsidiaries to:

(i) fail to satisfy the minimum funding requirements of Sections 412, 430, 431,432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA with respect to any Plan;

(ii) request a minimum funding waiver from the Internal Revenue Service with respect to any Plan;

(iii) engage in a Prohibited Transaction with any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with any other circumstances or set of circumstances resulting in liability under ERISA, that is likely to result in a Material Adverse Change;

 

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(iv) maintain a Plan with an adjusted funding target attainment percentage (as defined in Section 436 of the Code) that is less than, or is presumed under Section 436 of the Code to be less than, 80%;

(v) fail to make when due any contribution to any Multiemployer Plan that the Borrower or any member of the ERISA Group may be required to make under any agreement relating to such Multiemployer Plan, or any Law pertaining thereto;

(vi) withdraw (completely or partially) from any Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from any Multiple Employer Plan, where any such withdrawal is likely to have a Material Adverse Effect on the Borrower or any member of the ERISA Group;

(vii) terminate, or institute proceedings to terminate, any Plan, where such termination is likely to have a Material Adverse Effect on the Borrower or any member of the ERISA Group;

(viii) fail to give any and all notices and make all disclosures and governmental filings required under ERISA or the Code, where such failure is likely to result in a Material Adverse Change; or

(ix) fail to pay any required premiums to the PBGC on behalf of a Plan or a Multiemployer Plan.

8.2.12 Fiscal Year. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, change its fiscal year from the twelve-month period beginning July 1 and ending June 30.

8.2.13 Issuance of Stock. Each of the Loan Parties (other than the Borrower) shall not, and shall not permit any of its Subsidiaries to, issue any additional shares of its capital stock or any options, warrants or other rights in respect thereof.

8.2.14 Changes in Organizational Documents. Each of the Loan Parties shall not amend in any respect its certificate of incorporation (including any provisions or resolutions relating to Capital Stock), by-laws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents without providing at least ten (10) calendar days’ prior written notice to the Administrative Agent and the Lenders and, in the event such change would be adverse to the Lenders as determined by the Administrative Agent in its sole discretion, obtaining the prior written consent of the Required Lenders.

8.2.15 Inactive Subsidiaries. Borrower shall not permit any Inactive Subsidiary to conduct any business of any type and no Loan Party shall make any loan to or investment in any Inactive Subsidiary unless such Inactive Subsidiary becomes a party to this Agreement as a Guarantor pursuant to the provisions of Section 11.13 [Joinder of Guarantors] hereof.

 

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8.2.16 Limitation on Negative Pledges. Each of the Loan Parties shall not enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of such Loan Party to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure the Obligations, other than (a) this Agreement and the other Loan Documents (b) any agreements governing any purchase money Liens or capital lease obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) customary provisions restricting assignment of any licensing agreement (in which a Loan Party or its Subsidiaries are the licensee) with respect to a contract entered into by a Loan Party or its Subsidiaries in the ordinary course of business and (d) customary provisions restricting subletting, sublicensing or assignment of any intellectual property license or any lease governing any leasehold interests of a Loan Party.

8.2.17 Maximum Consolidated Leverage Ratio. The Loan Parties shall not at any time permit the Consolidated Leverage Ratio of the Borrower and its Subsidiaries to exceed 3.0 to 1.0.

8.2.18 Minimum Consolidated Interest Coverage Ratio. The Loan Parties shall not permit the Consolidated Interest Coverage Ratio of the Borrower and its Subsidiaries, calculated as of the end of each fiscal quarter for the four (4) fiscal quarters then ended, to be less than 4.0 to 1.0.

8.3 Reporting Requirements. The Loan Parties will furnish or cause to be furnished to the Administrative Agent and each of the Lenders:

8.3.1 Quarterly Financial Statements. As soon as available and in any event within forty-five (45) calendar days after the end of each of the first three fiscal quarters in each fiscal year, financial statements of the Borrower, consisting of a consolidated balance sheet as of the end of such fiscal quarter and related consolidated statements of income, stockholders’ equity and cash flows for the fiscal quarter then ended and the fiscal year through that date, all in reasonable detail and certified (subject to normal year-end audit adjustments) by the Chief Executive Officer, President or Chief Financial Officer of the Borrower as having been prepared in accordance with GAAP, consistently applied, and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year.

8.3.2 Annual Financial Statements. As soon as available and in any event within ninety (90) days after the end of each fiscal year of the Borrower, financial statements of the Borrower consisting of a consolidated balance sheet as of the end of such fiscal year, and related consolidated statements of income, stockholders’ equity and cash flows for the fiscal year then ended, all in reasonable detail and setting forth in comparative form the financial statements as of the end of and for the preceding fiscal year, and certified by independent certified public accountants of nationally recognized standing satisfactory to the Administrative Agent. The certificate or report of accountants shall be free of qualifications (other than any consistency qualification that may result from a change in the method used to prepare the financial

 

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statements as to which such accountants concur) and shall not indicate the occurrence or existence of any event, condition or contingency which would materially impair the prospect of payment or performance of any covenant, agreement or duty of any Loan Party under any of the Loan Documents.

8.3.3 Certificate of the Borrower. Concurrently with the financial statements of the Borrower furnished to the Administrative Agent and to the Lenders pursuant to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial Statements], a certificate (each a “Compliance Certificate”) of the Borrower signed by the Chief Executive Officer, President or Chief Financial Officer of the Borrower, in the form of Exhibit 8.3.3.

8.3.4 Notices.

8.3.4.1 Default. Promptly after any Authorized Officer of any Loan Party has learned of the occurrence of an Event of Default or Potential Default, a certificate signed by an Authorized Officer setting forth the details of such Event of Default or Potential Default and the action which such Loan Party proposes to take with respect thereto.

8.3.4.2 Litigation. Promptly after the commencement thereof, notice of all actions, suits, proceedings or investigations before or by any Official Body or any other Person against any Loan Party or Subsidiary of any Loan Party, involve a claim or series of claims in excess of $5,000,000 or which if adversely determined would constitute a Material Adverse Change.

8.3.4.3 Organizational Documents. Within the time limits set forth in Section 8.2.14 [Changes in Organizational Documents], any amendment to the organizational documents of any Loan Party.

8.3.4.4 Erroneous Financial Information. Immediately in the event that the Borrower or its accountants conclude or advise that any previously issued financial statement, audit report or interim review should no longer be relied upon or that disclosure should be made or action should be taken to prevent future reliance, notice in writing setting forth the details thereof and the action which the Borrower proposes to take with respect thereto.

8.3.4.5 Plans and Benefit Arrangements.

(i) ERISA Event. Immediately upon the occurrence of any ERISA Event, notice in writing setting forth the details thereof and the action which the Borrower proposes to take with respect thereto,

(ii) Notices of Involuntary Termination and Annual Reports. Promptly upon the receipt thereof, copies of (a) all notices received by the Borrower or any other member of the ERISA Group of the PBGC’s intent to terminate any Plan administered or maintained by the Borrower or any member of the ERISA Group, or to have a trustee appointed to administer any such Plan; (b) at the request of the Agent or any Bank each annual report (IRS Form 5500 series) and all accompanying schedules, the most recent actuarial reports, the most recent financial information concerning the financial status of each Plan administered or maintained by the Borrower or any other member of the ERISA Group, and schedules showing

 

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the amounts contributed to each such Plan by or on behalf of the Borrower or any other member of the ERISA Group in which any of their personnel participate or from which such personnel may derive a benefit, and each Schedule B (Actuarial Information) to the annual report filed by the Borrower or any other member of the ERISA Group with the Internal Revenue Service with respect to each such Plan; and (c) copies of any and all documents described in Section 101(k) and 101(l) of ERISA that are received by the Borrower or any other member of the ERISA Group, and

(iii) Notice of Voluntary Termination. Promptly upon filing thereof, copies of any Form 5310, or any successor or equivalent form to Form 5310, filed with the IRS in connection with the termination of any Plan.

8.3.4.6 Other Reports. Promptly upon their becoming available to the Borrower:

(i) Annual Budget; Five-Year Plan. The annual budget and five-year plan of the Borrower, to be supplied not later than thirty (30) days prior to commencement of the first fiscal year to which any of the foregoing may be applicable,

(ii) Management Letters. Any reports including management letters submitted to the Borrower by independent accountants in connection with any annual, interim or special audit,

(iii) SEC Reports; Shareholder Communications. Reports, including Forms 10-K, 10-Q and 8-K, registration statements and prospectuses and other shareholder communications, filed by the Borrower with the Securities and Exchange Commission,

(iv) Reportable Compliance Event. The occurrence of a Reportable Compliance Event, and

(v) Other Information. Such other reports and information as any of the Lenders may from time to time reasonably request.

9. DEFAULT

9.1 Events of Default. An Event of Default shall mean the occurrence or existence of any one or more of the following events or conditions (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):

9.1.1 Payments Under Loan Documents. The Borrower shall fail to pay any principal of any Loan (including scheduled installments, mandatory prepayments or the payment due at maturity), Reimbursement Obligation or Letter of Credit or Obligation or any interest on any Loan, Reimbursement Obligation or Letter of Credit Obligation or any other amount owing hereunder or under the other Loan Documents on the date on which such principal, interest or other amount becomes due in accordance with the terms hereof or thereof;

9.1.2 Breach of Warranty. Any representation or warranty made at any time by any of the Loan Parties herein or by any of the Loan Parties in any other Loan Document, or in any certificate, other instrument or statement furnished pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time it was made or furnished;

 

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9.1.3 Breach of Negative Covenants or Visitation Rights. Any of the Loan Parties shall default in the observance or performance of any covenant contained in Section 8.1.5 [Visitation Rights] or Section 8.2 [Negative Covenants];

9.1.4 Breach of Other Covenants. Any of the Loan Parties shall default in the observance or performance of any other covenant, condition or provision hereof or of any other Loan Document and such default shall continue unremedied for a period of thirty (30) days after any officer of any Loan Party becomes aware of the occurrence thereof (such grace period to be applicable only in the event such default can be remedied by corrective action of the Loan Parties as determined by the Administrative Agent in its sole discretion);

9.1.5 Defaults in Other Agreements or Indebtedness. A default or event of default shall occur at any time under the terms of (i) the YEN Revolving Credit Agreement (Japan); or (ii) any other agreement involving borrowed money or the extension of credit or any other Indebtedness under which any Loan Party or Subsidiary of any Loan Party may be obligated as a borrower or guarantor in excess of $5,000,000 in the aggregate, and such breach, default or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any Indebtedness when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any Indebtedness (whether or not such right shall have been waived) or the termination of any commitment to lend;

9.1.6 Final Judgments or Orders. Any final judgments or orders for the payment of money in excess of $5,000,000 in the aggregate shall be entered against any Loan Party by a court having jurisdiction in the premises, which judgment is not discharged, vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry;

9.1.7 Loan Document Unenforceable. Any of the Loan Documents shall cease to be legal, valid and binding agreements enforceable against the party executing the same or such party’s successors and assigns (as permitted under the Loan Documents) in accordance with the respective terms thereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or shall in any way be challenged or contested or cease to give or provide the respective Liens, security interests, rights, titles, interests, remedies, powers or privileges intended to be created thereby;

9.1.8 Uninsured Losses; Proceedings Against Assets. There shall occur any material uninsured damage to or loss, theft or destruction of any of the assets of any Loan Party in excess of $5,000,000 or any other of the Loan Parties’ or any of their Subsidiaries’ assets in excess of $5,000,000 attached, seized, levied upon or subjected to a writ or distress warrant; or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within thirty (30) days thereafter;

 

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9.1.9 Events Relating to Plans and Benefit Arrangements. (i) (i) An ERISA Event occurs with respect to a Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Plan or the PBGC in an aggregate amount in excess of $5,000,000, (ii) Borrower or any other member of the ERISA Group fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in excess of $5,000,000, (iii) any Reportable Event, which the Administrative Agent determines in good faith constitutes grounds for the termination of any Plan by the PBGC or the appointment of a trustee to administer or liquidate any Plan, shall have occurred and be continuing, (iv) proceedings shall have been instituted or other action taken to terminate any Plan, or a termination notice shall have been filed with respect to any Plan, (v) a trustee shall be appointed to administer or liquidate any Plan, (vi) the PBGC shall give notice of its intent to institute proceedings to terminate any Plan or Plans or to appoint a trustee to administer or liquidate any Plan; and, in the case of the occurrence of (iii), (iv), (v) or (vi) above, the Administrative Agent determines in good faith that the amount of the Borrower’s liability is likely to exceed $5,000,000, (vii) the Borrower or any member of the ERISA Group shall fail to make any contributions when due to a Plan or a Multiemployer Plan, including, but not limited to, any installment payments with respect to withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount which could reasonably be expected to result in a Material Adverse Change, (viii) the Borrower or any other member of the ERISA Group shall withdraw completely or partially from a Multiemployer Plan, (ix) the Borrower or any other member of the ERISA Group shall withdraw (or shall be deemed under Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan, (x) the responsible actuary for any Plan or Multiemployer Plan certifies that the Plan or Multiemployer Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Section 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA, or (xi) any applicable Law is adopted, changed or interpreted by any Official Body with respect to or otherwise affecting one or more Plans, Multiemployer Plans or Benefit Arrangements and, with respect to any of the events specified in (vii), (viii), (ix), or (x) or (xi), the Administrative Agent determines in good faith that any such occurrence would be reasonably likely to materially and adversely affect the total enterprise represented by the Borrower and the other members of the ERISA Group;

9.1.10 Change of Control. A Change of Control shall occur; or

9.1.11 Relief Proceedings. (i) A Relief Proceeding shall have been instituted against any Loan Party or Subsidiary of a Loan Party and such Relief Proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court shall enter a decree or order granting any of the relief sought in such Relief Proceeding, (ii) any Loan Party or Subsidiary of a Loan Party institutes, or takes any action in furtherance of, a Relief Proceeding, or (iii) any Loan Party or any Subsidiary of a Loan Party ceases to be Solvent or admits in writing its inability to pay its debts as they mature.

9.2 Consequences of Event of Default.

9.2.1 Events of Default Other Than Relief Proceedings. If an Event of Default specified under Sections 9.1.1 through 9.1.10 shall occur and be continuing, the Lenders and the Administrative Agent shall be under no further obligation to make Loans and the Issuing

 

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Lender shall be under no obligation to issue Letters of Credit and the Administrative Agent may, and upon the request of the Required Lenders, shall (i) by written notice to the Borrower, declare the unpaid principal amount of the Notes then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder to be forthwith due and payable, and the same shall thereupon become and be immediately due and payable to the Administrative Agent for the benefit of each Lender without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, and (ii) require the Borrower to, and the Borrower shall thereupon, deposit in a non-interest-bearing account with the Administrative Agent, as cash collateral for its Obligations under the Loan Documents, an amount equal to the maximum amount currently or at any time thereafter available to be drawn on all outstanding Letters of Credit, and the Borrower hereby pledges to the Administrative Agent and the Lenders, and grants to the Administrative Agent and the Lenders a security interest in, all such cash as security for such Obligations. Upon the curing of all existing Events of Default to the satisfaction of the Required Lenders, the Administrative Agent shall return such cash collateral to the Borrower; and

9.2.2 Relief Proceedings. If an Event of Default specified under Section 9.1.11 [Relief Proceedings] shall occur, the Lenders shall be under no further obligations to make Loans hereunder and the Issuing Lender shall be under no obligation to issue Letters of Credit and the unpaid principal amount of the Loans then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the Lenders hereunder and thereunder shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and

9.2.3 Set-off. If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Lender, and each of their respective Affiliates and any participant of such Lender or Affiliate which has agreed in writing to be bound by the provisions of Section 5.3 [Sharing of Payments by Lenders] is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Lender or any such Affiliate or participant to or for the credit or the account of any Loan Party against any and all of the Obligations of such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, the Issuing Lender, Affiliate or participant, irrespective of whether or not such Lender, Issuing Lender, Affiliate or participant shall have made any demand under this Agreement or any other Loan Document and although such Obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the Issuing Lender different from the branch or office holding such deposit or obligated on such Indebtedness. The rights of each Lender, the Issuing Lender and their respective Affiliates and participants under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Lender or their respective Affiliates and participants may have. Each Lender and the Issuing Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application; and

 

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9.2.4 Application of Proceeds. From and after the date on which the Administrative Agent has taken any action pursuant to this Section 9.2 and until Payment in Full, any and all proceeds received by the Administrative Agent from any sale or other disposition of any assets of any Loan Party after entry of judgment, or any part thereof, or the exercise of any other remedy by the Administrative Agent, shall be applied as follows:

(i) First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Administrative Agent in its capacity as such, the Issuing Lender in its capacity as such and the Swing Loan Lender in its capacity as such, ratably among the Administrative Agent, the Issuing Lender and Swing Loan Lender in proportion to the respective amounts described in this clause First payable to them;

(ii) Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them;

(iii) Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and Reimbursement Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

(iv) Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, Reimbursement Obligations and payment obligations then owing under Lender Provided Hedges and Other Lender Provided Financial Service Products, ratably among the Lenders, the Issuing Lender, and the Lenders or Affiliates of Lenders which provide Lender Provided Hedges and Other Lender Provided Financial Service Products, in proportion to the respective amounts described in this clause Fourth held by them;

(v) Fifth, to the Administrative Agent for the account of the Issuing Lender, to cash collateralize any undrawn amounts under outstanding Letters of Credit; and

(vi) Last, the balance, if any, to the Loan Parties or as required by Law.

10. THE ADMINISTRATIVE AGENT

10.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby irrevocably appoints PNC to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article 10 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

 

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10.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

10.3 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Potential Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.1 [Modifications, Amendments or Waivers] and 9.2 [Consequences of Event of Default]) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Potential Default or Event of Default unless and until notice describing such Potential Default or Event of Default is given to the Administrative Agent by the Borrower, a Lender or the Issuing Lender.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Potential Default or Event of

 

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Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article 7 [Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

10.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

10.5 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article 10 shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

10.6 Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with approval from the Borrower (so long as no Event of Default has occurred and is continuing), to appoint a successor, such approval not to be unreasonably withheld or delayed. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lender under any of the Loan

 

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Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section 10.6. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article 10 and Section 11.3 [Expenses; Indemnity; Damage Waiver] shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

If PNC resigns as Administrative Agent under this Section 10.6, PNC shall also resign as an Issuing Lender. Upon the appointment of a successor Administrative Agent hereunder, such successor shall (i) succeed to all of the rights, powers, privileges and duties of PNC as the retiring Issuing Lender and Administrative Agent and PNC shall be discharged from all of its respective duties and obligations as Issuing Lender and Administrative Agent under the Loan Documents, and (ii) issue letters of credit in substitution for the Letters of Credit issued by PNC, if any, outstanding at the time of such succession or make other arrangement satisfactory to PNC to effectively assume the obligations of PNC with respect to such Letters of Credit.

10.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

10.8 No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the financial institutions listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Lender hereunder.

