(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrowers shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (at least three (3) Business Days in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the Borrowers also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed the LC Sublimit, and (ii) the Availability shall not be less than the Minimum Availability Amount.

 

(iii) Sale of Equity.  Within three (3) Business Days of the receipt by any Credit Party or any Restricted Subsidiary of any Net Proceeds of the consummation of the issuance of any Equity Interests of Holdings or any Restricted Subsidiary (other than (A) the issuance of any Equity Interest in connection with any incentive plans available to officers, directors or employees of Holdings or any of its Subsidiaries, (B) the issuance of any Equity Interests by any Subsidiary to Holdings or any other Subsidiary or (C) the issuance of any Equity Interest to sellers in connection with a Permitted Acquisition), the Borrowers shall make a mandatory prepayment of the R evolving Loans in an amount equal to 100% of the Net Proceeds received, any prepayment to be applied in accordance with Section 2.09(c), provided that so long as no Full Cash Dominion Period is in effect and no Event of Default shall have occurred and be continuing at the time of the receipt of the proceeds of such issuance, no prepayment of the Revolving Loan on account of the issuance of any such Equity Interests shall be required under this clause (iii).

 

(iv) Incurrence of Indebtedness.  Within three (3) Business Days of the receipt by any Credit Party or any Restricted Subsidiary of any Net Proceeds of the consummation of the issuance of any debt securities or other Indebtedness for borrowed money of Holdings or any Restricted Subsidiary (other than Indebtedness permitted pursuant to clauses 6.01(a) through (h), (l), (m), (n), (o) or (p)), the Borrowers shall make a mandatory prepayment of the Revolving Loans in an amount equal to 100% of the Net Proceeds received, any prepayment to be applied in accordance with Section 2.09(c), provided that so long as no Full Cash Dominion Period is in effect and no Event of Default shall have occurred and be continuing at the time of the receipt of the proceeds of such issuance, no prepayment of the Revolving Loans on account of the issuance of any such debt securities or Indebtedness shall be required under this clause (iv).

 

(c) Application of Mandatory Prepayments of Revolving Loans.  In the event of any mandatory prepayment pursuant to Section 2.09(b), such prepayment shall be accompanied by accrued interest to the extent required by Section 2.11 and shall be applied, (i) first, as a payment of accrued and unpaid interest on any Protective Advances, (ii) second, as a payment of the outstanding principal amount of any Protective Advances, (iii) third, as a pro rata payment of accrued and unpaid interest on Swingline Loans, (iv) fourth, as a pro rata payment of the outstanding principal amount of the Swingline Loans, (v) fifth, as a pro rata payment of accrued and unpaid interest on the Revolving Loans (other than Swingline Loans), (vi) sixth, as a pro rata payment of the outstanding principal amount of the Revolving Loans (other than Swingline Loans) without a corresponding reduction in Revolving Commitments (provided, that if a Required Term Lender Remedy Notice Period shall have elapsed and the Required Term Lender Remedy Notice giving rise to such Required Term Lender Remedy Notice Period shall not have been withdrawn and the Event of Default that entitled the Required Term Lenders to send such Required Term Lender Remedy Notice shall be continuing, the application of any mandatory prepayment to the outstanding principal amount of Revolving Loans in accordance with this clause (vi) shall be accompanied by a corresponding reduction in Revolving Commitments), and (vii) seventh, to the repayment of any other Obligations of the Borrowers to the Administrative Agent and the Lenders which are then due and outstanding.

 

(d) Notice of Prepayment of Revolving Loans.  The Borrowers shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 12:00 noon, New York City time three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment, and (iii) in the case of a prepayment of a Swingline Loan, not later than 1:00 p.m., New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Revolving Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given under the circumstances in which a conditional notice of termination of the Revolving Commitments is permitted as contemplated by Section 2.07, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.07.  Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the applicable Revolving Lenders of the contents thereof.  Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02 (except that the foregoing shall not be applicable (i) to the extent that the payment is made from the operation of Borrowers& #8217; controlled disbursement account maintained with the Administrative Agent, (ii) to a prepayment in full of the aggregate principal amount of a Revolving Borrowing then outstanding or (iii) to the extent necessary to apply fully the required amount of a mandatory prepayment).

 

(e) Optional Prepayment of Term Loans.  The Borrowers shall have the right (i) at any time to prepay all the Term Loans in full in connection with the repayment in full of the Revolving Loans and the termination of this Agreement, (ii) at any time to prepay all the Term Loans in full in connection with a Permitted Term Loan Refinancing, and (iii) at any time, with the prior written consent of (A) the Administrative Agent and (B) (x) at any time when there are more than two Revolving Lenders, not less than three Revolving Lenders holding Revolving Loans, LC Exposure and unused Revolving Commitments representing more than 50% of the sum, at such time, of the agg regate outstanding principal amount of Revolving Loans, LC Exposure and unused Revolving Commitments at such time, all after giving effect to the terms of Section 2.16(f) and Section 2.18(b) or (y) at any time when there are two or less Revolving Lenders, the Required Revolving Lenders, to use a portion of the Net Proceeds received by the Credit Parties from any of the events described in Section 2.09(b)(ii), (iii) or (iv) to prepay the Term Loans; provided that at the time of such prepayment, no Full Cash Dominion Period shall be in effect and no Event of Default shall have occurred and be continuing.  Each optional prepayment of the Term Loans shall be made ratably among the Term Loans held by all Term Lenders, and such prepayments shall be made with respect to such Types of Term Loans as the Borrowers may specify by notice to the Administrative Agent at or before the time of such prepayment as provided in Section 2.09(g) below. 0; Prepayments shall be accompanied by fees to the extent required by Section 2.09(f) and Section 2.10 and accrued interest to the extent required by Section 2.11.

 

(f) Term Loan Prepayment Fee.  If the Term Loans are prepaid, in full or in part, prior to January 1, 2012 for any reason (including, without limitation, (i) acceleration of the Obligations as a result of the occurrence of an Event of Default, (ii) foreclosure and sale of, or collection of, the Collateral, (iii) sale of the Collateral in any insolvency proceeding, or (iv) the restructure, reorganization or compromise of the Obligations by the confirmation of a plan of reorganization or any other plan of compromise, restructure or arrangement in any insolvency proceeding), the Borrowers shall pay to the Administrative Agent for the account of each Term Lender a prepayment fee in an amount equal to (i) 2.00% of the aggregate amount of the Term Loans prepaid if such prepayment occurs prior to the first anniversary of the Effective Date, and (ii) 1.00% of the aggregate amount of the Term Loans prepaid if such prepayment occurs after the first anniversary of the Effective Date but prior to January 1, 2012; provided that, notwithstanding anything to the contrary set forth herein and for the avoidance of doubt, the parties acknowledge and agree that the Borrowers shall not be required to pay any prepayment fee to a Non-Consenting Lender solely in connection with the replacement of such Non-Consenting Lender in accordance with the provisions of Section 9.02(c).  The prepayment fee shall be payable in full in cash on the date on which the Term Loans are prepaid.

 

(g) Notice of Prepayment of Term Loans.  The Borrowers shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Term Borrowing, not later than 12:00 noon, New York City time three (3) Business Days before the date of prepayment, and (ii) in the case of prepayment of an ABR Term Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Term Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given under the circumstances in which a conditional notice of termination of the Revolving Commitments is permitted as contemplated by Section 2.07, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.07.  Promptly following receipt of any such notice relating to a Term Borrowing, the Administrative Agent shall advise the applicable Term Lenders of the contents thereof.  Each partial prepayment of any Term Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000.

 

SECTION 2.10 Fees.

 

(a) The Borrowers agree to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee (the “Revolving Credit Commitment Fee”), which shall accrue at the Applicable Commitment Rate on the average of the daily amount of the unused Revolving Commitment of such Revolving Lender during the period from and including the Effective Date to but excluding the date on which such Revolving Commitment terminates.  Accrued Revolving Credit Commitment Fees shall be payable quarterly in arrears on the first Business Day of January, April, July and October of each year and on the date on which the Revolving Commitments terminate, comm encing on the first such date to occur after the date hereof.  All Revolving Credit Commitment Fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  For purposes of computing Revolving Credit Commitment Fees, a Revolving Commitment of a Revolving Lender shall be deemed to be used to the extent of the outstanding Revolving Loans, Swingline Loans and LC Exposure of such Revolving Lender.

 

(b) The Borrowers agree to pay to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participation in Letters of Credit, which shall accrue for each day during the period from and including the Effective Date to but excluding the later of the date on which such Revolving Lender’s Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure, at a rate per annum equal to the Applicable Margin with respect to interest on Eurodollar Revolving Loans for such day, in each case multiplied by the average daily amount of such Revolving Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as a fronting fee to the Issuing Bank at a rate of 0.125% per annum on the face amount of each Letter of Credit payable in advance and the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees accrued through and including the last day of each calendar month shall be payable on the first Business Day of each calendar month following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing aft er the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable to the Issuing Bank on demand.  All participation and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(c) The Borrowers agree to pay to the Administrative Agent, for its own account, fees in the amounts and at the times separately agreed upon in writing between the Borrowers and the Administrative Agent.  The Borrowers agree to pay to the Term Facility Bookrunner, for its own account, fees in the amounts and at the times separately agreed upon in writing between the Borrowers and the Term Facility Bookrunner.

 

(d) The Borrowers agree to pay to each Term Lender, for its own account on the Effective Date, fees (which fees may be in the form of original issue discount) in the amounts and at the times separately agreed upon in writing between the Borrowers, the Term Facility Bookrunner, and each Term Lender.

 

(e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders.  Absent any error in the calculation thereof, fees paid shall not be refundable under any circumstances.

 

SECTION 2.11 Interest.

 

(a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest for each day on which any principal of such Loans remains outstanding at the Alternate Base Rate for such day plus the Applicable Margin for such day.

 

(b) The Loans comprising each Eurodollar Borrowing shall bear interest for each day during each Interest Period applicable thereto at the Adjusted LIBO Rate for such Interest Period plus the Applicable Margin for such day.

 

(c) Each Protective Advance shall bear interest at the Alternate Base Rate plus the Applicable Margin for Revolving Loans plus 2%.

 

(d) Notwithstanding the foregoing, (i) during the period when any Event of Default of the type described in Section 7.01(g) or (h) shall have occurred and be continuing, (A) all Loans shall automatically and without notice to the Borrowers bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section and (B) in the case of any other amount outstanding hereunder, such amount shall automatically and without notice to the Borrowers accrue at 2% plus the rate applicable to such fee or other obligation as provided, (ii) if there shall occur and be continuing any Event of Default (other than an Event of Default described in Section 7.01(g) or (h)), following written notice deli vered to the Borrowers by the Administrative Agent at the request of the Required Revolving Lenders (which notice may be revoked at the option of the Required Revolving Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender directly affected thereby” for reductions in interest rates), all Revolving Loans shall bear interest at 2% plus the rate otherwise applicable to such Revolving Loans as provided in the preceding paragraphs of this Section during the period beginning on the date such Event of Default first occurred and ending on the date such Event of Default is cured or waived, (iii) if there shall occur and be continuing any Event of Default (other than an Event of Default described in Section 7.01(g) or (h)), following written notice delivered to the Borrowers by the Administrative Agent at the request of the Required Term Lenders (which notice may be revoked at the option of the Required Term Lenders notwithstanding any provision of Section 9.02 requiri ng the consent of “each Lender directly affected thereby” for reductions in interest rates), all Term Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section during the period beginning on the date such Event of Default first occurred and ending on the date such Event of Default is cured or waived, and (iv) if there shall occur and be continuing any Event of Default (other than an Event of Default described in Section 7.01(g) or (h)), following written notice delivered to the Borrowers by the Administrative Agent at the request of the Required Lenders (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender directly affected thereby” for reductions in interest rates), any other amount outstanding hereunder shall accrue at 2% plus the rate applicable to such fee or other obligation as provided during the period be ginning on the date such Event of Default first occurred and ending on the date such Event of Default is cured or waived.

 

(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan, on the Maturity Date and, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Eurodollar Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Eurodollar Loan shall be payable on the effective dat e of such conversion.

 

(f) All interest hereunder shall be computed on the basis of a year of 360 days for Eurodollar Loans (and for ABR Loans based on the Adjusted LIBO Rate) and 365/366 days for ABR Loans (including Swingline Loans but excluding ABR Loans based on the Adjusted LIBO Rate), and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

SECTION 2.12 Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

 

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate, for such Interest Period; or

 

(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrowers and the Lenders by telephone or telecopy, as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving rise to such notice no longer exist (which notification shall be made promptly after the Administrative Agent obtains knowledge of the cessation of such circumstances), (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request or Interest Election Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

SECTION 2.13 Increased Costs.

 

(a) If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

 

(ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein (other than with respect to Indemnified Taxes or Other Taxes, which shall be governed by Section 2.15 and Excluded Taxes);

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Eurodollar Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise with respect to its Eurodollar Loans or its maintenance of, or participation in, Letters of Credit), then the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

 

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

 

(c) A certificate of a Lender or the Issuing Bank setting forth in reasonable detail the calculation of the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate on demand.

 

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation theref or; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.14 Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the In terest Period applicable thereto as a result of a request by the Borrowers pursuant to Section 2.17, then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such per iod, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.  Notwithstanding the foregoing, the Borrowers shall not be required to make any prepayment of a Eurodollar Borrowing pursuant to Section 2.09(b) until the last day of the Interest Period with respect thereto so long as an amount equal to such prepayment is deposited by the Borrowers into a cash collateral account with the Administrative Agent and applied to such prepayment on the last day of suc h Interest Period.

 

SECTION 2.15 Taxes.

 

(a) Any and all payments by or on account of any obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, the applicable Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b) In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c) The Borrowers shall jointly and severally indemnify the Administrative Agent, each Lender and the Issuing Bank, within ten (10) days after written demand therefor, for (i) the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relev ant Governmental Authority and (ii) any and all losses, claims, damages, liabilities and related expenses arising out of, in connection with or as a result of the failure of the Borrowers to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by the Borrowers for Taxes pursuant to this Section 2.15.  A certificate setting forth and explaining in reasonable detail the amount of such payment or liability delivered to the Borrowers by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

 

(d) Each Lender and Issuing Bank shall indemnify the Borrowers and the Administrative Agent, within ten (10) days after written demand therefor, for the full amount of any Taxes described in clause (c) of the definition of “Excluded Taxes” that are imposed on amounts paid to such Lender or Issuing Bank by the Borrowers or the Administrative Agent on or with respect to any payment by or on account of any obligation of any Borrower under any Financing Document and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the applicable Lender or Issuing Bank by the Borrowers or the Administrative Agent shall be conclusive absent manifest error.  The Borrowers or the Administrative Agent, as applicable, shall notify the applicable Lender or Issuing Bank of the incurrence or assertion of such liability within a reasonable time after the incurrence or assertion.  Each Lender and Issuing Bank hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or Issuing Bank, as the case may be, under this Agreement or any other Financing Document against any amount due to the Administrative Agent under this Section 2.15(d).