10.9 Administrative Agent’s Fee. The Borrower shall pay to the Administrative Agent a nonrefundable fee (the “Administrative Agent’s Fee”) under the terms of a letter (the “Administrative Agent’s Letter”) between the Borrower and Administrative Agent, as amended from time to time.

 

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10.10 Authorization to Release Guarantors. The Lenders and Issuing Lenders authorize the Administrative Agent to release any Guarantor from its obligations under the Guaranty Agreement if the ownership interests in such Guarantor are sold or otherwise disposed of or transferred to persons other than Loan Parties or Subsidiaries of the Loan Parties in a transaction permitted under Section 8.2.7 [Dispositions of Assets or Subsidiaries] or Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions].

10.11 No Reliance on Administrative Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any of the Loan Parties, their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (i) any identity verification procedures, (ii) any recordkeeping, (iii) comparisons with government lists, (iv) customer notices or (v) other procedures required under the CIP Regulations or such other Laws.

11. MISCELLANEOUS

11.1 Modifications, Amendments or Waivers. With the written consent of the Required Lenders, the Administrative Agent, acting on behalf of all the Lenders, and the Borrower, on behalf of the Loan Parties, may from time to time enter into written agreements amending or changing any provision of this Agreement or any other Loan Document or the rights of the Lenders or the Loan Parties hereunder or thereunder, or may grant written waivers or consents hereunder or thereunder. Any such agreement, waiver or consent made with such written consent shall be effective to bind all the Lenders and the Loan Parties; provided, that no such agreement, waiver or consent may be made which will:

11.1.1 Increase of Commitment. Increase the amount of the Revolving Credit Commitment of any Lender hereunder without the consent of such Lender;

11.1.2 Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment. Whether or not any Loans are outstanding, extend the Expiration Date or the time for payment of principal or interest of any Loan (excluding the due date of any mandatory prepayment of a Loan), the Commitment Fee or any other fee payable to any Lender, or reduce the principal amount of or the rate of interest borne by any Loan or reduce the Commitment Fee or any other fee payable to any Lender, without the consent of each Lender directly affected thereby;

11.1.3 Release of Guarantor. Except for sales of assets permitted by Section 8.2.7 [Dispositions of Assets or Subsidiaries], release any Guarantor from its Obligations under the Guaranty Agreement without the consent of all Lenders (other than Defaulting Lenders); or

 

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11.1.4 Miscellaneous. Amend Section 5.2 [Pro Rata Treatment of Lenders], Section 10.3 [Exculpatory Provisions] or Section 5.3 [Sharing of Payments by Lenders] or this Section 11.1, alter any provision regarding the pro rata treatment of the Lenders or requiring all Lenders to authorize the taking of any action or reduce any percentage specified in the definition of Required Lenders, in each case without the consent of all of the Lenders;

provided that no agreement, waiver or consent which would modify the interests, rights or obligations of the Administrative Agent, the Issuing Lender, or the Swing Loan Lender may be made without the written consent of the Administrative Agent, the Issuing Lender or the Swing Loan Lender, as applicable, and provided, further that, if in connection with any proposed waiver, amendment or modification referred to in Sections 11.1.1 through 11.1.4 above, the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained (each a “Non-Consenting Lender”), then the Borrower shall have the right to replace any such Non-Consenting Lender with one or more replacement Lenders pursuant to Section 5.6.2 [Replacement of a Lender]. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender, and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.

11.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further exercise thereof or of any other right, power, remedy or privilege. The rights and remedies of the Administrative Agent and the Lenders under this Agreement and any other Loan Documents are cumulative and not exclusive of any rights or remedies which they would otherwise have.

11.3 Expenses; Indemnity; Damage Waiver.

11.3.1 Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), and shall pay all reasonable fees and time charges and disbursements for attorneys who may be employees of the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be

 

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consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Lender (including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the Issuing Lender), and shall pay all reasonable fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the Issuing Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such reasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit, and (iv) all reasonable out-of-pocket expenses of the Administrative Agent’s regular employees and agents engaged periodically to perform audits of the Loan Parties’ books, records and business properties.

11.3.2 Indemnification by the Loan Parties. The Loan Parties shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance or nonperformance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) breach of representations, warranties or covenants of the Loan Parties under the Loan Documents, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, including any such items or losses relating to or arising under Environmental Laws or pertaining to environmental matters, whether based on contract, tort or any other theory, whether brought by a third party or by any Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by a Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 11.3.2 [Indemnification by the Loan Parties] shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

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11.3.3 Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Sections 11.3.1 [Costs and Expenses] or 11.3.2 [Indemnification by the Loan Parties] to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Lender or such Related Party, as the case may be, such Lender’s Ratable Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the Issuing Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or Issuing Lender in connection with such capacity.

11.3.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in Section 11.3.2 [Indemnification by Loan Parties] shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

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

11.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be due on a day which is not a Business Day such payment shall be due on the next Business Day (except as provided in Section 4.2 [Interest Periods]) and such extension of time shall be included in computing interest and fees, except that the Loans shall be due on the Business Day preceding the Expiration Date if the Expiration Date is not a Business Day. Whenever any payment or action to be made or taken hereunder (other than payment of the Loans) shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day, and such extension of time shall not be included in computing interest or fees, if any, in connection with such payment or action.

11.5 Notices; Effectiveness; Electronic Communication.

11.5.1 Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 11.5.2 [Electronic Communications]), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier (i) if to a Lender, to it at its address set forth in its administrative questionnaire, or (ii) if to any other Person, to it at its address set forth on Schedule 1.1(B).

 

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Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in Section 11.5.2 [Electronic Communications], shall be effective as provided in such Section.

11.5.2 Electronic Communications. Notices and other communications to the Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or the Issuing Lender if such Lender or the Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

11.5.3 Change of Address, Etc. Any party hereto may change its address, e-mail address or telecopier number for notices and other communications hereunder by notice to the other parties hereto.

11.6 Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

11.7 Duration; Survival. All representations and warranties of the Loan Parties contained herein or made in connection herewith shall survive the execution and delivery of this Agreement, the completion of the transactions hereunder and Payment In Full. All covenants and agreements of the Borrower contained herein relating to the payment of principal, interest, premiums, additional compensation or expenses and indemnification, including those set forth in the Notes, Article 5 [Payments] and Section 11.3 [Expenses; Indemnity; Damage Waiver], shall survive Payment In Full. All other covenants and agreements of the Loan Parties shall continue in full force and effect from and after the date hereof and until Payment In Full.

 

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11.8 Successors and Assigns.

11.8.1 Successors and Assigns Generally. The provisions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.8.2 [Assignments by Lenders], (ii) by way of participation in accordance with the provisions of Section 11.8.4 [Participations], or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.8.5 [Certain Pledges; Successors and Assigns Generally] (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.8.4 [Participations] and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

11.8.2 Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in clause (i)(A) of this Section 11.8.2, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption Agreement with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption Agreement, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment in respect of the Revolving Credit Commitment of the assigning Lender, and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.

 

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(iii) Required Consents. No consent shall be required for any assignment except for the consent of the Administrative Agent (which shall not be unreasonably withheld or delayed) and:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; and

(B) the consent of the Issuing Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding).

(iv) Assignment and Assumption Agreement. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption Agreement, together with a processing and recordation fee of $3,500, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an administrative questionnaire provided by the Administrative Agent.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons; Non-Financial Institutions. No such assignment shall be made to a natural Person or any Person that is not a financial institution.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.8.3 [Register], from and after the effective date specified in each Assignment and Assumption Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.4 [Euro-Rate Unascertainable; Etc.], 5.7 [Increased Costs], and 11.3 [Expenses, Indemnity; Damage Waiver] with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.8.2 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.8.4 [Participations].

 

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11.8.3 Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain a record of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time. Such register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is in such register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Such register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

11.8.4 Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, the Borrower or any of the Borrower’s Affiliates or Subsidiaries or a Person that is not a financial institution) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders, and the Issuing Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree (other than as is already provided for herein) to any amendment, modification or waiver with respect to Sections 11.1.1 [Increase of Commitment], 11.1.2 [Extension of Payment, Etc.], or 11.1.3 [Release of Guarantor]) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 4.4 [Euro-Rate Unascertainable, Etc.], 5.7 [Increased Costs], 5.9 [Indemnity] and 5.8 [Taxes] (subject to the requirements and limitations therein, including the requirements under Section 5.8.7 [Status of Lenders] (it being understood that the documentation required under Section 5.8.7 [Status of Lenders] shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.8.2 [Assignments by Lenders]; provided that such Participant (A) agrees to be subject to the provisions of Section 5.6.2 [Replacement of a Lender] and Section 5.6.3 [Designation of a Different Lending Office] as if it were an assignee under Section 11.8.2 [Assignments by Lenders]; and (B) shall not be entitled to receive any greater payment under Sections 5.7 [Increased Costs] or 5.8 [Taxes], with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 5.6.2 [Replacement of a Lender] and Section 5.6.3 [Designation of Different Lending Office] with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.2.3 [Set-off] as though it were a Lender; provided that such Participant agrees to be subject to Section 5.3 [Sharing of Payments by Lenders] as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts

 

89


(and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

11.8.5 Certain Pledges; Successors and Assigns Generally. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

11.9 Confidentiality.

11.9.1 General. Each of the Administrative Agent, the Lenders and the Issuing Lender agrees to maintain the confidentiality of the Information, except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower or (viii) to the extent such Information (Y) becomes publicly available other than as a result of a breach of this Section or (Z) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower or the other Loan Parties. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

90


11.9.2 Sharing Information With Affiliates of the Lenders. Each Loan Party acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each of the Loan Parties hereby authorizes each Lender to share any information delivered to such Lender by such Loan Party and its Subsidiaries pursuant to this Agreement to any such Subsidiary or Affiliate subject to the provisions of Section 11.9.1 [General].

11.10 Counterparts; Integration; Effectiveness.

11.10.1 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof including any prior confidentiality agreements and commitments. Except as provided in Article 7 [Conditions Of Lending And Issuance Of Letters Of Credit], this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.

11.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.

11.11.1 Governing Law. This Agreement shall be deemed to be a contract under the Laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles. Each standby Letter of Credit issued under this Agreement shall be subject either to the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ICC”) at the time of issuance (“UCP”) or the rules of the International Standby Practices (ICC Publication Number 590) (“ISP98”), as determined by the Issuing Lender, and each trade Letter of Credit shall be subject to UCP, and in each case to the extent not inconsistent therewith, the Laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

11.11.2 SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND

 

91


UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH PENNSYLVANIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

11.11.3 WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 11.11. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND AGREES NOT TO ASSERT ANY SUCH DEFENSE.

11.11.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.5 [NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

11.11.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

92


11.12 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Loan Parties that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of Loan Parties and other information that will allow such Lender or Administrative Agent, as applicable, to identify the Loan Parties in accordance with the USA Patriot Act.

11.13 Joinder of Guarantors. Any Subsidiary of the Borrower which is required to join this Agreement as a Guarantor pursuant to Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures] or Section 8.2.15 [Inactive Subsidiaries] shall execute and deliver to the Administrative Agent (i) a Guarantor Joinder in substantially the form attached hereto as Exhibit 1.1(G)(1) pursuant to which it shall join as a Guarantor to each of the documents to which the Guarantors are parties; and (ii) documents in the forms described in Section 7.1 [First Loans] modified as appropriate to relate to such Subsidiary. If such joinder is pursuant to Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures], the Loan Parties shall deliver such Guarantor Joinder and related documents to the Administrative Agent within five (5) Business Days after the date of the filing of such Subsidiary’s articles of incorporation if the Subsidiary is a corporation, the date of the filing of its certificate of limited partnership if it is a limited partnership or the date of its organization if it is an entity other than a limited partnership or corporation.

11.14 Amendment and Restatement. This Agreement amends and restates in its entirety the Existing Credit Agreement; and the Loan Parties confirm that the Existing Credit Agreement, and the other Loan Documents thereunder (as all such capitalized terms are defined in the Existing Credit Agreement) have at all times, since the date of the execution and delivery of such documents, remained in full force and effect. The Loans hereunder are a continuation of the Loans under (and as such terms are defined in) the Existing Credit Agreement. The Loan Parties, the Administrative Agent and the Lenders acknowledge and agree that the amendment and restatement of the Existing Credit Agreement by this Agreement is not intended to constitute, nor does it constitute, a novation, interruption, suspension of continuity, satisfaction, discharge or termination of the obligations, loans, liabilities, or indebtedness under the Existing Credit Agreement and the other Loan Documents (as such term is defined therein) thereunder and this Agreement and the other Loan Documents are entitled to all rights and benefits originally pertaining to the Existing Credit Agreement and the other Loan Documents (as such term is defined therein).

[INTENTIONALLY LEFT BLANK]

 

93


[SIGNATURE PAGE 1 OF 2—FIRST AMENDED AND RESTATED CREDIT AGREEMENT]

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written with the intention that this Agreement shall constitute a sealed instrument.

 

ATTEST:     BORROWER:
    II-VI INCORPORATED, a Pennsylvania corporation

/s/ Eric C. Springer

    By:   /s/ Craig A. Creaturo                                         (SEAL)
    Name:   Craig A. Creaturo
    Title:   Chief Financial Officer and Treasurer
    GUARANTORS:
    II-VI DELAWARE, INC., a Delaware corporation; VLOC INCORPORATED, a Pennsylvania corporation; EXOTIC ELECTRO-OPTICS, INC., a California corporation; II-VI WIDE BAND GAP, INC., a Pennsylvania corporation, MARLOW INDUSTRIES, INC., a Texas corporation; MARLOW INDUSTRIES ASIA, INC., a Delaware corporation; MAX LEVY AUTOGRAPH, INC., a Pennsylvania corporation; HIGHYAG LASERTECHNOLOGIE, INC., a Pennsylvania corporation; PHOTOP TECHNOLOGIES, INC., a California corporation; AEGIS LIGHTWAVE, INC., a Delaware corporation; AEGIS LIGHTWAVE SECURITY CORPORATION, a Massachusetts corporation; M CUBED TECHNOLOGIES, INC., a Delaware corporation

/s/ Eric C. Springer

    By:   /s/ Craig A. Creaturo                                         (SEAL)
    Name:   Craig A. Creaturo
    Title:   Treasurer of each of the entities listed above, other than PHOTOP TECHNOLOGIES, INC. for which he is the Secretary


[SIGNATURE PAGE 2 OF 2—FIRST AMENDED AND RESTATED CREDIT AGREEMENT]

 

   

PNC BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent

    By:  

/s/ Justin Krauss

    Name:   Justin Krauss
    Title:   Vice President


SCHEDULE 1.1(A)

PRICING GRID

VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO

 

Level

  

Leverage
Ratio

   Commitment
Fee
    Letter of
Credit Fee
    Revolving Credit
Base Rate Spread
    Revolving Credit
Euro-Rate Spread
 
I   

Less than or equal to 0.50 to 1.00

     0.15     0.75     0.00     0.75
II   

Greater than 0.50 to 1.00 but less than or equal to 1.00 to 1.00

     0.20     1.00     0.00     1.00
III   

Greater than 1.00 to 1.00 but less than or equal to 1.50 to 1.00

     0.20     1.25     0.25     1.25
IV   

Greater than 1.50 to 1.00 but less than or equal to 2.00 to 1.00

     0.25     1.50     0.50     1.50
V   

Greater than 2.00 to 1.00

     0.25     1.75     0.75     1.75

For purposes of determining the Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate:

(a) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be set on the Closing Date to the fees and spreads associated with “Level III” pricing and shall remain at such level until the delivery of the Compliance Certificate for the fiscal quarter ending June 30, 2013.

(b) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be recomputed as of the end of each fiscal quarter ending after the Closing Date based on the Leverage Ratio as of such quarter end. Any increase or decrease in the Applicable Margin, the Applicable Commitment Fee Rate or the Applicable Letter of Credit Fee Rate computed as of a quarter end shall be effective on the date on which the Compliance Certificate evidencing such computation is due to be delivered under Section 8.3.3 [Certificate of Borrower]. If a Compliance Certificate is not delivered when due in accordance with such Section 8.3.3, then the rates in Level V shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered.

 

Schedule 1.1(A)

1


(c) If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the Issuing Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the Issuing Lender, as the case may be, under Section 2.8 [Letter of Credit Subfacility] or Section 4.3 [Interest After Default] or Article 9 [Default]. The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

 

Schedule 1.1(A)

2


SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 1 of 2

Part 1—Commitments of Lenders and Addresses for Notices to Lenders

 

Lender

   Amount of Commitment for
Revolving Credit Loans
     Ratable Share  

Name: PNC Bank, National Association

Address: Three PNC Plaza

225 Fifth Avenue

Pittsburgh, PA 15222

Mailstop: P3-P3PP-04-5

Attention: Justin Krauss

Telephone: (412) 762-7262

   $ 140,000,000         100.000000000

Total

   $ 140,000,000         100.000000000 % 

 

Schedule 1.1(B)


SCHEDULE 1.1(B)

COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES

Page 2 of 2

Part 2—Addresses for Notices to Borrower and Guarantors:

ADMINISTRATIVE AGENT

Name: PNC Bank, National Association

Address: Three PNC Plaza

225 Fifth Avenue

Pittsburgh, PA 15222

Mailstop: P3-P3PP-04-5

Attention: Justin Krauss

Telephone: (412) 762-7262

With a Copy To:

Agency Services, PNC Bank, National Association

Mail Stop: P7-PFSC-04-I

Address: 500 First Avenue

Pittsburgh, PA 15219

Attention: Agency Services

Telephone: (412) 762-6442

Telecopy: (412) 762-8672

BORROWER:

Name: II-VI INCORPORATED

Address: 375 Saxonburg Boulevard

Saxonburg, PA 16056

Attention: Craig A. Creaturo, Chief Financial Officer and Treasurer

Telephone: (724) 352-5211

Telecopy: (724) 360-5947

IF TO ANY GUARANTOR:

Name: c/o II-VI INCORPORATED

Address: 375 Saxonburg Boulevard

Saxonburg, PA 16056

Attention: Craig A. Creaturo, Chief Financial Officer and Treasurer

Telephone: (724) 352-5211

Telecopy: (724) 360-5947

 

Schedule 1.1(B)


SCHEDULE 1.1(C)

ADDITIONAL COSTS

 

1. The Additional Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

 

2. On the first day of each Interest Period (or as soon as possible thereafter) each Lender shall calculate, as a percentage rate per annum, a rate (the “Additional Costs Rate”) for that Lender, in accordance with the paragraphs set out below.

 

3. The Additional Costs Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Borrower. This percentage will be certified by that Lender in its notice to the Borrower to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.

 

4. The Additional Costs Rate for any Lender lending from a lending office in the United Kingdom will be calculated by that Lender as follows:

 

  (a) in relation to a Loan in Pounds Sterling:

 

AB + C(B – D) + E x 0.01   percent per annum
          100 – (A + C)  

 

  (b) in relation to a Loan in any currency other than Pounds Sterling:

 

x 0.01   percent per annum.
    300  

Where:

 

  A is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements.

 

  B is the percentage rate of interest (excluding the Applicable Margin and the Additional Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in Section 4.3 [Interest After Default]) payable for the relevant Interest Period on the Loan.

 

Schedule 1.1(C)

1


  C is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.

 

  D is the percentage rate per annum payable by the Bank of England to that Lender on interest bearing Special Deposits.

 

  E is designed to compensate Lenders for amounts payable under the Fees Rules and is determined by each Lender as being the most recent rate of charge payable by that Lender as referenced in paragraph 7 below and expressed in pounds per £1,000,000.

 

5. For the purposes of this Schedule:

 

  (a) Eligible Liabilities” and “Special Deposits” have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

 

  (b) Fees Rules” means the rules on periodic fees contained in the Financial Services Authority Fees Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

 

  (c) Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);

 

  (d) Participating Member State” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to economic and monetary union.

 

  (e) Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules; and

 

  (f) Unpaid Sum” means any sum due and payable but unpaid by the Borrower under the Loan Documents.

 

6. In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 percent will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.

 

7. The rate of charge for any Lender is the rate of charge payable by that Lender to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Lender as being the average of the Fee Tariffs applicable to that Lender for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Lender.


8. The percentages of each Lender for the purpose of A and C above and the rates of charge of each Lender for the purpose of E above shall be determined by each Lender in accordance with this Schedule and on the assumption that, unless a Lender notifies the Borrower to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.

 

9. The Borrower shall pay to each Lender the Additional Cost of that Lender on the basis of the Additional Costs Rate for that Lender as determined by that Lender in accordance with this Schedule.

 

10. Any determination by a Lender pursuant to this Schedule in relation to a formula, the Additional Cost, an Additional Costs Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on the Borrower.

 

11. The Administrative Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to the Borrower any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on the Borrower.


SCHEDULE 1.1(P)

PERMITTED LIENS

 

1.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Wells Fargo Financial Leasing, Inc.    2007071901568    7/19/07   

RICOH Copiers:

 

4500-L9076421529; 3500-L8976121399

  

 

2.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Wells Fargo Financial Leasing, Inc.    2008042502874    4/25/08   

SHARP Copier: MX-5500N-75003976

 

RICOH AFICIO Copiers:

 

MP4500C-L9077221140; MP4000-M5585100844

  


3.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Citibank, N.A.    2009021204742    2/12/09    All right, title and interest of II-VI Incorporated (“Supplier”) in and to all accounts and all other forms of obligations (“Accounts Receivable”) owing to Supplier by Rockwell Collins, Inc. (“Account Debtor”) whether now existing or hereafter created, arising out of Supplier’s sale and delivery of goods and services to Account Debtor, to the extent such Accounts Receivable are purchased by Secured Party under that certain Supplier Agreement between Secured Party and Supplier, as such agreement may be amended, supplemented or modified from time to time, and all collections thereon and proceeds thereof.   

 

4.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

COMDOC    2010080902809    8/9/10   

Nine (9) XEROX machines:

 

WC77659 S/N RFX346687; WC7755P S/N RFX000605; WC7428P S/N PBB014310; WC7435P S/N PBB014555; WC7435P S/N PBB014907; WC7435P S/N PBB013433; WC7435P S/N PBB013377; WC7435P S/N PBB013625; WC7435P S/N PBB013566

  


5.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

COMDOC    2011101304277    10/13/11    Five copiers/printers, accessories and proceeds (cash and non-cash), including the proceeds of all insurance policies thereof.   

 

6.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Timepayment Corporation    2011111804370    11/18/11    Three pure water systems (S/N 0638200980; 0633200170; 0819213255)   

 

7.    Debtor Name:    II-VI Incorporated
   Jurisdiction:    PA – Secretary of State
   Search through date:    10/29/12
   Search Type:    UCC Debtor


Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

COMDOC    2012073109890    7/31/12    Two copiers/printers, accessories and proceeds (cash and non-cash), including the proceeds of all insurance policies thereof.   

 

8.    Debtor Name:    Exotic Electro-Optics, Inc.
   Jurisdiction:    CA – Secretary of State
   Search through date:    10/26/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Dell Financial Services, L.L.C.    107220097614    1/18/10    All computer equipment, peripherals, and other equipment (“Equipment”) wherever located, heretofore or hereafter financed by Exotic Electro-Optics, Inc. by Creditor pursuant to that certain revolving credit Account #6879450205000261256, dated December 10, 2009 (the “Account”) and all of Lessee’s rights, title and interest in and to use any software and services (collectively “Software”) financed under and described in the Account, along with any additions, financed amounts, modifications or supplements to the Account, and all substitutions, additions, accessions and replacements to the Equipment and Software, now or hereafter installed in, affixed to, or used in, conjunction with the Equipment and Software and the proceeds thereof together will all payments, insurance proceeds, any refunds or credits obtained by Debtor from a manufacturer, licensor or service provider, or other proceeds and payments due and to become due and arising from or relating to said Equipment, Software or the Account.   


9.    Debtor Name:    Marlow Industries, Inc.
   Jurisdiction:    TX – Secretary of State
   Search through date:    11/4/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Beckman Coulter, Inc.    07-0014495888    4/30/07   

Spacer Plates:

 

ST3738-01; ST3822-01

  

 

10.    Debtor Name:    Marlow Industries, Inc.
   Jurisdiction:    TX – Secretary of State
   Search through date:    11/4/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

EverBank Commercial Finance, Inc.    12-0016573247    5/23/12    Two Xerox 560 Color Copiers; One Xerox WC7545PT Copier; One Xerox WC5745APT Copier   

 

11.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor


Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Intech Funding Corp.    2007 3065637    8/13/07    One (1) Haas VF-3 Vertical Machining Center and one (1) Used Haas GR-510 Gantry Router located at 1300 Marrows Road, Newark, DE 19711    Amended on 8/14/07 (Filing No. 2007 3088217)

 

12.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Intech Funding Corp.    2007 3084208    8/14/07    One (1) used Sodick AQ750L Wire EDM Machine located at 1 Tralee Industrial Road, Newark, DE 19711    Amended on 8/15/07 (Filing No. 2007 3113346)

 

13.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Intech Funding Corp.    2007 3812285    10/10/07    One (1) used Charmilles Roboform 53 EDM Machine located at 921 Main Street, Monroe, CT 06468   


14.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Machinery Finance Resources, LLC    2008 0510782    2/7/08    One (1) new Haas VF-4 CNC Vertical Machining Center   

 

15.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Machinery Finance Resources, LLC    2008 0561983    2/12/08    One (1) New Haas VF-9/40 CNC Vertical Machining Center    Amended on 4/21/08 (Filing No. 2008 1381639)

 

16.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor


Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Intech Funding Corp.    2008 1069291    3/27/08    One (1) Haas GR-712 Gantry Router located at 921 Main Street, Monroe, CT 06468    Amended on 7/21/08 (Filing No. 2008 2493169)

 

17.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

Dell Financial Services L.L.C.    2008 1918034    6/5/08    All computer equipment and peripherals, as well as all rights, title and interest in and to use any software and services financed under a certain revolving credit account #6879450204575605   

 

18.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

U.S. Bancorp Equipment Finance, Inc.    2010 1138852    4/2/10    One (1) Belmont SY-4050TG CNC High Speed EDM Drilling Machine   


19.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

U.S. Bancorp Equipment Finance, Inc.    2010 2067803    6/14/10    One (1) Sodick Linear AQ560 LX (LN1W) Wire EDM   

 

20.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

U.S. Bancorp Equipment Finance, Inc.    2010 2433542    7/13/10    One (1) Carl Zeiss Contura G2 RDS 1000/1200/600 CNC   

 

21.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor


Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

MC Machinery Systems, Inc.    2011 0193568    1/19/11    One (1) new Mitsubishi High Speed EDM System model HC878 (Roku-Roku), together with all proceeds thereof   

 

22.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    DE – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

MC Machinery Systems, Inc.    2011 0197973    1/19/11    One (1) new Mitsubishi Roku Roku EDM System Model HC658-31I-ATC30 (0703)   

 

23.    Debtor Name:    M Cubed Technologies, Inc.
   Jurisdiction:    CT – Secretary of State
   Search through date:    10/25/12
   Search Type:    UCC Debtor

 

Secured Party

  

File Number

  

File

Date

  

Collateral

  

Amendments/

Part. Releases

UST Leasing Corporation    0001848263    5/5/98    One (1) Vacuum Furnace, ID #4-1515, (1) Wheelabrator WMT-48 Table Machine with Integral Dust Collector and one (1) Elatec Vacuum Furnance IAW    Continued on 11/12/02 (Filing No. 0002170292); Continued on 2/4/08 (Filing No. 0002616599)


SCHEDULE 2.8.1

OUTSTANDING LETTERS OF CREDIT

 

Instrument Number

 

Beneficiary

  

Issue Date

  

Expiry Date

  

Currency Amount

  

USD Amount

00262534-00   Federal Insurance Company    2003-12-05    2013-10-14    $680,000.00 USD    $680,000.00
00901696-00   Barclays Bank PLC    1998-10-09    2013-10-07    $400,000.00 USD    $400,000.00


SCHEDULE 6.1.3

SUBSIDIARIES

Domestic Subsidiaries of II-VI Incorporated

 

Aegis Lightwave, Inc.

Jurisdiction:

   Delaware

Authorized Capital Stock:

   1,000 shares of common stock

Issued and Outstanding Shares:            

   100 shares of common stock

Owner:

   II-VI Incorporated

Aegis Lightwave Security Corporation

Jurisdiction:

   Massachusetts

Authorized Capital Stock:

   1,000 shares of common stock

Issued and Outstanding Shares:

   1,000 shares of common stock

Owner:

   Aegis Lightwave, Inc.

CardinalPoint Optics, Inc. [Inactive Subsidiary under Credit Agreement Section 8.2.15]

Jurisdiction:

   New Jersey

Authorized Capital Stock:

   20,000 shares of common stock

Issued and Outstanding Shares:

   10,000 shares of common stock

Owner:

   Aegis Lightwave, Inc.

Exotic Electro-Optics, Inc.

Jurisdiction:

   California


Authorized Capital Stock:

   3,000,000 shares of common stock

Issued and Outstanding Shares:

   1,000 shares of common stock

Owner:

   II-VI Incorporated

HIGHYAG Lasertechnologie, Inc.

Jurisdiction:

   Pennsylvania

Authorized Capital Stock:

   1,000,000 shares of common stock

Issued and Outstanding Shares:

   100 shares of common stock

Owner:

   II-VI Incorporated

II-VI Delaware, Inc.

Jurisdiction:

   Delaware

Authorized Capital Stock:

   2,500 shares of common stock

Issued and Outstanding Shares:

   2,500 shares of common stock

Owner:

   II-VI Incorporated

II-VI Wide Band Gap, Inc.

Jurisdiction:

   Pennsylvania

Authorized Capital Stock:

   1,000,000 shares of common stock

Issued and Outstanding Shares:            

   100 shares of common stock

Owner:

   II-VI Incorporated

Marlow Industries, Inc.

Jurisdiction:

   Texas

Authorized Capital Stock:

   1,000,000 shares of common stock

 

2


Issued and Outstanding Shares:

   1,000 shares of common stock

Owner:

   II-VI Incorporated

Marlow Industries Asia, Inc.

Jurisdiction:

   Delaware

Authorized Capital Stock:

   10,000 shares of common stock

Issued and Outstanding Shares:            

   1,000 shares of common stock

Owner:

   Marlow Industries, Inc.

Max Levy Autograph, Inc.

Jurisdiction:

   Pennsylvania

Authorized Capital Stock:

   200,000 shares of common stock

Issued and Outstanding Shares:

   100 shares of common stock

Owner:

   II-VI Incorporated

M Cubed Technologies, Inc.

Jurisdiction:

   Delaware

Authorized Capital Stock:

   1,000 shares of common stock

Issued and Outstanding Shares:

   100 shares of common stock

Owner:

   II-VI Incorporated

Photop Technologies, Inc.

Jurisdiction:

   California

Authorized Capital Stock:

   1,000,000 shares of common stock

Issued and Outstanding Shares:

   1,000 shares of common stock

Owner:

   II-VI Incorporated

 

3


VLOC Incorporated

Jurisdiction:

   Pennsylvania

Authorized Capital Stock:

   1,000,000 shares of common stock

Issued and Outstanding Shares:            

   100 shares of common stock

Owner:

   II-VI Incorporated

There are no options, warrants or other rights outstanding to purchase any domestic Subsidiary Shares, Partnership Interests or LLC Interests.

Foreign Subsidiaries of II-VI Incorporated

 

Allied Rising Investment Limited

Jurisdiction:                                             

   Hong Kong

Owner:

   II-VI Incorporated

AOFR Pty Limited

Jurisdiction:

   Australian Capital Territory, Australia

Owner:

   Aegis Lightwave, Inc.

II-VI U.K. Limited

Jurisdiction:

   United Kingdom

Owner:

   II-VI Incorporated

 

4


II-VI Japan Incorporated

Jurisdiction:

   Japan

Owner:

   II-VI Incorporated

II-VI Holdings B.V.

Jurisdiction:

   The Netherlands

Owner:

   II-VI Incorporated

II-VI Technologies (Beijing) Co., Ltd.

Jurisdiction:

   China

Owner:

   II-VI Incorporated

II-VI Deutschland Holdings GmbH

Jurisdiction:                                     

   Germany

Owner:

   II-VI Holdings B.V.

II-VI Suisse S.a.r.l.

Jurisdiction:

   Switzerland

Owner:

   II-VI Holdings B.V.

II-VI Singapore Pte., Ltd.

Jurisdiction:

   Singapore

Owner:

   II-VI Holdings B.V.

 

5


Pacific Rare Specialty Metals & Chemicals, Inc.

Jurisdiction:

   Philippines

Owner:

   II-VI Holdings B.V. (98.4204%)
  

Heirs of Rodney Starr (1.5796%)

Photop Technologies, Inc.

Jurisdiction:

   Cayman Islands

Owner:

   II-VI Holdings B.V.

Marlow Industries Europe GmbH

Jurisdiction:

   Germany

Owner:

   II-VI Holdings B.V.

II-VI Italia s.r.l.

Jurisdiction:

   Italy

Owner:

   II-VI Holdings B.V.

II-VI Deutschland GmbH

Jurisdiction:                             

   Germany

Owner:

   II-VI Deutschland Holdings GmbH

HIGHYAG Lasertechnologies GmbH

Jurisdiction:

   Germany

Owner:

   II-VI Holdings B.V. (74.93%)
   Dr. Bjorn Wedel (25.07%)

 

6


II-VI Optics (Suzhou) Co., Ltd.

Jurisdiction:

   China

Owner:

   II-VI Singapore Pte., Ltd.

II-VI Trading (Suzhou) Co. Ltd.

Jurisdiction:                                 

   China

Owner:

   II-VI Singapore Pte., Ltd.

II-VI International Pte., Ltd.

Jurisdiction:

   Singapore

Owner:

   II-VI Singapore Pte., Ltd.

II-VI Vietnam Co. Ltd.

Jurisdiction:

   Vietnam

Owner:

   II-VI Singapore Pte., Ltd.

Photop Technologies Co., Limited

Jurisdiction:

   Hong Kong

Owner:

   Photop Technologies, Inc. (Cayman Islands)

Optimal Coatech (Guangzhou) Co., Ltd.

Jurisdiction:

   China

Owner:

   Photop Technologies, Inc. (Cayman Islands)

 

7


Photop Koncent, Inc.

Jurisdiction:

   China

Owner:

   Photop Technologies, Inc. (Cayman Islands)

Fuzhou Photop Technologies, Inc.

Jurisdiction:

   China

Owner:

   Photop Technologies, Inc. (Cayman Islands)

Photop Optics, Inc.

Jurisdiction:

   China

Owner:

   Photop Technologies, Inc. (Cayman Islands)

Photop Suwtech, Inc.

Jurisdiction:                                         

   China

Owner:

   Photop Technologies, Inc. (Cayman Islands)

II-VI Benelux, N.V.

Jurisdiction:

   Belgium

Owner:

   Exotic Electro-Optics, Inc. (99.99%)
  

James Martinelli (0.01%)

Marlow Industries Limited

Jurisdiction:

   United Kingdom

Owner:

   Marlow Industries, Inc.

 

8


Richly World Investment Limited

Jurisdiction:

   Hong Kong

Owner:

   II-VI Delaware, Inc.

Guangdong Fuxin Electric Technology Company

Jurisdiction:                             

   China

Owner:

   Allied Rising Investment Limited (10.00%)
   Richly World Investment Limited (10.20%)
   23 citizens of the People’s Republic of China and Tun Sing International Development Limited (79.80%)

Beijing Lasertech Co., Ltd.

Jurisdiction:

   China

Owner:

   II-VI Technologies (Beijing) Co., Ltd.

 

9


SCHEDULE 6.1.16

INSURANCE POLICIES

See attached insurance certificates.

 

10


SCHEDULE 6.1.20

EMPLOYEE BENEFIT PLAN DISCLOSURES

Newly acquired subsidiary M Cubed Technologies, Inc.’s 401(k) plan insurance bond is currently not in compliance with Section 412 of ERISA. Section 412 of ERISA requires that an insurance bond equal to at least ten percent (10%) of a 401(k) plan’s assets (up to a maximum of $500,000) be maintained. M Cubed Technologies, Inc.’s current 401(k) plan has assets of approximately $9,000,000. Therefore, under Section 412 of ERISA, M Cubed Technologies, Inc. is required to hold a $500,000 insurance bond on its 401(k) plan. M Cubed Technologies, Inc. currently maintains a $100,000 insurance bond on its 401(k) plan. M Cubed Technologies, Inc. is in the process of obtaining the required insurance bond and such bond shall be in place no later than December 31, 2012.

 

11


SCHEDULE 6.1.21

ENVIRONMENTAL DISCLOSURES

Max Levy Autograph, Inc.

 

1. Notice of Significant Non-Compliance of Wastewater Discharge Permit sent by the City of Philadelphia Water Department dated April 24, 2009 due to Nickel in excess of permitted limits and failure to monitor as required and was assessed and paid a fine in the amount of $4,200.

 

2. Notice of Significant Non-Compliance of Wastewater Discharge Permit sent by the City of Philadelphia Water Department dated September 5, 2009 due to Lead, Nickel and Zinc in excess of permitted limits and was assessed and paid a fine in the amount of $3,900.

 

3. Installation and Operating Air Management Services Permits are required by the City of Philadelphia for each natural gas boiler and process vent located at 2710 Commerce Way, Philadelphia, Pennsylvania 19154. Max Levy Autograph, Inc. is working with the City of Philadelphia to obtain all required Air Management Services Permits.

M Cubed Technologies, Inc.

 

1. Newly acquired Subsidiary M Cubed Technologies, Inc. has received the following notices from the Delaware Department of Natural Resources and Environmental Control:

 

  (a) Notice of Violation No. 12-HW-03, dated February 7, 2012, notifying M Cubed Technologies, Inc. of violation of Delaware’s Regulations Governing Hazardous Waste at One Tralee Industrial Park. Two used oil drums were not labeled.