 

(e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(f) Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to such Borrower (with a copy to the Administrative Agent), such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.  Any Foreign Lender shall provide the Administrative Agent and the relevant Borrower with two properly completed and executed originals of each of the following, as applicable: (i) Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is effectively connected with a U.S. trade or business), W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under an income tax treaty) and/or W-8IMY, or any successor forms, (ii) in the case of a Foreign Lender claiming exemption under Sections 871(h) or 881(c) of the Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to the Administrative Agent that such Foreign Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of any of the Borrowers within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS certifying as to the entitlement of such Foreign Lender to such exemption from United States withholding tax or reduced rate with respect to all payments to be made to such Foreign Lender under the Finance Documents.  Each U.S. Lender shall provide the Administrative Agent and the Borrowers two properly completed and executed originals of Form W-9 or any successor form.  The forms to be delivered pursuant to this Section 2.15(f) shall be provided upon execution and delivery of this Agreement, at the time or times prescribed by applicable law, promptly upon reasonable demand by Administrative Agent or the Borrowers and promptly upon learning that such forms have become obsolete or ineffective.

 

(g) If the Administrative Agent or a Lender determines, in its sole good faith discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to Section 2.15, it shall pay over such refund to the Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 2.15 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrowers, upon the request of the Administrative Agent or such Lender, agree to repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event that the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.

 

SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a) The Borrowers shall make each payment required to be made by the Borrowers hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately available funds, without set-off or counterclaim.  All payments made in respect of the Revolving Loans shall be made for the account of the Revolving Lenders pro rata in accordance with each Revolving Lender’s Applicable Revolving Percentage  All payments made in respect of the Term Loans shall be made for the account of the Term Lenders pro rata in accordance with each Term Lender’s Applicable Term Percentage.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, except payments to be made directly to the Issuing Bank as expressly provided herein and except that payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension; provided that, in the case of any prepayment of principal of or interest on any Eurodollar Loan, if such next succeeding Business Day would fall in the next calendar month, the date for payment shall instead be the next preceding Business Day.  All payments hereunder shall be made in dollars.

 

(b) Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Financing Documents (which shall be applied as specified by the Borrowers), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.09) or (C) amounts to be applied from the Collection Account during a Full Cash Dominion Period (which shall be applied in accordance with Section 2.08(b)) or (ii) after an Event of Default has occurred and is continuing and (A) the Administrative Agent so elects, (B) the Required Lenders so direct, (C) the Loans are accelerated pursuant to Section 7.02, or (D) a Required Term Lender Remedy Notice Period shall have elapsed and the Required Term Lender Remedy Notice giving rise to such Required Term Lender Remedy Notice Period shall not have been withdrawn and the Event of Default or other fact or condition that entitled the Required Term Lenders to send such Required Term Lender Remedy Notice shall be continuing, such funds shall be applied ratably (based upon the Administrative Agent’s and each Lender’s interest in the aggregate outstanding Secured Obligations described in each of categories first through fourteenth described below) first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the Borrowers (other than in connection with Banking Services Obligations or Swap Obligations), second, to pay any fees or expense reimbursements then due to the Revolving Lenders from the Borrowers (other than in connection with Banking Services Obligations or Swap Obligations), third, to pay interest due in respect of the Protective Advances, fourth, to pay the principal of the Protective Advances, fifth, to pay interest then due and payable on the Revolving Loans (other than the Protective Advances) ratably, sixth, to prepay principal on the Revolving Loans (other than the Protective Advances) and unreimbursed LC Disbursements ratably (and, if any of the following shall have occurred: (x) the Loans shall have been accelerated; (y) the Administrative Agent shall have exercised any remedies pursuant to Section 7.02 av ailable under the Financing Documents or applicable law (it being understood that changes to reserves, borrowing base advance rates or eligibility criteria, or increases in interest rates following an Event of Default, shall not be deemed to constitute the exercise of remedies for purposes of this Section 2.16(b)); or (z) a Required Term Lender Remedy Notice Period shall have elapsed and the Required Term Lender Remedy Notice giving rise to such Required Term Lender Remedy Notice Period shall not have been withdrawn and the Event of Default that entitled the Required Term Lenders to send such Required Term Lender Remedy Notice shall be continuing; then, the Revolving Commitments shall be permanently reduced by the amount of any prepayment of the Revolving Loans pursuant to this clause sixth), seventh, to pay an amount to the Administrative Agent equal to 105% of the aggregate undr awn face amount of all outstanding Letters of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as cash collateral for such Obligations, but only to the extent required to be cash collateralized at such time pursuant to Section 2.04(j) or Section 2.18(c), eighth, to pay amounts owing with respect to Secured Obligations consisting of Noticed Banking Services Obligations in an aggregate amount not to exceed $500,000 (based on the amounts then certified by the Revolving Lender or Affiliate thereof providing the applicable Noticed Banking Services to the Administrative Agent to be due and payable to such Revolving Lender or Affiliate with respect thereto), ninth, to pay any fees (including prepayment fees) or expense reimbursements then due to the Term Lenders from the Borrowers, tenth, to pay in terest then due and payable on the Term Loans ratably, eleventh, to prepay principal on the Term Loans ratably, twelfth, to pay amounts owing with respect to Secured Obligations consisting of Noticed Banking Services in excess of $500,000 and in respect of Noticed Swap Obligations (based on the amounts then certified by the Revolving Lender or Affiliate thereof providing the applicable Noticed Banking Services or party to the applicable Swap Agreement to the Administrative Agent to be due and payable to such Revolving Lender or Affiliate with respect thereto), thirteenth, to pay amounts owing with respect to Secured Obligations consisting of Banking Services Obligations (other than Noticed Banking Services Obligations) and Swap Obligations (other than Noticed Swap Obligations) (based on the amounts then certified by the Revolving Lender or Affiliate thereof providing the applicable Banking Services or party to the applicable Swap Agreement to the Administrative Agent to be due and payable to such Lender or Affiliate with respect thereto), fourteenth, to pay any other Secured Obligation due to the Administrative Agent or any Lender by the Borrowers, and fifteenth, any excess to be returned to the Borrowers.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrowers, or unless an Event of Default has occurred and is continuing, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding ABR Loans and, in any such eve nt, the Borrowers shall pay the break funding payment required in accordance with Section 2.14. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

 

(c) At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under the Financing Documents, may be paid from the proceeds of Borrowings made hereunder as such payments become due hereunder whether made following a request by the Borrowers pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of any Borrower maintained with the Administrative Agent (other than an escrow account or other account for segregated funds).  Each Borrower hereby irrevocably authorizes (i ) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Financing Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans) and that all such Borrowings shall be deemed to have been requested pursuant to Sections 2.03 or 2.05, as applicable, and (ii) the Administrative Agent to charge any deposit account of any Borrower maintained with the Administrative Agent (other than an escrow account or other account for segregated funds) for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Financing Documents.

 

(d) If any Revolving Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Revolving Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Revolving Lender, then the Revolving Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements and Swingline Loans of other Revolving Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Revolving Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; 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, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Revolving Lender as consideration for the assignment of or sale of a participation in any of its Revolving Loans or participations in LC Disbursements to any assignee or participant, other than to the Credit Pa rties or any of their Affiliates (as to which the provisions of this paragraph shall apply).  If any Term Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Term Loans resulting in such Term Lender receiving payment of a greater proportion of the aggregate amount of its Term Loans and accrued interest thereon than the proportion received by any other Term Lender, then the Term Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Term Loans of other Term Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Term Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Term Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise there to is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Term Lender as consideration for the assignment of or sale of a participation in any of its Term Loans to any assignee or participant, other than to the Credit Parties or any of their Affiliates (as to which the provisions of this paragraph shall apply).  The Borrowers consent to the foregoing and agree, to the extent the Borrowers may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrowers rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrowers in the amount of such participati on.  Notwithstanding anything to the contrary set forth herein, if, at any time any Term Lender shall receive any proceeds of Collateral or payment from the Borrowers that, in accordance with the terms of this Agreement, should have been remitted to the Administrative Agent or the Revolving Lenders to be applied against the Revolving Loans, Swingline Loans or Protective Advances, or against any interest or fees owing with respect to the Revolving Loans, Swingline Loans or Protective Advances, such Term Lender shall promptly notify the Administrative Agent and deliver to the Administrative Agent such proceeds or payment for distribution to the Revolving Lenders.  Notwithstanding anything to the contrary set forth herein, if, at any time any Revolving Lender shall receive any proceeds of Collateral or payment from the Borrowers that, in accordance with the terms of this Agreement, should have been remitted to the Administrative Agent or the Term Lenders to be applied against the outstanding Term Loans or against any interest or fees owing with respect to the outstanding Term Loans, such Revolving Lender shall promptly notify the Administrative Agent and deliver to the Administrative Agent such proceeds or payment for distribution to the Term Lenders.

 

(e) Unless the Administrative Agent shall have received notice from the Borrowers prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distri buted to such Lender or Issuing Bank 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.

 

(f) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(d) or (e), 2.05(b) or 2.16(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid; application of any such amounts shall be made in such order as may be determined by the Administrative Agent in its discretion.  Until such Lender’s unsatisfied obligations are fully paid, such Lender shall be excluded from any determination of Required Lenders, Required Revolvi ng Lenders, or Required Term Lenders, as applicable, under this Agreement.

 

SECTION 2.17 Mitigation Obligations; Replacement of Lenders

 

(a) If any Lender requests compensation under Section 2.13, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvan tageous to such Lender.  The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b) If any Lender requests compensation under Section 2.13, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, or if any Lender becomes a Defaulting Lender, or if any Lender fails to approve an amendment or waiver to this Agreement requiring its consent, which amendment or waiver is approved by the Required Lenders, the Required Revolving Lenders, or the Required Term Lenders, as applicable, then the Borrowers may, at their sole expense and effort, 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 Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrowers, shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, its participations in LC Disbursements and Swingline Loans (if applicable), accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) , (iii) in the case of any such assignment resulting from a Lender becoming a Non-Consenting Lender, such assignment shall also be in accordance with Section 9.02(c), and (iv) in the case of any such assignment resulting from a claim for compensation under Section 2.13 or payments required to be made pursuant to Section 2.15, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

SECTION 2.18 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:

 

           (a)           fees shall cease to accrue on the unused portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.10(a);

 

           (b)           (i) the Revolving Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders, or the Required Revolving Lenders, as applicable, have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02), and (ii) the Term Loans held by such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders, or the Required Term Lenders, as applicable, have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02); provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender; provided, further, that in no event shall the commitment of a Defaulting Lender be increased or extended beyond the Maturity Date without the consent of such Defaulting Lender;

 

           (c)           if at the time a Revolving Lender becomes a Defaulting Lender, such Revolving Lender has any Swingline Exposure or LC Exposure, then:

 

           (i)           all or any part of such Swingline Exposure and LC Exposure shall be reallocated among the non-Defaulting Revolving Lenders in accordance with their respective Applicable Revolving Percentages but only to the extent (x) the sum of all non-Defaulting Revolving Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Revolving Lenders’ Revolving Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time; and

 

           (ii)           if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrowers shall within one (1) Business Day following notice by the Administrative Agent, without prejudice to any rights or remedies of the Borrowers against such Defaulting Lender, (x) first, prepay such Swingline Exposure and (y) second, cash collateralize such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.04(j) for so long as such LC Exposure is outstanding;

 

           (iii)           if the Borrowers cash collateralize any portion of such Defaulting Lender’s LC Exposure pursuant to Section 2.18(c)(ii), the Borrowers shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.10(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

 

           (iv)           if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section 2.18(c), then the fees payable to the Revolving Lenders pursuant to Section 2.10(a) and Section 2.10(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Revolving Percentages; or

 

           (v)           if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated pursuant to Section 2.18(c), then, without prejudice to any rights or remedies of the Issuing Bank or any Revolving Lender hereunder, all letter of credit fees payable under Section 2.10(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated;

 

           (d)           The Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Revolving Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.18(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Revolving Lenders in a manner consistent with Section 2.18(c)(i) (and Defaulting Lenders shall not participate therein); and

 

           (e)           in the event and on the date that each of the Administrative Agent, the Borrowers, the Issuing Bank and the Swingline Lender agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the other Revolving Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on such date such Lender shall purchase at par such of the Revolving Loans of the other Revolving Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Revolving Loans in accordance with its Applicable Revolving Perce ntage.

 

SECTION 2.19 Returned Payments.  If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Administrative Agent or any Lender is for any reason (other than under circumstances which constitute gross negligence or willful misconduct on the part of the Administrative Agent or such Lender as determined by a court of competent jurisdiction) compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other r eason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender.  The provisions of this Section 2.19 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds.  The provisions of this Section 2.19 shall survive the termination of this Agreement.

 

ARTICLE III.                                

 

 

Representations and Warranties

 

The Borrowers represent and warrant to the Lenders and the Administrative Agent that:

 

SECTION 3.01 Existence and Power.  Each Credit Party is a corporation organized, validly existing and in good standing under the laws of the State of Delaware, and has all necessary powers required to carry on its business as now conducted and, except where the failure to do so would not be reasonably expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

 

SECTION 3.02 Corporate and Governmental Authorization; No Contravention.  The execution, delivery and performance by each Credit Party of the Financing Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any Governmental Authority (except as contemplated by the Security Agreement) and do not contravene, or constitute a default under, any provision of applicable law or regulation or of its charter or bylaws or of any agreement, judgment, injunction, order, decree or other instrument binding upon each (except for any such breach or de fault which would not reasonably be expected to have a Material Adverse Effect) or result in the creation or imposition of any Lien on any asset of the Credit Parties or any of their Restricted Subsidiaries (except the Liens in favor of the Administrative Agent under the Security Agreement).

 

SECTION 3.03 Binding Effect.  This Agreement and the other Financing Documents to which each Credit Party is a party constitute valid and binding agreements of such Credit Party, in each case enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or moratorium or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.

 

SECTION 3.04 Financial Information.

 

(a) The Borrowers have heretofore furnished to the Administrative Agent (i) consolidated financial statements of Holdings and its Subsidiaries for the fiscal years ended December 31, 2007, December 31, 2008, and December 31, 2009 audited by PriceWaterhouseCoopers LLP, independent public accountants, and (ii) management prepared consolidated financial statements of Holdings and its Subsidiaries for the fiscal quarter ended June 30, 2010.  Such financial statements present fairly in all material respects the financial condition and results of operations of Holdings and its Subsidiaries as of the dates and for the periods indicated in accordance with GAAP consistently applied (except, in the case of quarterly financial stateme nts, for the presentation of footnotes and for applicable normal year-end audit adjustments).

 

(b) The Borrowers have heretofore furnished to the Administrative Agent for the 2010, 2011 and 2012 fiscal years, projected consolidated income statements, balance sheets and cash flows of Holdings and its Subsidiaries, all in form and substance reasonably satisfactory to the Lenders who requested and were granted access to such projections, in their good faith judgment, all such projections disclosing all assumptions made by Holdings and its Subsidiaries in formulating such projections and giving effect to the Transactions.  The projections have been prepared on the basis of the assumptions stated therein, and reflect as of the date prepared the good faith estimate of Holdings and its Subsidiaries of the results of operati ons and other information projected therein, provided that no representation is made that the assumptions will prove to be correct or that such projections will be realized, it being understood that projections are subject to significant uncertainties.