 

  (b)

Notice of Violation No. 11-HW-15, dated April 15, 2011, notifying M Cubed Technologies, Inc. of violation of Delaware’s Regulations Governing Hazardous Waste at One Tralee Industrial Park. Spent aerosol containers were unidentified and open, boxes of mercury used lamps were open/unmarked, oil barrels

 

12


  unmarked and stored in improper locations. Per that certain Return to Compliance Notice dated May 24, 2011, each of these violations have been corrected to the satisfaction of the Delaware Department of Natural Resources and Environmental Control satisfaction.

 

  (c) Notice of Violations, dated March 27, 2009, notifying M Cubed Technologies, Inc. of failure to comply with existing permit conditions, including: (i) failure to notify the Department of Natural Resources and Environmental Control of changes to equipment specifications, (ii) exceeding capacity limit of stack emissions and failure to correct within 48 hours, (iii) failure to display permit, and (iv) use of equipment not listed on permit.

 

2. As more particularly described in that certain ARCADIS environmental compliance assessment dated September 13, 2012, the following activities have occurred at M Cubed Technologies, Inc.’s facility located at 921 Main Street, Monroe, CT:

 

  (a) Monthly hazardous waste accumulations exceeded the limits placed on a registered Small Quantity Generator by Title 40 of the Code of Federal Regulations in 2010 and 2011.

 

  (b) A No Exposure Certification, verifying that all industrial materials and activities are protected by a storm resistant shelter to prevent exposure to rain, snow, snowmelt, run-on and run-off, was filed with the Connecticut Department of Environmental Protection in May, 2011. Some exposures of pollutants to storm water were reported in contradiction of that No Exposure Certification.

 

3. The following constitute all known instances of Regulated Substances present on, in, under or emanating from any of M Cubed Technologies, Inc.’s leased real property which have or could result in Contamination:

 

  (a) As more particularly set forth in item (2)(b) above, certain pollutants were exposed to storm water at M Cubed Technologies, Inc.’s facility located at 921 Main Street, Monroe, CT, in contradiction to the facility’s May, 2011, No Exposure Certification from the Connecticut Department of Environmental Protection.

 

13


  (b) Contaminated groundwater under M Cubed Technologies, Inc.’s facility located at 31 Pecks Lane, Newtown, CT, during occupancy by prior tenant. Contamination confirmed insignificant and contained by Contamination Mediation Report dated February 5, 1999.

 

4. As more particularly described in that certain ARCADIS environmental compliance assessment dated September 13, 2012, the following Required Environmental Notices have not been maintained at M Cubed Technologies, Inc.’s facility located at 921 Main Street, Monroe, CT:

 

  (a) Toxic Release Inventory Determinations required by the Federal Emergency Planning and Community Right-to-Know Act were not submitted in 2010, 2011 or 2012.

 

  (b) Tier II reports of hazardous chemical inventories were not submitted to the Connecticut State Emergency Response Commission for 2010, 2011 or 2012, as required by the Federal Emergency Planning and Community Right-to-Know Act.

 

  (c) Hazardous material registrations as required by Title 49 of the Code of Federal Regulations were not submitted to the Federal Department of Transportation for any years from 1999-2012.

 

  (d) Spill Prevention, Control and Countermeasure plan required by the Federal Clean Water Act for oil inventory greater than 1,320 gallons does not exist.

 

14


SCHEDULE 8.2.1

PERMITTED INDEBTEDNESS

Outstanding amounts as of November 14, 2012:

Line of Credit in favor of II-VI Singapore PTE, Ltd from the Development Bank of Singapore (DSB) in the maximum amount of SING $700,000. The Line of Credit has not presently been drawn upon and there are no amounts due or outstanding at this time.

 

15


SCHEDULE 8.2.4

EXISTING LOANS AND INVESTMENTS

Outstanding amounts as of November 14, 2012:

1. 100 shares of Zygo Corporation common stock (Nasdaq: ZIGO) – US $1,570 market value (Cost basis – US $1,080)

 

16


SCHEDULE 8.2.9

EXISTING INVESTMENTS IN

PERMITTED JOINT VENTURES

Allied Rising Investment Limited

Allied Rising Investment Limited owns a 10.0% interest in Guangdong Fuxin Electronic Technology Company under the terms of the “Amended and Restated Joint Venture Contract of Guangdong Fuxin Electronic Technology Company” among 23 citizens of the People’s Republic of China, Tun Sing International Development Limited, Allied Rising Investment Limited and Richly World Investment Limited dated June 3, 2008. The investment balance is $4,878,076.00 as of September 30, 2012.

Richly World Investment Limited

Richly World Investment Limited owns a 10.2% interest in Guangdong Fuxin Electronic Technology Company under the terms of the “Amended and Restated Joint Venture Contract of Guangdong Fuxin Electronic Technology Company” among 23 citizens of the People’s Republic of China, Tun Sing International Development Limited, Allied Rising Investment Limited and Richly World Investment Limited dated June 3, 2008. The investment balance is $6,104,636.00 as of September 30, 2012.

 

17


EXHIBIT 1.1(A)

FORM OF

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [INSERT NAME OF ASSIGNOR] (the “Assignor”) and [INSERT NAME OF ASSIGNEE] (the “Assignee”). Capitalized terms used but not defined herein shall have. the meanings given to. them in the First Amended and Restated Credit Agreement identified below (as the same may be further amended, restated, modified, or supplemented, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as ‘contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including, without limitation, any Letters of Credit and guarantees included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

        Assignor:   
        Assignee:    [and is an Affiliate of [IDENTIFY LENDER]]
        Borrower:    II-VI INCORPORATED, a Pennsylvania corporation
        Administrative Agent:    PNC BANK, NATIONAL ASSOCIATION, as administrative agent under the Credit Agreement

 

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        Credit Agreement:    First Amended and Restated Credit Agreement, dated as of November 16, 2012, among II-VI Incorporated, and Guarantors now or hereafter party thereto, the Lenders party thereto and PNC Bank, National Association, as Administrative Agent.
        Assigned Interest:   

 

Facility Assigned

   Aggregate Amount of
Commitment / Loans
for all Lenders
     Amount of
Commitment / Loans
Assigned
     Percentage Assigned
of Commitment /
Loans1
     CUSIP
Number

Revolving Credit. Commitment

   $         $           %      

 

        Trade Date:         2   

[SIGNATURE PAGE FOLLOWS]

 

1 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

2 

To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

 

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Effective Date:                     , 20     . [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]3

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR
 
By:    
Name:    
Title:    
ASSIGNEE

 

By:    
Name:    
Title:    

Consented to and Accepted:

 

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:    
Name:    
Title:    

Consented to:4

 

II-VI INCORPORATED,

a Pennsylvania corporation

By:    
Name:    
Title:    

 

3 

Assignor shall pay a fee of $3,500 to the Administrative Agent in connection with the Assignment and Assumption.

4 

If applicable.

 

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ANNEX 1

II-VI INCORPORATED

CREDIT FACILITY

STANDARD TERMS AND CONDITIONS

FOR ASSIGNMENT AND ASSUMPTION AGREEMENT

12. REPRESENTATIONS AND WARRANTIES.

12.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (vi) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of .any of their respective obligations under any Loan Document.

12.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an eligible assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement and the other Loan Documents as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 8.3 [Reporting Requirements] thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption Agreement and to purchase the Assigned Interest and (vii) if Assignee is not incorporated or organized under the Laws of the United States of America or a state thereof, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent,


the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

13. PAYMENTS. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to the Assignee.

14. GENERAL PROVISIONS. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

 

2


EXHIBIT 1.1(G)(1)

FORM OF

JOINDER AND ASSUMPTION AGREEMENT

THIS JOINDER AND ASSUMPTION AGREEMENT (“Joinder”) is made this                     , 20    , by                     , a                     [limited liability company/limited partnership/general partnership/corporation] (the “New Guarantor”).

Background

Reference is made to (i) the First Amended and Restated Credit Agreement, dated as of November 16, 2012 (as the same may be further amended, restated, modified or supplemented from time to time the “Agreement”) by and among II-VI Incorporated, a Pennsylvania corporation (the “Borrower”), the Guarantors party thereto, PNC Bank, National Association (“PNC Bank”), various other financial institutions which are now or hereafter become a party thereto (PNC Bank and such other financial institutions are each, a “Lender” and collectively, the “Lenders”) and PNC Bank, in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), (ii) the Form of Guaranty and Suretyship Agreement referred to in the Agreement and attached thereto as Exhibit 1.1(G)(2) (as the same may be further amended, restated, modified or supplemented from time to time the “Guaranty”), and (iii) the other Loan Documents referred to in the Agreement, as the same may be amended, restated, modified or supplemented from time to time.

Agreement

Capitalized terms defined in the Agreement are used herein as defined therein. In consideration of the New Guarantor becoming a Guarantor under the terms of the Agreement and in consideration of the value of the direct and indirect benefits received by New Guarantor as a result of becoming affiliated with Borrower and the Guarantors, the New Guarantor hereby agrees that effective as of the date hereof, it hereby is, and shall be deemed to be, a “Guarantor” and a “Loan Party” under the Agreement, and a “Guarantor” under the Guaranty and each of the other Loan Documents to which the Loan Parties or the Guarantors are a party and agrees that from the date hereof and so long as any Loan or any Commitment of any Lender shall remain outstanding and until Payment in Full, the New Guarantor has assumed the joint and several obligations of a “Guarantor” under, and the New Guarantor shall perform, comply with and be subject to and bound by, jointly and severally, each of the terms, provisions and waivers of the Agreement, the Guaranty, the Intercompany Subordination Agreement and each of the other Loan Documents which are stated to apply to or are made by a “Guarantor”. Without limiting the generality of the foregoing, the New Guarantor hereby represents and warrants that (i) each of the representations and warranties set forth in Article 6 of the Agreement applicable to New Guarantor as a Guarantor is true and correct as to the New Guarantor on and as of the date hereof as if made on and as of the date hereof by the New Guarantor (except representations and warranties which relate solely to an earlier date or time which representations and warranties shall be true and correct in all material respects on and as of the specific date or times referred to in said representations and warranties) and (ii) the New Guarantor has heretofore received a true and correct copy of the Agreement, the Guaranty, the Intercompany Subordination Agreement and each of the other Loan Documents (including any modifications thereof or supplements or waivers thereto) as in effect on the date hereof.

 

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The New Guarantor hereby makes, affirms, and ratifies in favor of the Lenders and the Administrative Agent the Agreement, the Guaranty, the Intercompany Subordination Agreement and each of the other Loan Documents given by the Guarantors to the Administrative Agent and any of the Lenders.

The New Guarantor is simultaneously delivering to the Administrative Agent the following documents together with this Joinder required under Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions], Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures] and/or Section 11.13 [Joinder of Guarantors] of the Agreement, as applicable.

 

Document

   Delivered    Not Delivered

Opinion of Counsel (mandatory)

   ¨    ¨

Officer’s Certificate (mandatory)

   ¨    ¨

Secretary’s Certificate (mandatory)

   ¨    ¨

Waivers (if applicable)

   ¨    ¨

Schedule No. and Description

   Delivered    Not Delivered

Schedule 1.1(P) Permitted Liens (if applicable)

   ¨    ¨

Schedule 6.1.2 Capitalization and Ownership (mandatory)

   ¨    ¨

Schedule 6.1.3 Subsidiaries (mandatory)

   ¨    ¨

Schedule 6.1.16 Insurance (mandatory)

   ¨    ¨

[Schedule 6.1.20 ERISA Matters (if applicable)]

   ¨    ¨

Schedule 6.1.21 Environmental Disclosures (if applicable)

   ¨    ¨

Schedule 8.2.1 Indebtedness (if applicable)

   ¨    ¨

[Note: updates to schedules do not cure any breach of warranties unless

expressly agreed in accordance with the terms of the Agreement.]

 

4


In furtherance of the foregoing, the New Guarantor shall execute and deliver or cause to be executed and delivered at any time and from time to time such further instruments and documents and do or cause to be done such further acts as may be reasonably necessary or proper in the opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Joinder and the other Loan Documents.

This Joinder may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same instrument. New Guarantor acknowledges and agrees that a telecopy transmission to the Administrative Agent or any Lender of signature pages hereof purporting to be signed on behalf of New Guarantor shall constitute effective and binding execution and delivery hereof by New Guarantor.

[INTENTIONALLY LEFT BLANK]

 

5


IN WITNESS WHEREOF, and intending to be legally bound, the New Guarantor has duly executed this Joinder and delivered the same to the Administrative Agent for the benefit of the Lenders, on the date and year first above written, as a document under seal.

 

[NEW GUARANTOR]  
By:       (SEAL)
Name:      
Title:      

Acknowledged and accepted:

 

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

By:    
Name:    
Title:    


ACKNOWLEDGMENT

 

STATE/COMMONWEALTH OF        )   
       )    SS:
COUNTY OF            )   

[On this, the         day of                     ,         , before me, a Notary Public, the undersigned officer, personally appeared                     , who acknowledged himself/herself to be the                     of                     , a                     (the “Company”), and that he/she as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the Company as such officer.]

[On this, the         day of                     ,         , before me, a Notary Public, the undersigned officer, personally appeared                     , an individual, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he/she executed the same for the purposes therein contained.]

[On this, the         day of                     ,         , before me a Notary Public, personally appeared                     , who acknowledged himself/herself to be the                     , of                     , a                     , (the “General Partner”), the general partner of                     , a                     , (the “Partnership”), and that he/she, as the such officer of the General Partner, executed the foregoing instrument for the purposes therein contained by signing his/her name on behalf of the Partnership.]

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

  
Notary Public

My Commission Expires:

 

2


EXHIBIT 1.1(G)(2)

FORM OF

FIRST AMENDED AND RESTATED

CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP

THIS CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP (as may be further amended, restated, modified or supplemented from time to time, this “Guaranty”), dated as of this 16th day of November, 2012, is jointly and severally given by EACH OF THE UNDERSIGNED AND EACH OF THE OTHER PERSONS WHICH BECOME GUARANTORS HEREUNDER FROM TIME TO TIME (each, a “Guarantor” and collectively the “Guarantors”) in favor of PNC BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (as hereinafter defined) (the “Administrative Agent”) in connection with that First Amended and Restated Credit Agreement, dated as of November 16, 2012, by and among II-VI Incorporated, a Pennsylvania corporation (the “Borrower”), the Administrative Agent, the Lenders now or hereafter party thereto (the “Lenders”) and the Guarantors (as may be further amended, restated, modified or supplemented from time to time, the “Credit Agreement”). Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them by the Credit Agreement and the rules of construction set forth in Section 1.2 [Construction] of the Credit Agreement shall apply to this Guaranty.

15. GUARANTIED OBLIGATIONS. TO INDUCE THE ADMINISTRATIVE AGENT AND THE LENDERS TO MAKE LOANS AND GRANT OTHER FINANCIAL ACCOMMODATIONS TO THE BORROWER UNDER THE CREDIT AGREEMENT, EACH GUARANTOR HEREBY JOINTLY AND SEVERALLY, UNCONDITIONALLY AND IRREVOCABLY, GUARANTIES TO THE ADMINISTRATIVE AGENT, EACH LENDER AND ANY LENDER WHICH PROVIDES A LENDER PROVIDED HEDGE OR ANY PROVIDER OF OTHER LENDER PROVIDED FINANCIAL SERVICE PRODUCTS, AND BECOMES SURETY, AS THOUGH IT WAS A PRIMARY OBLIGOR FOR, THE FULL AND PUNCTUAL PAYMENT AND PERFORMANCE WHEN DUE (WHETHER ON DEMAND, AT STATED MATURITY, BY ACCELERATION, OR OTHERWISE AND INCLUDING ANY AMOUNTS WHICH WOULD BECOME DUE BUT FOR THE OPERATION OF AN AUTOMATIC STAY UNDER THE FEDERAL BANKRUPTCY CODE OF THE UNITED STATES OR ANY SIMILAR LAWS OF ANY COUNTRY OR JURISDICTION) OF ALL OBLIGATIONS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL OBLIGATIONS, LIABILITIES, AND INDEBTEDNESS FROM TIME TO TIME OF THE BORROWER OR ANY OTHER GUARANTOR TO THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS OR ANY AFFILIATE OF ANY LENDER UNDER OR IN CONNECTION WITH THE (I) CREDIT AGREEMENT, (II) ANY OTHER LOAN DOCUMENT, (III) ANY LENDER PROVIDED HEDGE, AND/OR (IV) ANY OTHER LENDER PROVIDED FINANCIAL SERVICE PRODUCT, WHETHER FOR PRINCIPAL, INTEREST, FEES, INDEMNITIES, EXPENSES, OR OTHERWISE, AND ALL RENEWALS, EXTENSIONS, AMENDMENTS, REFINANCINGS OR REFUNDINGS THEREOF, WHETHER SUCH OBLIGATIONS, LIABILITIES, OR INDEBTEDNESS ARE DIRECT OR INDIRECT, SECURED OR UNSECURED, JOINT OR SEVERAL, ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, WHETHER FOR PAYMENT OR PERFORMANCE, NOW EXISTING OR

 

3


HEREAFTER ARISING (AND INCLUDING OBLIGATIONS, LIABILITIES, AND INDEBTEDNESS ARISING OR ACCRUING AFTER THE COMMENCEMENT OF ANY BANKRUPTCY, INSOLVENCY, REORGANIZATION, OR SIMILAR PROCEEDING WITH RESPECT TO THE BORROWER OR ANY GUARANTOR OR WHICH WOULD HAVE ARISEN OR ACCRUED BUT FOR THE COMMENCEMENT OF SUCH PROCEEDING, EVEN IF THE CLAIM FOR SUCH OBLIGATION, LIABILITY, OR INDEBTEDNESS IS NOT ENFORCEABLE OR ALLOWABLE IN SUCH PROCEEDING, AND INCLUDING ALL OBLIGATIONS, LIABILITIES, AND INDEBTEDNESS ARISING FROM ANY EXTENSIONS OF CREDIT UNDER OR IN CONNECTION WITH ANY LOAN DOCUMENT FROM TIME TO TIME, REGARDLESS OF WHETHER ANY SUCH EXTENSIONS OF CREDIT ARE IN EXCESS OF THE AMOUNT COMMITTED UNDER OR CONTEMPLATED BY THE LOAN DOCUMENTS OR ARE MADE IN CIRCUMSTANCES IN WHICH ANY CONDITION TO EXTENSION OF CREDIT IS NOT SATISFIED) (ALL OF THE FOREGOING OBLIGATIONS, LIABILITIES AND INDEBTEDNESS ARE REFERRED TO HEREIN COLLECTIVELY, AS THE “GUARANTIED OBLIGATIONS” AND EACH, AS A “GUARANTIED OBLIGATION”). WITHOUT LIMITATION OF THE FOREGOING, ANY OF THE GUARANTIED OBLIGATIONS SHALL BE AND REMAIN GUARANTIED OBLIGATIONS ENTITLED TO THE BENEFIT OF THIS GUARANTY IF THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS (OR ANY ONE OR MORE ASSIGNEES OR TRANSFEREES THEREOF) FROM TIME TO TIME ASSIGN OR OTHERWISE TRANSFER ALL OR ANY PORTION OF THEIR RESPECTIVE RIGHTS AND OBLIGATIONS UNDER THE LOAN DOCUMENTS, OR ANY OTHER GUARANTIED OBLIGATIONS, TO ANY OTHER PERSON. IN FURTHERANCE OF THE FOREGOING., EACH GUARANTOR JOINTLY AND SEVERALLY AGREES AS FOLLOWS.

16. GUARANTY. EACH GUARANTOR HEREBY PROMISES TO PAY AND PERFORM ALL SUCH GUARANTIED OBLIGATIONS IMMEDIATELY UPON DEMAND OF THE ADMINISTRATIVE AGENT AND THE LENDERS OR ANY ONE OR MORE OF THEM. ALL PAYMENTS MADE HEREUNDER SHALL BE MADE BY EACH GUARANTOR IN IMMEDIATELY AVAILABLE FUNDS IN U.S. DOLLARS AND SHALL BE MADE WITHOUT SETOFF, COUNTERCLAIM, WITHHOLDING, OR OTHER DEDUCTION OF ANY NATURE.

17. OBLIGATIONS ABSOLUTE. THE OBLIGATIONS OF THE GUARANTORS HEREUNDER SHALL NOT BE DISCHARGED OR IMPAIRED OR OTHERWISE DIMINISHED BY THE FAILURE, DEFAULT, OMISSION, OR DELAY, WILLFUL OR OTHERWISE, BY ANY LENDER, THE ADMINISTRATIVE AGENT, THE BORROWER OR ANY OTHER OBLIGOR ON ANY OF THE GUARANTIED OBLIGATIONS, OR BY ANY OTHER ACT OR THING OR OMISSION OR DELAY TO DO ANY OTHER ACT OR THING WHICH MAY OR MIGHT IN ANY MANNER OR TO ANY EXTENT VARY THE RISK OF ANY GUARANTOR OR WOULD OTHERWISE OPERATE AS A DISCHARGE OF ANY GUARANTOR AS A MATTER OF LAW OR EQUITY. EACH OF THE GUARANTORS AGREES THAT THE GUARANTIED OBLIGATIONS WILL BE PAID AND PERFORMED STRICTLY IN ACCORDANCE WITH THE TERMS OF THE LOAN DOCUMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH GUARANTOR HEREBY CONSENTS TO, AT ANY TIME AND FROM TIME TO TIME, AND THE JOINT AND SEVERAL OBLIGATIONS OF EACH GUARANTOR HEREUNDER SHALL NOT BE DIMINISHED, TERMINATED, OR OTHERWISE SIMILARLY AFFECTED BY ANY OF THE FOLLOWING:

 

4


17.1 Any lack of genuineness, legality, validity, enforceability or allowability (in a bankruptcy, insolvency, reorganization or similar proceeding, or otherwise), or any avoidance or subordination, in whole or in part, of any Loan Document or any of the Guarantied Obligations and regardless of any Law, regulation or order now or hereafter in effect in any jurisdiction affecting any of the Guarantied Obligations, any of the terms of the Loan Documents, or any rights of the Administrative Agent or the Lenders or any other Person with respect thereto;

17.2 Any increase, decrease, or change in the amount, nature, type or purpose of any of, or any release, surrender, exchange, compromise or settlement of any of the Guarantied Obligations (whether or not contemplated by the Loan Documents as presently constituted); any change in the time, manner, method, or place of payment or performance of, or in any other terms of, any of the Guarantied Obligations; any execution or delivery of any additional Loan Documents; or any amendment, modification or supplement to, or renewals, extensions, refinancing or refunding of, any Loan Document or any of the Guarantied Obligations;

17.3 Any failure to assert any breach of or default under any Loan Document or any of the Guarantied Obligations; any extensions of credit in excess of the amount committed under or contemplated by the Loan Documents, or in circumstances in which any condition to such extensions of credit has not been satisfied; any other exercise or non-exercise, or any other failure, omission, breach, default, delay, or wrongful action in connection with any exercise or non-exercise, of any right or remedy against the Borrower or any other Person under or in connection with any Loan Document or any of the Guarantied Obligations; any refusal of payment or performance of any of the Guarantied Obligations, whether or not with any reservation of rights against any Guarantor; or any application of collections (including but not limited to collections resulting from realization upon any direct or indirect security for the Guarantied Obligations) to other obligations, if any, not entitled to the benefits of this Guaranty, in preference to Guarantied Obligations entitled to the benefits of this Guaranty, or if any collections are applied to Guarantied Obligations, any application to particular Guarantied Obligations;

17.4 Any taking, exchange, amendment, modification, waiver, supplement, termination, subordination, compromise, release, surrender, loss, or impairment of, or any failure to protect, perfect, or preserve the value of, or any enforcement of, realization upon, or exercise of rights, or remedies under or in connection with, or any failure, omission, breach, default, delay, or wrongful action by the Administrative Agent or the Lenders, or any of them, or any other Person in connection with the enforcement of, realization upon, or exercise of rights or remedies under or in connection with, or, any other action or inaction by the Administrative Agent or the Lenders, or any of them, or any other Person in respect of, any direct or indirect security for any of the Guarantied Obligations. As used in this Guaranty, “direct or indirect security” for the Guarantied Obligations, and similar phrases, includes any collateral security, guaranty, suretyship, letter of credit, capital maintenance agreement, put option, subordination agreement, or other right or assignment of any nature providing direct or indirect assurance of payment or performance of any of the Guarantied Obligations, made by or on behalf of any Person;

 

5


17.5 Any merger, consolidation, liquidation, dissolution, winding-up, charter revocation, or forfeiture, or other change in, restructuring or termination of the corporate structure or existence of, the Borrower or any other Person; any bankruptcy, insolvency, reorganization or similar proceeding with respect to the Borrower or any other Person; or any action taken or election made by the Administrative Agent or the Lenders, or any of them (including but not limited to any election under Section 1111(b)(2) of the United States Bankruptcy Code), the Borrower or any other Person in connection with any such proceeding;

17.6 Any defense, setoff, or counterclaim which may at any time be available to or be asserted by the Borrower or any other Person with respect to any Loan Document or any of the Guarantied Obligations; or any discharge by operation of law or release of the Borrower or any other Person from the performance or observance of any Loan Document or any of the Guarantied Obligations; and/or

17.7 Any other event or circumstance, whether similar or dissimilar to the foregoing, and whether known or unknown, which might otherwise constitute a defense available to, or limit the liability of, any Guarantor, a guarantor or a surety, excepting only Payment in Full.

Each Guarantor acknowledges, consents, and agrees that new Guarantors may join in this Guaranty pursuant to Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures] of the Credit Agreement and each Guarantor affirms that its obligations shall continue hereunder undiminished.

18. WAIVERS, ETC. EACH OF THE GUARANTORS HEREBY WAIVES ANY DEFENSE TO OR LIMITATION ON ITS OBLIGATIONS UNDER THIS GUARANTY ARISING OUT OF OR BASED ON ANY EVENT OR CIRCUMSTANCE REFERRED TO IN SECTION 3 HEREOF. WITHOUT LIMITATION AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR WAIVES EACH OF THE FOLLOWING:

18.1 All notices, disclosures and demands of any nature which otherwise might be required from time to time to preserve intact any rights against any Guarantor, including the following: any notice of any event or circumstance described in Section 3 hereof; any notice required by any Law, regulation or order now or hereafter in effect in any jurisdiction; any notice of nonpayment, nonperformance, dishonor, or protest under any Loan Document or any of the Guarantied Obligations; any notice of the incurrence of any Guarantied Obligation; any notice of any default or any failure on the part of the Borrower or any other Person to comply with any Loan Document or any of the Guarantied Obligations or any direct or indirect security for any of the Guarantied Obligations; and any notice of any information pertaining to the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person;

18.2 Any right to any marshaling of assets, to the filing of any claim against the Borrower or any other Person in the event of any bankruptcy, insolvency, reorganization or similar proceeding, or to the exercise against the Borrower or any other Person of any other right

 

6


or remedy under or in connection with any Loan Document or any of the Guarantied Obligations or any direct or indirect security for any of the Guarantied Obligations; any requirement of promptness or diligence on the part of the Administrative Agent or the Lenders, or any of them, or any other Person; any requirement to exhaust any remedies under or in connection with, or to mitigate the damages resulting from default under, any Loan Document or any of the Guarantied Obligations or any direct or indirect security for any of the Guarantied Obligations; any benefit of any statute of limitations; and any requirement of acceptance of this Guaranty or any other Loan Document, and any requirement that any Guarantor receive notice of any such acceptance;

18.3 Any defense or other right arising by reason of any Law now or hereafter in effect in any jurisdiction pertaining to election of remedies (including but not limited to anti-deficiency laws, “one action” laws or the like), or by reason of any election of remedies or other action or inaction by the Administrative Agent or the Lenders, or any of them (including but not limited to commencement or completion of any judicial proceeding or nonjudicial sale or other action in respect of collateral security for any of the Guarantied Obligations), which results in denial or impairment of the right of the Administrative Agent or the Lenders, or any of them, to seek a deficiency against the Borrower or any other Person or which otherwise discharges or impairs any of the Guarantied Obligations; and

18.4 Any and all defenses it may now or hereafter have based on principles of suretyship, impairment of collateral, or the like.

19. REINSTATEMENT. THIS GUARANTY IS A CONTINUING OBLIGATION OF THE GUARANTORS AND SHALL REMAIN IN FULL FORCE AND EFFECT NOTWITHSTANDING THAT NO GUARANTIED OBLIGATIONS MAY BE OUTSTANDING FROM TIME TO TIME AND NOTWITHSTANDING ANY OTHER EVENT OR CIRCUMSTANCE. UPON PAYMENT IN FULL, THIS GUARANTY SHALL TERMINATE; PROVIDED, HOWEVER, THAT THIS GUARANTY SHALL CONTINUE TO BE EFFECTIVE OR BE REINSTATED, AS THE CASE MAY BE, ANY TIME ANY PAYMENT OF ANY OF THE GUARANTIED OBLIGATIONS IS RESCINDED, RECOUPED, AVOIDED, OR MUST OTHERWISE BE RETURNED OR RELEASED BY ANY LENDER OR ADMINISTRATIVE AGENT UPON OR DURING THE INSOLVENCY, BANKRUPTCY, OR REORGANIZATION OF, OR ANY SIMILAR PROCEEDING AFFECTING, THE BORROWER OR ANY OTHER PERSON OR FOR ANY OTHER REASON WHATSOEVER, ALL AS THOUGH SUCH PAYMENT HAD NOT BEEN MADE AND WAS DUE AND OWING.

20. SUBROGATION. EACH GUARANTOR WAIVES AND AGREES IT WILL NOT EXERCISE ANY RIGHTS AGAINST BORROWER OR ANY OTHER GUARANTOR ARISING IN CONNECTION WITH, OR ANY COLLATERAL SECURING, THE GUARANTIED OBLIGATIONS (INCLUDING RIGHTS OF SUBROGATION, CONTRIBUTION, AND THE LIKE) UNTIL THE GUARANTIED OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID IN FULL, AND ALL COMMITMENTS HAVE BEEN TERMINATED AND ALL LETTERS OF CREDIT HAVE EXPIRED. IF ANY AMOUNT SHALL BE PAID TO ANY GUARANTOR BY OR ON BEHALF OF THE BORROWER OR ANY OTHER GUARANTOR BY VIRTUE OF ANY RIGHT OF SUBROGATION, CONTRIBUTION, OR THE LIKE, SUCH AMOUNT SHALL BE DEEMED TO HAVE BEEN

 

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PAID TO SUCH GUARANTOR FOR THE BENEFIT OF, AND SHALL BE HELD IN TRUST FOR THE BENEFIT OF, THE ADMINISTRATIVE AGENT AND THE LENDERS AND SHALL FORTHWITH BE PAID TO THE ADMINISTRATIVE AGENT TO BE CREDITED AND APPLIED UPON THE GUARANTIED OBLIGATIONS, WHETHER MATURED OR UNMATURED, IN ACCORDANCE WITH THE TERMS OF THE CREDIT AGREEMENT.

21. NO STAY. WITHOUT LIMITATION OF ANY OTHER PROVISION OF THIS GUARANTY, IF ANY DECLARATION OF DEFAULT OR ACCELERATION OR OTHER EXERCISE OR CONDITION TO EXERCISE OF RIGHTS OR REMEDIES UNDER OR WITH RESPECT TO ANY GUARANTIED OBLIGATION SHALL AT ANY TIME BE STAYED, ENJOINED, OR PREVENTED FOR ANY REASON (INCLUDING BUT NOT LIMITED TO STAY OR INJUNCTION RESULTING FROM THE PENDENCY AGAINST THE BORROWER OR ANY OTHER PERSON OF A BANKRUPTCY, INSOLVENCY, REORGANIZATION OR SIMILAR PROCEEDING), THE GUARANTORS AGREE THAT, FOR THE PURPOSES OF THIS GUARANTY AND THEIR OBLIGATIONS HEREUNDER, THE GUARANTIED OBLIGATIONS SHALL BE DEEMED TO HAVE BEEN DECLARED IN DEFAULT OR ACCELERATED, AND SUCH OTHER EXERCISE OR CONDITIONS TO EXERCISE SHALL BE DEEMED TO HAVE BEEN TAKEN OR MET.

22. [RESERVED].

23. NOTICES. EACH GUARANTOR AGREES THAT ALL NOTICES, STATEMENTS, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS UNDER THIS GUARANTY SHALL BE GIVEN TO SUCH GUARANTOR AT THE ADDRESS SET FORTH ON A SCHEDULE TO, OR IN A GUARANTOR JOINDER AND ASSUMPTION AGREEMENT GIVEN UNDER, THE CREDIT AGREEMENT AND IN THE MANNER PROVIDED IN SECTION 11.5 [NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION] OF THE CREDIT AGREEMENT. THE ADMINISTRATIVE AGENT AND THE LENDERS MAY RELY ON ANY NOTICE (WHETHER OR NOT MADE IN A MANNER CONTEMPLATED BY THIS GUARANTY) PURPORTEDLY MADE BY OR ON BEHALF OF A GUARANTOR, AND THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL HAVE NO DUTY TO VERIFY THE IDENTITY OR AUTHORITY OF THE PERSON GIVING SUCH NOTICE.

24. COUNTERPARTS; TELECOPY SIGNATURES. THIS GUARANTY MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH, WHEN SO EXECUTED, SHALL BE DEEMED AN ORIGINAL, BUT ALL SUCH COUNTERPARTS SHALL CONSTITUTE BUT ONE AND THE SAME INSTRUMENT. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT A TELECOPY TRANSMISSION TO ADMINISTRATIVE AGENT OR ANY LENDER OF SIGNATURE PAGES HEREOF PURPORTING TO BE SIGNED ON BEHALF OF ANY GUARANTOR SHALL CONSTITUTE EFFECTIVE AND BINDING EXECUTION AND DELIVERY HEREOF BY SUCH GUARANTOR.

25. SETOFF, DEFAULT PAYMENTS BY BORROWER.

 

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25.1 In the event that at any time any obligation of the Guarantors now or hereafter existing under this Guaranty shall have become due and payable, the Administrative Agent and the Lenders, or any of them, shall have the right from time to time, without notice to any Guarantor, to set off against and apply to such due and payable amount any obligation of any nature of any Lender or the Administrative Agent, or any subsidiary or affiliate of any Lender or Administrative Agent, to any Guarantor, including but not limited to all deposits (whether time or demand, general or special, provisionally credited or finally credited, however evidenced) now or hereafter maintained by any Guarantor with the Administrative Agent or any Lender. Such right shall be absolute and unconditional in all circumstances and, without limitation, shall exist whether or not the Administrative Agent or the Lenders, or any of them, shall have given any notice or made any demand under this Guaranty or under such obligation to the Guarantor, whether such obligation to the Guarantor is absolute or contingent, matured or unmatured (it being agreed that the Administrative Agent and the Lenders, or any of them, may deem such obligation to be then due and payable at the time of such setoff), and regardless of the existence or adequacy of any collateral, guaranty, or other direct or indirect security or right or remedy available to the Administrative Agent or any of the Lenders. The rights of the Administrative Agent and the Lenders under this Section are in addition to such other rights and remedies (including, without limitation, other rights of setoff and banker’s lien) which the Administrative Agent and the Lenders, or any of them, may have, and nothing in this Guaranty or in any other Loan Document shall be deemed a waiver of or restriction on the right of setoff or banker’s lien of the Administrative Agent and the Lenders, or any of them. Each of the Guarantors hereby agrees that, to the fullest extent permitted by Law, any affiliate or subsidiary of the Administrative Agent or any of the Lenders and any holder of a participation in any obligation of any Guarantor under this Guaranty, shall have the same rights of setoff as the Administrative Agent and the Lenders as provided in this Section (regardless whether such affiliate or participant otherwise would be deemed a creditor of such Guarantor).

25.2 Upon the occurrence and during the continuation of any default under any Guarantied Obligation, if any amount shall be paid to any Guarantor by or for the account of Borrower, such amount shall be held in trust for the benefit of each Lender and Administrative Agent and shall forthwith be paid to the Administrative Agent to be credited and applied to the Guarantied Obligations when due and payable.

26. CONSTRUCTION. THE SECTION AND OTHER HEADINGS CONTAINED IN THIS GUARANTY ARE FOR REFERENCE PURPOSES ONLY AND SHALL NOT AFFECT INTERPRETATION OF THIS GUARANTY IN ANY RESPECT. THIS GUARANTY HAS BEEN FULLY NEGOTIATED BETWEEN THE APPLICABLE PARTIES, EACH PARTY HAVING THE BENEFIT OF LEGAL COUNSEL, AND ACCORDINGLY NEITHER ANY DOCTRINE OF CONSTRUCTION OF GUARANTIES OR SURETYSHIPS IN FAVOR OF THE GUARANTOR OR SURETY, NOR ANY DOCTRINE OF CONSTRUCTION OF AMBIGUITIES IN AGREEMENTS OR INSTRUMENTS AGAINST THE PARTY CONTROLLING THE DRAFTING THEREOF, SHALL APPLY TO THIS GUARANTY.