 

(c) Since December 31, 2009, no event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect.

 

SECTION 3.05 Litigation.  There is no action, suit or proceeding pending against, or to the knowledge of the Borrowers threatened against or affecting, Holdings or any of its Subsidiaries before any arbitrator or any Governmental Authority, that (a) except for the Disclosed Matters, would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, or (b) which would in any material respect draw into question the enforceability against the Credit Parties of any of the Financing Documents, taken as a whole.

 

SECTION 3.06 Compliance with ERISA.  Each of Holdings and its Subsidiaries and each ERISA Affiliate has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan, and has not incurred any liability under Title IV of ERISA (i) to the PBGC other than a liability to the PBGC for premiums under Section 4007 of ERISA or (ii) in respect of a Multiemployer Plan which has not been discharged in full when due.

 

SECTION 3.07 Taxes.  Each of Holdings and its Subsidiaries has filed all applicable United States Federal income tax returns and all other material tax returns which are required to be filed by it and has paid all taxes stated to be due in such returns or pursuant to any assessment received by it, except for (a) taxes the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and (b) such returns or taxes which, if not filed or paid, would not constitute a Material Adverse Effect.  The charges, accruals and reserves on the books of Holdings and its Subsidiaries in respect of taxes or other similar gover nmental charges, additions to taxes and any penalties and interest thereon are, in the opinion of the Borrowers, adequate.

 

SECTION 3.08 Environmental Compliance.  Except as described in the Disclosed Matters:  (a) Holdings and its Subsidiaries have obtained and are in compliance with all permits, certificates, approvals, licenses and other authorizations (“Permits”) which are required under Environmental Laws and necessary for their operations, except for such failures to obtain or comply with such Permits as would not have a Material Adverse Effect; (b) no notice, citation, summons, complaint, or enforcement action has been issued, and, to the best knowledge of Borrowers, no investigation is pe nding, concerning any alleged failure of Holdings or any Subsidiary to have a required Permit, any alleged violation of Environmental Law or a Permit by Holdings or any Subsidiary, or any use, generation, treatment, storage, disposal or release of a Hazardous Material by Holdings or any Subsidiary or Predecessor, except for such event or events as would not individually or in the aggregate have a Material Adverse Effect; (c) to the best knowledge of Borrowers, neither Holdings nor any of its Subsidiaries nor its Predecessor has used, generated, transported, stored, disposed, discharged, released or threatened to release any Hazardous Materials on, from or under the Real Property which would result in a violation of or liability under Environmental Law, except for such violations or liabilities as would not, individually or in the aggregate, constitute a Material Adverse Effect or be materially adverse to the interests of the Lenders; (d) to the best knowledge of Borrowers, no condition exists on the Real Pro perty that violates or creates liability under the Environmental Laws which would individually or in the aggregate, constitute a Material Adverse Effect; and (e) there are no Liens under Environmental Laws on the interests of any Credit Party in any Real Property, and no governmental actions have been taken, or to Borrowers’ knowledge are pending, which could subject such property to such Liens.  Notwithstanding anything to the contrary herein, no representation or warranty is made by the Borrowers under this Section 3.08 as to any environmental conditions or activities of Predecessor, or any violation or liability resulting therefrom, to the extent that the United States Government has assumed responsibility for such condition, activity, violation or liability.

 

SECTION 3.09 Properties.

 

(a) As of the Effective Date, each of Holdings and its Restricted Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property reflected on the balance sheet described in Section 3.04(a) (other than assets which are the subject of a Capital Lease Obligation), except for (i) minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (ii) uranium inventory and other property owned by Customers of the Credit Parties and other third parties for which a corresponding liability in favor of such Customers or third parties is reflected in such balance sheet.

 

(b) Except to the extent set forth on Schedule 3.09(b), each of Holdings and its Restricted Subsidiaries owns, or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual property material to its business, and the use thereof by Holdings and its Restricted Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10 Compliance with Laws and Agreements.  Each of Holdings and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property (except for Environmental Laws which are the subject of Section 3.08), except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  Each of Holdings and its Restricted Subsidiaries is in compliance with all indentures, agreements and other instruments binding upon it or its property, and has all material governmental licenses, authorizations, consents and approvals r equired to carry on its business as now conducted, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.11 Investment Company Status.  Neither Holdings nor any of its Restricted Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

 

SECTION 3.12 Full Disclosure.  All written information (including electronic communications) furnished at or prior to the Effective Date by the Borrowers to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or any of the Transactions (including information deemed delivered if otherwise in Holdings’ filings with the Securities and Exchange Commission and available on its website) is, taken as whole and in light of the circumstances under which such information is furnished, true and accurate in all material respects on the date as of which such information is furnished, and true and accurate in all material respec ts on the date as of which such information is stated or certified.  It is understood that the foregoing is limited to the extent that (i) projections have been made in good faith by the management of Holdings and its Restricted Subsidiaries and in the view of management of Holdings and its Restricted Subsidiaries are based upon assumptions believed to be reasonable in light of all information known to management as of the date prepared, and (ii) no representation or warranty is made as to whether the projected results will be realized, it being understood that projections are subject to significant uncertainties.

 

SECTION 3.13 Security Interest.  The Security Agreement creates and grants to the Administrative Agent, for its own benefit and for the benefit of the Lenders, legal, valid and perfected first priority (except as permitted pursuant to Section 6.02 hereof) Liens in the Collateral identified therein.  Such Collateral is not subject to any other Liens whatsoever, except Liens permitted by Section 6.02 hereof.

 

SECTION 3.14 Solvency.

 

(a) Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of the Credit Parties, taken as a whole, at a fair valuation, will exceed their debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of the Credit Parties, taken as a whole, will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Credit Parties, taken as a whole, will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabili ties become absolute and matured; and (iv) the Credit Parties, taken as a whole, will not have unreasonably small capital with which to conduct their business in which they are engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

 

(b) Neither Borrower intends to, or believes that it or any other Credit Party will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any other Credit Party and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any other Credit Party.

 

(c) Neither Borrower believes that final judgments against Holdings or any Restricted Subsidiary in actions for money damages presently pending will be rendered at a time when, or in an amount such that, they will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum reasonable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered).  The cash flow of Holdings and its consolidated Restricted Subsidiaries, after taking into account all other anticipated uses of the cash of Holdings and its consolidated Restricted Subsidiaries (including the payments on or in respect of debt referred to in paragraph (b) of this Section), will at all times be sufficient to pay all such judgments promptly in accordance with their terms.

 

SECTION 3.15 Employee Matters.  There are no strikes, slowdowns, work stoppages or controversies pending or, to the knowledge of the Borrowers, threatened between any Credit Party and its employees, other than employee grievances arising in the ordinary course of business, none of which would have, either individually or in the aggregate, a Material Adverse Effect.  The hours worked by and payments made to employees of the Credit Parties have not been in violation of the Fair Labor Standards Act, or any other applicable Federal, state, local or foreign law dealing with such matters, except, in each case, as would not, individually or in the aggregate , reasonably be expected to have a Material Adverse Effect.  All material payments due from any Credit Party, or for which any claim may be made against any Credit Party, on account of wages, vacation pay and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Credit Party.

 

SECTION 3.16 Use of Proceeds.  The proceeds of the Loans made and Letters of Credit issued under this Agreement shall be used by the Borrowers for working capital needs, and for general corporate purposes in the ordinary course of business, of the Credit Parties and their Subsidiaries (including Permitted Acquisitions and capital expenditures and ACP Expenditures permitted hereunder), and to refinance certain existing Indebtedness, including, without limitation, under the Existing Credit Agreement.

 

SECTION 3.17 Subsidiaries.  Schedule 3.17 sets forth, as of the Effective Date, all Subsidiaries.  The authorized, issued and outstanding Equity Interests in each Subsidiary consists, on the date hereof, of the Equity Interests described on Schedule 3.17.

 

SECTION 3.18 Insurance.  Schedule 3.18 sets forth a description of all insurance maintained by or on behalf of the Credit Parties and their Restricted Subsidiaries as of the Effective Date.  As of the Effective Date, all premiums due and payable prior to the Effective Date in respect of such insurance have been paid.  The Borrowers believe that the insurance maintained by or on behalf of the Credit Parties and their Restricted Subsidiaries is adequate.

 

SECTION 3.19 Foreign Assets Control Regulations, etc..  Neither the making of the Loans to, or issuance of Letters of Credit on behalf of, the Borrowers nor the use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.  Without limiting the foregoing, neither the Borrowers nor any of their Subsidiaries or Affiliates (a) is or will become a Person whose property or interests in property are blocked pursuant to Section 1 of Execut ive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.  Reg.  49079 (2001)) or (b) engages or will engage in any dealings or transactions, or be otherwise associated, with any such Person.  The Borrowers and their Subsidiaries and Affiliates are in compliance, in all material respects, with the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of the Loans or Letters of Credit will be used, directly or indirectly, in violation in any material respect of the United States Foreign Corrupt Practices Act of 1977, as amended.  No Credit Party is engaged in or has engaged in any course of conduct that would reasonably be expected to subject any of their respective properties to any Lien, seizure or other forfeiture under any criminal law, racketeer inf luenced and corrupt organizations law or other similar laws.  None of the Credit Parties or any of their respective Subsidiaries is named on the list of Specially Designated Nationals and Blocked Persons maintained by the United States Department of Treasury Office of Foreign Assets Control.

 

SECTION 3.20 Material Agreements.  All material agreements and contracts to which any Credit Party is a party or is bound as of the date of this Agreement are disclosed in Holdings’ filings with the Securities and Exchange Commission.

 

ARTICLE IV.                                

 

 

Conditions

 

SECTION 4.01 Effective Date.  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

 

(a) The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence reasonably satisfactory to the Administrative Agent (which may include electronic or telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

 

(b) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) O’Melveny & Myers LLP, counsel for the Credit Parties, substantially in the form of Exhibit B, and covering such matters relating to the Credit Parties, this Agreement or the Transactions as the Required Lenders shall reasonably request, (ii) Peter B. Saba, in-house counsel to the Credit Parties, covering such matters as may be reasonably requested by the Administrative Agent and (iii) Morgan Lewis & Bockius LLP, special nuclear regulatory counsel to the Credit Parties with respect to appli cable nuclear laws and such other matters as may be reasonably requested by the Administrative Agent.  The Borrowers hereby request such counsel to deliver such opinions.

 

(c) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Credit Parties, the authorization of the Transactions and any other legal matters relating to the Credit Parties, this Agreement or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

 

(d) The Administrative Agent shall have received a certificate of the Borrowers, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of Enrichment, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02.

 

(e) The Administrative Agent, the Term Facility Bookrunner and the Term Lenders shall have received all fees and other amounts due and payable, on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.

 

(f) The Administrative Agent (or its counsel) shall have received the other Financing Documents, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel and shall have determined that all conditions set forth therein have been satisfied.

 

(g) With respect to any Liens not permitted pursuant to Section 6.02 hereof, the Administrative Agent shall have received termination statements in form and substance satisfactory to it.

 

(h) Each document (including each Uniform Commercial Code financing statement) required by law or requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent for its own benefit and for the benefit of the Lenders a first priority perfected Lien in the Collateral shall have been properly filed, registered or recorded in each jurisdiction in which the filing, registration or recordation thereof is so required or requested, or arrangements reasonably satisfactory to the Administrative Agent for the filing, registering or recording thereof shall have been made.

 

(i) The Administrative Agent shall have received the results of a search of tax and other Liens, and judgments and of the Uniform Commercial Code filings made with respect to the Credit Parties in the jurisdictions in which each Credit Party is organized and such other jurisdictions as the Administrative Agent may require.

 

(j) The Administrative Agent shall have received and determined to be in form and substance reasonably satisfactory to it:

 

(i) the most recent (dated within forty-five (45) days of the Effective Date) aging of accounts receivable of the Credit Parties;

 

(ii) an opening Borrowing Base Certificate that calculates the Borrowing Base as of a date no more than forty-five (45) days prior to the Effective Date and that evidences not less than $125,000,000 of Availability on the Effective Date after giving effect to the transactions occurring on that date and initial copies of the other reports required to be delivered under Section 5.01(g);

 

(iii) a copy of the most recent field examination of Holdings’ and its Restricted Subsidiaries’ books and records, to the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement;

 

(iv) evidence of the compliance by the Borrowers with Section 5.02(b) hereof, to the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement;

 

(v) the financial statements described in Section 3.04 hereof;

 

(vi) the 2009 Appraisal, to the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement;

 

(vii) all stock certificates evidencing the Equity Interests of each Material Subsidiary (other than Enrichment) pledged to the Administrative Agent pursuant to the Security Agreement, together with duly executed in blank undated stock powers attached thereto, to the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement;

 

(viii) a survey of the Customer contracts representing at least 80% of projected revenue (based on existing contracts) for fiscal years 2010 through 2012 prepared as of a date not more than 270 days prior to the Effective Date and comparison of significant provisions with those contained in the model customer contract;

 

(ix) a copy of the surety bond and/or standby trust agreement in favor of the NRC with respect to the ultimate disposal of waste and disposition of depleted uranium, decontamination and decommissioning of the gaseous diffusion plants that are the Credit Parties’ responsibility, to the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement; and

 

(x) a certificate dated the Effective Date and signed by a duly authorized officer of the Borrowers, confirming that the employees set forth in the Facility Letter delivered to the Administrative Agent in connection with the Existing Credit Agreement continue to hold such offices and positions as set forth therein and have authority to handle the operation of the credit facility.

 

(k) The Administrative Agent shall have received such other documents, and completed such other reviews, including all material agreements and contracts, including, without limitation, all agreements with the DOE, Fabricators, the Tennessee Valley Authority and the Russian government, litigation and taxes, as the Administrative Agent or its counsel shall reasonably deem necessary; provided that Holdings and its Subsidiaries shall not be obligated to provide any information that is “classified” for reasons of national security or foreign policy, or otherwise restricted from disclosure under applicable laws or agreements.

 

(l) The Administrative Agent shall be satisfied with the management information systems and cash management systems of Holdings and its Restricted Subsidiaries.

 

(m) The Administrative Agent shall have received in form and substance reasonably satisfactory to it policies of insurance covering the credit risk with respect to foreign Receivables assigned to the Administrative Agent, to the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement.

 

(n) The Administrative Agent shall have received a customer list prepared as of a date not more than 180 days prior to the Effective Date that includes addresses which the Administrative Agent agrees shall only be used in the manner and at the times permitted by the Security Agreement.

 

(o) The Administrative Agent shall be satisfied that the Credit Parties have designated, in a manner reasonably satisfactory to the Administrative Agent, that the Credit Parties’ inventory is subject to the Liens of the Administrative Agent for the benefit of the Secured Parties.