27. SUCCESSORS AND ASSIGNS. THIS GUARANTY SHALL BE BINDING UPON EACH GUARANTOR, ITS SUCCESSORS AND ASSIGNS, AND SHALL INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY THE ADMINISTRATIVE AGENT AND

 

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THE LENDERS, OR ANY OF THEM, AND THEIR SUCCESSORS AND PERMITTED ASSIGNS; PROVIDED, HOWEVER, THAT NO GUARANTOR MAY ASSIGN OR TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER OR ANY INTEREST HEREIN AND ANY SUCH PURPORTED ASSIGNMENT OR TRANSFER SHALL BE NULL AND VOID. WITHOUT LIMITATION OF THE FOREGOING, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM (AND ANY SUCCESSIVE ASSIGNEE OR TRANSFEREE), FROM TIME TO TIME MAY ASSIGN OR OTHERWISE TRANSFER ALL OR ANY PORTION OF ITS RIGHTS OR OBLIGATIONS UNDER THE LOAN DOCUMENTS (INCLUDING ALL OR ANY PORTION OF ANY COMMITMENT TO EXTEND CREDIT), OR ANY OTHER GUARANTIED OBLIGATIONS, TO ANY OTHER PERSON AND SUCH GUARANTIED OBLIGATIONS (INCLUDING ANY GUARANTIED OBLIGATIONS RESULTING FROM EXTENSION OF CREDIT BY SUCH OTHER PERSON UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS) SHALL BE AND REMAIN GUARANTIED OBLIGATIONS ENTITLED TO THE BENEFIT OF THIS GUARANTY, AND TO THE EXTENT OF ITS INTEREST IN SUCH GUARANTIED OBLIGATIONS SUCH OTHER PERSON SHALL BE VESTED WITH ALL THE BENEFITS IN RESPECT THEREOF GRANTED TO THE ADMINISTRATIVE AGENT AND THE LENDERS IN THIS GUARANTY OR OTHERWISE.

28. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

28.1 Governing Law. This Guaranty shall be governed by, construed, and enforced in accordance with, the internal Laws of the Commonwealth of Pennsylvania, without regard to conflict of laws principles.

28.2 Certain Waivers. Each Guarantor hereby irrevocably:

28.2.1 Submits to the nonexclusive jurisdiction of any state or federal court sitting in Allegheny County, Pennsylvania in any action or proceeding arising out of or relating to this Guaranty, and each Guarantor hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such state or federal court. Each Guarantor hereby waives to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any such action or proceeding. Each Guarantor hereby appoints the process agent identified below (the “Process Agent”) as its agent to receive on behalf of such party and its respective property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Guarantor in care of the Process Agent at the Process Agent’s address, and each Guarantor hereby authorizes and directs the Process Agent to receive such service on its behalf. Each Guarantor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions (or any political subdivision thereof) by suit on the judgment or in any other manner provided at law. Each Guarantor further agrees that it shall, for so long as any commitment or any obligation of any Loan Party to any Lender remains outstanding, continue to retain Process Agent for the purposes set forth in this Section 14. The Process Agent is II-VI Incorporated, with an office on the date hereof as set forth in the Credit Agreement. The Process Agent hereby accepts the appointment of Process Agent by the Guarantors and agrees to act as Process Agent on behalf of the Guarantors;

 

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28.2.2 Waives any objection to jurisdiction and venue of any action instituted against it as provided herein and agrees not to assert any defense based on lack of jurisdiction or venue; and

28.2.3 WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS GUARANTY, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT TO THE FULLEST EXTENT PERMITTED BY LAW.

29. SEVERABILITY; MODIFICATION TO CONFORM TO LAW.

29.1 It is the intention of the parties that this Guaranty be enforceable to the fullest extent permissible under applicable Law, but that the unenforceability (or modification to conform to such Law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder hereof. If any provision in this Guaranty shall be held invalid or unenforceable in whole or in part in any jurisdiction, this Guaranty shall, as to such jurisdiction, be deemed amended to modify or delete, as necessary, the offending provision or provisions and to alter the bounds thereof in order to render it or them valid and enforceable to the maximum extent permitted by applicable Law, without in any manner affecting the validity or enforceability of such provision or provisions in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

29.2 Without limitation of the preceding subsection (a), to the extent that applicable Law (including applicable Laws pertaining to fraudulent conveyance or fraudulent or preferential transfer) otherwise would render the full amount of the Guarantor’s obligations hereunder invalid, voidable, or unenforceable on account of the amount of a Guarantor’s aggregate liability under this Guaranty, then, notwithstanding any other provision of this Guaranty to the contrary, the aggregate amount of such liability shall, without any further action by the Administrative Agent or any of the Lenders or such Guarantor or any other Person, be automatically limited and reduced to the highest amount which is valid and enforceable as determined in such action or proceeding, which (without limiting the generality of the foregoing) may be an amount which is equal to the greater of:

29.2.1 the fair consideration actually received by such Guarantor under the terms and as a result of the Loan Documents and the value of the benefits described in this Section 15(b) hereof, including (and to the extent not inconsistent with applicable federal and state Laws affecting the enforceability of guaranties) distributions, commitments, and advances made to or for the benefit of such Guarantor with the proceeds of any credit extended under the Loan Documents, or

29.2.2 the excess of (A) the amount of the fair value of the assets of such Guarantor as of the date of this Guaranty as determined in accordance with applicable federal and state Laws governing determinations of the insolvency of debtors as in effect on the date hereof, over (B) the amount of all liabilities of such Guarantor as of the date of this Guaranty, also as determined on the basis of applicable federal and state Laws governing the insolvency of debtors as in effect on the date hereof.

 

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29.3 Notwithstanding anything to the contrary in this Section or elsewhere in this Guaranty, this Guaranty shall be presumptively valid and enforceable to its full extent in accordance with its terms, as if this Section (and references elsewhere in this Guaranty to enforceability to the fullest extent permitted by Law) were not a part of this Guaranty, and in any related litigation the burden of proof shall be on the party asserting the invalidity or unenforceability of any provision hereof or asserting any limitation on any Guarantor’s obligations hereunder as to each element of such assertion.

30. ADDITIONAL GUARANTORS. AT ANY TIME AFTER THE INITIAL EXECUTION AND DELIVERY OF THIS GUARANTY TO THE ADMINISTRATIVE AGENT AND THE LENDERS, ADDITIONAL PERSONS MAY BECOME PARTIES TO THIS GUARANTY AND THEREBY ACQUIRE THE DUTIES AND RIGHTS OF BEING GUARANTORS HEREUNDER BY EXECUTING AND DELIVERING TO THE ADMINISTRATIVE AGENT AND THE LENDERS A GUARANTOR JOINDER PURSUANT TO THE CREDIT AGREEMENT. NO NOTICE OF THE ADDITION OF ANY GUARANTOR SHALL BE REQUIRED TO BE GIVEN TO ANY PRE-EXISTING GUARANTOR AND EACH GUARANTOR HEREBY CONSENTS THERETO.

31. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS AND ADDITIONAL LIABILITIES OF THE GUARANTORS UNDER THIS GUARANTY ARE JOINT AND SEVERAL OBLIGATIONS OF THE GUARANTORS, AND EACH GUARANTOR HEREBY WAIVES TO THE FULL EXTENT PERMITTED BY LAW ANY DEFENSE IT MAY OTHERWISE HAVE TO THE PAYMENT AND PERFORMANCE OF THE GUARANTIED OBLIGATIONS AND THAT ITS LIABILITY HEREUNDER IS LIMITED AND NOT JOINT AND SEVERAL. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT THE FOREGOING WAIVERS AND THOSE SET FORTH BELOW SERVE AS A MATERIAL INDUCEMENT TO THE AGREEMENT OF THE ADMINISTRATIVE AGENT AND THE LENDERS TO MAKE THE LOANS, AND THAT THE ADMINISTRATIVE AGENT AND THE LENDERS ARE RELYING ON EACH SPECIFIC WAIVER AND ALL SUCH WAIVERS IN ENTERING INTO THIS GUARANTY. THE UNDERTAKINGS OF EACH GUARANTOR HEREUNDER SECURE THE OBLIGATIONS OF ITSELF AND THE OTHER GUARANTORS. THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, MAY, IN THEIR SOLE DISCRETION, ELECT TO ENFORCE THIS GUARANTY AGAINST ANY GUARANTOR WITHOUT ANY DUTY OR RESPONSIBILITY TO PURSUE ANY OTHER GUARANTOR AND SUCH AN ELECTION BY THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, SHALL NOT BE A DEFENSE TO ANY ACTION THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, MAY ELECT TO TAKE AGAINST ANY GUARANTOR. EACH OF THE LENDERS AND ADMINISTRATIVE AGENT HEREBY RESERVE ALL RIGHTS AGAINST EACH GUARANTOR.

32. RECEIPT OF CREDIT AGREEMENT; OTHER LOAN DOCUMENTS; BENEFITS.

 

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32.1 Each Guarantor hereby acknowledges that it has received a copy of the Credit Agreement and the other Loan Documents and each Guarantor certifies that the representations and warranties made therein with respect to such Guarantor are true and correct. Further, each Guarantor acknowledges and agrees to perform, comply with, and be bound by all of the provisions of the Credit Agreement and the other Loan Documents.

32.2 Each Guarantor hereby acknowledges, represents, and warrants that it receives direct and indirect benefits by virtue of its affiliation with Borrower and the other Guarantors and that it will receive direct and indirect benefits from the financing arrangements contemplated by the Credit Agreement and that such benefits, together with the rights of contribution and subrogation that may arise in connection herewith are a reasonably equivalent exchange of value in return for providing this Guaranty.

33. MISCELLANEOUS.

33.1 Generality of Certain Terms. As used in this Guaranty, the terms “hereof”, “herein” and terms of similar import refer to this Guaranty as a whole and not to any particular term or provision; the term “including”, as used herein, is not a term of limitation and means “including without limitation”.

33.2 Amendments, Waivers. No amendment to or waiver of any provision of this Guaranty, and no consent to any departure by any Guarantor herefrom, shall in any event be effective unless in a writing manually signed by or on behalf of the Administrative Agent and the Lenders. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No delay or failure of the Administrative Agent or the Lenders, or any of them, in exercising any right or remedy under this Guaranty shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Administrative Agent and the Lenders under this Guaranty are cumulative and not exclusive of any other rights or remedies available hereunder, under any other agreement or instrument, by Law, or otherwise.

33.3 Telecommunications. Each Lender and Administrative Agent shall be entitled to rely on the authority of any individual making any telecopy, electronic or telephonic notice, request, or signature without the necessity of receipt of any verification thereof.

33.4 Expenses. Each Guarantor unconditionally agrees to pay all costs and expenses, including reasonable attorney’s fees incurred by the Administrative Agent or any of the Lenders in enforcing this Guaranty against any Guarantor and each Guarantor shall pay and indemnify each Lender and the Administrative Agent for, and hold it harmless from and against, any and all obligations, liabilities, losses, damages, costs, expenses (including disbursements and reasonable legal fees of counsel to any Lender or the Administrative Agent), penalties, judgments, suits, actions, claims, and disbursements imposed on, asserted against, or incurred by any Lender or the Administrative Agent (except as may result from the gross negligence or willful misconduct of any Lender or Administrative Agent):

 

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33.4.1 relating to the preparation, negotiation, execution, administration, or enforcement of or collection under this Guaranty or any document, instrument, or agreement relating to any of the Obligations, including in any bankruptcy, insolvency, or similar proceeding in any jurisdiction or political subdivision thereof;

33.4.2 relating to any amendment, modification, waiver, or consent hereunder or relating to any telecopy or telephonic transmission purporting to be by any Guarantor or Borrower; and

33.4.3 in any way relating to or arising out of this Guaranty, or any document, instrument, or agreement relating to any of the Guarantied Obligations, or any action taken or omitted to be taken by any Lender or the Administrative Agent hereunder, and including those arising directly or indirectly from the violation or asserted violation by any Guarantor, the Borrower, the Administrative Agent or any Lender of any Law, rule, regulation, judgment, order, or the like of any jurisdiction or political subdivision thereof (including those relating to environmental protection, health, labor, importing, exporting, or safety) and regardless whether asserted by any governmental entity or any other Person.

33.5 Prior Understandings. This Guaranty and the Credit Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede any and all other prior and contemporaneous understandings and agreements.

33.6 Survival. All representations and warranties of the Guarantors made in connection with this Guaranty shall survive, and shall not be waived by, the execution and delivery of this Guaranty, any investigation by or knowledge of the Administrative Agent and the Lenders, or any of them, any extension of credit, or any other event or circumstance whatsoever.

34. AMENDMENT AND RESTATEMENT. THIS GUARANTY AMENDS AND RESTATES THAT CERTAIN CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP, DATED JUNE 15, 2011, MADE BY THE GUARANTORS TO THE ADMINISTRATIVE AGENT (THE “PRIOR GUARANTY”). THIS GUARANTY IS ISSUED IN SUBSTITUTION FOR (AND NOT IN DISCHARGE OF) THE OBLIGATIONS EVIDENCED BY THE PRIOR GUARANTY.

[INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned parties intending to be legally bound, have executed this Guaranty as of the date first above written with the intention that this Guaranty shall constitute a sealed instrument.

 

   GUARANTORS:
WITNESS:    II-VI DELAWARE, INC., a Delaware corporation; VLOC INCORPORATED, a Pennsylvania corporation; EXOTIC ELECTRO-OPTICS, INC., a California corporation; II-VI WIDE BAND GAP, INC., a Pennsylvania corporation, MARLOW INDUSTRIES, INC., a Texas corporation; MARLOW INDUSTRIES ASIA, INC., a Delaware corporation; MAX LEVY AUTOGRAPH, INC., a Pennsylvania corporation; HIGHYAG LASERTECHNOLOGIE, INC., a Pennsylvania corporation; PHOTOP TECHNOLOGIES, INC., a California corporation; AEGIS LIGHTWAVE, INC., a Delaware corporation; AEGIS LIGHTWAVE SECURITY CORPORATION, a Massachusetts corporation; M CUBED TECHNOLOGIES, INC., a Delaware corporation

 

Name: Eric C. Springer, Esquire

  

By:                                                   (SEAL)

Name: Craig A. Creaturo

Title:     Treasurer of each of the entities listed above, other than PHOTOP TECHNOLOGIES, INC. for which he is the Secretary

 

Address:

c/o II-VI Incorporated

375 Saxonburg Blvd

Saxonburg, PA 16056

Telecopier: 724-360-5947


Acknowledged and consented to:

 

   BORROWER:
WITNESS:    II-VI INCORPORATED

 

Name: Eric C. Springer, Esquire

  

By:                                          (SEAL)

Name: Craig A. Creaturo

Title:   Treasurer

 

Address:

c/o II-VI Incorporated

375 Saxonburg Blvd

Saxonburg, PA 16056

Telecopier: 724-360-5947

 

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EXHIBIT 1.1(I)

FORM OF

FIRST AMENDED AND RESTATED

INTERCOMPANY SUBORDINATION AGREEMENT

THIS FIRST AMENDED AND RESTATED INTERCOMPANY SUBORDINATION AGREEMENT (as amended, restated, modified or supplemented from time to time, this “Agreement”), is dated November 16, 2012, and is made by and among the entities listed on the signature page hereto (or subsequently joining this Agreement) (each being individually referred to herein as a “Company” and collectively as the “Companies”).

WITNESSETH THAT:

WHEREAS, each capitalized term used herein shall, unless otherwise defined herein, have the meaning specified in the First Amended and Restated Credit Agreement, dated of even date herewith, by and among II-VI Incorporated, a Pennsylvania corporation (the “Borrower”), the Guarantors now or hereafter party thereto, PNC Bank, National Association (“PNC”), various other financial institutions which are now or hereafter become a party thereto (such other financial institutions are each, a “Lender” and collectively, the “Lenders”) and PNC, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) (as the same may be further amended, restated, modified or supplemented from time to time, the “Credit Agreement”); and

WHEREAS, pursuant to the Credit Agreement and the other Loan Documents, the Lenders intend to make Loans to the Borrower; and

WHEREAS, the Companies have or, in the future may have, liabilities, obligations or indebtedness owed to each other (the liabilities, obligations and indebtedness of each of the Companies to any other Company, now existing or hereafter incurred (whether created directly or acquired by assignment or otherwise), and interest and premiums, if any, thereon and other amounts payable in respect thereof and all other obligations and other amounts payable by any Company to any other Company are hereinafter collectively referred to as the “Intercompany Indebtedness”); and

WHEREAS, the obligations of the Lenders to maintain the Commitments and make Loans to the Borrower from time to time are subject to the condition, among others, that the Companies subordinate the Intercompany Indebtedness to the Obligations of the Borrower or any other Company to the Administrative Agent or the Lenders or any Affiliate of any Lender pursuant to the Credit Agreement or the other Loan Documents or any Lender Provided Hedge or any Other Lender Provided Financial Service Product (collectively, the “Senior Debt”) in the manner set forth herein.

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto covenant and agree as follows:

 

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35. INTERCOMPANY INDEBTEDNESS SUBORDINATED TO SENIOR DEBT. THE RECITALS SET FORTH ABOVE ARE HEREBY INCORPORATED BY REFERENCE. ALL INTERCOMPANY INDEBTEDNESS SHALL BE SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT UNTIL RECEIPT BY THE ADMINISTRATIVE AGENT AND THE LENDERS OF PAYMENT IN FULL.

36. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. UPON ANY DISTRIBUTION OF ASSETS OF ANY COMPANY IN THE EVENT OF (A) ANY INSOLVENCY OR BANKRUPTCY CASE OR PROCEEDING, OR ANY RECEIVERSHIP, LIQUIDATION, REORGANIZATION OR OTHER SIMILAR CASE OR PROCEEDING IN CONNECTION THEREWITH, RELATIVE TO ANY SUCH COMPANY OR TO ITS CREDITORS, AS SUCH, OR TO ITS ASSETS, OR (B) ANY LIQUIDATION, DISSOLUTION OR OTHER WINDING UP OF ANY SUCH COMPANY, WHETHER VOLUNTARY OR INVOLUNTARY AND WHETHER OR NOT INVOLVING INSOLVENCY OR BANKRUPTCY, OR (C) ANY ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR ANY MARSHALING OF ASSETS AND LIABILITIES OF ANY SUCH COMPANY (A COMPANY DISTRIBUTING ASSETS AS SET FORTH HEREIN BEING REFERRED TO IN SUCH CAPACITY AS A “DISTRIBUTING COMPANY”), THEN AND IN ANY SUCH EVENT, THE ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RECEIVE, FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT AND THE LENDERS AS THEIR RESPECTIVE INTERESTS MAY APPEAR, PAYMENT IN FULL OF ALL AMOUNTS DUE OR TO BECOME DUE (WHETHER OR NOT AN EVENT OF DEFAULT HAS OCCURRED UNDER THE TERMS OF THE LOAN DOCUMENTS OR THE SENIOR DEBT HAS BEEN DECLARED DUE AND PAYABLE PRIOR TO THE DATE ON WHICH IT WOULD OTHERWISE HAVE BECOME DUE AND PAYABLE) ON OR IN RESPECT OF ANY AND ALL SENIOR DEBT BEFORE THE HOLDER OF ANY INTERCOMPANY INDEBTEDNESS OWED BY THE DISTRIBUTING COMPANY IS ENTITLED TO RECEIVE ANY PAYMENT ON ACCOUNT OF THE PRINCIPAL OF OR INTEREST ON SUCH INTERCOMPANY INDEBTEDNESS, AND TO THAT END, THE ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RECEIVE, FOR APPLICATION TO THE PAYMENT OF THE SENIOR DEBT, ANY PAYMENT OR DISTRIBUTION OF ANY KIND OR CHARACTER, WHETHER IN CASH, PROPERTY OR SECURITIES, WHICH MAY BE PAYABLE OR DELIVERABLE IN RESPECT OF THE INTERCOMPANY INDEBTEDNESS OWED BY THE DISTRIBUTING COMPANY IN ANY SUCH CASE, PROCEEDING, DISSOLUTION, LIQUIDATION OR OTHER WINDING UP EVENT.

37. NO COMMENCEMENT OF ANY PROCEEDING. EACH COMPANY AGREES THAT, SO LONG AS THE SENIOR DEBT SHALL REMAIN UNPAID, IT WILL NOT COMMENCE, OR JOIN WITH ANY CREDITOR OTHER THAN THE LENDERS AND THE ADMINISTRATIVE AGENT IN COMMENCING ANY PROCEEDING REFERRED TO IN SECTION 2 HEREOF AGAINST ANY OTHER COMPANY THAT OWES IT ANY INTERCOMPANY INDEBTEDNESS.

38. PRIOR PAYMENT OF SENIOR DEBT UPON ACCELERATION OF INTERCOMPANY INDEBTEDNESS. IF ANY PORTION OF THE INTERCOMPANY INDEBTEDNESS OWED BY ANY COMPANY BECOMES OR IS DECLARED DUE AND PAYABLE BEFORE ITS STATED MATURITY, THEN AND IN SUCH EVENT THE

 

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ADMINISTRATIVE AGENT AND THE LENDERS SHALL BE ENTITLED TO RECEIVE PAYMENT IN FULL OF ALL AMOUNTS DUE AND TO BECOME DUE ON OR IN RESPECT OF THE SENIOR DEBT (WHETHER OR NOT AN EVENT OF DEFAULT HAS OCCURRED UNDER THE TERMS OF THE LOAN DOCUMENTS OR THE SENIOR DEBT HAS BEEN DECLARED DUE AND PAYABLE PRIOR TO THE DATE ON WHICH IT WOULD OTHERWISE HAVE BECOME DUE AND PAYABLE) BEFORE THE HOLDER OF ANY SUCH INTERCOMPANY INDEBTEDNESS IS ENTITLED TO RECEIVE ANY PAYMENT THEREON.

39. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT. IF ANY EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, OR SUCH AN EVENT OF DEFAULT OR POTENTIAL DEFAULT WOULD RESULT FROM OR EXIST AFTER GIVING EFFECT TO A PAYMENT WITH RESPECT TO ANY PORTION OF THE INTERCOMPANY INDEBTEDNESS, UNLESS THE LENDERS OR REQUIRED LENDERS, AS APPLICABLE, SHALL HAVE CONSENTED TO OR WAIVED THE SAME, SO LONG AS ANY OF THE SENIOR DEBT SHALL REMAIN OUTSTANDING, NO PAYMENT SHALL BE MADE BY ANY COMPANY OWING SUCH INTERCOMPANY INDEBTEDNESS ON ACCOUNT OF PRINCIPAL OR INTEREST ON ANY PORTION OF THE INTERCOMPANY INDEBTEDNESS.

40. PAYMENT PERMITTED IF NO DEFAULT. NOTHING CONTAINED IN THIS AGREEMENT SHALL PREVENT ANY OF THE COMPANIES, AT ANY TIME EXCEPT DURING THE PENDENCY OF ANY OF THE CONDITIONS DESCRIBED IN SECTIONS 2, 4 AND 5 HEREOF, FROM MAKING REGULARLY SCHEDULED PAYMENTS OF PRINCIPAL OF OR INTEREST ON ANY PORTION OF THE INTERCOMPANY INDEBTEDNESS, OR THE RETENTION THEREOF BY ANY OF THE COMPANIES OF ANY MONEY DEPOSITED WITH THEM FOR THE PAYMENT OF OR ON ACCOUNT OF THE PRINCIPAL OF OR INTEREST ON THE INTERCOMPANY INDEBTEDNESS.

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42. RIGHTS OF SUBROGATION. EACH COMPANY AGREES THAT NO PAYMENT OR DISTRIBUTION TO THE ADMINISTRATIVE AGENT OR THE LENDERS PURSUANT TO THE PROVISIONS OF THIS AGREEMENT SHALL ENTITLE IT TO EXERCISE ANY RIGHTS OF SUBROGATION IN RESPECT THEREOF UNTIL PAYMENT IN FULL OF THE SENIOR DEBT.

43. INSTRUMENTS EVIDENCING INTERCOMPANY INDEBTEDNESS. EACH COMPANY SHALL CAUSE EACH INSTRUMENT WHICH NOW OR HEREAFTER EVIDENCES ALL OR A PORTION OF THE INTERCOMPANY INDEBTEDNESS TO BE CONSPICUOUSLY MARKED AS FOLLOWS:

“This instrument is subject to the terms of that certain Intercompany Subordination Agreement dated November 16, 2012 in favor of PNC Bank, National Association, as administrative agent for the Lenders referred to therein, which Intercompany Subordination Agreement is incorporated herein by reference. Notwithstanding any contrary statement contained in the within instrument, no payment on account of the principal thereof or interest thereon shall become due or payable except in accordance with the express terms of the Intercompany Subordination Agreement.”

Each Company will further mark its internal records in such a manner as shall be effective to give proper notice to the effect of this Agreement.

44. AGREEMENT SOLELY TO DEFINE RELATIVE RIGHTS. THE PURPOSE OF THIS AGREEMENT IS SOLELY TO DEFINE THE RELATIVE RIGHTS OF THE COMPANIES, ON THE ONE HAND, AND THE ADMINISTRATIVE AGENT AND THE LENDERS, ON THE OTHER HAND. NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO OR SHALL IMPAIR, AS BETWEEN ANY OF THE COMPANIES AND THEIR CREDITORS OTHER THAN THE ADMINISTRATIVE AGENT AND THE LENDERS, THE OBLIGATION OF THE COMPANIES TO EACH OTHER TO PAY THE PRINCIPAL OF AND INTEREST ON THE INTERCOMPANY INDEBTEDNESS AS AND WHEN THE SAME SHALL BECOME DUE AND PAYABLE IN ACCORDANCE WITH ITS TERMS, OR IS INTENDED TO OR SHALL AFFECT THE RELATIVE RIGHTS AMONG THE COMPANIES AND THEIR CREDITORS OTHER THAN THE ADMINISTRATIVE AGENT AND THE LENDERS, NOR SHALL ANYTHING HEREIN PREVENT ANY OF THE COMPANIES FROM EXERCISING ALL REMEDIES OTHERWISE PERMITTED BY APPLICABLE LAW UPON DEFAULT UNDER ANY AGREEMENT PURSUANT TO WHICH THE INTERCOMPANY INDEBTEDNESS IS CREATED, SUBJECT TO THE RIGHTS, IF ANY, UNDER THIS AGREEMENT OF THE ADMINISTRATIVE AGENT AND THE LENDERS TO RECEIVE CASH, PROPERTY OR SECURITIES OTHERWISE PAYABLE OR DELIVERABLE WITH RESPECT TO THE INTERCOMPANY INDEBTEDNESS.

 

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45. NO IMPLIED WAIVERS OF SUBORDINATION. NO RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO ENFORCE SUBORDINATION, AS HEREIN PROVIDED, SHALL AT ANY TIME IN ANY WAY BE PREJUDICED OR IMPAIRED BY ANY ACT OR FAILURE TO ACT ON THE PART OF ANY COMPANY OR BY ANY ACT OR FAILURE TO ACT BY THE ADMINISTRATIVE AGENT OR ANY LENDER, OR BY ANY NON-COMPLIANCE BY ANY COMPANY WITH THE TERMS, PROVISIONS AND COVENANTS OF ANY AGREEMENT PURSUANT TO WHICH THE INTERCOMPANY INDEBTEDNESS IS CREATED, REGARDLESS OF ANY KNOWLEDGE THEREOF WITH WHICH THE ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE OR BE OTHERWISE CHARGED. EACH COMPANY BY ITS ACCEPTANCE HEREOF SHALL AGREE THAT, SO LONG AS THERE IS SENIOR DEBT OUTSTANDING OR COMMITMENTS IN EFFECT UNDER THE CREDIT AGREEMENT, SUCH COMPANY SHALL NOT AGREE TO SELL, ASSIGN, PLEDGE, ENCUMBER OR OTHERWISE DISPOSE OF, OR AGREE TO COMPROMISE, THE OBLIGATIONS OF THE OTHER COMPANIES WITH RESPECT TO THEIR INTERCOMPANY INDEBTEDNESS, OTHER THAN BY MEANS OF PAYMENT OF SUCH INTERCOMPANY INDEBTEDNESS ACCORDING TO ITS TERMS, WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT.

Without in any way limiting the generality of the foregoing paragraph, the Administrative Agent or any of the Lenders may, at any time and from time to time, without the consent of or notice to the Companies, without incurring responsibility to the Companies and without impairing or releasing the subordination provided in this Agreement or the obligations hereunder of the Companies to the Administrative Agent and the Lenders, do any one or more of the following in accordance with the terms of the Credit Agreement: (i) change the manner, place or terms of payment, or extend the time of payment, renew or alter the Senior Debt or otherwise amend or supplement the Senior Debt or the Loan Documents; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing the Senior Debt; (iii) release any Person liable in any manner for the payment or collection of the Senior Debt; and (iv) exercise or refrain from exercising any rights against any of the Companies and any other Person.

46. ADDITIONAL SUBSIDIARIES. THE COMPANIES COVENANT AND AGREE THAT THEY SHALL CAUSE SUBSIDIARIES CREATED OR ACQUIRED AFTER THE DATE OF THIS AGREEMENT, AND ANY OTHER SUBSIDIARIES REQUIRED TO JOIN THIS AGREEMENT PURSUANT TO SECTION 8.2.9 [SUBSIDIARIES, PARTNERSHIPS AND JOINT VENTURES] OR OTHERWISE UNDER THE CREDIT AGREEMENT, TO EXECUTE A GUARANTOR JOINDER IN SUBSTANTIALLY THE FORM OF EXHIBIT 1.1(G)(1) TO THE CREDIT AGREEMENT, WHEREBY SUCH SUBSIDIARY JOINS THIS AGREEMENT AND SUBORDINATES ALL INDEBTEDNESS OWED TO ANY SUCH SUBSIDIARY BY ANY OF THE COMPANIES OR OTHER SUBSIDIARIES HEREAFTER CREATED OR ACQUIRED TO THE SENIOR DEBT.

47. CONTINUING FORCE AND EFFECT. THIS AGREEMENT SHALL CONTINUE IN FORCE FOR SO LONG AS ANY PORTION OF THE SENIOR DEBT REMAINS UNPAID AND ANY COMMITMENTS OR LETTERS OF CREDIT UNDER THE CREDIT AGREEMENT REMAIN OUTSTANDING, IT BEING CONTEMPLATED THAT THIS AGREEMENT BE OF A CONTINUING NATURE.

 

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48. MODIFICATION, AMENDMENTS OR WAIVERS. ANY AND ALL AGREEMENTS AMENDING OR CHANGING ANY PROVISION OF THIS AGREEMENT OR THE RIGHTS OF THE ADMINISTRATIVE AGENT OR THE LENDERS HEREUNDER, AND ANY AND ALL WAIVERS OR CONSENTS TO EVENTS OF DEFAULT OR OTHER DEPARTURES FROM THE DUE PERFORMANCE OF THE COMPANIES HEREUNDER, SHALL BE MADE ONLY BY WRITTEN AGREEMENT, WAIVER OR CONSENT SIGNED BY THE ADMINISTRATIVE AGENT, ACTING ON BEHALF OF ALL THE LENDERS, WITH THE WRITTEN CONSENT OF THE REQUIRED LENDERS, ANY SUCH AGREEMENT, WAIVER OR CONSENT MADE WITH SUCH WRITTEN CONSENT BEING EFFECTIVE TO BIND ALL THE LENDERS.

49. EXPENSES. THE COMPANIES UNCONDITIONALLY AND JOINTLY AND SEVERALLY AGREE UPON DEMAND TO PAY TO THE ADMINISTRATIVE AGENT AND THE LENDERS THE AMOUNT OF ANY AND ALL OUT-OF-POCKET COSTS, EXPENSES AND DISBURSEMENTS, INCLUDING FEES AND EXPENSES OF COUNSEL (INCLUDING ALLOCATED COSTS OF STAFF COUNSEL) FOR WHICH REIMBURSEMENT IS CUSTOMARILY OBTAINED, WHICH THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS MAY INCUR IN CONNECTION WITH (A) THE ADMINISTRATION OF THIS AGREEMENT, (B) THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OF THE ADMINISTRATIVE AGENT OR THE LENDERS HEREUNDER, OR (C) THE FAILURE BY THE COMPANIES TO PERFORM OR OBSERVE ANY OF THE PROVISIONS HEREOF.

50. SEVERABILITY. THE PROVISIONS OF THIS AGREEMENT ARE INTENDED TO BE SEVERABLE. IF ANY PROVISION OF THIS AGREEMENT SHALL BE HELD INVALID OR UNENFORCEABLE IN WHOLE OR IN PART IN ANY JURISDICTION, SUCH PROVISION SHALL, AS TO SUCH JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY OR UNENFORCEABILITY WITHOUT IN ANY MANNER AFFECTING THE VALIDITY OR ENFORCEABILITY THEREOF IN ANY OTHER JURISDICTION OR THE REMAINING PROVISIONS HEREOF IN ANY JURISDICTION.

51. GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT UNDER THE INTERNAL LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT GIVING EFFECT TO ITS PRINCIPLES OF CONFLICT OF LAWS.

52. SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL INURE TO THE BENEFIT OF THE ADMINISTRATIVE AGENT AND THE LENDERS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS AND THE OBLIGATIONS OF THE COMPANIES SHALL BE BINDING UPON THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, PROVIDED THAT NO COMPANY MAY ASSIGN OR TRANSFER ITS RIGHTS OR OBLIGATIONS HEREUNDER OR ANY INTEREST HEREIN AND ANY SUCH PURPORTED ASSIGNMENT OR TRANSFER SHALL BE NULL AND VOID. THE DUTIES AND OBLIGATIONS OF THE COMPANIES MAY NOT BE DELEGATED OR TRANSFERRED BY THE COMPANIES WITHOUT THE WRITTEN CONSENT OF THE

 

8


REQUIRED LENDERS AND ANY SUCH DELEGATION OR TRANSFER WITHOUT SUCH CONSENT SHALL BE NULL AND VOID. EXCEPT TO THE EXTENT OTHERWISE REQUIRED BY THE CONTEXT OF THIS AGREEMENT, THE WORD “LENDERS” WHEN USED HEREIN SHALL INCLUDE, WITHOUT LIMITATION, ANY HOLDER OF A NOTE OR AN ASSIGNMENT OF RIGHTS THEREIN ORIGINALLY ISSUED TO A LENDER UNDER THE CREDIT AGREEMENT, AND EACH SUCH HOLDER OF A NOTE OR ASSIGNMENT SHALL HAVE THE BENEFITS OF THIS AGREEMENT TO THE SAME EXTENT AS IF SUCH HOLDER HAD ORIGINALLY BEEN A LENDER UNDER THE CREDIT AGREEMENT.

53. JOINT AND SEVERAL OBLIGATIONS. EACH OF THE OBLIGATIONS OF EACH AND EVERY COMPANY UNDER THIS AGREEMENT ARE JOINT AND SEVERAL. THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, MAY, IN THEIR SOLE DISCRETION, ELECT TO ENFORCE THIS AGREEMENT AGAINST ANY COMPANY WITHOUT ANY DUTY OR RESPONSIBILITY TO PURSUE ANY OTHER COMPANY AND SUCH AN ELECTION BY THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, SHALL NOT BE A DEFENSE TO ANY ACTION THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, MAY ELECT TO TAKE AGAINST ANY COMPANY. EACH OF THE LENDERS AND ADMINISTRATIVE AGENT HEREBY RESERVE ALL RIGHT AGAINST EACH COMPANY.

54. COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS AND BY THE DIFFERENT PARTIES HERETO ON SEPARATE COUNTERPARTS, EACH OF WHICH, WHEN EXECUTED AND DELIVERED, SHALL BE DEEMED AN ORIGINAL, BUT ALL SUCH COUNTERPARTS SHALL CONSTITUTE BUT ONE AND THE SAME INSTRUMENT. EACH COMPANY ACKNOWLEDGES AND AGREES THAT A TELECOPY OR ELECTRONIC TRANSMISSION TO THE ADMINISTRATIVE AGENT OR ANY LENDER OF THE SIGNATURE PAGE HEREOF PURPORTING TO BE SIGNED ON BEHALF OF SUCH COMPANY SHALL CONSTITUTE EFFECTIVE AND BINDING EXECUTION AND DELIVERY HEREOF BY SUCH COMPANY.

55. ATTORNEYS-IN-FACT. EACH OF THE COMPANIES HEREBY AUTHORIZES AND EMPOWERS THE ADMINISTRATIVE AGENT, AT ITS ELECTION AND IN THE NAME OF EITHER ITSELF, FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT AND THE LENDERS AS THEIR RESPECTIVE INTERESTS MAY APPEAR, OR IN THE NAME OF EACH SUCH COMPANY AS IS OWED INTERCOMPANY INDEBTEDNESS, TO EXECUTE AND FILE PROOFS AND DOCUMENTS AND TAKE ANY OTHER ACTION THE ADMINISTRATIVE AGENT MAY DEEM ADVISABLE TO COMPLETELY PROTECT THE ADMINISTRATIVE AGENT’S AND THE LENDERS’ INTERESTS IN THE INTERCOMPANY INDEBTEDNESS AND THEIR RIGHT OF ENFORCEMENT THEREOF, AND TO THAT END EACH OF THE COMPANIES HEREBY IRREVOCABLY MAKES, CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT, ITS OFFICERS, EMPLOYEES AND AGENTS, OR ANY OF THEM, WITH FULL POWER OF SUBSTITUTION, AS THE TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT OF SUCH COMPANY, AND WITH FULL POWER

 

9


FOR SUCH COMPANY, AND IN THE NAME, PLACE AND STEAD OF SUCH COMPANY FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS OF THIS AGREEMENT, AND TAKING ANY ACTION AND EXECUTING, DELIVERING, FILING AND RECORDING ANY INSTRUMENTS THAT THE ADMINISTRATIVE AGENT MAY DEEM NECESSARY OR ADVISABLE TO ACCOMPLISH THE PURPOSES HEREOF, WHICH POWER OF ATTORNEY, BEING GIVEN FOR SECURITY, IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE. EACH COMPANY HEREBY RATIFIES AND CONFIRMS, AND AGREES TO RATIFY AND CONFIRM, ALL ACTION TAKEN BY THE ADMINISTRATIVE AGENT, ITS OFFICERS, EMPLOYEES OR AGENTS PURSUANT TO THE FOREGOING POWER OF ATTORNEY.