 

(p) To the extent not previously provided to the Administrative Agent pursuant to the Existing Credit Agreement, the Administrative Agent shall have received, in form and substance reasonably satisfactory to the Administrative Agent, a processor agreement from each of the Fabricators or a good faith undertaking from the Credit Parties in form and substance reasonably satisfactory to the Administrative Agent that the Credit Parties will utilize good faith commercially reasonable efforts to obtain any such processor agreements, not obtained on or prior to the Effective Date as promptly as possible after the Effective Date.

 

The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 4:00 p.m., Chicago time, on October 15, 2010 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

 

SECTION 4.02 Each Credit Event.  The obligation of any Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction on such date of the following conditions:

 

(a) The representations and warranties of the Credit Parties set forth in this Agreement and in the other Financing Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable; provided that any such representations and warranties that by their express terms are made as of a specific date shall be true and correct as of such specific date.

 

(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing and the Borrowers shall otherwise be in compliance with the provisions of Section 2.01, 2.04(b) or 2.05(c), as applicable.

 

(c) After giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, Availability is not less than the Minimum Availability Amount.

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section.

 

ARTICLE V.                                

 

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or been terminated and all LC Disbursements have been reimbursed, the Borrowers covenant and agree with the Administrative Agent and Lenders that:

 

SECTION 5.01 Information.  The Borrowers will furnish to the Administrative Agent and each of the Lenders, subject to confidentiality requirements and it being understood that (x) neither the Borrowers nor any Subsidiary shall be obligated to provide any information that is “classified” for reasons of national security or foreign policy, or otherwise restricted from disclosure under applicable laws or agreements and (y) the following information may be transmitted to the Administrative Agent and the Lenders by electronic mail:

 

(a) within the earlier of (i) ninety (90) days after the end of each fiscal year or (ii) two (2) Business Days after the date Holdings is required to file its Annual Report on Form 10K with the Securities and Exchange Commission after the end of each fiscal year, (A) a consolidated balance sheet and consolidated income statement showing the financial position of Holdings and its Subsidiaries as of the close of such fiscal year and the results of their operations during such year, and (B) a consolidated statement of shareholders’ equity and a consolidated statement of cash flow, as of the close of such fiscal year, comparing such financial position and results of operations to such financial condition and results of operations f or the comparable period during the immediately preceding fiscal year, all the foregoing financial statements to be audited by PriceWaterhouseCoopers LLP or other independent public accountants reasonably acceptable to the Administrative Agent (which report shall not contain any going concern or similar qualification or exception as to scope), and together with management’s discussion and analysis presented to the management of Holdings and its Subsidiaries;

 

(b) within the earlier of (i) forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal year of Holdings or (ii) two (2) Business Days after the date Holdings is required to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission after the end of each of the first three (3) fiscal quarters of each fiscal year of Holdings, unaudited consolidated balance sheets of Holdings and its Subsidiaries as of the end of such fiscal quarter, together with the related consolidated statements of income for such fiscal quarter and for the portion of Holdings’ fiscal year ended at the end of such fiscal quarter and the related consolidated statements of cash flows and consolidate d changes in shareholders’ equity for the portion of Holdings’ fiscal year ended at the end of such fiscal quarter and in comparative form the corresponding financial information as at the end of, and for, the corresponding fiscal quarter of Holdings’ prior fiscal year and the portion of Holdings’ prior fiscal year ended at the end of such corresponding fiscal quarter, in each case certified by a Financial Officer of Holdings as presenting fairly in all material respects the financial position and results of operations and cash flow of Holdings and its Subsidiaries in accordance with GAAP consistently applied (except the absence of footnote disclosure and subject to year-end adjustments), in each case subject to normal year-end audit adjustments, and, solely for the last month of each fiscal quarter for such quarter then ending, management’s discussion and analysis presented to the management of Holdings and its Subsidiaries;

 

(c) if, at any time, Availability shall fall below an amount equal to $60,000,000, then, during the period from the date that Availability fell below such amount and continuing until the ninetieth (90th) consecutive day on which Availability exceeds $60,000,000, within thirty (30) days after the end of each calendar month, unaudited consolidated balance sheets of Holdings and its Subsidiaries as at the end of such month, together with the related unaudited consolidated statements of income for such month and the portion of Holdings’ fiscal year ended at the end of such month and the related consolidated statements of cash flows and consolidated chang es in shareholders’ equity for the portion of Holdings’ fiscal year ended at the end of such month and, in comparative form, the corresponding financial information as at the end of, and for, the corresponding month of Holdings’ prior fiscal year and the portion of Holdings’ prior fiscal year ended at the end of such corresponding month, in each case certified by a Financial Officer of Holdings as presenting fairly in all material respects the financial position and results of operations and cash flows of Holdings and its Subsidiaries as at the date of, and for the periods covered by, such financial statements, in accordance with GAAP consistently applied (except for the absence of footnotes and subject to year-end adjustments), in each case subject to normal year-end audit adjustments;

 

(d) concurrently with any delivery under (a)(i), (b)(i) or (c) and within three (3) Business Days after any delivery under (a)(ii) or (b)(ii), (i) a certificate of the firm or Person referred to therein, (A) which certificate, in the case of the certificate of a Financial Officer of Holdings, shall be substantially in the form of Exhibit 5.01(d) hereto (a “Compliance Certificate”) and shall (x) certify that, to the best of his or her knowledge, no Default has occurred (including calculations demonstrating compliance, as of the dates of the financial statements being furnished, with the covenant s set forth in Sections 6.09 and 6.11 and, to the extent applicable, Section 6.10 hereof) and, if such a Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto, and (y) set forth a computation of the Fixed Charge Coverage Ratio as of the end of each fiscal quarter (or each month, in the case of any Compliance Certificate delivered at a time when the Borrowers are required to deliver monthly financial statements under Section 5.01(c)) for the period of four fiscal quarters most recently ended (or the period of twelve (12) consecutive months most recently ended, in the case of any Compliance Certificate delivered at a time when the Borrowers are required to deliver monthly financial statements under Section 5.01(c)); and (B) which certificate, in the case of the certificate furnished by the independent public accountants referred in paragraph (a) above, may be limited to accounting matters and disclaim responsibility for legal interpretations, but shall in any event, to the extent available consistent with industry practice and professional standards, state that to the best of such accountants’ knowledge, as of the dates of the financial statements being furnished no Default has occurred under any of the covenants set forth in Sections 6.09 and 6.11 and, to the extent applicable, Section 6.10 hereof and, if such a Default has occurred, specifying the nature and extent thereof; provided, however, that any certificate delivered concurrently with (a) above shall be accompanied by a supplemental certificate confirming the accuracy of the accountants’ certificate (and shall in any event include calculations demonstrating compliance with the covenants set forth in Sections 6.09 and 6.11 and, to the extent applicable, Section 6.10 hereof) and signed by a Financial Officer of Holdings, (ii) a repor t showing monthly production levels at the Paducah Gaseous Diffusion Plant on a trailing twelve (12) month basis until such time as production level tests under the DOE Agreement are no longer applicable and (iii) if Holdings has received any Net Proceeds from any issuance of Equity Interests after the Effective Date but on or prior to the delivery under clause (a), (b) or (c) (as applicable), a certificate of a Financial Officer of Holdings, in form reasonably satisfactory to the Administrative Agent, calculating in reasonable detail the ACP Net Equity Financing Proceeds and Cumulative Loss Amount as of the end of the fiscal quarter (or, in the case of any such certificate delivered together with the financial statements provided pursuant to clause (c), as of the end of the month) then most recently ended;

 

(e) promptly after the same become publicly available, copies of such registration statements, annual, periodic and other reports, and such proxy statements and other information, if any, as shall be filed by Holdings or any of its Restricted Subsidiaries with the Securities and Exchange Commission pursuant to the requirements of the Securities Act of 1933, as amended, or the Exchange Act, if any;

 

(f) within sixty (60) days after the beginning of each fiscal year, a summary of business plans and financial operation projections (including with respect to Capital Expenditures) for Holdings and its Restricted Subsidiaries for such fiscal year (including quarterly balance sheets, statements of income and of cash flow) prepared by management and in form, substance and detail (including principal assumptions provided separately in writing) reasonably satisfactory to the Administrative Agent;

 

(g) within fifteen (15) Business Days after the end of each calendar month (or, if, at any time, Availability shall fall below an amount equal to $60,000,000, then, during the period from the date that Availability fell below such amount and continuing until the ninetieth (90th) consecutive day on which Availability exceeds $60,000,000, with such greater frequency as the Administrative Agent shall request, in its Permitted Discretion), (i) a certificate substantially in the form of Exhibit 5.01(g) hereto (a “Borrowing Base Certif icate”) executed by a Financial Officer of the Borrowers demonstrating compliance as at the end of each month (or as of the end of such more frequent period, as applicable) with the Availability requirements, which shall include a Borrowing Base calculation, inventory designation, an inventory reconciliation delineating Credit Party owned inventory versus Customer owned inventory (to the extent included in the determination of the Borrowing Base or any reserves with respect thereto), and (ii) an aging schedule of Receivables and a report showing debit and credit adjustments to Receivables, a reconciliation of Receivables aging to the general ledger, accounts payable listing and reconciliation of accounts payable listing to the general ledger, a detailed list of customer liabilities and deferred revenue accounts, a detailed inventory report, detailed credit insurance coverage by Customer and binding order backlog information, in each case in form and detail satisfactory to the Administrative Agen t in its Permitted Discretion; provided that in the event that such Borrowing Base Certificates and reports described in clauses (i) and (ii) above are required more frequently than monthly, inventory data will not be required to be reported more frequently than monthly;

 

(h) from and after the earlier to occur of (i) any transfer of any material assets by the Borrowers to the ACP Companies and the commencement of commercial operations by the American Centrifuge Project and (ii) the delivery of such financial statements to any lender(s) to one or more of the ACP Companies, (A) within the earlier of (x) ninety (90) days after the end of each fiscal year and (ii) two (2) Business Days after the date Holdings is required to file its Annual Report on Form 10K with the Securities and Exchange Commission, consolidating balance sheets and statements of operations, stockholders’ equity and cash flows as of the end of and for such year for Holdings and its Subsidiaries (including without limitation, the ACP Companies), setting forth in each case in comparative form the figures for the previous fiscal year, all certified by a Financial Officer of Holdings as presenting fairly in all material respects the financial condition and results of operations of Holdings and its Subsidiaries (including without limitation, the ACP Companies) in accordance with GAAP, consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, and (B) within the earlier of (x) forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of Holdings and (y) two (2) Business Days after the date Holdings is required to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission with respect to each of the first three fiscal quarters of each fiscal year of Holdings, consolidating balance sheets and statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the f iscal year for Holdings and its Subsidiaries (including without limitation, the ACP Companies), setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer of Holdings as presenting fairly in all material respects the financial condition and results of operations of Holdings and its Subsidiaries (including without limitation, the ACP Companies) in accordance with GAAP, consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

 

(i) as soon as practicable, copies of Form 327 to be submitted to the NRC containing inventory reporting as at September 30 of each year and copies of Form 742 and Form A200 relating to the Credit Parties’ annual inventory reconciliation with the “Nuclear Materials Management Safeguard System” (in each case, only to the extent such inventory is included in the determination of the Borrowing Base or any reserves with respect thereto) and copies of all material financial, inventory and operational compliance reports, forms, filings, loan documents and financial information (including information relating to DOE Lease Turnover Obligations, tails disposition and any other indemnity obligations) submitted to governmental agencies (including the DOE and the NRC) (excluding documents generated in the ordinary course), subject, in each case, to any confidentiality requirements, material financial reports distributed to its equity holders and all reports submitted to the issuer of the Credit Parties’ foreign credit Receivables policy;

 

(j) promptly upon becoming aware thereof, notice to the Administrative Agent of the execution of or termination of a material contract of any Borrower or any Restricted Subsidiary with a Customer, the DOE, the NRC or the Tennessee Valley Authority or the failure to fulfill an order under such a material contract with a Customer;

 

(k) within thirty (30) days after the beginning of each fiscal year and more frequently as may be requested by the Administrative Agent, a report showing the Customer base and Customer corporate credit ratings (for all Customers that have corporate credit ratings);

 

(l) as soon as possible and in any event within ten (10) days of the filing thereof, copies of all tax returns filed by any Credit Party with the U.S. Internal Revenue Service;

 

(m) periodic updates, but no less frequently than once each fiscal year, of estimated DOE Lease Turnover Obligations;

 

(n) to the extent that the results of the Specified Entity are consolidated with those of Holdings in the financial statements delivered pursuant to Sections 5.01(a), (b) or (c), within the earlier of (i) five (5) Business Days after the same are filed with the applicable regulatory authorities and (ii) two (2) Business Days after receipt by the Borrowers, financial statements of the Specified Entity; and

 

(o) such other information as the Administrative Agent or any Lender may reasonably request.

 

SECTION 5.02 Maintenance of Property; Insurance.

 

(a) The Borrowers will keep, and will cause each Restricted Subsidiary to keep, all material properties used or useful in its business as then conducted in good working order and condition, ordinary wear and tear and loss or damage from casualty excepted.