56. APPLICATION OF PAYMENTS. IN THE EVENT ANY PAYMENTS ARE RECEIVED BY THE ADMINISTRATIVE AGENT UNDER THE TERMS OF THIS AGREEMENT FOR APPLICATION TO THE SENIOR DEBT AT ANY TIME WHEN THE SENIOR DEBT HAS NOT BEEN DECLARED DUE AND PAYABLE AND PRIOR TO THE DATE ON WHICH IT WOULD OTHERWISE BECOME DUE AND PAYABLE, SUCH PAYMENT SHALL CONSTITUTE A VOLUNTARY PREPAYMENT OF THE SENIOR DEBT FOR ALL PURPOSES UNDER THE CREDIT AGREEMENT.

57. REMEDIES. IN THE EVENT OF A BREACH BY ANY OF THE COMPANIES IN THE PERFORMANCE OF ANY OF THE TERMS OF THIS AGREEMENT, THE ADMINISTRATIVE AGENT, ON BEHALF OF THE LENDERS, MAY DEMAND SPECIFIC PERFORMANCE OF THIS AGREEMENT AND SEEK INJUNCTIVE RELIEF AND MAY EXERCISE ANY OTHER REMEDY AVAILABLE AT LAW OR IN EQUITY, IT BEING RECOGNIZED THAT THE REMEDIES OF THE ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS AT LAW MAY NOT FULLY COMPENSATE THE ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS FOR THE DAMAGES THEY MAY SUFFER IN THE EVENT OF A BREACH HEREOF.

58. CONSENT TO JURISDICTION. EACH COMPANY HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY PENNSYLVANIA STATE OR FEDERAL COURT SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH PENNSYLVANIA STATE OR FEDERAL COURT. EACH COMPANY HEREBY WAIVES TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. EACH COMPANY HEREBY APPOINTS THE PROCESS AGENT IDENTIFIED BELOW (THE “PROCESS AGENT”) AS ITS AGENT TO RECEIVE ON BEHALF OF SUCH PARTY AND ITS RESPECTIVE PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO THE COMPANY IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT’S ADDRESS, AND EACH COMPANY HEREBY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO RECEIVE SUCH SERVICE ON ITS BEHALF.

 

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EACH COMPANY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS (OR ANY POLITICAL SUBDIVISION THEREOF) BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED AT LAW. EACH COMPANY FURTHER AGREES THAT IT SHALL, FOR SO LONG AS ANY COMMITMENT OR ANY OBLIGATION OF ANY LOAN PARTY TO ANY LENDER REMAINS OUTSTANDING, CONTINUE TO RETAIN PROCESS AGENT FOR THE PURPOSES SET FORTH IN THIS SECTION 24. THE PROCESS AGENT IS THE BORROWER, WITH AN OFFICE ON THE DATE HEREOF AS SET FORTH IN THE CREDIT AGREEMENT. THE PROCESS AGENT HEREBY ACCEPTS THE APPOINTMENT OF PROCESS AGENT BY THE COMPANIES AND AGREES TO ACT AS PROCESS AGENT ON BEHALF OF THE COMPANIES.

59. WAIVER OF JURY TRIAL. EACH COMPANY HEREBY WAIVES TRIAL BY A JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULLEST EXTENT PERMITTED BY LAW.

60. NOTICES. ALL NOTICES, STATEMENTS, REQUESTS AND DEMANDS AND OTHER COMMUNICATIONS GIVEN TO OR MADE UPON THE COMPANIES, THE ADMINISTRATIVE AGENT OR THE LENDERS IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT SHALL BE GIVEN OR MADE AS PROVIDED IN SECTION 11.5 [NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION] OF THE CREDIT AGREEMENT.

61. RULES OF CONSTRUCTION. THE RULES OF CONSTRUCTION SET FORTH IN SECTION 1.2 [CONSTRUCTION] OF THE CREDIT AGREEMENT SHALL APPLY TO THIS AGREEMENT.

62. AMENDMENT AND RESTATEMENT. THIS AGREEMENT AMENDS AND RESTATES THAT CERTAIN INTERCOMPANY SUBORDINATION AGREEMENT, DATED JUNE 15, 2011, MADE BY THE COMPANIES FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT (THE “PRIOR AGREEMENT”). THIS AGREEMENT IS ISSUED IN SUBSTITUTION FOR (AND NOT IN DISCHARGE OF) THE OBLIGATIONS EVIDENCED BY THE PRIOR AGREEMENT.

[INTENTIONALLY LEFT BLANK]

 

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WITNESS the due execution hereof, with the intention to be legally bound, as of the day and year first above written as a document under seal.

 

BORROWER:
WITNESS:   

II-VI INCORPORATED,

a Pennsylvania corporation

 

   By:                                          (SEAL)
Name: Eric C. Springer, Esquire   

Name: Craig A. Creaturo

Title:   Chief Financial Officer and Treasurer

GUARANTORS:
WITNESS:    II-VI DELAWARE, INC., a Delaware corporation; VLOC INCORPORATED, a Pennsylvania corporation; EXOTIC ELECTRO-OPTICS, INC., a California corporation; II-VI WIDE BAND GAP, INC., a Pennsylvania corporation, MARLOW INDUSTRIES, INC., a Texas corporation; MARLOW INDUSTRIES ASIA, INC., a Delaware corporation; MAX LEVY AUTOGRAPH, INC., a Pennsylvania corporation; HIGHYAG LASERTECHNOLOGIE, INC., a Pennsylvania corporation; PHOTOP TECHNOLOGIES, INC., a California corporation; AEGIS LIGHTWAVE, INC., a Delaware corporation; AEGIS LIGHTWAVE SECURITY CORPORATION, a Massachusetts corporation; M CUBED TECHNOLOGIES, INC., a Delaware corporation

 

   By:                                                       (SEAL)
Name: Eric C. Springer, Esquire   

Name: Craig A. Creaturo

Title:     Treasurer of each of the entities listed above, other than PHOTOP TECHNOLOGIES, INC. for which he is the Secretary


EXHIBIT 1.1(N)(1)

FORM OF

REVOLVING CREDIT NOTE

 

$                                                             , 20    

FOR VALUE RECEIVED, the undersigned, II-VI Incorporated, a Pennsylvania corporation (the “Borrower”), hereby unconditionally promises to pay to the order of                             (the “Lender”), the lesser of (i) the principal sum of                         Dollars (US$                    ), or (ii) the aggregate unpaid principal balance of all Revolving Credit Loans made by the Lender to the Borrower pursuant to Section 2.5.4 [Repayment of Revolving Credit Loans] of the First Amended and Restated Credit Agreement, dated as of November 16, 2012, among the Borrower, the Guarantors now or hereafter party thereto, the Lenders now or hereafter party thereto and PNC Bank, National Association, as administrative agent, (hereinafter referred to in such capacity as the “Administrative Agent”) (as amended, restated, modified, or supplemented from time to time, the “Credit Agreement”), together with all outstanding interest thereon on the Expiration Date.

The Borrower shall pay interest on the unpaid principal balance hereof from time to time outstanding from the date hereof at the rate or rates per annum specified by the Borrower pursuant to, or as otherwise provided in, the Credit Agreement. Subject to the provisions of the Credit Agreement, interest on this Revolving Credit Note will be payable pursuant to Section 5.5 [Interest Payment Dates] of, or as otherwise provided in, the Credit Agreement. If any payment or action to be made or taken hereunder shall be stated to be or become due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day, unless otherwise provided in the Credit Agreement, and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action. Upon the occurrence and during the continuation of an Event of Default beyond the expiration of any applicable notice or cure period, and at the Administrative Agent’s discretion or upon written demand by the Required Lenders, the Borrower shall pay interest on the entire principal amount of the then outstanding Revolving Credit Loans evidenced by this Revolving Credit Note and all other obligations due and payable to the Lender pursuant to the Credit Agreement and the other Loan Documents at a rate per annum as set forth in Section 4.3 [Interest After Default] of the Credit Agreement. Such interest will accrue before and after any judgment has been entered.

Subject to the provisions of the Credit Agreement, payments of both principal and interest shall be made without setoff, counterclaim or other deduction of any nature at the office of the Administrative Agent located at 500 First Avenue, Pittsburgh, Pennsylvania 15219 unless otherwise directed in writing by the Administrative Agent, in lawful money of the United States of America in immediately available funds.

This Revolving Credit Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement and the other Loan Documents, including the representations, warranties, covenants, conditions, security interests, if any, and Liens, if any, contained or

 

2


granted therein. The Credit Agreement among other things contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments, in certain circumstances, on account of principal hereof prior to maturity upon the terms and conditions therein specified. The Borrower waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Revolving Credit Note and the Credit Agreement.

This Revolving Credit Note shall bind the Borrower and its successors and assigns, and the benefits hereof shall inure to the benefit of the Lender and its successors and assigns. All references herein to the “Borrower” and the “Lender” shall be deemed to apply to the Borrower and the Lender, respectively, and their respective successors and assigns as permitted under the Credit Agreement.

This Revolving Credit Note and any other documents delivered in connection herewith and the rights and obligations of the parties hereto and thereto shall for all purposes be governed, by and construed and enforced in accordance with, the internal laws of the Commonwealth of Pennsylvania without giving effect to its conflicts of law principles.

All capitalized terms used herein shall, unless otherwise defined herein, have the same meanings given to such terms in the Credit Agreement and Section 1.2 [Construction] of the Credit Agreement shall apply to this Revolving Credit Note.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned has executed this Revolving Credit Note by its duly authorized officer as a document under seal.

 

II-VI INCORPORATED
By:                                               (SEAL)

Name: Craig A. Creaturo

Title:   Treasurer


EXHIBIT 1.1(N)(2)

FORM OF

SWING LOAN NOTE

 

$10,000,000    November     , 2012

FOR VALUE RECEIVED, the undersigned, II-VI Incorporated, a Pennsylvania corporation (the “Borrower”), hereby unconditionally promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the “Swing Loan Lender”), the lesser of (i) the principal sum of Ten Million and 00/100 Dollars (US$10,000,000), or (ii) the aggregate unpaid principal balance of all Swing Loans made by the Swing Loan Lender to the Borrower pursuant to the First Amended and Restated Credit Agreement, dated as of November 16, 2012, among the Borrower, the Guarantors now or hereafter party thereto, the Lenders now or hereafter party thereto, and the Swing Loan Lender, as administrative agent (hereinafter referred to in such capacity as the “Administrative Agent”) (as amended, restated, modified, or supplemented from time to time, the “Credit Agreement”), payable with respect to each Swing Loan evidenced hereby on the earlier of (i) demand by the Swing Loan Lender or (ii) on the Expiration Date.

The Borrower shall pay interest on the unpaid principal balance of each Swing Loan from time to time outstanding from the date hereof at the rate per annum and on the date(s) provided in the Credit Agreement. Subject to the provisions of the Credit Agreement, interest on this Swing Loan Note will be payable pursuant to Section 5.5 [Interest Payment Dates] of, or as otherwise provided in, the Credit Agreement. If any payment or action to be made or taken hereunder shall be stated to be or become due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day, unless otherwise provided in the Credit Agreement, and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action. Upon the occurrence and during the continuation of an Event of Default beyond the expiration of any applicable notice or cure period, and at the Administrative Agent’s discretion or upon written demand by the Required Lenders, the Borrower shall pay interest on the entire principal amount of the then outstanding Swing Loans evidenced by this Swing Loan Note at a rate per annum as set forth in Section 4.3 [Interest After Default] of the Credit Agreement. Such interest will accrue before and after any judgment has been entered.

Subject to the provisions of the Credit Agreement, payments of both principal and interest shall be made without setoff, counterclaim or other deduction of any nature at the office of the Administrative Agent located at 500 First Avenue, Pittsburgh, Pennsylvania 15219, unless otherwise directed in writing by the holder hereof, in lawful money of the United States of America in immediately available funds.

 

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This Swing Loan Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement and the other Loan Documents, including the representations, warranties, covenants, conditions, security interests, if any, and Liens, if any, contained or granted therein. The Credit Agreement among other things contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments, in certain circumstances, on account of principal hereof prior to maturity upon the terms and conditions therein specified. The Borrower waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Swing Loan Note and the Credit Agreement.

The Borrower acknowledges and agrees that the Swing Loan Lender may at any time and in its sole discretion demand payment of all amounts outstanding under this Swing Loan Note without prior notice to the Borrower.

This Swing Loan Note shall bind the Borrower and its successors and assigns, and the benefits hereof shall inure to the benefit of the Swing Loan Lender and its successors and assigns. All references herein to the “Borrower” and the “Swing Loan Lender” shall be deemed to apply to the Borrower and the Swing Loan Lender, respectively, and their respective successors and assigns as permitted under the Credit Agreement.

This Swing Loan Note and any other documents delivered in connection herewith and the rights and obligations of the parties hereto and thereto shall for all purposes be governed, by and construed and enforced in accordance with, the internal laws of the Commonwealth of Pennsylvania without giving effect to its conflicts of law principles.

All capitalized terms used herein shall, unless otherwise defined herein, have the same meanings given to such terms in the Credit Agreement and Section 1.2 [Construction] of the Credit Agreement shall apply to this Swing Loan Note.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned has executed this Swing Loan Note by its duly authorized officers as a document under seal.

 

II-VI INCORPORATED  
By:       (SEAL)
Name:   Craig A. Creaturo  
Title:   Treasurer  


EXHIBIT 2.4.1

FORM OF

LOAN REQUEST

 

TO: PNC Bank, National Association, as Administrative Agent
     PNC Firstside Center—4th Floor
     500 First Avenue
     P7-PFSC-04-I
     Pittsburgh, PA 15219
     Telephone No.: (412) 762—6442
     Telecopier No.: (412) 762—8672
     Attn: Agency Services

 

FROM: II-VI INCORPORATED, a Pennsylvania corporation (the “Borrower”).

 

RE: First Amended and Restated Credit Agreement (as it may be amended, restated, modified or supplemented, the “Credit Agreement”), dated as of November 16, 2012, by and among the Borrower, the Guarantors party thereto, the Lenders party thereto and PNC Bank, National Association, as administrative agent for the Lenders (the “Administrative Agent”).

Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them by the Credit Agreement.

 

A. Pursuant to Section 2.4.1 [Revolving Credit Loan Requests] or Section 4.1.1 [Interest Rate Options], as the case may be, of the Credit Agreement, the undersigned Borrower irrevocably requests [check one line under 1 below, and fill in blank space next to the line as appropriate]

 

1               A new Revolving Credit Loan, OR
      Renewal of the Euro-Rate Option applicable to an outstanding Revolving Credit Loan originally made on                     , 20        , OR
      Conversion of the Base Rate Option applicable to an outstanding Revolving Credit Loan originally made on                     , 20         to a Loan to which the Euro-Rate Option applies, OR
      Conversion of the Euro-Rate Option applicable to an outstanding Revolving Credit Loan originally made on                     , 20         to a Loan to which the Base Rate Option applies.

 

2


SUCH NEW, RENEWED OR CONVERTED LOAN SHALL BEAR INTEREST:

[Check 2(a) or 2(b) below and fill in blank spaces in line next to line]:

 

2(a)       Under the Base Rate Option. Such Loan shall have a Borrowing Date of                     , 20         (which date shall be (i) the same Business Day of receipt by the Administrative Agent by 10:00 a.m. eastern time of this Loan Request for making a new Revolving Credit Loan to which the Base Rate Option applies, or (ii) the last day of the preceding Interest Period if a Loan to which the Euro-Rate Option applies is being converted to a Loan to which the Base Rate Option applies).
     

OR

(b)      

Under the Euro-Rate Option. Such Loan shall have a Borrowing Date of                     , 20         (which date shall be four (4) Business Days, in the case of Optional Currency Loans, and three (3) Business Days for all other Loans subsequent to the Business Day of receipt by the Administrative Agent by 10:00 a.m. eastern time of this Loan Request for making a new Revolving Credit Loan to which the Euro-Rate Option applies, renewing a Loan to which the Euro-Rate Option applies, or converting a Loan to which the Base Rate Option applies to a Loan to which the Euro-Rate Option applies).

 

[Check 3(a) or (b) below and fill in blank spaces in line next to line]

3(a)    Such Loan is in Dollars, in the principal amount of U.S. $                    or the principal amount to be renewed or converted is U.S. $                    
  

OR

(b)   

Such Loan is in the following Optional Currency                     , in the principal amount of                     , or the principal amount of such Optional Currency to be renewed is                     .

 

[for Revolving Credit Loans under Section 2.4.1 not to be less than $500,000 and in increments of $500,000 for each Borrowing Tranche under the LIBOR Rate Option and not less than the lesser of $500,000 or the maximum amount available for Borrowing Tranches under the Base Rate Option.]

4   

[Completeblank below if the Borrowers are selecting the LIBOR Rate Option]:

 

Such Loan shall have an Interest Period of one, two, three, or six Month(s):                                                          

 

B As of the date hereof and the date of making the above-requested Loan (and after giving effect thereto): all of the representations and warranties contained in Article 6 of the Credit Agreement and in the other Loan Documents are true and correct, except for representations and warranties made as of a specified date (which were true and correct, as applicable, as of such date); no Event of Default or Potential Default has occurred and is continuing or exists beyond the expiration of any applicable notice or cure period; the making of such Loan shall not contravene any Law applicable to the Borrower, any other Loan Party, any Subsidiary of the Borrower or of any other Loan Party or any other Guarantor, or any Lender; and the making of such Loan shall not cause the Revolving Facility Usage to exceed the Revolving Credit Commitments.

 

3


C The undersigned hereby irrevocably requests [check one line below and fill in blank spaces next to the line as appropriate]:

 

1       Funds to be deposited into a PNC Bank bank account per our current standing instructions. Complete amount of deposit if not full loan advance amount:                         U.S. $                    .
2      

Funds to be wired per the following wire instructions:

 

U.S. $                     Amount of Wire Transfer

Bank Name: __________________________________

ABA: _______________________________________

Account Number: ______________________________

Account Name: ________________________________

Reference: ____________________________________

3       Funds to be wired per the attached Funds Flow (multiple wire transfers).

[SIGNATURE PAGE FOLLOWS]

 

4


[SIGNATURE PAGE 1 OF 1 TO LOAN REQUEST]

The Borrower certifies to the Administrative Agent for the benefit of the Lenders as to the accuracy of the foregoing on                     , 20        .

 

II-VI INCORPORATED  
By:       (SEAL)
Name:        
Title:        


EXHIBIT 2.4.2

FORM OF

SWING LOAN REQUEST

 

TO: PNC Bank, National Association, as Administrative Agent
     PNC Firstside Center—4th Floor
     500 First Avenue
     P7-PFSC-04-I
     Pittsburgh, PA 15219
     Telephone No.: (412) 762—6442
     Telecopier No.: (412) 762—8672

 

     Attn: Agency Services

 

FROM: II-VI INCORPORATED, a Pennsylvania corporation (the “Borrower”).