 

(b) The Borrowers will maintain, and will maintain on behalf of each Restricted Subsidiary, to the extent commercially available, (i) physical damage insurance on substantially all its real and personal property in the United States (including all Collateral and books and records relating to any proceeds of Collateral other than Accounts, Deposit Accounts, Equity Interests, Instruments, Copyright Collateral, Patent Collateral and Trademark Collateral (Equity Interests, Copyright Collateral, Instruments, Patent Collateral and Trademark Collateral being defined in the Security Agreement)) on an “All Risks” form subject to normal exclusions (including the perils of flood and quake) on a repair and replacement cost basis for all such property in an amount not less than $700,000,000 (subject to a deductible amount or retention not to exceed $55,000,000, and consequential loss coverage for extra expense), (ii) public liability insurance in an amount not less than $100,000,000, excluding risks covered by an agreement of indemnification between Enrichment and the Department of Energy or other government agency; and risks of public liability arising from nuclear incidents occurring outside the United States, and (iii) such other insurance coverage in such amounts and with respect to such risks relating to the Credit Parties’ Collateral as the Required Lenders may reasonably request.  All such insurance, except for the share of Credit Parties’ property insurance underwritten by the European Mutual Association for Nuclear Insurance, which shall not exceed $225,000,000, shall be provided by insurers having an A.M. Best policyholders rating of not less than A- as of the Effective Date.  Prior to the Effect ive Date, the Borrowers will cause the Administrative Agent to be named as an insured party or loss payee, on behalf of the Administrative Agent and Lenders, on each insurance policy covering risks relating to any of the Collateral and books and records relating to any proceeds of Collateral and as an additional insured on all other insurance referenced in the first sentence of this Section 5.02(b).  Each such insurance policy in effect during the term of this Agreement shall include effective waivers by the insurer of all claims for insurance premiums against the Administrative Agent or any other Person entitled to the benefits of the Security Agreement, provide that all insurance proceeds in excess of deductible amounts or retentions which are payable in respect of losses relating to Collateral and books and records shall be adjusted with and payable to the Administrative Agent (except so long as no Default has occurred and is continuing any loss which is less than $1,000,000 may be adjusted with and payable to the Credit Parties), and provide that no cancellation or termination thereof shall be effective until at least thirty (30) days after receipt by the Administrative Agent of written notice thereof.  The Administrative Agent will consult with the Borrowers before agreeing to any adjustment of insurance proceeds covered by the preceding sentence.  Net Proceeds of insurance received by any Borrower or any Restricted Subsidiary if not (i) applied to acquire other assets or property within the timelines provided in Section 2.09(b)(ii) hereof, (ii) applied to prepay the Term Loans as permitted by Section 2.09(e), or (iii) in the case of business interruption insurance promptly applied to the operation of Credit Parties’ business, shall be applied to prepay Revolving Loans in accordance with Section 2.09(b)(ii) hereof.  During the occurrence and continuance of an Event of Default, the Net Proceeds of insurance received by any Borrower or any Restricted Subsidiary s hall be maintained in a cash collateral account with the Administrative Agent and may be, upon notice to the Borrowers, setoff and applied to prepay outstanding principal and interest on the Loans.  In addition to insurance for physical damage and public liability, the Borrowers shall continue to maintain, and shall continue to maintain on behalf of each Restricted Subsidiary, the foreign credit Receivable insurance in effect on the Effective Date covering the Customers and countries then in effect with the deductibles, coverage limits and insuring percentages then in effect, with such changes as may be approved by the Administrative Agent in its Permitted Discretion.  The Borrowers will deliver, and will deliver on behalf of each Restricted Subsidiary, to the Administrative Agent (A) on the Effective Date and within ninety-five (95) days after the end of each fiscal year of Holdings, a certificate dated such date showing the total amount of insurance coverage as of such date, (B) from ti me to time true and complete copies of such insurance policies of the Credit Parties (or, if the Credit Parties do not have such insurance policies in their possession, evidence thereof) relating to such insurance coverage as the Required Lenders through the Administrative Agent may request, (C) within fifteen (15) days of receipt of notice from any insurer, a copy of any notice of cancellation or material adverse change in coverage from that existing on the date of this Agreement and (D) within fifteen (15) days of any cancellation or nonrenewal of coverage by the Credit Parties, notice of such cancellation or nonrenewal.

 

(c) The Borrowers shall cause all DOE Collateral consisting of natural uranium feed material or other uranium inventory transferred by the DOE to be maintained in specifically designated cylinders and physically separated from Eligible Inventory, and shall maintain separate written or electronic records identifying all Receivables constituting DOE Collateral.

 

SECTION 5.03 Compliance with Laws.  The Borrowers will comply, and cause each Subsidiary to comply, with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including ERISA and the rules and regulations thereunder, but excluding Environmental Laws which are the subject of Section 5.06) except where failure to comply would not have a Material Adverse Effect, or where the necessity of compliance therewith is being contested in good faith by appropriate proceedings.

 

 

3.9 Documents of Title.  No material bill of lading, warehouse receipt or other document or instrument of title is outstanding with respect to any Collateral other than Inventory in transit in the ordinary course of business to a location set forth on Annex C or to a Customer of a Pledgor, or to a Fabricator or other nuclear fuel processor.

 

3.10 Deposit Accounts and Securities Accounts.  Annex H correctly sets forth all Deposit Accounts and Securities Accounts of each Pledgor.  Each such Deposit Account (other than Excluded Accounts) is covered by a deposit account control agreement in favor of the Agent, in form and substance satisfactory to the Agent.  Each Securities Account of any Pledgor is covered by a securities account control agreement in favor of the Agent, in form and substance satisfactory to the Agent.

 

ARTICLE IV                                

 

 

COVENANTS

 

4.1 Use and Disposition of Collateral.  So long as no Event of Default shall have occurred and be continuing, each Pledgor may, in any lawful manner not inconsistent with the provisions of this Agreement and the other Financing Documents, use, control and manage the Collateral in the operation of its businesses, and receive and use the income, revenue and profits arising therefrom and the Proceeds thereof, in the same manner and with the same effect as if this Agreement had not been made; provided, however, that no Pledgor will sell or otherwise dispose of, grant any option with respect to, or grant any Lien with respect to or otherwise encumber any of the Collateral or any interest therein, except for the security interest created in favor of the Agent hereunder and except as may be otherwise expressly permitted in accordance with the terms of this Agreement and the Credit Agreement (including any applicable provisions therein regarding delivery of proceeds of sale or disposition to the Agent).  Nothing herein shall preclude any Borrower from swapping Inventory for comparable material of equal or greater value.

 

4.2 Change of Name, Locations, etc.  No Pledgor will (i) change its name, or, if applicable, the state in which it is registered, (ii) change its chief executive office from the location thereof listed on Annex C, (iii) except as permitted by Section 4.6, remove any Collateral (other than goods in transit), or any books, records or other information relating to Collateral, from the applicable location thereof listed on Annex C, or keep or maintain any Collateral at a location n ot listed on Annex C, unless in each case such Pledgor has (A) given fifteen (15) days’ prior written notice to the Agent of its intention to do so, together with information regarding any such new location and such other information in connection with such proposed action as the Agent may reasonably request, and (B) delivered to the Agent fifteen (15) days prior to any such change or removal of such documents, instruments and financing statements as may be required under applicable law, all in form and substance reasonably satisfactory to the Agent, paid all necessary filing and recording fees and taxes, and taken all other actions reasonably requested by the Agent (including, at the request of the Agent, delivery of opinions of counsel reasonably satisfactory to the Agent to the effect that all such actions have been taken), in order to perfect and maintain the Lien upon and security interest in the Collateral provided for herein in acc ordance with the provisions of Section 3.2.

 

4.3 Records; Inspection.

 

(a) Each Pledgor will keep and maintain at its own cost and expense satisfactory and complete records of the Accounts and all other Collateral, including, without limitation, records of all payments received, all credits granted thereon, all merchandise returned and all other documentation relating thereto, and will furnish to the Agent from time to time such statements, schedules and reports (including, without limitation, accounts receivable aging schedules) with regard to the Collateral as the Agent may reasonably request.

 

(b) In addition to the rights of inspection of the Agent and the Lenders under Section 5.04 of the Credit Agreement and subject to the provisions of Section 9.12 of the Credit Agreement, each Pledgor shall, from time to time at such times as may be reasonably requested and upon reasonable notice, to the extent permitted under Section 5.04 of the Credit Agreement, make available to the Agent or any Lender for inspection and review at such Pledgor’s offices copies of all invoices and other documents and information relating to the Collateral (including, without lim itation, itemized schedules of all collections of Accounts, showing the name of each account debtor, the amount of each payment and such other information as the Agent shall reasonably request).  At the request of the Agent, each Pledgor will legend, in form and manner reasonably satisfactory to the Agent, the books, records and materials evidencing or relating to the Collateral with an appropriate reference to the fact that the Collateral has been assigned to the Agent and that the Agent has a security interest therein.  The Agent shall have the right to make test verifications of Accounts in any reasonable manner and through any reasonable medium, and each Pledgor agrees to furnish all such reasonable assistance and information as the Agent may require in connection therewith, provided that, so long as no Event of Default shall have occurred and be continuing, any such verification shall be conducted either by the Borrower ’s independent public accountants in the name of the Pledgor or in such other manner so as not to disclose the Agent’s identity or interest in the Collateral.

 

4.4 Accounts.

 

(a) Upon the occurrence and continuance of an Event of Default, each Pledgor shall, at the request of the Agent, take such action as the Agent may deem necessary or advisable (within applicable laws) to enforce collection of its Accounts.  No Pledgor shall, except to the extent done in the ordinary course of its business consistent with past practices and in accordance with sound business judgment and provided that no Event of Default shall have occurred and be continuing, (i) grant any extension of the time for payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release, in whole or in part, any person or property liable for the payment of any Account, or (iv) allow any credit or discount on any Account.  In each Borrowing Base Certificate delivered pursuant to Section 5.01(g) of the Credit Agreement, the Pledgors shall inform the Agent of any material disputes with any account debtor or obligor and of any claimed offset and counterclaim that may be asserted with respect thereto, where the Pledgors reasonably believe that the likelihood of payment by such account debtor is materially impaired, indicating in detail the reason for the dispute, all claims relating thereto and the amount in controversy.

 

(b) Except to the extent otherwise permitted under the Credit Agreement or any other Financing Document, each Pledgor will, at its own cost and expense, (i) arrange for remittances on Accounts to be made directly to lockboxes designated by the Agent which shall be in the name of the Agent and subject to control by the Agent or in such other manner as the Agent may direct, and (ii) promptly deposit, or cause to be deposited, all payments received by such Pledgor on account of Accounts and the Proceeds of other Collateral or from the sale or other disposition of assets permitted pursuant to the Credit Agreement, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in the Collection Account, in precisely the form received (but with any endorsements of such Pledgor necessary for deposit or collection), subject to withdrawal by the Agent only, as hereinafter provided, and until such payments are deposited, such payments shall be deemed to be held in trust by such Pledgor for and as the Lenders’ property and shall not be commingled with such Pledgor’s other funds.  All remittances and payments that are deposited in accordance with the foregoing will be applied by the Agent, upon the occurrence and during the continuation of a Full Cash Dominion Period, in accordance with Section 2.08(b) of the Credit Agreement; provided, however, that, so long as no Full Cash Dominion Period is in effect, the Borrowers may require that all remittances and payments that are deposited in accordance with the foregoing be forwarded to any other account of any Borrower.& #160; Except upon the occurrence and during the continuance of an Event of Default, no payment of a Eurodollar Borrowing shall be made under this Section on a date other than the last date of the Interest Period for such Eurodollar Borrowing or the Maturity Date.  Upon the occurrence and continuance of an Event of Default, the Agent may send a notice of assignment and/or notice of the Agent’s security interest to any and all customers or any third party holding or otherwise concerned with any of the Collateral, and thereafter the Agent shall have the sole right to collect Accounts and/or take possession of the Collateral and the books and records relating thereto and to establish Collateral Accounts as provided for in Section 6.3 hereof.

 

(c) Pursuant to clause (i) of the definition of “Eligible Receivables” set forth in the Credit Agreement, Accounts owing from the United States government or any agency or department thereof, including without limitation, the DOE and the Tennessee Valley Authority, shall, in the Agent’s Permitted Discretion, not constitute Eligible Receivables unless the Agent shall have received such documentation from the Pledgors as the Agent shall in its Permitted Discretion upon reasonable prior notice to the Pledgors require to enable the Agent to make all filings necessary to comply with the Federal Assignment of Claims Act of 1940, as amended with respect to each contract under which such Accounts arise (such documentation b eing the “FACA Documents”).  In the event that the Pledgors have executed and delivered to the Agent any FACA Documents in respect of any contract and Availability shall fall below $100,000,000 for three (3) consecutive Business Days or any Event of Default shall occur and be continuing, the Agent shall be entitled to file such FACA Documents with the applicable Governmental Authorities and, upon such filing, to direct such Governmental Authorities to make all payments in respect of such Accounts directly to the Agent for application to the Secured Obligations as provided in this Agreement.  The Pledgors agree to execute and deliver such other documents and take or cause to be taken such other actions as the Agent may reasonably request in connection with any such filing of FACA Documents pursuant to this paragraph.

 

4.5 Instruments.  Each Pledgor agrees that if any Collateral shall at any time be evidenced by a promissory note, tangible Chattel Paper or other Instrument (other than checks or other Instruments for deposit in the ordinary course of business), the same shall promptly be duly endorsed to the order of the Agent and delivered to the Agent to be held as Collateral hereunder.

 

4.6 Inventory.  Each Pledgor will, in accordance with sound business practices, maintain all Eligible Inventory held by it or on its behalf in good saleable or useable condition.  Unless an Event of Default has occurred and is continuing and the Agent has instructed the Pledgors otherwise, each Pledgor may, in any lawful manner not inconsistent with the provisions of this Agreement and the other Financing Documents, process, use, ship, deliver and, in the ordinary course of business or as otherwise permitted under the Credit Agreement, sell, transfer, lease or otherwise dispose of its Inventory.  Without limiting the generality of the foreg oing, each Pledgor agrees that it shall not permit any Inventory to be in the possession of any bailee, warehouseman, agent or processor (but not including agents engaged for the sole purpose of transporting Inventory) at any time unless such Pledgor shall have utilized commercially reasonable efforts to have notified such bailee, warehouseman, agent or processor of the security interest created by this Agreement and to have obtained, at such Pledgor’s sole cost and expense, a written agreement by such person to hold such Inventory subject to the security interest created by this Agreement and the instructions of the Agent and to waive and release any Lien (whether arising by operation of law or otherwise) such person may have with respect to such Inventory, such agreement to be in form and substance reasonably satisfactory to the Agent.  Each Pledgor further agrees that its Eligible Inventory will be produced in compliance with the applicable requirements of the Fair Labor Standards Act, as amended, if such Inventory is produced by Pledgor in the United States.

 

4.7 Taxes.  Each Pledgor will, to the extent required under Section 5.07 of the Credit Agreement, pay and discharge (i) all taxes, assessments and governmental charges or levies imposed upon it, upon its income or profits or upon any of its properties, prior to the date on which penalties would attach thereto, and (ii) all lawful claims for taxes, assessment, governmental charges or levies that, if unpaid, might become a Lien upon any of the Collateral.

 

4.8 Insurance.

 

(a) Each Pledgor will maintain and pay for, or cause to be maintained and paid for, with financially sound and reputable insurance companies, insurance with respect to its assets, properties and business, against such hazards and liabilities, of such types and in such amounts, as is required pursuant to Section 5.02 of the Credit Agreement.

 

(b) Each Pledgor hereby irrevocably makes, constitutes and appoints the Agent at all times during the continuance of an Event of Default, its true and lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims under such policies of insurance, endorsing its name on any check, draft, instrument or other item or payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect to such policies of insurance.

 

(c) If any Pledgor fails to obtain and maintain any of the policies of insurance required to be maintained hereunder or to pay any premium in whole or in part, the Agent may, without waiving or releasing any obligation or Default, at such Pledgor’s expense, but without any obligation to do so, procure such policies or pay such premiums.  All sums so disbursed by the Agent, including reasonable attorneys’ fees, court costs, expenses and other charges related thereto, shall be payable by the Pledgors to the Agent on demand and shall be additional Secured Obligations hereunder, secured by the Collateral.

 

(d) Each Pledgor will deliver to the Agent, promptly as rendered, true copies of all material claims and reports made in any reporting forms to insurance companies.  Such Pledgor will deliver to the Agent one or more certificates of insurance evidencing renewal of the insurance coverage required hereunder (or issuance of a replacement policy from another insurance company meeting the requirements of this Section 4.8) plus such other evidence of payment of premiums therefor as the Agent may request.  Upon the reasonable request of the Agent from time to time, each Pledgor will deliver to the Agent evidence that the insurance required to be maintained pursuant to this Section is in effect.

 

4.9 Intellectual Property.

 

(a) Promptly following the Agent’s request from time to time, the Pledgors shall deliver to the Agent an updated schedule of material Patents and Trademarks, which schedule shall correctly set forth all material registered Patents and Trademarks owned by the Pledgors; provided, however that, for so long as Collateral Availability exceeds an amount equal to $75,000,000, such requests shall be limited to one time each fiscal year; and provided further, that, if an Event of D efault shall have occurred and be continuing, the Agent may request such updated schedules as often as the Agent may, in its Permitted Discretion, determine to be appropriate.  As of the date on which the Lien on the Deferred Interests attaches, each Pledgor will, at its own expense, execute and deliver a fully completed Copyright Security Agreement, Patent Security Agreement or Trademark Security Agreement in the respective forms of Exhibits B, C and D, as applicable, with regard to any Copyright Collateral, Patent Collateral or Trademark Collateral (in each case, to the extent registered or filed, subject to the provisions of Section 3.8 hereof), as the case may be of such Pledgor, desc ribed in Annexes D, E and F hereto.  In the event that after such date any Pledgor shall acquire any registered Copyright Collateral, Patent Collateral or Trademark Collateral or effect any registration of any such Copyright Collateral, Patent Collateral or Trademark Collateral or file any application for registration thereof, within the United States, such Pledgor shall promptly furnish written notice thereof to the Agent together with information sufficient to permit the Agent, upon its receipt of such notice, to (and each Pledgor hereby authorizes the Agent to) modify this Agreement, as appropriate, by amending Annex D, E or F hereto or to add additional exhibits hereto to include any Copyright Collateral, Patent Collateral or Trademark Collateral (in each case, to the extent registered or filed, subject to the provisions of Section 3.8 hereof) that becomes part of the Collateral under this Agreement, and such Pledgor shall additionally, at its own expense, execute and deliver, as promptly as possible (but in any event within ten (10) days) after the date of such notice, with regard to United States Copyrights, Patents and Trademarks, fully completed Copyright Security Agreements, Patent Security Agreements or Trademark Security Agreements in the forms of Exhibits B, C and D, as applicable, together in all instances with any other agreements, instruments and documents that the Agent may reasonably request from time to time to further effect and confirm the security interest created by this Agreement in such Copyright Collateral, Patent Collateral and Trademark Collateral, and each Pledgor hereby appoints the Agent its attorney-in-fact, upon the occurrence and the continuance of an Event of Default, to execute, deliver and record any and all such agreements, instruments and documents for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed and such power, being coupled with an interest, being irrevocable for so long as this Agreement shall be in effect with respect to such Pledgor.  In that connection, each Pledgor shall also execute and deliver on the date on which the Lien on the Deferred Interests attaches, such number of Special Powers of Attorney in the form of Annex I hereto as may be reasonably requested by the Agent.

 

(b) The Pledgors shall file and prosecute diligently all applications for registration of Patents, Trademarks or Copyrights now or hereafter pending that would be necessary to the business of the Pledgors to which any such applications pertain, and do all acts (or refrain from doing all acts), in any such instance, reasonably necessary to preserve and maintain all material rights in Patents, Trademarks or Copyrights, unless such Patents, Trademarks or Copyrights are not material to the business of the Pledgors, as reasonably determined by the Pledgors consistent with prudent and commercially reasonable business practices.

 

(c) From and after the date on which the Lien on the Deferred Interests attaches, each Pledgor shall notify the Agent promptly if it knows or has reason to know that any material Patent Collateral, Trademark Collateral or Copyright Collateral used in the conduct of its business may become abandoned or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the U.S. Patent and Trademark Office, U.S. Copyright Office or any court) regarding such Pledgor’s ownership of any material Patent Collateral, Trademark Collateral or Copyright Collateral, its right to register the same, or to keep and maintain the same.

 

(d) From and after the date on which the Lien on the Deferred Interests attaches, in the event that any Collateral consisting of a material Patent Collateral, Trademark Collateral or Copyright Collateral used in the conduct of any Pledgor’s business is believed infringed, misappropriated or diluted by a third party, such Pledgor shall notify the Agent promptly after it learns thereof and shall, if consistent with the exercise of reasonable business judgment and applicable laws, regulations and agreements to which the applicable Pledgor is a party, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Collateral.

 

(e) From and after the date on which the Lien on the Deferred Interests attaches, upon the occurrence and during the continuance of any Event of Default, each Pledgor shall use its commercially reasonable efforts to obtain all requisite consents or approvals from the licensor of each material License included within the Copyright Collateral, Patent Collateral or Trademark Collateral to effect the assignment of all of such Pledgor’s right, title and interest thereunder to the Agent or its designee.

 

4.10 Delivery of Collateral.  All certificates or instruments representing or evidencing any material Account, Equity Interest or other Collateral delivered to the Agent pursuant hereto, shall be in form suitable for transfer by delivery and shall be delivered together with undated stock powers duly executed in blank, appropriate endorsements or other necessary instruments of registration, transfer or assignment, duly executed and in form and substance satisfactory to the Agent, and in each case such other instruments or documents as the Agent may reasonably request.

 

4.11 Deposit and Collection Procedures.  Each Pledgor agrees that, upon the creation of a new Deposit Account (other than an Excluded Account or any account which is part of the DOE Collateral) not held with the Agent or any new Securities Account, it will immediately enter into a control agreement in favor of the Agent for such Deposit Account or Securities Account, as applicable, in form and substance satisfactory to the Agent.  Subject to the foregoing exceptions, no Proceeds of Accounts will be deposited in or at any time transferred to such a Deposit Account other than such a Deposit Account covered by a control agreement in favor of the Agent i n form and substance reasonably satisfactory to the Agent; provided that in no event shall any Proceeds of Accounts be deposited in or at any time transferred to any account which is part of the DOE Collateral.  Nothing contained in this Section 4.11 shall prohibit the Pledgors from making any pledges or deposits permitted by the Credit Agreement.

 

4.12 Protection of Security Interest.  Each Pledgor agrees that it will use commercially reasonable efforts, at its own cost and expense, to take any and all actions necessary to warrant and defend the right, title and interest of the Agent and Secured Parties in and to the Collateral against the claims and demands of all other persons.

 

4.13 Control of Investment Property and Electronic Chattel Paper.  If any Investment Property (whether now owned or hereafter acquired) is included in the Collateral, each applicable Pledgor will notify the Agent thereof and will promptly take and cause to be taken all actions required under Articles 8 and 9 of the Uniform Commercial Code and any other applicable law to enable the agent to acquire “control” (within the meaning of such term under Section 8-106 (or its successor provision) of the Uniform Commercial Code) of such Investment Property and as may be otherwise necessary or deemed appropriate by the Agent to perfect the security interest o f the Agent therein.  If any Account of any Pledgor would constitute “electronic chattel paper” as defined under the Uniform Commercial Code, each Pledgor will promptly notify the Agent and will take such other steps as may be necessary or deemed appropriate by the Agent to give the Agent “control” over such electronic chattel paper (within the meaning of Section 9-105 of the Uniform Commercial Code).

 

4.14 Supplements to Schedules and Annexes.  The Credit Parties shall, from time to time (including, without limitation, in connection with any reaffirmation by the Pledgors of the representations and warranties made by any Pledgor hereunder or under any Financing Document), and upon the reasonable request of the Agent, amend or supplement in writing and deliver to the Agent revisions of and supplements to the Annexes and schedules hereto to the extent necessary to disclose new or changed facts or circumstances arising after the Effective Date, which, if existing or occurring on such date, would have been required to be set forth or described in such Annex or s chedule hereto; provided that (i) in connection with any amendment or supplement to Annex A, the Credit Parties shall comply with Section 5.1(b), (ii) in connection with any amendment or supplement to Annex B, the Credit Parties shall provide the Agent at least fifteen (15) days’ advance notice of any such amendment or supplement (or such shorter period as the Agent may approve), shall comply with Section 4.2 and shall take any other action reasonably requested by Agent in connection therewith to maintain the Lien of Agent on the Collateral after giving effect to such amendment or supplement, (iii) in connection with any amendment or supplement to Annex H, the Credit Parties shall provide the Agent at least fifteen (15) days’ advance notice of any such amendment or supplement (or such shorter period as the Agent may approve), shall comply with Sections 3.10 and 4.11 and shall take any other action reasonably requested by Agent in connection therewith to maintain the Lien of Agent on the Collateral after giving effect to such amendment or supplement, (iv) in connection with any amendment or supplement to Annex C, the Credit Parties shall comply with Section 4.2, (v) in connection with any amendment or supplement to Annexes D, E or F, the Credit Parties shall comply with Section 4.9(a), and (vi) no such amendment or supplement to any such Annex shall constitute a waiver of any Default or Event of Default in existence on or prior to the date of such amendment or supplement.  Any reference to an Annex or schedule in this Agreement shall refer to such Annex as amended or supplemented from time to time in accordance with this Section 4.14.

 

ARTICLE V                                

 

 

CERTAIN PROVISIONS RELATING TO EQUITY INTERESTS

 

5.1 Ownership; After-Acquired Equity Interests.

 

(a) Except as otherwise permitted under Section 6.03(c) of the Credit Agreement or in connection with any Restructuring Event, each Pledgor will cause the Equity Interests pledged by it hereunder (including without limitation, all Equity Interests constituting Deferred Interests which would become Collateral if a Deferred Interests Triggering Event were to occur) to constitute at all times 100% of the capital stock or other Equity Interests in each issuer held by such Pledgor thereof, such that the issuer thereof shall be a wholly owned subsidiary of such Pledgor, provided that (i) in no event shall the Parent cease to own, directly or indirectly through one or more Gua rantor Pledgors, 100% of the Equity Interests in Enrichment and (ii) if, after giving effect to any transaction permitted by Sections 6.03(c) of the Credit Agreement or in connection with any Restructuring Event, any Equity Interests of any issuer pledged hereunder are held by any Subsidiary which is not a Pledgor, the Parent shall cause such Subsidiary to execute and deliver a Pledgor Guarantee and a Pledgor Addendum pursuant to which such Subsidiary shall become a Pledgor hereunder and grant a first priority Lien in favor of the Agent on the Collateral of such Subsidiary, including without limitation, all such Equity Interests (subject, in the case of any Equity Interests constituting Deferred Interests, to Section 2.3). Unless the Agent shall have given its prior written consent, no Pledgor will cause or permit any such issuer to issue or sell any new capital stock, any warrants, options or rights to acquire the same, or other Equity Interests of any nature to any person other than such Pledgor, or cause, permit or consent to the admission of any other person as a stockholder, partner or member of any such issuer.

 

 

ARTICLE VIII                                

 

 

MISCELLANEOUS

 

8.1 Indemnity and Expenses.  The Pledgors agree jointly and severally:

 

(a) to indemnify and hold harmless the Agent, each other Secured Party and each of their respective directors, officers, employees, agents and affiliates from and against any and all claims, damages, demands, losses, obligations, judgments and liabilities (including, without limitation, reasonable attorneys’ fees and expenses) in any way arising out of or in connection with this Agreement, except to the extent the same shall arise as a result of the gross negligence or willful misconduct of the party seeking to be indemnified; and

 

(b) to pay and reimburse the Agent upon demand for all reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) that the Agent may incur in connection with (i) the custody, use or preservation of, or the sale of, collection from or other realization upon, any of the Collateral, including the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, (ii) the exercise or enforcement of any rights or remedies granted hereunder (including, without limitation, under Article VI), under any of the other Financing Documents or otherwise available to it (whet her at law, in equity or otherwise), or (iii) the failure by any Pledgor to perform or observe any of the provisions hereof.  The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of any of the Secured Obligations, the termination or expiration of all Letters of Credit under the Credit Agreement, the termination of the Commitments under the Credit Agreement and the termination of this Agreement or any other Financing Document.

 

8.2 No Waiver.  The rights and remedies of the Secured Parties expressly set forth in this Agreement and the other Financing Documents are cumulative and in addition, to, and not exclusive of, all other rights and remedies available at law, in equity or otherwise.  No failure or delay on the part of any Secured Party in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or be construed to be a waiver of any Default or Event of Default.  N o course of dealing between the Pledgors and the Secured Parties or their agents or employees shall be effective to amend, modify or discharge any provision of this Agreement or any other Financing Document or to constitute a waiver of any Default or Event of Default.  No notice to or demand upon any Pledgor in any case shall entitle such Pledgor or any other Pledgor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of any Secured Party to exercise any right or remedy or take any other or further action in any circumstances without notice or demand.

 

8.3 Pledgors’ Obligations Absolute.  Until such time as this Agreement terminates pursuant to Section 8.6, each Pledgor agrees that its obligations hereunder, and the security interest granted to and all rights, remedies and powers of the Agent hereunder, are irrevocable, absolute and unconditional and shall not be discharged, limited or otherwise affected (unless agreed to by the parties hereto) by reason of any of the following, whether or not such Pledgor has knowledge thereof:

 

(i) any change in the time, manner or place of payment of, or in any other term of, any Secured Obligations, or any amendment, modification or supplement to, restatement of, or consent to any rescission or waiver of or departure from, any provisions of the Credit Agreement, any Pledgor Guarantee, any other Financing Document or any agreement or instrument delivered pursuant to any of the foregoing;

 

(ii) the invalidity or unenforceability of any Secured Obligations or any provisions of the Credit Agreement, any Pledgor Guarantee, any other Financing Document or any agreement or instrument delivered pursuant to any of the foregoing;

 

(iii) the addition or release of Pledgors hereunder or the taking, acceptance or release of any Secured Obligations or additional Collateral or other security therefor;

 

(iv) any sale, exchange, release, substitution, compromise, nonperfection or other action or inaction in respect of any Collateral or other direct or indirect security for any Secured Obligations, or any discharge, modification, settlement, compromise or other action or inaction in respect of any Secured Obligations;

 

(v) any agreement not to pursue or enforce or any failure to pursue or enforce (whether voluntarily or involuntarily as a result of operation of law, court order or otherwise) any right or remedy in respect of any Secured Obligations or any Collateral or other security therefor, or any failure to create, protect, perfect, secure, insure, continue or maintain any Liens in any such Collateral or other security;

 

(vi) the exercise of any right or remedy available under the Financing Documents, at law, in equity or otherwise in respect of any Collateral or other security for any Secured Obligations, in any order and by any manner thereby permitted, including, without limitation, foreclosure on any such Collateral or other security by any manner of sale thereby permitted, whether or not every aspect of such sale is commercially reasonable;

 

(vii) any bankruptcy, reorganization, arrangement, liquidation, insolvency, dissolution, termination, reorganization or like change in the corporate structure or existence of the Borrower, any other Pledgor or any other person directly or indirectly liable for any Secured Obligations;

 

(viii) any manner of application of any payments by or amounts received or collected from any person, by whomsoever paid and howsoever realized, whether in reduction of any Secured Obligations or any other obligations of the Borrowers or any other person directly or indirectly liable for any Secured Obligations, regardless of what Secured Obligations may remain unpaid after any such application; or

 

(ix) any other circumstance that might otherwise constitute a legal or equitable discharge of, or a defense, set-off or counterclaim available to, the Borrowers, any Pledgor or a surety or guarantor generally, other than the occurrence of all of the following:  (x) the payment in full of the Secured Obligations, (y) the termination or expiration of all Letters of Credit under the Credit Agreement and (z) the termination of the Commitments under the Credit Agreement (the events in clauses (x), (y) and (z) above, collectively, the “Termination Requirements”).

 

8.4 Enforcement.  By its acceptance of the benefits of this Agreement, each Secured Party agrees that this Agreement may be enforced only by the Agent, acting upon the instructions or with the consent of the Lenders to the extent provided for in the Credit Agreement, and that no Secured Party shall have any right individually to enforce or seek to enforce this Agreement or to realize upon any Collateral or other security given to secure the payment and performance of the Secured Obligations.

 

8.5 Amendments, Waivers, etc.  No amendment, modification, waiver, discharge or termination of, or consent to any departure by any Pledgor from, any provision of this Agreement, shall be effective unless in a writing executed and delivered in accordance with Section 9.02 of the Credit Agreement, and then the same shall be effective only in the specific instance and for the specific purpose for which given.

 

8.6 Continuing Security Interest; Term; Successors and Assigns; Assignment; Termination and Release; Survival.  This Agreement shall create a continuing security interest in the Collateral and shall secure the payment and performance of all of the Secured Obligations as the same may arise and be outstanding at any time and from time to time from and after the date hereof, and shall (i) remain in full force and effect until the occurrence of the Termination Requirements, (ii) be binding upon and enforceable against each Pledgor and its successors and assigns (provided, however, that no Pledgor may sell, assign or transfer any of its rights, interests, duties or obligations hereunder without the prior written consent of the Lenders) and (iii) inure to the benefit of and, subject to Section 8.4, be enforceable by each Secured Party and its successors and assigns.  Upon any sale, lease, transfer or other disposition by any Pledgor of any Collateral (including, without limitation, any ACP Property) in a transaction expressly permitted hereunder or under or pursuant to the Credit Agreement or any other applicable Financing Document, or any amendment or waiver hereunder or thereunder, the Lien and security interest created by this Agreement in and upon such Collateral shall be automatically released, upon any Pledgor ceasing to be a Guarantor pursuant to a transaction so permitted, the Lien and security interest created by this Agreement in any Collateral of such Pledgor shall be automatically released and upon the satisfaction of all of the Termination Requirements, this Agreement and the Lien and security interest created hereby shall terminate; and in connection with any such release or termination, the Agent, at the request and expense of the applicable Pledgor, will execute and deliver to such Pledgor such documents and instruments evidencing such release or termination as such Pledgor may reasonably request and will assign, transfer and deliver to such Pledgor, without recourse and without representation or warranty, such of the Collateral as may then be in the possession of the Agent (or, in the case of any partial release of Collateral, such of the Collateral so being released as may be in its possession).  All representations, warranties, covenants and agreements herein shall survive the execution and delivery of this Agreement and any Pledge Amendment or Pledgor Addendum.

 

8.7 Additional Pledgors.  Each Pledgor recognizes that the provisions of the Credit Agreement require persons that become Material Subsidiaries of the Parent (other than a Foreign Subsidiary), and that are not already parties hereto, to execute and deliver a Pledgor Addendum, whereupon each such Person shall become a Pledgor hereunder with the same force and effect as if originally a Pledgor hereunder on the date hereof, and agrees that its obligations hereunder shall not be discharged, limited or otherwise affected by reason of the same, or by reason of the Agent’s actions in effecting the same or in releasing any Pledgor hereunder, in each case without the necessity of giving notice to or obtaining the consent of such Pledgor or any other Pledgor.

 

8.8 Notices.  All notices and other communications provided for hereunder shall be given to the parties in the manner and subject to the other notice provisions set forth in (i) in the case of the Borrowers or the Agent, the Credit Agreement and (ii) in the case of any other Pledgor, its Pledgor Guarantee.

 

8.9 Applicable Law.  THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, BUT IN ANY EVENT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

8.10 Severability.  To the extent any provision of this Agreement is prohibited by or invalid under the applicable law of any jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in such jurisdiction, without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this Agreement in any jurisdiction.

 

8.11 Construction.  The headings of the various sections and subsections of this Agreement have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof.  Unless the context otherwise requires, words in the singular include the plural and words in the plural include the singular.

 

8.12 Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute but one contract, and shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall be delivered to the Agent.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed signature page hereto.

 

8.13 Submission to Jurisdiction.  Any legal action or proceeding with respect to this Agreement may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each Pledgor hereby submits for itself and in respect of its property, generally and unconditionally, to the jurisdiction of the aforesaid courts, waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which such Pledgor now or hereafter has to the bringing of any such action or proceeding in such respective jurisdictions and consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to each such person, as the case may be, as provided for in Section 8.8.  The Agent may also serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against any Pledgor in any other jurisdiction.

 

8.14 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY 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 THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

8.15 Qualifications Regarding Pledgor Disclosures.  Notwithstanding anything to the contrary set forth herein, in no event shall any Pledgor be required to provide in any annex, exhibit or schedule hereto, or in response to any disclosure required hereunder, any information that is “classified” for reasons of national security or foreign policy under applicable laws, and each of the Pledgors’ representations and warranties hereunder and the annexes, exhibits and schedules hereto are so qualified.

 

8.16 Certain Regulatory Restrictions.  Notwithstanding anything to the contrary set forth herein, certain rights, remedies and powers provided the Agent in this Agreement, such as (a) actions by the Agent that would constitute a direct or indirect transfer of control of one or more Permits (as defined below), within the meaning of Section 184 of the Atomic Energy Act of 1954, as amended, and (b) actions (other than acquiring title or ownership to Inventory by foreclosure or otherwise pursuant to existing general licenses from the NRC issued to and generally available for use by any person) that involve taking possession or controlling the use of nuclear materi als or facilities for which a Permit is required, are subject to regulatory restrictions that may require the Agent to obtain the prior written consent or approval of the NRC, and all provisions of this Security Agreement shall be limited to conform with such restrictions.  For purposes hereof, “Permits” means permits, licenses, certificates, approvals and other authorizations issued by the NRC, or by a state agency exercising NRC’s authority under an agreement with the NRC.

 

8.17 Restatement.  As of the date hereof, the terms conditions, agreements, covenants, representations and warranties set forth in the Existing Security Agreement are hereby amended, restated, replaced and superseded in their entirety by this Agreement, provided that nothing herein shall impair or adversely affect the continuation of the liability and obligations of the Pledgors under the Existing Security Agreement, as amended and restated hereby, and nothing herein shall be construed to constitute payment of, or impair, limit, cancel or extinguish, or constitute a novation in respect of, the ob ligations and liabilities of the Pledgors arising under the Existing Security Agreement, as amended and restated hereby, and the liens and security interests in favor of the Agent under the Existing Security Agreement shall not in any manner be impaired, limited, terminated, waived or released, except as expressly provided in the Credit Agreement and the other Financing Documents. Notwithstanding the foregoing, each party hereto acknowledges and agrees that non-compliance with any provision of the Existing Security Agreement, if any, prior to the Effective Date is hereby waived.

 

 

[Remainder of Page Intentionally Left Blank]

 

BOS111 12487896.6

 

 

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date first above written.

 

PLEDGORS:

 

UNITED STATES ENRICHMENT CORPORATION

 

By:           /s/ John C. Barpoulis                                                      

Name:           John C. Barpoulis

Title:           Senior Vice President and Chief Financial

Officer

 

USEC INC.

 

By:           /s/ John C. Barpoulis                                                      

Name:           John C. Barpoulis

Title:           Senior Vice President and Chief Financial

Officer

 

NAC INTERNATIONAL INC.

 

By:           /s/ John J. Butler                                                                

 

Name:           John J. Butler

 

Title: Vice President, Finance and Treasurer

 

 

[Signature page Third Amended and Restated Omnibus Pledge and Security Agreement]

 

BOS111 12487896.6

 

 

 

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AGENT:

 

JPMORGAN CHASE BANK, N.A. (formerly known

as JPMorgan Chase Bank), as

Administrative and Collateral Agent

By:           /s/ Dan Bueno                                                                

 

Name:           Dan Bueno

 

Title:           Vice President

 

 

 

 

[Signature page Third Amended and Restated Omnibus Pledge and Security Agreement]

 

BOS111 12487896.6

 

 

 

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Annex A to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

 

 

 

 

 

PLEDGED EQUITY INTERESTS

 

 

 

 

 

 

 

 

BOS111 12487896.6                                                                  A-

 

 

 

 

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Annex B to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

FILING LOCATIONS

 

BOS111 12487896.6                                                                   C-

 

 

 

 

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Annex C to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

LOCATIONS OF CHIEF EXECUTIVE OFFICES, RECORDS RELATING TO

 

COLLATERAL AND EQUIPMENT AND INVENTORY

 

BOS111 12487896.6                                                                   C-

 

 

 

 

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Annex D to

Third Amended and Restated Omnibus Pledge and Security Agreement

 

 

COPYRIGHTS AND COPYRIGHT APPLICATIONS

 

Pledgor

Application or Registration Number

Country

Issue or Filing Date

 

BOS111 12487896.6                                                                  D-

 

 

 

 

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Annex E to

Third Amended and Restated Omnibus Pledge and Security Agreement

PATENTS AND PATENT APPLICATIONS

 

Pledgor

Application or Registration No.

Country

Inventor

Issue or Filing Date

 

BOS111 12487896.6                                                                   E-

 

 

 

 

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Annex F to

Third Amended and Restated Omnibus Pledge and Security Agreement

TRADEMARKS AND APPLICATIONS

 

Pledgor

Mark

Application or Registration No.

Country

Issue or Filing Date

 

BOS111 12487896.6                                                                   F-

 

 

 

 

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Annex H to

 

THIRD AMENDED AND RESTATED OMNIBUS PLEDGE AND SECURITY AGREEMENT

 

 

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

 

BOS111 12487896.6                                                                  H-

 

 

 

 

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Annex I to

Third Amended and Restated Omnibus Pledge and Security Agreement

To Be Completed When Lien

on Deferred Interests Attaches

SPECIAL POWER OF ATTORNEY

 

STATE OF                                           )

 

:  ss.:

 

COUNTY OF                                                      )

 

KNOW ALL MEN BY THESE PRESENTS, THAT [___________________], a Delaware corporation with its principal office at [__________________________] (hereinafter called “Grantor”), hereby appoints and constitutes JPMorgan Chase Bank, N.A., a national banking association, as agent (referred to herein as the “Grantee”), for the ratable benefit of the Secured Parties as defined in the Third Amended and Restated Omnibus Pledge and Security Agreement dated as of [_______], 2010 (as amended or supplemented from time to time, the “Security Agreement”) among Grantor, the other Pledgors named therein and the Grantee, its tru e and lawful attorney, with full power of substitution, and with full power and authority to perform the following acts on behalf of Grantor, subject to applicable law, including, without limitation, all laws governing the handling of classified information:

 

1. For the purpose of assigning, selling, licensing or otherwise disposing of all right, title and interest of Grantor in and to any letters patent of the United States or any other country or political subdivision thereof, and all registrations, recordings, reissues, continuations, continuations-in-part and extensions thereof, and all pending applications therefor, and for the purpose of the recording, registering and filing of, or accomplishing any other formality with respect to, the foregoing, to execute and deliver any and all agreements, documents, instruments of assignment or other papers necessary or advisable to effect such purpose;

 

2. For the purpose of assigning, selling, licensing or otherwise disposing of all right, title and interest of Grantor in and to any copyrights, trademarks, trade names, trade styles and service marks, and all registrations, recordings, reissues, extensions and renewals thereof, and all pending applications therefor, and for the purpose of the recording, registering and filing of, or accomplishing any other formality with respect to, the foregoing, to execute and deliver any and all agreements, documents, instruments of assignment or other papers necessary or advisable to effect such purpose;

 

3. To execute any and all documents, statements, certificates or other papers necessary or advisable in order to obtain the purposes described above as Grantee may in its sole discretion determine.

 

This power of attorney is made pursuant to the Security Agreement and takes effect solely for the purposes of Section 4.9 thereof and is subject to the conditions thereof and may not be revoked until the “Termination Requirements” as defined in such Security Agreement, shall have been satisfied.

 

Dated:                                           , 20__

 

[_______________________________]

 

By:                                                                

 

Name:

 

Title:

 

 

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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Exhibit A to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

PLEDGE AMENDMENT

 

THIS PLEDGE AMENDMENT, dated as of __________, 20__, is delivered by [NAME OF PLEDGOR] (the “Pledgor”) pursuant to Section 5.1 of the Security Agreement referred to herein below.  The Pledgor hereby agrees that this Pledge Amendment may be attached to the Third Amended and Restated Omnibus Pledge and Security Agreement, dated as of [_______], 2010 (as amended, modified, restated or supplemented from time to time, the “Security Agreement,” capitalized terms defined therein being used herein as therein defined) made by the Pledgors named therein in favor of JPMorgan Chase Bank, N.A., as administrative and collateral agent (the “Agent”) for the benefit of the Secured Parties, and that the Equity Interests listed on Annex A to this Pledge Amendment shall be deemed to be part of the Equity Interests within the meaning of the Security Agreement and shall become part of the Collateral and shall secure all of the Secured Obligations as provided in the Security Agreement.  The Pledgor hereby confirms that all representations and warranties set forth in Sections 3.1, 3.2, 3.4, 3.5 and 3.7 of the Security Agreement are true and correct with respect to the Equity Interests listed on Annex A to this Pledge Amendment.  This Pledge Amendment and its attachments are hereby incorporated into the Security A greement and made a part thereof.

 

[NAME OF PLEDGOR]

 

By:                                                                

 

Title:                                                                

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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ANNEX A

 

EQUITY INTERESTS

 

Name of Issuer

Type of Interests

Certificate No. (if applicable)

No. of Shares/Units (if applicable)

Percentage of Outstanding Interests in Issuer

 

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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Exhibit B to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

To Be Completed When the

 

Deferred Interests Attach

 

SECURITY AGREEMENT

 

 

(COPYRIGHTS)

 

WHEREAS, [________________], a [_______________________] (herein referred to as “Grantor”), has adopted, used and is using the copyrights listed on Schedule I annexed hereto, which copyrights are registered in the United States Copyright Office (the “Copyrights”);

 

WHEREAS, Grantor has entered into that certain Third Amended and Restated Omnibus Pledge and Security Agreement dated as of [_______], 2010 (as amended, modified, restated or supplemented from time to time, the “Security Agreement”; capitalized terms used herein but not otherwise defined herein have the meanings attributed to them in the Security Agreement) among Grantor, the other Pledgors party thereto, and JPMorgan Chase Bank, N.A., as administrative and collateral agent (referred to herein as “Grantee”) for the benefit of the Secured Parties;

 

WHEREAS, Grantor is obligated to Grantee for the payment and performance of the Secured Obligations; and

 

WHEREAS, pursuant to the Security Agreement, Grantor has granted to Grantee, for the ratable benefit of the Secured Parties, a security interest in, and mortgage on, all right, title and interest of Grantor in and to the Copyrights, all extensions, continuations, continuations-in-part, renewals and reissues thereof, and all proceeds thereof, including, without limitation, any and all causes of action which may now or hereafter exist by reason of infringement thereof (the “Collateral”), to secure the payment, performance and observance of the Secured Obligations.

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Grantor does hereby further assign unto Grantee and grant to Grantee, for the ratable benefit of the Secured Parties a security interest in, and mortgage on, the Collateral to secure the prompt payment, performance and observance of the Secured Obligations.

 

Grantor does hereby further acknowledge and affirm that the rights and remedies of Grantee with respect to the security interest in and mortgage on the Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein.

 

IN WITNESS WHEREOF, Grantor has caused this Assignment to be duly executed by its officer thereunto duly authorized as of the ____ day of________, 20__.

 

[                                                                           ]

 

By:

 

Name:

 

Title:

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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SCHEDULE I TO SECURITY AGREEMENT

 

 

COPYRIGHTS

 

 

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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Exhibit C to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

To Be Completed When the

 

Deferred Interests Attach

 

SECURITY AGREEMENT

 

 

(PATENTS)

 

WHEREAS, [______________], a [_______________________] (herein referred to as “Grantor”), is the owner and user of the patents issued by and/or patent applications filed with the United States Patent and Trademark Office, as more particularly described on Schedule I annexed hereto (the “Patents”);

 

WHEREAS, Grantor has entered into that certain Third Amended and Restated Omnibus Pledge and Security Agreement dated as of [_______], 2010 (as amended, modified, restated or supplemented from time to time, the “Security Agreement”; capitalized terms used herein but not otherwise defined herein have the meanings attributed to them in the Security Agreement) among Grantor, the other Pledgors party thereto, and JPMorgan Chase Bank, N.A., as administrative and collateral agent (referred to herein as “Grantee”) for the benefit of the Secured Parties;

 

WHEREAS, Grantor is obligated to Grantee for the payment and performance of the Secured Obligations; and

 

WHEREAS, pursuant to the Security Agreement, Grantor has granted to Grantee, for the ratable benefit of the Secured Parties, a security interest in, and mortgage on, all right, title and interest of Grantor in and to the Patents, together with any reissue, continuation, continuation-in-part or extension thereof, and all proceeds thereof, including, without limitation, any and all causes of action which may exist by reason of infringement thereof for the full term of the Patents (the “Collateral”), to secure the prompt payment, performance and observance of the Secured Obligations.

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Grantor does hereby further grant to Grantee, for the ratable benefit of the Secured Parties, a security interest in, and mortgage on, the Collateral to secure the prompt payment, performance and observance of the Secured Obligations.

 

Grantor does hereby further acknowledge and affirm that the rights and remedies of Grantee with respect to the assignment of, security interest in and mortgage on the Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein.

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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IN WITNESS WHEREOF, Grantor has caused this Assignment to be duly executed by its officer thereunto duly authorized as of the ____ day of_________, 20__.

 

[                                                                           ]

 

By:

 

Name:

 

Title:

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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SCHEDULE I TO SECURITY AGREEMENT

 

 

ISSUED PATENTS

 

Title	Date Issued	Patent No.

 

 

PENDING PATENT APPLICATIONS

 

Title	Serial Number / Filing Date

 

 

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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Exhibit D to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

To Be Completed When the

 

Deferred Interests Attach

 

SECURITY AGREEMENT

 

 

(TRADEMARKS)

 

WHEREAS, [_____________], a [__________________] (herein referred to as “Grantor”), is the owner and user of the United States registered trademarks and/or trademark applications listed on Schedule I annexed hereto (the “Trademarks”);

 

WHEREAS, Grantor has entered into that certain Third Amended and Restated Omnibus Pledge and Security Agreement dated as of [_______], 2010 (as amended, modified, restated or supplemented from time to time, the “Security Agreement”; capitalized terms used herein but not otherwise defined herein have the meanings attributed to them in the Security Agreement) among Grantor, the other Pledgors party thereto, and JPMorgan Chase Bank, N.A., as administrative and collateral agent (referred to herein as “Grantee”) for the benefit of the Secured Parties;

 

WHEREAS, Grantor is obligated to Grantee for the payment and performance of the Secured Obligations; and

 

WHEREAS, pursuant to the Security Agreement, Grantor has granted to Grantee, for the ratable benefit of the Secured Parties, a security interest in, and mortgage on, all right, title and interest of Grantor in and to the Trademarks, together with the goodwill of the business symbolized by the Trademarks and the applications and registrations thereof, and all proceeds thereof, including, without limitation, any and all causes of action which may exist by reason of infringement thereof (the “Collateral”), to secure the payment, performance and observance of the Secured Obligations.

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Grantor does hereby further grant to Grantee, for the ratable benefit of the Secured Parties, a security interest in, and mortgage on, the Collateral to secure the prompt payment, performance and observance of the Secured Obligations.

 

Grantor does hereby further acknowledge and affirm that the rights and remedies of Grantee with respect to the assignment of, security interest in and mortgage on the Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein.

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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IN WITNESS WHEREOF, Grantor has caused this Assignment to be duly executed by its officer thereunto duly authorized as of the ____ day of_________, 20__.

 

[                                                                           ]

 

By:

 

Name:

 

Title:

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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SCHEDULE I TO SECURITY AGREEMENT

 

 

REGISTERED TRADEMARKS AND TRADEMARK APPLICATIONS

 

Trademark	Reg. Date. (if applicable)	Reg. No./ Serial No.

 

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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Exhibit E to

 

Third Amended and Restated Omnibus Pledge and Security Agreement

 

FORM OF

 

PLEDGOR ADDENDUM

 

THIS PLEDGOR ADDENDUM (this “Addendum”), dated as of __________, 20__, is executed and delivered by __________, a ______________ (the “Company”), in favor of JPMorgan Chase Bank, N.A., in its capacity as administrative and collateral agent under the Credit Agreement referred to herein below (in such capacity, the “Agent”), pursuant to the Security Agreement referred to herein below.

 

Reference is made to that certain Third Amended and Restated Credit Agreement, dated as of [_______], 2010, among USEC Inc. (“Holdings”), United States Enrichment Corporation (“Enrichment” and, together with Holdings, the “Borrowers”), the Agent, the Lenders from time to time party thereto, and the arrangers, book managers and other agents named therein (as amended, modified, restated or supplemented from time to time, the “Credit Agreement”).  In connection with and as a condition to the initial and continued extensions o f credit under the Credit Agreement, the Borrowers and NAC International Inc. (“NAC International”) have executed and delivered a Third Amended and Restated Omnibus Pledge and Security Agreement, dated as of [_______], 2010 (as amended, modified, restated or supplemented from time to time, the “Security Agreement”), pursuant to which they have granted in favor of the Agent a security interest in and Lien upon the Collateral as security for the Secured Obligations.  In addition, NAC International has executed and delivered the NAC Guarantee, pursuant to which NAC International guaranteed to the Secured Parties the payment in full of the Guaranteed Obligations (as defined in the NAC Guarantee), including without limitation, the obligations of the Borrowers under the Credit Agreement.  Capitalized terms used herein without definition shall have the meanings given to them in the Security Agreement.

 

The Borrowers have agreed under the Credit Agreement to cause such of their future Material Subsidiaries (other than Foreign Subsidiaries) to become a party to the Security Agreement as a Pledgor thereunder in accordance with the terms thereof and to execute and deliver a Pledgor Guarantee.  The Company is a direct or indirect subsidiary of USEC Inc. and, as required by the Credit Agreement, has executed and delivered a Pledgor Guarantee as of the date hereof.  The Company will obtain benefits as a result of the continued extension of credit to the Borrowers under the Credit Agreement, which benefits are hereby acknowledged, and, accordingly, desires to execute and deliver this Addendum.  Therefore, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the Lenders to continue to extend credit to the Borrowers under the Credit Agreement, the Company hereby agrees as follows:

 

1.           The Company hereby joins in and agrees to be bound by each and all of the provisions of the Security Agreement as a Pledgor thereunder.  In furtherance (and without limitation) of the foregoing, (a) pursuant to Section 2.1 of the Security Agreement, and as security for all of the Secured Obligations, the Company hereby pledges, assigns and delivers to the Agent, for the ratable benefit of the Secured Parties, and grants to the Agent, for the ratable benefit of the Secured Parties, a Lien upon and security interest in, all of its right, title and interest in and to the Collateral as set forth in Section 2.1 of the Security Agreement, all on the terms and subject to the conditions set forth in the Security Agreement and (b) subject to Section 2.3(b) of the Sec urity Agreement, pursuant to Section 2.3 of the Security Agreement, and as security for the Secured Obligations, the Company hereby pledges, assigns and delivers to the Agent, for the ratable benefit of the Secured Parties, and grants to the Agent, for the ratable benefit of the Secured Parties, a Lien upon and security interest in, all of its rights, title and interest in and to the Collateral as set forth in Section 2.3 of the Security Agreement, all on the terms and subject to the conditions set forth in the Security Agreement.

 

2.           The Company hereby represents and warrants that (i) Schedule I hereby sets forth all information required to be listed on Annexes A, B, C, D, E, F and H to the Security Agreement in order to make each representation and warranty contained in Article III of t he Security Agreement true and correct with respect to the Company as of the date hereof and after giving effect to this Addendum and (ii) after giving effect to this Addendum and to the incorporation into such Annexes, as applicable, of the information set forth in Schedule I, each representation and warranty contained in Article III of the Security Agreement is true and correct with respect to the Company as of the date hereof, as if such representations and warranties were set forth at length herein.

 

3.           This Addendum shall be a Financing Document, shall be binding upon and enforceable against the Company and its successors and assigns, and shall inure to the benefit of and be enforceable by such Secured Party and its successors and assigns.  This Addendum and its attachments are hereby incorporated into the Security Agreement and made a part thereof.

 

[The remainder of this page is intentionally left blank.]

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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IN WITNESS WHEREOF, the Company has caused this Addendum to be executed by its duly authorized officer as of the date first above written.

 

[NAME OF COMPANY]

 

By:

 

Name:

 

Title:

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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SCHEDULE I

 

Information to be added to Annex A of the Security Agreement

 

[To be Completed When Lien on Deferred Interests Attaches (in the case of any Intermediate Holdco]

 

PLEDGED EQUITY INTERESTS

 

Pledgor

Name of Issuer

Type of Interests

Certificate Number, if applicable

Number of Shares/Units, if applicable

Percentage of Outstanding Interests in Issuer

 

 

Information to be added to Annex B of the Security Agreement:

 

FILING LOCATIONS

 

 

 

Information to be added to Annex C of the Security Agreement:

 

LOCATIONS OF CHIEF EXECUTIVE OFFICES, RECORDS

 

RELATING TO COLLATERAL AND EQUIPMENT AND INVENTORY

 

1.           Chief Executive Office:                                                                Tax I.D. #                                           

 

Organizational I.D. #__________

 

 

 

 

2.           Records relating to Collateral:

 

 

 

 

3.           Equipment or Inventory:

 

 

 

 

4.           Other Places of Business:

 

 

 

 

5.           Trade/Fictitious or Prior Corporate Names (last five years):

 

 

 

 

6.           State of Registration, if applicable:

 

 

 

 

 

 

Information to be added to Annex D of the Security Agreement

 

[To be Completed When Lien on Deferred Interests Attaches]

 

COPYRIGHTS AND COPYRIGHT APPLICATIONS

 

Pledgor

Application or Registration Number

Country

Issue or Filing Date

 

 

 

 

 

Information to be added to Annex E of the Security Agreement

 

[To be Completed When Lien on Deferred Interests Attaches]

 

PATENTS AND PATENT APPLICATIONS

 

Pledgor

Application or Registration No.

Country

Inventor

Issue or Filing Date

 

 

 

 

 

 

Information to be added to Annex F of the Security Agreement

 

[To be Completed When Lien on Deferred Interests Attaches]

 

TRADEMARKS AND APPLICATIONS

 

Pledgor

Mark

Application or Registration No.

Country

Issue or Filing Date

 

 

 

 

 

 

Information to be added to Annex H of the Security Agreement

 

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

 

Deposit Accounts:

 

Financial Institution	Address	Account Number	Account Holder

 

Securities Accounts:

 

Financial Institution	Address	Account Number	Account Holder

 

BOS111 12487896.6                                                                   I-

 

 

 

 

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TABLE OF CONTENTS

Page

 

ARTICLE I

DEFINITIONS

 

1.1

Defined Terms

 

1.2

Classified Information

 

1.3

Other Terms

 

ARTICLE II

CREATION OF SECURITY INTEREST

 

2.1

Pledge and Grant of Security Interest

 

2.2

Security for Secured Obligations

 

2.3

Deferred Interests

 

2.4

Inventory Account

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

3.1

Ownership of Collateral

 

3.2

Security Interests; Filings

 

3.3

Locations

 

3.4

Authorization; Consent

 

3.5

No Restrictions

 

3.6

Eligible Receivables

 

3.7

Equity Interests

 

3.8

Intellectual Property

 

3.9

Documents of Title

 

3.10

Deposit Accounts and Securities Accounts

 

ARTICLE IV

COVENANTS

 

4.1

Use and Disposition of Collateral

 

4.2

Change of Name, Locations, etc

 

4.3

Records; Inspection

 

4.4

Accounts

 

4.5

Instruments

 

4.6

Inventory

 

4.7

Taxes

 

4.8

Insurance

 

4.9

Intellectual Property

 

4.10

Delivery of Collateral

 

4.11

Deposit and Collection Procedures

 

4.12

Protection of Security Interest

 

4.13

Control of Investment Property and Electronic Chattel Paper

 

4.14

Supplements to Schedules and Annexes

 

ARTICLE V

CERTAIN PROVISIONS RELATING TO EQUITY INTERESTS

 

5.1

Ownership; After-Acquired Equity Interests

 

5.2

Voting Rights

 

5.3

Dividends and Other Distributions

 

ARTICLE VI

REMEDIES

 

6.1

Remedies

 

6.2

Application of Proceeds

 

6.3

Collateral Accounts

 

6.4

Grant of License

 

6.5

Private Sales

 

6.6

Waivers

 

ARTICLE VII

THE AGENT

 

7.1

The Agent; Standard of Care

 

7.2

Further Assurances; Attorney-in-Fact

 

ARTICLE VIII

MISCELLANEOUS

 

8.1

Indemnity and Expenses

 

8.2

No Waiver

 

8.3

Pledgors’ Obligations Absolute

 

8.4

Enforcement

 

8.5

Amendments, Waivers, etc

 

8.6

Continuing Security Interest; Term; Successors and Assigns; Assignment; Termination and Release; Survival

 

8.7

Additional Pledgors

 

8.8

Notices

 

8.9

Applicable Law

 

8.10

Severability

 

8.11

Construction

 

8.12

Counterparts

 

8.13

Submission to Jurisdiction

 

8.14

WAIVER OF JURY TRIAL

 

8.15

Qualifications Regarding Pledgor Disclosures

 

8.16

Certain Regulatory Restrictions

 

8.17

Restatement

 

 

 

BOS111 12487896.6

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